MARKETVEST FUNDS, PRE 14A, 1998-01-22

MARKETVEST FUNDS
PRE 14A, 1998-01-22

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Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934 (Amendment No.______)

Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ X ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or
Sec. 240.14a-12

Marketvest Funds
(Name of Registrant as Specified In Its Charter)

Federated Investors
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1. Title of each class of securities to which transaction applies:

2. Aggregate number of securities to which transaction applies:

3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

4. Proposed maximum aggregate value of transaction:

5. Total fee paid:

[ ] Fee paid previously with preliminary proxy materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:
---------------------------------------------------------------

2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------

3) Filing Party:
---------------------------------------------------------------

4) Date Filed:
---------------------------------------------------------------

Marketvest Funds, Inc.
Marketvest Funds

Proxy for Special Meeting of Shareholders

This proxy is solicited on behalf of the Board of Trustees of Marketvest
Funds and the Board of Directors of Marketvest Funds, Inc. (the "Marketvest
Funds") for use at a Joint Special Meeting of the Shareholders of the
above-referenced series of the Marketvest Funds to be held of March 4, 1998 at
10 o'clock a.m. (Eastern Time) at Federated Investors Tower, 19th Floor,
Pittsburgh, Pennsylvania.

The undersigned hereby appoints Victor R. Siclari, Timothy S. Johnson, S.
Elliott Cohan, Leanne O'Brien and Patricia F. Conner, and each of them,
attorneys and proxies of the undersigned each with the power of substitution and
resubstitution, to attend, vote and act for the undersigned at the
above-referenced Joint Special Meeting of Shareholders, and at any adjournment
thereof, casting votes according to the number of shares of the series which the
undersigned may be entitled to vote with respect to the proposals set forth
below, in accordance with the specification indicated, if any, and with all the
powers which the undersigned would possess if personally present, hereby
revoking any prior proxy to vote at such Joint Special Meeting, and hereby
ratifying and confirming all that said attorneys and proxies, or each of them,
may lawfully do by virtue hereof.

You are encouraged to specify your choices by marking the appropriate box,
SEE RESERVE SIDE. The Proxies cannot vote your shares unless you sign and return
this card.

(continued and to be SIGNED on the other side)

_____________________ FUND

The undersigned hereby acknowledges receipt of the Notice of Joint Special
Meeting of Shareholders and the Proxy Statement dated ____________________,
1998.

1. To approve the Agreement and Plan of Reorganization (the "Reorganization
Agreement"), between the Marketvest Funds and ARK Funds, and the transactions
contemplated thereby, including: (a) the transfer of all the assets and
stated liabilities of each portfolio of the Marketvest Funds (collectively,
the "Acquired Funds") to a corresponding portfolio of ARK Funds
(collectively, the "Acquiring Funds') in exchange for shares of such
Acquiring Fund; (b) the distribution of the Acquiring Fund shares so received
by an Acquired Fund pro rata to shareholders of the Acquired Funds; and (c)
the termination and deregistration of the Acquired Funds and the Marketvest
Funds.

FOR AGAINST ABSTAIN
--- --- ---

2. To consider and act upon such other business as may properly come before the
Joint Special Meeting and any adjournments thereof.

FOR AGAINST ABSTAIN
--- --- ---

This Proxy, if properly executed, will be voted in accordance with the
undersigned's direction as set forth herein. If no direction is made, this Proxy
will be voted FOR Proposal 1. This Proxy may be revoked in writing prior to its
exercise. The undersigned hereby revokes any proxies heretofore given to vote
upon or act with respect to such shares.

NOTE: PLEASE SIGN EXACTLY AS YOUR NAME OR NAMES APPEAR HEREON. CORPORATE OR
PARTNERSHIP PROXIES SHOULD BE SIGNED IN FULL CORPORATE OR PARTNERSHIP NAME BY AN
AUTHORIZED OFFICER. JOINT OWNERS SHOULD EACH SIGN PERSONALLY, WHEN SIGNING AS AN
ATTORNEY, EXECUTOR, TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL TITLE AS SUCH.

Dated: ______________________________, 1998

-----------------------------------------
Signature

-----------------------------------------
Signature (see note above)

IMPORTANT: PLEASE SIGN, DATE AND RETURN PROMPTLY.

THIS PROXY CARD IS ONLY VALID WHEN SIGNED AND DATED.

MARKETVEST FUNDS, INC.
MARKETVEST FUNDS
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7010

February __, 1998
Dear Shareholder:

On November 11, 1997, the boards of the Marketvest Funds, Inc. and
Marketvest Funds (collectively, the "Marketvest Funds") met to consider and
approve a proposal for reorganizing each portfolio of the Marketvest Funds, with
a portfolio of ARK Funds having similar investment objectives and policies. The
reorganizations are being proposed following the acquisition of Dauphin Deposit
Bank and Trust Company by First Maryland Bancorp in July 1997. After carefully
studying the merits of the proposal, the respective boards of the Marketvest
Funds determined that the reorganization of each portfolio of the Marketvest
Funds with a corresponding ARK Funds portfolio is in the best interests of the
shareholders of the Marketvest Funds.

Since the boards of the Marketvest Funds have approved combining the
Marketvest Funds with ARK Funds portfolios that have similar investment
objectives and policies, you and your fellow shareholders are being asked to
approve the proposal at a joint special meeting of Marketvest Funds'
shareholders to be held at Federated Investors Tower, 19th Floor, Pittsburgh,
Pennsylvania, on March 4, 1998. A proxy card is enclosed for use in the joint
special meeting. This card represents shares you held as of the record date,
February 4, 1998. IT IS IMPORTANT THAT YOU COMPLETE, SIGN AND RETURN YOUR PROXY
CARD IN THE ENVELOPE PROVIDED AS SOON AS POSSIBLE.

If you and the other shareholders of your fund approve the proposed
reorganization of your fund and certain other conditions are satisfied, you will
be able to continue your investment program through ownership in an ARK Funds
portfolio with similar investment objectives and policies. As a shareholder of
an ARK Funds portfolio, you will enjoy access, through the exchange privilege,
to a much larger family of funds, including types of funds that Marketvest Funds
currently do not offer. This will provide you with a convenient way to diversify
your investments.

I encourage you to review the attached materials in detail. Some of your
questions are answered on the next page. Some important facts about the proposed
reorganizations are outlined below.

- The reorganizations will not affect the value of your account.
There are no sales charges on the reorganizations.

<PAGE>

- The reorganizations are not expected to result in any federal
income tax to any of the Marketvest Funds or their shareholders.

Since all of the Marketvest Funds are required to vote, we have grouped the
funds on one proxy statement to reduce costs. If you hold shares in more than
one fund, you will receive a proxy card for each fund you own. Please vote each
proxy card you receive.

Because the boards believe the proposed reorganizations will benefit all
shareholders, they encourage you to vote for the proposal. Should you have any
additional questions, we invite you to call the Marketvest Funds toll free at
1-800-MKT-VEST.

EDWARD C. GONZALES
President

Q. WHY HAVE I RECEIVED THIS PACKAGE?

A. In July 1997, Dauphin Deposit Bank and Trust Company was acquired by First
Maryland Bancorp. First Maryland Bancorp is the parent company of Allied
Investment Advisors, Inc., investment adviser to ARK Funds. Subsequent to this
merger, the Marketvest Funds entered into an Agreement and Plan of
Reorganization with ARK Funds. Under the agreement, the assets of the Marketvest
Funds and ARK Funds will be combined, and your Marketvest Fund shares will be
exchanged for shares of an ARK portfolio having similar investment objectives
and policies. The boards of the Marketvest Funds have approved the proposed
reorganizations. You, as a Marketvest Fund shareholder, are now being asked to
approve the proposed reorganization of your fund with the corresponding ARK
Funds portfolio.

Q. WHY ARE THE REORGANIZATIONS BEING PROPOSED?

A. The boards of the Marketvest Funds believe that combining Marketvest Funds
and the ARK Funds could result in more efficient operations. Also, as a result
of these transactions, shareholders of the Marketvest Funds will become part of
a larger mutual-fund family with more fund portfolios including some types of
funds that Marketvest Funds currently do not offer. As an ARK Funds shareholder,
you will have access to these funds through the ARK Funds' exchange privilege.

<PAGE>

Q. HOW WILL THIS AFFECT ME AS A MARKETVEST FUND SHAREHOLDER?

A. You will become a shareholder of an ARK Funds portfolio with similar
investment objectives and policies as the Marketvest Fund you currently hold. As
an ARK Funds shareholder, you will have access to the wider array of fund
portfolios offered by ARK Funds.

There are no sales charges on this transaction. The shares of the ARK Funds
portfolio that you receive will have an aggregate net asset value equal to the
net asset value of the Marketvest Fund shares you held immediately before the
transaction.

Q. WILL THE REORGANIZATIONS RESULT IN ANY TAXES?

A. The Marketvest Funds or their shareholders will not incur any federal
income tax as a result of the reorganizations.

Q. WHAT FUND(S) WILL I HOLD FOLLOWING THE REORGANIZATIONS?

A. Marketvest Fund shareholders will receive shares of the following
corresponding ARK portfolios. Unlike Marketvest Funds, each ARK Funds portfolio
currently has two classes of shares outstanding, Retail Class and Institutional
Class. Marketvest Funds shareholders will receive Institutional Class shares in
the reorganizations.

Marketvest Funds ARK Funds
---------------- ---------
Marketvest Short-Term Bond Fund ARK Short-Term Bond Portfolio

Marketvest Intermediate U.S. Government ARK U.S. Government Bond Portfolio
Bond Fund

Marketvest Pennsylvania Intermediate ARK Pennsylvania Tax-Free Portfolio
Municipal Bond Fund

Marketvest Equity Fund ARK Value Equity Portfolio

Marketvest International Equity Fund
ARK International Equity Selection Portfolio

<PAGE>

Q. WILL THE INVESTMENT ADVISER CHANGE?

A. Yes. Dauphin Deposit Bank and Trust Company currently serves as investment
adviser to the Marketvest Funds. Allied Investment Advisors, Inc. serves as
investment adviser to the ARK Funds and will continue as investment adviser
following these transactions. These two companies are wholly-owned by First
Maryland Bancorp. Following the Reorganizations, several portfolio managers of
Dauphin Deposit Bank and Trust Company will be joining Allied Investment
Advisors, Inc.

Q. HOW DO THE MARKETVEST FUNDS BOARDS RECOMMEND THAT I VOTE?

A. After careful consideration, the boards of the Marketvest Funds unanimously
recommend that you vote "FOR" the proposed reorganizations.

Q. HOW DO I CONTACT YOU?

A. If you have any questions, call the Marketvest Funds toll-free at
1-800-MKT-VEST, Monday through Friday, 8:00 a.m. to 8:00 p.m. (Eastern Time),
or Saturday and Sunday, 9:00 a.m. to 4:00 p.m. (Eastern Time).

PLEASE VOTE.
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN.

<PAGE>

MARKETVEST FUNDS, INC.
MARKETVEST FUNDS
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7010

NOTICE IS HEREBY GIVEN that a Joint Special Meeting of the shareholders of
Marketvest Funds, Inc. and Marketvest Funds (collectively, the "Marketvest
Funds") will be held at Federated Investors, 5800 Corporate Drive, 19th Floor,
Pittsburgh, Pennsylvania, on March 4, 1998 at 10 o'clock a.m., Eastern Time, for
the following purposes:

ITEM 1. To consider and act upon a proposal to approve an
Agreement and Plan of Reorganization (the "Reorganization
Agreement"), between the Marketvest Funds and ARK Funds,
and the transactions contemplated thereby, including: (a)
the transfer of all of the assets and stated liabilities
of each portfolio of the Marketvest Funds (collectively,
the "Acquired Funds") to a corresponding portfolio of ARK
Funds (collectively, the "Acquiring Funds") in exchange
for shares of such Acquiring Fund; (b) the distribution of
the Acquiring Fund shares so received by an Acquired Fund
pro rata to shareholders of the Acquired Funds; and (c)
the termination and deregistration of the Acquired Funds
and the Marketvest Funds.

ITEM 2. To transact such other business as may properly come before
the meeting and any adjournment thereof.

The proposed reorganizations and related matters are described in the
attached Prospectus/Proxy Statement. A copy of the Reorganization Agreement is
attached to the Prospectus/Proxy Statement as Appendix A.

Only shareholders of record on February 4, 1998 are entitled to notice of
and to vote at the Joint Special Meeting and any adjournment thereof.

SHAREHOLDERS ARE REQUESTED TO EXECUTE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE THE ACCOMPANYING PROXY CARD. THIS IS IMPORTANT TO ENSURE A QUORUM AT
THE MEETING. PROXIES MAY BE REVOKED AT ANY TIME BEFORE THEY ARE EXERCISED BY
SUBMITTING A WRITTEN NOTICE OF REVOCATION OR A SUBSEQUENTLY EXECUTED PROXY OR BY
ATTENDING THE MEETING AND VOTING IN PERSON.

VICTOR R. SICLARI
Secretary

February ____, 1998

PROSPECTUS/PROXY STATEMENT

Dated February __, 1998

ARK FUNDS
Oaks, Pennsylvania 19456
Telephone 1-800-ARK-FUNDS

MARKETVEST FUND, INC.
MARKETVEST FUNDS
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7010
Telephone 1-800-MKT-VEST

This Prospectus/Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Marketvest Funds, Inc. and
the Board of Trustees of Marketvest Funds (collectively, the "Marketvest Funds")
in connection with the Joint Special Meeting (the "Meeting") of shareholders to
be held at Federated Investors, Federated Investors Tower, 19th Floor,
Pittsburgh, Pennsylvania, on March 4, 1998 at 10 o'clock a.m., Eastern Time, at
which shareholders will be asked to consider and approve a proposed Agreement
and Plan of Reorganization, dated as of January 15, 1998 (the "Reorganization
Agreement"), by and among the Marketvest Funds and ARK Funds.

The Marketvest Funds and ARK Funds are open-end, series, management
investment companies whose investment advisers are wholly-owned by First
Maryland Bancorp. In reviewing the proposed reorganizations (each such
transaction between a portfolio of the Marketvest Funds and the corresponding
ARK Funds portfolio is referred to individually as a "Reorganization" and
collectively, as the "Reorganizations"), the Marketvest Funds' boards
considered, among other things, that the investment advisers of the Marketvest
Funds and ARK Funds are under common control, that each Reorganization would
constitute a tax-free reorganization and that the interests of shareholders
would not be diluted as a result of the Reorganizations.

This Prospectus/Proxy Statement constitutes the proxy statement of the
Marketvest Funds for the Meeting and the prospectus for the shares of ARK Funds
that have been registered with the Securities and Exchange Commission ("SEC")
and are to be issued in connection with the Reorganization of the Marketvest
Pennsylvania Intermediate Municipal Bond Fund. The investment operations of
Marketvest Short-Term Bond Fund, Marketvest Intermediate U.S. Government Bond
Fund, Marketvest Equity Fund and Marketvest International Equity Fund will be
continued by the ARK Short-Term Bond Portfolio, ARK U.S. Government Bond
Portfolio, ARK Value Equity Portfolio and ARK International Equity Selection
Portfolio, respectively, and this Prospectus/Proxy Statement does not constitute
a prospectus (because none is required) for the shares that will be issued by
these ARK Funds portfolios in connection with the Reorganizations of the
corresponding portfolios of the Marketvest Funds.

The Reorganization Agreement provides that each portfolio of the Marketvest
Funds (an "Acquired Fund" and collectively, the "Acquired Funds") will transfer
substantially all of its assets and stated liabilities to the portfolio of ARK
Funds (an "Acquiring Fund" and collectively, the "Acquiring Funds") identified
below:

Acquired Funds Acquiring Funds
-------------- ---------------
Marketvest Short-Term Bond Fund ARK Short-Term Bond Portfolio

Marketvest Intermediate U.S. Government ARK U.S. Government Bond Portfolio
Bond Fund

Marketvest Pennsylvania Intermediate ARK Pennsylvania Tax-Free Portfolio
Municipal Bond Fund

Marketvest Equity Fund ARK Value Equity Portfolio

Marketvest International Equity Fund ARK International Equity Selection
Portfolio

In exchange for the transfer of assets and liabilities, each Acquired Fund
will receive Institutional Class shares of the corresponding Acquiring Fund
identified above. Each Acquired Fund will then make a liquidating distribution
to its shareholders of the Acquiring Fund shares, so that a shareholder of an
Acquired Fund at the time of the Reorganization will receive Institutional Class
shares of the corresponding Acquiring Fund with the same aggregate net asset
value as the shareholder had in the Acquired Fund immediately before the
Reorganization. Following the Reorganizations, the Acquired Funds and the
Marketvest Funds will be terminated and deregistered as described in the
Reorganization Agreement.

ARK Pennsylvania Tax-Free Portfolio is currently conducting investment
operations as described in this Prospectus/Proxy Statement. ARK Short-Term Bond
Portfolio, ARK U.S. Government Bond Portfolio, ARK Value Equity Portfolio and
ARK International Equity Selection Portfolio have recently been organized for
the purpose of continuing the investment operations of Marketvest Short-Term
Bond Fund, Marketvest Intermediate U.S. Government Bond Fund, Marketvest Equity
Fund and Marketvest International Equity Fund, respectively, and are not
expected to commence operations until the consummation of the Reorganizations.

<PAGE>

This Prospectus/Proxy Statement sets forth the information that a
shareholder should know before voting on the Reorganization Agreement (and
related transactions) and should be retained for future reference. The
Prospectus dated February __, 1998 relating to the shares of the Acquiring
Funds, which describes the operations of the Acquiring Funds, is incorporated
herein by reference and accompanies this Prospectus/Proxy Statement. Additional
information is contained in: (i) the Statement of Additional Information dated
February __, 1998, relating to this Prospectus/Proxy Statement; (ii) the
Statement of Additional Information dated February __, 1998, relating to the
shares of the

Acquiring Funds; (iii) the ARK Funds' Annual Report for the fiscal year ended
April 30, 1997, as supplemented and Semi-Annual Report for the six-months ended
October 31, 1997; (iv) the Combined Prospectus and Combined Statement of
Additional Information, each dated June 30, 1997, as supplemented, relating to
the Acquired Funds; and (v) the Combined Annual Report for the fiscal year ended
February 28, 1997, and Combined Semi-Annual Report for the six-months ended
August 31, 1997, relating to the Acquired Funds. Each of these documents is
incorporated herein by reference and is also enclosed in the materials
accompanying this Prospectus/Proxy Statement. The information contained in the
Combined Prospectus and the Combined Statement of Additional Information, each
dated June 30, 1997, as supplemented, the Combined Annual Report for the fiscal
year ended February 28, 1997, and the Combined Semi-Annual Report for the six
month period ended August 31, 1997, each relating to the Acquired Funds, is
incorporated herein by reference and accompanies this Prospectus/Proxy
Statement.

This Prospectus/Proxy Statement is expected to be first sent to
shareholders no later than February __, 1998.

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

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS/PROXY STATEMENT
AND IN THE MATERIALS EXPRESSLY INCORPORATED HEREIN BY REFERENCE AND, IF GIVEN OR
MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY MARKETVEST FUNDS OR ARK FUNDS.

SHARES OF ARK FUNDS AND MARKETVEST FUNDS ARE NOT DEPOSITS OR OBLIGATIONS
OF, OR GUARANTEED OR ENDORSED BY, THE FIRST NATIONAL BANK OF MARYLAND, DAUPHIN
DEPOSIT BANK AND TRUST COMPANY OR ANY DEPOSITORY INSTITUTION, AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD
OR ANY OTHER GOVERNMENTAL AGENCY. INVESTING IN SHARES OF ARK FUNDS INVOLVES
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.

TABLE OF CONTENTS
<TABLE>
<CAPTION>

<S> <C>

Page
----
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Proposed Reorganizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Reasons for Reorganizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Overview of Marketvest Funds and ARK Funds . . . . . . . . . . . . . . . . . . . . . 2
Marketvest Pennsylvania Intermediate Municipal Bond Fund and
ARK Pennsylvania Tax-Free Portfolio . . . . . . . . . . . . . . . . . . . . . 2
Certain Arrangements with Service Providers -- Marketvest Funds . . . . . . . . 2
Certain Arrangements with Service Providers -- ARK Funds . . . . . . . . . . . . 3
Comparative Fee Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Expense Ratios -- Acquired Funds . . . . . . . . . . . . . . . . . . . . . . . . 10
Expense Ratios -- Acquiring Funds . . . . . . . . . . . . . . . . . . . . . . . 10
Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Exchanges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Dividends and Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Redemption Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Voting Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Investment Objectives and Policies . . . . . . . . . . . . . . . . . . . . . . . . . 14
Investment Practices and Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Investment Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Information Relating to the Proposed Reorganizations . . . . . . . . . . . . . . . . . . . 23
Description of the Reorganization Agreement . . . . . . . . . . . . . . . . . . . . . 23
Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Information Relating to Voting Matters . . . . . . . . . . . . . . . . . . . . . . . . . . 28
General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Shareholder and Board Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Annual Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Additional Information about ARK Funds . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Additional Information about Marketvest Funds . . . . . . . . . . . . . . . . . . . . . . . 32
Management's Discussion of Acquiring Fund Performance . . . . . . . . . . . . . . . . . . . 32
Other Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Shareholder Inquiries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
</TABLE>

<PAGE>

SUMMARY

The following is a summary of certain information relating to the proposed
Reorganizations, the parties thereto and the related transactions, and is
qualified by reference to the more complete information contained elsewhere in
this Prospectus/Proxy Statement, the Statement of Additional Information
relating to this Prospectus/Proxy Statement, the Combined Prospectus and
Combined Statement of Additional Information of the Marketvest Funds, Marketvest
Funds' Combined Annual Report and most recent Combined Semi-Annual Report. The
Prospectus and Statement of Additional Information of ARK Funds, and the
Reorganization Agreement attached to this Prospectus/Proxy Statement as Appendix
A.

PROPOSED REORGANIZATIONS. Based upon their evaluation of the relevant
information presented to them, and in light of their fiduciary duties under
federal and state law, the Board of Directors of Marketvest Funds, Inc. and the
Board of Trustees of Marketvest Funds, and the Board of Trustees of ARK Funds,
including in each case the directors/trustees who are not "interested persons"
within the meaning of the Investment Company Act of 1940, as amended (the "1940
Act"), have determined that each of the proposed Reorganizations is in the best
interests of shareholders of each Acquired Fund and each Acquiring Fund,
respectively, and that the interests of existing shareholders of the Acquired
Funds and the Acquiring Funds, respectively, will not be diluted as a result of
such Reorganizations.

REASONS FOR THE REORGANIZATIONS. The primary reasons for each of the
proposed Reorganizations are: (a) the acquisition of Dauphin Deposit
Corporation, the parent company of Dauphin Deposit Bank and Trust Company, the
Acquired Funds' investment adviser, by First Maryland Bancorp, the parent
company of Allied Investment Advisors, Inc., the Acquiring Funds' investment
adviser, (b) the fact that the investment advisers of the Acquired Funds and the
Acquiring Funds are under common control, (c) the fact that shareholder
interests would not be diluted in the proposed Reorganizations, (d) the status
of each Reorganization as a tax-free reorganization, (e) the similarity of the
investment objective and policies of each Acquired Fund and the corresponding
Acquiring Fund, (f) the improved marketing opportunities that could result from
each Reorganization, and (g) the opportunity for the shareholders of each
Acquired Fund to participate in a larger family of mutual funds through the
exchange privilege offered by ARK Funds.

FEDERAL INCOME TAX CONSEQUENCES. Shareholders of each Acquired Fund will
not recognize any gain or loss for federal income tax purposes on the receipt
of shares of the corresponding Acquiring Fund. Neither the Acquired Funds nor
the Acquiring Funds will incur any gain or loss for federal tax purposes as a
result of the Reorganizations. See "Information Relating to the Proposed
Reorganizations - Federal Income Tax Consequences."

OVERVIEW OF MARKETVEST FUNDS AND ARK FUNDS. The investment objectives and
policies of Marketvest Short-Term Bond Fund and ARK Short-Term Bond Portfolio,
Marketvest Intermediate U.S. Government Bond Fund and ARK U.S. Government Bond
Portfolio, Marketvest Equity Fund and ARK Value Equity Portfolio, and Marketvest
International Equity Fund and ARK International Equity Selection Portfolio are
substantially similar. However, the ARK Short-Term Bond Portfolio and ARK U.S.
Government Bond Portfolio may each invest up to 5% of total assets in
lower-quality debt securities; the corresponding Marketvest Funds do not have a
similar provision in their investment policies.

The investment objective and policies of the Marketvest Pennsylvania
Intermediate Municipal Bond Fund are similar to those of the ARK Pennsylvania
Tax-Free Portfolio as described below.

Marketvest Pennsylvania Intermediate Municipal Bond Fund and ARK Pennsylvania
Tax-Free Portfolio

Under normal market conditions, the Marketvest Pennsylvania Intermediate
Municipal Bond Fund and the ARK Pennsylvania Tax-Free Portfolio invest at least
80% and 65%, respectively, of their net assets in Pennsylvania municipal
securities. In addition, the Marketvest Pennsylvania Intermediate Municipal Bond
Fund invests its assets so that, under normal circumstances, at least 65% of the
value of its total assets will be invested in securities of Pennsylvania
issuers.

See "Risk Factors" below and in the prospectuses of the Marketvest Funds
and ARK Funds, which are incorporated herein by reference, for a further
description of the similarities and differences between the investment
objectives, policies and limitations of the Acquired Funds and the Acquiring
Funds.

Certain Arrangements with Service Providers -- Marketvest Funds

Pursuant to an investment advisory contract with both Marketvest Funds,
Inc. and Marketvest Funds, investment decisions for the Acquired Funds are made
by Dauphin Deposit Bank and Trust Company ("Dauphin Deposit"), the Acquired
Funds' investment adviser, subject to the direction of the Marketvest Funds'
boards. Dauphin Deposit continually conducts investment research and supervision
for each Acquired Fund and is responsible for the purchase or sale of portfolio
instruments, for which it receives an annual investment advisory fee from the
assets of each Acquired Fund (as described in the comparative fee tables below).
Dauphin Deposit may voluntarily waive some or all of its fee from time to time
in its sole discretion.

Edgewood Services Inc., a subsidiary of Federated Investors, is the
principal distributor for shares of the Acquired Funds.

Pursuant to the provisions of a distribution plan adopted in accordance
with Rule 12b-1 under the 1940 Act, each Acquired Fund may pay the distributor
of its shares an amount computed at an annual rate of up to 0.25% of the average
daily net asset value of that Acquired

Fund to finance any activity which is principally intended to result in the sale
of that Acquired Fund's shares. No fees have been paid under the distribution
plan.

Federated Administrative Services ("FAS"), a subsidiary of Federated
Investors, provides the Acquired Funds with administrative personnel and
services necessary to operate each Acquired Fund. Such services include certain
legal and accounting services. FAS receives an annual administrative fee equal
to 0.15% of the Acquired Funds' average aggregate daily net assets. The
administrative fee received during any fiscal year is subject to an aggregate
minimum of at least $75,000 per Acquired Fund. FAS may voluntarily waive all or
a portion of its fee from time to time in its sole discretion.

Dauphin Deposit is custodian for the securities and cash of the Acquired
Funds. Federated Shareholder Services Company ("FSSC") is the transfer agent and
dividend disbursing agent for the Acquired Funds, and Federated Services Company
("FSCo") provides certain portfolio accounting services to the Acquired Funds.
FSSC and FSCo are subsidiaries of Federated Investors.

Certain Arrangements with Service Providers -- ARK Funds

Allied Investment Advisors, Inc. ("AIA") serves as the investment adviser
to each Acquiring Fund and is entitled to receive investment advisory fees,
which are accrued daily and paid monthly, from each Acquiring Fund (as described
in the comparative fee tables below). AIA may voluntarily waive some or all of
its fee from time to time in its sole discretion. See "Management" in the
Prospectus of ARK Funds accompanying this Prospectus/Proxy Statement, which is
incorporated herein by reference, for additional information on AIA.

SEI Investments Distribution Co., a wholly-owned subsidiary of SEI
Investments Company, serves as the distributor for each Acquiring Fund.

Under a shareholder services plan in effect with respect to the
Institutional Class of each Acquiring Fund, the Acquiring Fund may pay
shareholder services fees to securities dealers and other financial institutions
(including affiliates of First Maryland Bancorp), at an annual rate of up to
0.15% of the average net assets of the Institutional Class shares attributable
to their customers, for providing ongoing shareholder support services to
customers with accounts in such class. The Board of Trustees of ARK Funds has
approved an annual shareholder services fee rate of 0.06% of the average net
assets of the Institutional Class of each Acquiring Fund.

SEI Investments Fund Resources ("SFR") provides administrative services to
each Acquiring Fund. SEI Investments Management Corporation, a wholly-owned
subsidiary of SEI Co., is the owner of all beneficial interest in SFR. For its
services, SFR receives a fee, which is calculated daily and paid monthly, at an
annual rate of 0.13% of the aggregate average net assets of the Acquiring Funds.
SFR may voluntarily waive all or a portion of its fee from time to time in its
sole discretion. Pursuant to a separate agreement with SFR, FMB Trust Company,
National Association performs sub-administration services on behalf of each ARK

Funds portfolio, for which it receives a fee from SFR at the annual rate of up
to 0.0275% of aggregate average daily net assets of the Acquiring Funds. See
"Management" in the Prospectus of ARK Funds accompanying this Prospectus/Proxy
Statement, which is incorporated herein by reference, for additional information
about SFR.

FMB Trust Company, National Association is custodian for the securities and
cash of ARK Funds. SFR provides transfer agent and related services for the
Acquiring Funds and has subcontracted the transfer agency services to State
Street Bank and Trust Company. State Street Bank and Trust Company maintains
shareholder accounts and records for the Acquiring Funds.

Comparative Fee Tables

The tables set forth below show (a) shareholder transaction expenses and
estimated annual operating expenses for each Acquired Fund (other than the
Marketvest International Equity Fund) for the fiscal year ended February 28,
1997, estimated shareholder transaction expenses and estimated annual operating
expenses for the Marketvest International Equity Fund, for the fiscal year
ending February 28, 1998, and shareholder transaction expenses and estimated
annual operating expenses for the Institutional Class of each Acquiring Fund as
of April 30, 1997 for its fiscal year ended on such date, in each case restated
to reflect expenses the Acquired Funds and the Institutional Class of shares of
the Acquiring Funds, respectively, expect to incur during the current fiscal
year, and (b) pro forma information for each Acquiring Fund assuming the
Reorganization of such Acquiring Fund had taken place on October 31, 1997.

Unless otherwise noted, the information in the expense tables and the
examples reflects voluntary fee waivers and/or reimbursements. The assumption in
the example of a 5% annual return is required by the SEC for all mutual funds,
and is not a prediction of any fund's future performance. THE EXAMPLES SHOULD
NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OF ANY FUND.
ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

Pro Forma
Marketvest Short-Term ARK Short-Term ARK Short-Term
Bond Fund Bond Portfolio Bond Portfolio
--------- -------------- --------------
SHAREHOLDER TRANSACTION EXPENSES

Maximum sales load imposed on purchases and 3.50% None None
reinvested dividends

Deferred sales charges imposed on redemptions None None None

Redemption Fee None None None

Exchange Fee None None None

ANNUAL OPERATING EXPENSES
(expressed as a percentage of average net assets)

Advisory Fee (after waiver)(1) 0.60% 0.70% 0.70%

12b-1 Fee (after waiver)(2) 0.00% N/A N/A

Shareholder Services Fees (after waiver)(3) N/A 0.06% 0.06%

Other Expenses (after waiver)(4) 0.30% 0.18% 0.18%

Total Operating Expenses (after waivers)(5) 0.90% 0.94% 0.94%
</TABLE>

EXAMPLE

A shareholder would pay the following expenses on a $1,000 investment,
assuming a 5% annual return, reinvestment of all dividends and redemption of the
shares after the number of years indicated:

1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Marketvest Short-Term Bond Fund $44 $63 $83 $142
ARK Short-Term Bond Portfolio 10 30 52 115
Pro Forma ARK Short-Term Bond Portfolio 10 30 52 115
</TABLE>

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

(1) Absent fee waivers, advisory fees would be 0.75%.

(2) The Marketvest Short-Term Bond Fund is not currently paying or accruing
12b-1 fees. The Marketvest Short-Term Bond Fund can pay up to 0.25% as a 12b-1
fee to the distributor of the Marketvest Funds.

(3) Absent fee waivers, shareholder services fees for the Institutional Class of
the ARK Short-Term Bond Portfolio would be 0.15%.

(4) Other Expenses for the Marketvest Short-Term Bond Fund have been reduced to
reflect the voluntary waiver of 0.03% of the administrative fee by the
administrator. The administrator can terminate these voluntary waivers and
reimbursements at any time at their sole discretion.

(5) Absent fee waivers, total operating expenses would be 1.08%, 1.13% and
1.13%, respectively.

Marketvest
Intermediate Pro Forma
U.S. Government ARK U.S. Government ARK U.S. Government
Bond Fund Bond Portfolio Bond Portfolio
--------- -------------- --------------
SHAREHOLDER TRANSACTION EXPENSES

Maximum sales load imposed on purchases and 3.50% None None
reinvested dividends

Deferred sales charges imposed on redemptions None None None

Redemption Fee None None None

Exchange Fee None None None

ANNUAL OPERATING EXPENSES
(expressed as a percentage of average net assets)

Advisory Fee (after waiver)(1) 0.60% 0.65% 0.65%

12b-1 Fee (after waiver)(2) 0.00% N/A N/A

Shareholder Services Fees(3) N/A 0.06% 0.06%

Other Expenses (after waiver)(4) 0.25% 0.19% 0.19%

Total Operating Expenses (after waivers)(5) 0.85% 0.90% 0.90%
</TABLE>

EXAMPLE

A shareholder would pay the following expenses on a $1,000 investment,
assuming a 5% annual return, reinvestment of all dividends and redemption of the
shares after the number of years indicated:

<S> <C> <C> <C> <C>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Marketvest Intermediate U.S. Government $43 $61 $80 $136
Bond Fund

ARK U.S. Government Bond Portfolio 9 29 50 111

Pro Forma ARK U.S. Government Bond
Portfolio 9 29 50 111
</TABLE>

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

(1) Absent fee waivers, advisory fees would be 0.75%.

(2) The Marketvest Intermediate U.S. Government Bond Fund is not currently
paying or accruing 12b-1 fees. The Marketvest Intermediate U.S. Government Bond
Fund can pay up to 0.25% as a 12b-1 fee to the distributor of the Marketvest
Funds.

(3) Absent fee waivers, shareholder services fees for the Institutional Class of
the ARK U.S. Government Bond Portfolio would be 0.15%

(4) Other Expenses for the Marketvest Intermediate U.S. Government Bond Fund
have been reduced to reflect the voluntary waiver of 0.03% of the administrative
fee by the administrator. The administrator can terminate these voluntary
waivers and reimbursements at any time at their sole discretion.

(5) Absent fee waivers, total operating expenses would be 1.03%, 1.99% and
1.99%, respectively.

Marketvest
Pennsylvania Pro Forma
Intermediate Municipal ARK Pennsylvania ARK Pennsylvania
Bond Fund Tax-Free Portfolio Tax-Free Portfolio
--------- ------------------ ------------------
SHAREHOLDER TRANSACTION EXPENSES

Maximum sales load imposed on purchases and 3.50% None None
reinvested dividends

Deferred sales charges imposed on redemptions None None None

Redemption Fee None None None

Exchange Fee None None None

ANNUAL OPERATING EXPENSES
(expressed as a percentage of average net assets)

Advisory Fee(1) 0.60% 0.65% 0.65%

12b-1 Fee (after waiver)(2) 0.00% N/A N/A

Shareholder Services Fees(3) N/A 0.06% 0.06%

Other Expenses (after waiver)(4) 0.23% 0.23% 0.18%

Total Operating Expenses (after waivers)(5) 0.83% 0.94% 0.89%
</TABLE>

EXAMPLE

A shareholder would pay the following expenses on a $1,000 investment,
assuming a 5% annual return, reinvestment of all dividends and redemption of the
shares after the number of years indicated:

1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Marketvest Pennsylvania Intermediate $43 $61 $79 $134
Municipal Bond Fund

ARK Pennsylvania Tax-Free Portfolio 10 30 52 115

Pro Forma ARK Pennsylvania Tax-Free
Portfolio 9 28 49 110
</TABLE>

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

(1) Absent fee waiver, the advisory fee for the Marketvest Pennsylvania
Intermediate Municipal Bond Fund would be 0.75%.

(2) The Marketvest Pennsylvania Intermediate Municipal Bond Fund is not
currently paying or accruing 12b-1 fees. The Marketvest Pennsylvania
Intermediate Municipal Bond Fund can pay up to 0.25% as a 12b-1 fee to the
distributor of the Marketvest Funds.

(3) Absent fee waivers, shareholder services fees for the Institutional Class of
the ARK Pennsylvania Tax-Free Portfolio would be 0.15%

(4) Other Expenses for the Marketvest Pennsylvania Intermediate Municipal Bond
Fund have been reduced to reflect the voluntary waiver of 0.04% of the
administrative fee by the administrator. The administrator can terminate this
voluntary waiver at any time at its sole discretion.

(5) Absent fee waivers, total operating expenses would be 1.02%, 1.03% and
0.98%, respectively.

Pro Forma
Marketvest Equity ARK Value Equity ARK Value Equity
Fund Portfolio Portfolio
---- --------- ---------
SHAREHOLDER TRANSACTION EXPENSES

Maximum sales load imposed on purchases and 4.75% None None
reinvested dividends

Deferred sales charges imposed on redemptions None None None

Redemption Fee None None None

Exchange Fee None None None

ANNUAL OPERATING EXPENSES
(expressed as a percentage of average net assets)

Advisory Fee (after waiver)(1) 0.80% 0.87% 0.87%

12b-1 Fee (after waiver)(2) 0.00% N/A N/A

Shareholder Services Fees(3) N/A 0.06% 0.06%

Other Expenses (after waiver)(4) 0.25% 0.13% 0.13%

Total Operating Expenses (after waivers)(5) 1.05% 1.06% 1.06%
</TABLE>

EXAMPLE

A shareholder would pay the following expenses on a $1,000 investment,
assuming a 5% annual return, reinvestment of all dividends and redemption of the
shares after the number of years indicated:

1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Marketvest Equity Fund $58 $79 $103 $170

ARK Value Equity Portfolio 11 34 58 129

Pro Forma ARK Value Equity Portfolio 11 34 58 129
</TABLE>

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

(1) Absent fee waivers, advisory fees would be 1.00%.

(2) The Marketvest Equity Fund is not currently paying or accruing 12b-1 fees.
The Marketvest Equity Fund can pay up to 0.25% as a 12b-1 fee to the distributor
of the Marketvest Funds.

(3) Absent fee waivers, shareholder services fees for the Institutional Class of
the ARK Value Equity Portfolio would be 0.15%

(4) Other Expenses for the Marketvest Equity Fund have been reduced to reflect
the voluntary waiver of 0.01% of the administrative fee by the administrator.
The administrator can terminate this voluntary waiver at any time at its sole
discretion.

(5) Absent fee waivers, total operating expenses would be 1.26%, 1.28% and
1.28%, respectively.

Pro Forma
Marketvest ARK ARK
International Equity International Equity International Equity
Fund Selection Portfolio Selection Portfolio
---- ------------------- -------------------
SHAREHOLDER TRANSACTION EXPENSES

Maximum sales load imposed on purchases and 1.50% None None
reinvested dividends

Deferred sales charges imposed on redemptions None None None

Redemption Fee None None None

Exchange Fee None None None

ANNUAL OPERATING EXPENSES
(expressed as a percentage of average net assets)

Advisory Fee (after waiver)(1) 0.50% 0.55% 0.55%

12b-1 Fee (after waiver)(2) 0.00% N/A N/A

Shareholder Services Fees(3) N/A 0.06% 0.06%

Other Expenses (after waiver)(4) 0.25% 0.26% 0.26%

Total Operating Expenses (after waivers)(5) 0.75% 0.81% 0.81%
</TABLE>

EXAMPLE

A shareholder would pay the following expenses on a $1,000 investment,
assuming a 5% annual return, reinvestment of all dividends and redemption of the
shares after the number of years indicated:

1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Marketvest International Equity Fund $23 $39 --- ---

ARK International Equity Selection
Portfolio 8 26 45 100

Pro Forma ARK International Equity
Selection Portfolio 8 26 45 100
</TABLE>

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

(1) Absent fee waivers, advisory fees would be 0.65%.

(2) The Marketvest International Equity Fund is not currently paying or accruing
12b-1 fees. The Marketvest International Equity Fund can pay up to 0.25% as a
12b-1 fee to the distributor of the Marketvest Funds.

(3) Absent fee waivers, shareholder services fees for the Institutional Class of
the ARK International Equity Selection Portfolio would be 0.15%

(4) Other Expenses of the Marketvest International Equity Fund have been reduced
to reflect voluntary waiver of 0.17% of the administrative fee by the
administrator and reimbursement of certain expenses by the adviser. The
administrator and adviser can terminate these voluntary waivers and
reimbursements at any time at their sole discretion.

(5) Absent fee waivers, total operating expenses would be 1.07%, 1.06% and
1.06%, respectively.

Expense Ratios -- Acquired Funds

The following table sets forth (a) the ratios of operating expenses to
average net assets of each Acquired Fund (other than the Marketvest
International Equity Fund) for the fiscal year ended February 28, 1997, (i)
after fee waivers and expense reimbursements, and (ii) absent fee waivers and
expense reimbursements, and (b) the annualized ratios of operating expenses to
average net assets of each Acquired Fund for the six-months ended August 31,
1997, (i) after fee waivers and expense reimbursements and (ii) absent fee
waivers and expense reimbursements.

FISCAL YEAR ENDED FEBRUARY 28, 1997

Ratio of Operating Expenses Ratio of Operating Expenses
to Average Net Assets to Average Net Assets
After Fee Absent Fee
Waivers and Expense Waivers and Expense
Acquired Fund Reimbursements Reimbursements
- ------------- -------------- --------------
Marketvest Short-Term Bond Fund 0.90% 1.08%

Marketvest Intermediate U.S. Government 0.85% 1.03%
Bond Fund

Marketvest Pennsylvania Intermediate Municipal 0.83% 1.02%
Bond Fund

Marketvest Equity Fund 1.05% 1.26%

SIX-MONTHS ENDED AUGUST 31, 1997

Marketvest Intermediate U.S. Government 0.80% 0.99%
Bond Fund

Marketvest Pennsylvania Intermediate Municipal 0.81% 1.00%
Bond Fund

Marketvest Equity Fund 1.02% 1.22%

Marketvest International Equity Fund 0.75% 1.16%

Expense Ratios -- Acquiring Funds
</TABLE>

The following table sets forth (a) the ratios of operating expenses to
average net assets of the Institutional Class of the ARK Pennsylvania Tax-Free
Portfolio for the fiscal year ended April 30, 1997, (i) after fee waivers and
expense reimbursements and (ii) absent fee waivers and expense reimbursements,
and (b) the annualized ratios of operating expenses to average net assets of the
Institutional Class of the ARK Pennsylvania Tax-Free Portfolio for the
six-months

ended October 31, 1997, (i) after fee waivers and expense reimbursements, and
(ii) absent fee waivers and expense reimbursements.

FISCAL YEAR ENDED APRIL 30, 1997

Ratio of Operating Expenses Ratio of Operating Expenses
to Average Net Assets to Average Net Assets
After Fee Absent Fee
Waivers and Expense Waivers and Expense
Acquiring Fund Reimbursements Reimbursements
- -------------- -------------- --------------
ARK Pennsylvania Tax-Free Portfolio 0.63% 0.76%

SIX-MONTHS ENDED OCTOBER 31, 1997

The ARK Short-Term Bond Portfolio, ARK U.S. Government Bond Portfolio, ARK
Value Equity and ARK International Equity Selection Portfolio have recently been
organized for the purpose of continuing the investment operations of the
Marketvest Short-Term Bond Fund, Marketvest Intermediate U.S. Government Fund,
Marketvest Equity Fund and Marketvest International Equity Fund, respectively,
had not commenced operations as of October 31, 1997, and are not expected to
commence operations until the consummation of the Reorganizations.

Purchases

Except for the shares to be issued in connection with the Reorganizations,
Institutional Class shares of the Acquiring Funds are sold to individuals,
institutions and other entities that have established trust, custodial or money
management relationships with First National Bank of Maryland ("First National")
or its affiliates. Institutional Class shares may be purchased by eligible
investors at their net asset value without a sales charge next calculated after
an investment is received and accepted. Marketvest Fund shareholders may
reinvest their dividends in Institutional Class shares of the Acquiring Funds
but additional share purchases of Institutional Class shares may only be made by
Marketvest Fund shareholders who are otherwise eligible to purchase
Institutional Class shares. Share purchases may be made Monday through Friday,
except on certain holidays. The net asset value of each Acquiring Fund is
calculated as of the close of regular trading (normally 4:00 p.m. Eastern Time)
on the New York Stock Exchange. The following minimum investments apply to
Institutional Class shares of the Acquiring Funds unless they are waived:

<S> <C>

To open an account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100,000*

To add to an account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A

Minimum account balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250,000*
</TABLE>

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

* The minimum initial investment required to open an account is $100,000.
Within six months, a registered Institutional Class shareholder must reach and
maintain an aggregate balance of $250,000. Both the minimum initial investment
and aggregate balance requirements are being waived for all Marketvest Fund
shareholders in the Reorganizations. However, additional purchases of
Institutional Class shares may be made only if a shareholder is otherwise
eligible to purchase Institutional Class shares.

Shares of the Acquired Funds are sold on a continuous basis at net asset
value plus any applicable sales charge. The maximum sales charge is 4.75% for
the Marketvest Equity Fund; 3.50% for the Marketvest Short-Term Bond Fund,
Marketvest Intermediate U.S. Government Bond Fund and Marketvest Pennsylvania
Intermediate Municipal Bond Fund; and 1.50% for the Marketvest International
Equity Fund. Purchases may be made Monday through Friday, except on certain
holidays. The net asset value of each Acquired Fund is calculated as of the
close of regular trading (normally 4:00 p.m., Eastern Time) on the New York
Stock Exchange. The following minimum investments apply to purchases of shares
of the Acquired Funds unless they are waived:

To open an account . . . . . . . . . . . . . . . . . . . $1,000*

To add to an account . . . . . . . . . . . . . . . . . . 50

Minimum account balance . . . . . . . . . . . . . . . . 1,000

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

* The minimum investment to open an account for the Marketvest
International Equity Fund is $10,000.

Participants in the Acquired Funds' systematic investment program may
direct the deduction of the purchase price for shares of any Acquired Fund from
an eligible deposit account. If the Reorganization of any such Acquired Fund is
approved and consummated as set forth herein, all amounts so deducted will be
automatically invested in the corresponding Acquiring Fund.

Exchanges

All or a portion of shares of any of the Acquiring Funds may be exchanged
on any business day at their net asset value for shares of the same class of one
or more of the other Acquiring Funds or any other ARK Funds portfolio.
Shares of the Acquired Funds may be

exchanged at their net asset value plus any sales charge differential for the
shares of any of the other Acquired Funds.

Dividends and Distributions

ARK Short-Term Bond Portfolio, ARK U.S. Government Bond Portfolio and ARK
Pennsylvania Tax-Free Portfolio pay dividends from net investment income
monthly. ARK Value Equity Portfolio pays dividends from net investment income
quarterly. ARK International Equity Selection Portfolio pays dividends from net
investment income annually. Commencing March 1, 1998, income dividends on all
Acquiring Funds will be declared daily and paid monthly, quarterly or annually,
as described above. Each Acquiring Fund distributes net realized capital gains,
if any, at least annually. Holders of shares of the Acquiring Funds may elect to
have their dividends and distributions automatically reinvested in additional
shares at the net asset value next determined after payment, to receive their
dividends and distributions in cash, or to receive a combination of additional
shares and cash. If a shareholder fails to select an option, all dividends and
distributions are reinvested in additional shares.

Marketvest Short-Term Bond Fund, Marketvest Intermediate U.S. Government
Bond Fund, and Marketvest Pennsylvania Intermediate Municipal Bond Fund declare
dividends daily and pay dividends from net investment income monthly. Marketvest
Equity Fund declares and pays dividends from net investment income monthly.
Marketvest International Equity Fund declares and pays dividends from net
investment income annually. Each Acquired Fund distributes net realized capital
gains, if any, at least annually. Dividends and distributions are automatically
reinvested in additional shares on the payment dates at the ex-dividend date net
asset value without a sales charge, unless cash payments are requested in
writing.

Redemption Procedures

The shares of the Acquiring Funds and the Acquired Funds are redeemable on
any business day at a price equal to the net asset value of the shares the next
time it is calculated after receipt of a redemption request in good order.

VOTING INFORMATION. This Prospectus/Proxy Statement is being furnished in
connection with the solicitation of proxies by the Board of Directors of
Marketvest Funds, Inc. and the Board of Trustees of Marketvest Funds in
connection with the Joint Special Meeting of Shareholders to be held at
Federated Investors, 5800 Corporate Drive, Pittsburgh, Pennsylvania, on March 4,
1998, at 10 o'clock a.m., Eastern Time, (such meeting and any adjournment
thereof hereinafter referred to as the "Meeting"). Only shareholders of record
at the close of business on February 4, 1998 will be entitled to notice of and
to vote at the Meeting. Each share or fraction thereof is entitled to one vote
or fraction thereof. Shares of each Acquired Fund will be counted separately.
Shares represented by a properly executed proxy will be voted in accordance with
the instructions thereon, or if no instruction is made, the persons named as
proxies will vote in favor of each proposal set forth in the Notice of Meeting.
Proxies may be revoked at any time before they are exercised by submitting a
written notice of revocation or a subsequently executed proxy or by attending
the Meeting and voting in person. For additional information, including a

description of the shareholder vote required for approval of the Reorganization
Agreement and related transactions contemplated thereby, see "Information
Relating to Voting Matters."

RISK FACTORS

The following discussion summarizes some of the more significant
similarities and differences in the investment objectives, policies, practices
and risk factors of the Acquired Funds and the Acquiring Funds and is qualified
in its entirety by the prospectuses and statements of additional information of
the Acquired Funds and the Acquiring Funds accompanying this Prospectus/Proxy
Statement, which are incorporated herein by reference.

INVESTMENT OBJECTIVES AND POLICIES. The investment objective and policies
of the Marketvest Short-Term Bond Fund and ARK Short-Term Bond Portfolio, of the
Marketvest Intermediate U.S. Government Bond Fund and ARK U.S. Government Bond
Portfolio, of the Marketvest Equity Fund and ARK Value Equity Portfolio, or of
the Marketvest International Equity Fund and ARK International Equity Selection
Portfolio are substantially similar. However, the ARK Short-Term Bond Portfolio
and ARK U.S. Government Bond Portfolio may each invest up to 5% of total assets
in lower-quality debt securities; the corresponding Marketvest Funds do not have
a similar provision in their investment polices. The investment objective and
policies of the Marketvest Pennsylvania Intermediate Municipal Bond Fund are
similar to those of the ARK Pennsylvania Tax-Free Portfolio. There are, however,
certain material differences.

Marketvest Pennsylvania Intermediate Municipal Bond Fund and ARK
Pennsylvania Tax-Free Portfolio. The investment objective of each of the
Marketvest Pennsylvania Intermediate Municipal Bond Fund and the ARK
Pennsylvania Tax-Free Portfolio is to provide current income which is exempt
from federal regular income tax and the state income taxes imposed by the
Commonwealth of Pennsylvania. Each fund pursues its investment objective by
investing primarily in Pennsylvania municipal securities. Under normal market
conditions, the Marketvest Pennsylvania Intermediate Municipal Bond Fund and the
ARK Pennsylvania Tax-Free Portfolio invest at least 80% and 65%, respectively,
of their net assets in Pennsylvania municipal securities. In addition, the
Marketvest Pennsylvania Intermediate Municipal Bond Fund invests its assets so
that, under normal circumstances, at least 65% of the value of its total assets
will be invested in securities of Pennsylvania issuers. Up to 20% of each fund
may generate income that is subject to the federal income tax, including the
alternative minimum tax.

See the Combined Prospectus of the Marketvest Funds and the Prospectus of
ARK Funds, which are incorporated herein by reference, for a further description
of the similarities and differences between the investment objectives and
policies of the Acquired Funds and the Acquiring Funds.

INVESTMENT PRACTICES AND RISKS. This section describes certain practices
and risks that are generally common to a number of the Acquired Funds and
Acquiring Funds.

Fixed-Income Securities. The market value of fixed-income securities will
change in response to interest rate changes and other factors. During periods of
falling interest rates, the value of outstanding fixed-income securities
generally rises. Conversely, during periods of rising interest rates, the value
of such securities generally declines. Moreover, while securities with longer
maturities tend to produce higher yields, the prices of longer maturity
securities are also subject to greater market fluctuations as a result of
changes in interest rates. Changes by recognized agencies in the credit rating
of any fixed-income security and in the ability of an issuer to make payments of
interest and principal also affect the value of these investments. Changes in
the value of portfolio securities will not necessarily affect cash income
derived from those securities but will affect the net asset value of the fund's
shares. Each of the Acquired Funds and the Acquiring Funds may invest in
fixed-income securities consistent with its investment objective and policies.

Bonds rated Baa by Moody's or BBB by Standard & Poors, or with equivalent
ratings by other nationally recognized statistical rating organizations
("NRSROs"), may have speculative characteristics, and changes in economic
conditions or other circumstances are more likely to lead to a weakened capacity
to make principal and interest payments than is the case with higher grade
bonds. Debt securities rated lower than Baa by Moody's or BBB by Standard &
Poors, or with equivalent ratings by other NRSROs, (sometimes referred to as
"junk bonds") have poor protection against default in payment of principal and
interest. These securities are often considered to be speculative and involve
greater risk of loss or price changes due to changes in the issuer's capacity to
pay. Market prices of lower-rated debt securities may fluctuate more often than
those of higher-rated securities, and may decline significantly in periods of
general economic difficulty which may follow rising interest rates. Unrated
securities are not necessarily of lower quality than rated securities, but they
may not be attractive to as many buyers. The Marketvest International Equity
Fund and the corresponding Acquiring Fund may invest up to 35% of their total
assets in lower-quality debt securities. The ARK Short-Term Bond Portfolio and
the ARK U.S. Government Bond Portfolio, each an Acquiring Fund, may invest up to
5% in such securities.

Municipal Obligations. The Marketvest Pennsylvania Intermediate Bond Fund
and the ARK Pennsylvania Tax-Free Portfolio invest primarily in municipal
obligations. The other funds may invest in such obligations to the extent
permitted by their investment policies. Municipal securities are issued to raise
money for various public purposes, including general purpose financing for state
and local governments as well as financing for specific projects or public
facilities. Municipal securities may be backed by the full taxing power of a
municipality or by the revenues from a specific project or by the credit of a
private organization. Some municipal securities are insured by private insurance
companies, while others may be supported by letters of credit furnished by
domestic or foreign banks. Yields on municipal obligations depend on a variety
of factors, including the general conditions of the money markets and of the
municipal bond and municipal note markets, the size of a particular offering,
the maturity of the obligation, and the rating of the issue. Municipal
obligations with longer maturities tend to produce higher yields and generally
are subject to potentially greater price fluctuations than obligations with
shorter maturities.

Equity Securities Generally. Investments in equity securities are subject
to market risks which may cause their prices to fluctuate. Accordingly, the
Acquired Funds and the Acquiring Funds investing in equity securities may be
more suitable for long-term investors who can bear the risk of short-term
fluctuations. Changes in the value of portfolio securities will not necessarily
affect income derived from those securities but will affect the net asset value
of the fund's shares. Equity securities held by a fund may not perform well
during certain market cycles and may not respond to general market movements to
the same extent as other securities.

Foreign Securities. Each of the Acquired Funds and Acquiring Funds may
invest in foreign securities to the extent permitted by their investment
policies. The Marketvest International Equity Fund and the corresponding
Acquiring Fund invest primarily in the securities of investment companies
investing in foreign securities. Investing in the securities of foreign issuers
involves special risks not typically associated with investing in U.S.
companies. These risks include differences in accounting, auditing and financial
reporting standards, generally higher commission rates on foreign portfolio
transactions, the possibility of expropriation or confiscatory taxation, adverse
changes in investment or exchange control regulations, political instability
which could affect U.S. investment in foreign countries, and potential
restrictions on the flow of international capital and currencies. Foreign
issuers may also be subject to less government regulation than U.S. companies.
Moreover, the dividends and interest payable on foreign securities may be
subject to foreign withholding taxes, thus reducing the net amount of income
available for distribution to a fund's shareholders. Further, foreign securities
often trade with less frequency and volume than domestic securities and,
therefore, may exhibit greater price volatility. Investing in emerging markets
involves special considerations (in addition to those relating to foreign
investment generally) which include, among others, greater political
uncertainty, an economy's dependence on revenues from particular commodities or
on international aid or development assistance, currency transfer restrictions,
a limited number of potential buyers for securities, and delays and disruptions
in securities settlement procedures. Changes in foreign exchange rates will
affect, favorably or unfavorably, the value of those securities which are
denominated or quoted in currencies other than the U.S. dollar.

Non-Diversification. Investing in the Marketvest Pennsylvania Intermediate
Bond Fund and the ARK Pennsylvania Tax-Free Portfolio, which are non-diversified
funds, may entail greater risk than investing in a diversified fund because the
concentration in securities of relatively-fewer issuers could result in greater
fluctuation in the total market value of the fund's holdings. Any economic,
political or regulatory developments affecting the value of the securities the
fund holds could have a greater impact on the total value of its holdings than
would be the case if the securities were diversified among more issuers.

Pennsylvania's economy is based on a mixture of manufacturing, mining,
trade, medical and health services, education and financial institutions.
Pennsylvania's continued dependence on manufacturing, mining, steel and coal,
however, has made the state vulnerable to cyclical fluctuations, foreign imports
and environmental concerns. Pennsylvania's population and per capita income have
been increasing slightly over the past five years, and its employment and
unemployment rates have generally not been significantly different over the past
five years from

that of the United States. Pennsylvania is engaged in certain litigation matters
which are described in the Statement of Additional Information of the Acquiring
Funds accompanying this Prospectus/Proxy Statement and incorporated herein by
reference.

Delayed Delivery or Purchases on a When-Issued Basis. Delayed delivery or
purchases of securities on a when-issued basis are transactions where the price
of the securities is fixed at the time of commitment and the delivery and
payment ordinarily takes place beyond customary settlement time. The interest
rate to be realized on these securities is fixed as of the purchase date and no
interest accrues to the buyer before settlement. The securities are subject to
market fluctuation due to changes in market interest rates; the securities are
also subject to fluctuation in value pending settlement based upon public
perception of the creditworthiness of the issuer of these securities. Liquid
assets sufficient to make payments for the securities to be purchased are
segregated at the trade date. Each of the Acquired Funds and Acquiring Funds may
purchase securities on a delayed delivery or when-issued basis and may dispose
of the when-issued commitment prior to settlement which may result in short-term
profits or losses.

Repurchase Agreements. A repurchase agreement is an agreement where a
person buys a security and simultaneously commits to sell the security to the
seller at an agreed-upon price (including principal and interest) on an agreed
upon date within a number of days from the date of purchase. A fund which buys
the security bears a risk of loss in the event the other party defaults on its
obligations and the fund is delayed or prevented from exercising its right to
dispose of the collateral securities or if the fund realizes a loss on the sale
of the collateral securities. Each Acquired Fund and Acquiring Fund may enter
into repurchase agreements. Each Acquired Fund and Acquiring Fund will only
enter into repurchase agreements with banks and other recognized financial
institutions which are deemed by its investment adviser to be creditworthy
pursuant to guidelines established by its Board of Directors/Trustees.

Reverse Repurchase Agreements. Each of the Acquired Funds and the Acquiring
Funds may enter into reverse repurchase agreements. Reverse repurchase
agreements involve the sale of securities held by a fund and the agreement by
the fund to repurchase the securities at an agreed-upon price, date and interest
payment. When a fund enters into reverse repurchase transactions, it will
maintain appropriate liquid assets in a segregated custodial account to cover
the value of the securities subject to the agreement. The segregation of assets
could impair the fund's ability to meet its current obligations or impede
investment management if a large portion of the fund's assets are involved.
Reverse repurchase agreements are considered to be a form of borrowing.

Securities Lending. Consistent with applicable regulatory requirements and
in order to generate additional income, each of the Acquired Funds and the ARK
Short-Term Bond Portfolio and ARK U.S. Government Bond Portfolio may lend
portfolio securities to broker-dealers and other institutional borrowers. It is
the current view of the SEC that a fund may engage in loan transactions only
under the following conditions: (1) the fund must receive 100% collateral in the
form of cash or cash equivalents (e.g., U.S. Treasury bills, notes or other
liquid securities) from the borrower; (2) the borrower must increase the
collateral whenever the market value of the securities loaned (determined on a
daily basis) rises above the value of the collateral; (3) after giving notice,
the fund must be able to terminate the loan at any time; (4) the fund must
receive reasonable interest on the loan or a flat fee from the borrower, as well
as amounts equivalent to any dividends, interest, or other distributions on the
securities loaned and to any increase in market value; (5) the fund may pay only
reasonable custodian fees in connection with the loan; and (6) the Board of
Directors/Trustees must be able to vote proxies on the securities loaned, either
by terminating the loan or by entering into an alternative arrangement with the
borrower. Each of the funds will not make loans where the value of securities
loaned by it would exceed 33 1/3% of its total assets. In the event of the
bankruptcy of the other party to a securities loan, a fund could experience
delays in recovering either the securities loaned or cash. To the extent that,
in the meantime, the value of the securities loaned has increased or the value
of the securities purchased has decreased, the fund could experience a loss.

Options. The Acquiring Funds and the Marketvest Equity Fund and Marketvest
International Equity Fund may engage in options transactions from time to time.
A put option gives a fund, in return for a premium, the right (but not the
obligation) to sell the underlying security to the writer or seller of the
option at a specified price during the term of the option. A call option gives a
fund, in return for a premium, the right (but not the obligation) to buy the
underlying securities from the seller at a specified price during the term of
the option. The Marketvest Equity Fund and Marketvest International Equity Fund
may write covered put and call options on portfolio securities to attempt to
hedge all or a portion of their portfolio investments or to attempt to increase
their current income. Each of these funds may only write call options either on
securities held in its portfolio or on securities which it has the right to
obtain without payment of further consideration (or has segregated cash in the
amount of any additional consideration). In the case of put options, the
eligible Marketvest Funds will segregate cash, U.S. Treasury obligations or
other liquid securities with a value equal to or greater than the exercise price
of the underlying securities. In contrast, under normal conditions, no Acquiring
Fund will hedge more than 25% of its total assets by engaging in options
transactions and futures (see "Futures and Options on Futures" below). In
addition, each Acquiring Fund will not write puts where the value of the
underlying investment exceeds 25% (including the value of futures held by the
fund) of its total assets and will not buy calls with a value exceeding 5% of
its total assets. There are risks associated with options transactions,
including that the success of a hedging strategy will depend on the ability of
the investment adviser to predict movements in the prices of individual
securities, market fluctuations and movements in interest rates; there may be an
imperfect correlation between the movement in

prices of securities held by a fund and price movements of the related options;
and there may not be a liquid secondary market for options.

Futures and Options on Futures. Futures contracts provide for the future
sale by one party and purchase by another party of a specified amount of a
specified security at a specified future time and at a specified price. An
option on a futures contract gives the purchaser the right, in exchange for a
premium, to assume a position in a futures contract at a specified exercise
price during the term of the option. Each of the Acquiring Funds and the
Marketvest Equity Fund and Marketvest International Equity Fund may enter into
futures contracts and options on futures contracts, provided that, with respect
to the Marketvest Funds' positions in futures contracts and related options
contracts that are not for "bona fide hedging purposes", the sum of its initial
margin deposits on open futures contracts plus the amount paid for premiums for
unexpired options on futures contracts does not exceed 5% of the liquidation
value of its net assets after taking into account unrealized profits and
unrealized losses on any such contracts and excluding the value of any options
that are "in-the-money" at the time of purchase. In every other instance, each
of the Acquiring Funds and the Marketvest Equity Fund and Marketvest
International Equity Fund use futures contracts and related options, within
their respective investment limitations noted in "Options" above, only for bona
fide hedging purposes, i.e., to offset unfavorable changes in the value of
securities otherwise held or expected to be acquired for investment purposes.
There are risks associated with these hedging activities. See "Options" above.

Other Considerations. Certain other investments and investment techniques
permitted for the Acquired Funds and the Acquiring Funds pose special risks in
addition to those described above. See the Combined Prospectus and Combined
Statement of Additional Information of the Marketvest Funds and the Prospectus
and Statement of Additional Information of ARK Funds for more information. By
itself no fund constitutes a balanced investment plan. There is no assurance
that a fund will achieve its investment objective. Investors should review the
investment objective, policies and practices of a fund and carefully consider
their ability to assume the risks involved.

INVESTMENT LIMITATIONS. None of the Acquiring Funds or the Acquired Funds
may change their fundamental investment limitations without the affirmative vote
of the holders of a majority of the outstanding voting securities (as defined in
the 1940 Act) of such Acquiring Fund or Acquired Fund. However, investment
limitations that are not fundamental policies may be changed by the appropriate
Board of Directors/Trustees without shareholder approval. The investment
limitations of the Acquired Funds and the corresponding Acquiring Funds are
similar, but not identical.

Concentration of Investments. As a fundamental policy, none of the
Acquiring Funds or the Acquired Funds may purchase any securities which would
cause more than 25% of the total assets of such fund to be invested in the
securities of one or more issuers conducting their principal business activities
in the same industry. This limitation does not apply to investments in
obligations issued or guaranteed by the U.S. Government or its agencies and
instrumentalities. The Marketvest International Equity Fund may, however, invest
in investment companies that

concentrate their assets within one industry. In addition, the Marketvest
Pennsylvania Intermediate Municipal Bond Fund will not purchase securities if,
as a result of such purchase, 25% or more of the value of its total assets would
be invested in any one industry or in industrial development bonds or other
securities, the interest upon which is paid from revenues of similar types of
projects. However, the funds may invest as temporary investments more than 25%
of the value of its assets in cash or cash items.

Loans. As a fundamental policy, none of the Acquiring Funds or Acquired
Funds may make loans, except that a fund may (a) purchase or hold debt
instruments; (b) enter into repurchase agreements; and (c) engage in securities
lending, in each case where permitted by its investment objective, policies and
limitations.

Diversification of Investments. As a fundamental policy, none of the
Acquiring Funds (other than the ARK Pennsylvania Tax-Free Portfolio) or the
Acquired Funds (other than the Marketvest Pennsylvania Intermediate Municipal
Bond Fund) may acquire more than 10% of the voting securities of any one issuer,
or invest more than 5% of its total assets in the securities of an issuer;
provided that the foregoing limitation does not apply to 25% of the total assets
of any of the Acquired Funds or the Acquiring Funds. For purposes of the
foregoing, with respect to the Acquiring Funds and the Acquired Funds,
securities issued or guaranteed by the United States, its agencies or
instrumentalities, are excluded and with respect to the Acquiring Funds and the
Marketvest International Equity Fund, securities of other investment companies
are excluded.

Issuing Senior Securities or Borrowing Money. As a fundamental policy, none
of the Acquiring Funds or the Acquired Funds may borrow or issue senior
securities, except that (a) an Acquiring Fund may borrow money from banks and
may enter into reverse repurchase agreements and (b) an Acquired Fund may borrow
money in an amount not to exceed 33 1/3% of its total assets as a temporary
measure for extraordinary or emergency purposes (which may include the need to
meet shareholder redemption requests). None of the Acquiring Funds or the
Acquired Funds will purchase any securities for its portfolio at any time at
which its borrowings equal or exceed 5% of its total assets. None of the
Acquiring Funds or the Acquired Funds will borrow for investment purposes.

Pledging Assets. As a fundamental policy, none of the Acquired Funds may
pledge, mortgage, or hypothecate assets except to secure temporary borrowings
permitted in the preceding paragraph. For purposes of this limitation, with
respect to the Acquired Funds, the following will not be deemed to be pledges
(where applicable): margin deposits for the purchase and sale of financial
futures contracts and related options and segregation or collateral arrangements
made in connection with options activities or the purchase of securities on a
when-issued basis. The Acquiring Funds do not have a fundamental policy
regarding the pledging of assets.

Investing in Real Estate and Commodities. As a fundamental policy, none of
the Acquiring Funds or the Acquired Funds may purchase or sell real estate,
including real estate limited partnership interests (except that the Marketvest
International Equity Fund may purchase such limited partnership interests),
commodities and commodities contracts, but excluding

interests in a pool of securities that are secured by interests in real estate.
Each of the Acquiring Funds and the Acquired Funds may, however, subject to
compliance with other investment policies, invest in companies which invest in
real estate. Each of the Acquiring Funds and the Marketvest Equity Fund and
Marketvest International Equity Fund may invest in futures contracts and options
thereon to the extent permitted by its investment objective, policies and
limitations.

Selling Short or Buying on Margin. As a non-fundamental policy, none of the
Acquiring Funds or the Acquired Funds may make short sales of securities,
maintain a short position or purchase securities on margin, except that the
Acquiring Funds may sell securities short if they own or have the right to
obtain securities equivalent in kind and amount to the securities sold short.
The Acquired Funds may obtain short-term credits as necessary for the clearance
of purchases and sales of portfolio securities and, with respect to the
Marketvest Equity Fund and Marketvest International Equity Fund, the deposit of
initial and variation margins in futures contracts are not considered purchasing
securities on margin. For both the Acquiring Funds and the Acquired Funds,
transactions in futures contracts and options are not deemed to constitute
selling securities short.

Underwriting. As a fundamental policy, none of the Acquiring Funds or the
Acquired Funds may act as an underwriter of securities of other issuers, except
as it may deemed an underwriter under federal securities laws in selling a
security held by it.

Investing in Securities of Other Investment Companies. As a non-fundamental
policy, none of the Acquiring Funds or the Acquired Funds may purchase
securities of other investment companies except as permitted by the 1940 Act and
the rules and regulations thereunder. The Marketvest International Equity Fund
and ARK International Equity Selection Portfolio invest primarily in other
mutual funds. See the Combined Prospectus of the Marketvest Funds and the
Prospectus of ARK Funds, which are incorporated herein by reference, for a
further description of the investment practices and risks of these funds.

Investment companies typically incur fees that are separate from those fees
incurred directly by the Acquiring Fund or the Acquired Fund. An Acquiring
Fund's or an Acquired Fund's purchase of such investment company securities
results in the layering of expenses, such that shareholders would indirectly
bear a proportionate share of the operating expenses of such investment
companies, including advisory fees.

Puts, Calls or Other Options. The Acquiring Funds and the Marketvest Equity
Fund and Marketvest International Equity Fund may write or purchase puts, calls
or other options or combinations thereof subject to compliance with other
investment policies. The Marketvest Equity and International Equity Funds may
write covered put and call options on portfolio securities held in its portfolio
or on securities which it has the right to obtain without payment of further
consideration (or has segregated cash in the amount of any additional
consideration). In the case of put options, the eligible Marketvest Funds will
segregate cash, U.S. Treasury obligations or other liquid securities with a
value equal to or greater than the exercise price of the underlying securities.
In contrast, under normal conditions no Acquiring Fund will hedge more

than 25% of its total assets by engaging in options transactions and futures. In
addition, each Acquiring Fund will not write puts where the value of the
underlying investment exceeds 25% (including the value of futures held by the
fund) of its total assets and will not buy calls with a value exceeding 5% of
its total assets. See "Risk Factors - Options" and "- Futures and Options on
Futures".

Restricted and Illiquid Securities. As a non-fundamental policy, none of
the Acquiring Funds or Acquired Funds will invest in illiquid securities in an
amount exceeding, in the aggregate, 15% of its net assets. Repurchase agreements
providing for settlement in more than seven days after notice, over-the-counter
options, non-negotiable time deposits with maturities over seven days, certain
holdings of shares of other investment companies owned by the Marketvest
International Equity Fund or the ARK International Equity Portfolio, and certain
restricted securities not determined by the board to be liquid are also be
counted toward such percentage limitation.

The foregoing limitation does not apply to restricted securities held by
any of the Acquiring Funds or the Acquired Funds if it is determined by or under
procedures established by the applicable Board of Trustees/Directors that, based
on trading markets for the specific restricted security in question, such
security is not illiquid.

The absence of a trading market for restricted or illiquid securities can
make it difficult to ascertain a market value for these securities. Disposing of
illiquid securities may involve time-consuming negotiation and legal expense,
and it may be difficult or impossible to sell illiquid securities promptly at an
acceptable price.

OTHER INFORMATION. ARK Funds, Marketvest Funds, Inc. and Marketvest Funds
are registered as open-end management investment companies under the 1940 Act.
Currently ARK Funds offers eighteen investment portfolios, Marketvest Funds,
Inc. offers three investment portfolios and Marketvest Funds offers two
investment portfolios. ARK Short-Term Bond Portfolio, ARK U.S. Government Bond
Portfolio, ARK Value Equity and ARK International Equity Selection Portfolio
will be offered by ARK Funds after their Reorganizations with the corresponding
Acquired Funds.

Marketvest Funds, Inc. is organized as a Maryland corporation and is
subject to the provisions of its charter and bylaws. ARK Funds and Marketvest
Funds are organized as Massachusetts business trusts and are subject to the
provisions of their respective declarations of trust and bylaws.

Shares of ARK Funds, Marketvest Funds, Inc. and Marketvest Funds: (i) are
entitled to one vote for each full share held and a proportionate fractional
vote for each fractional share held; (ii) will vote in the aggregate by fund and
not by class or series except as otherwise expressly required by law or when
class voting is permitted by the respective Board of Directors/Trustees; and
(iii) are entitled to participate equally in the dividends and investment income
and in the net distributable assets of the respective class and series of such
fund on liquidation. In addition, shares of the Acquiring Funds and Acquired
Funds have no preemptive

rights and only such conversion and exchange rights as the respective boards of
trustees/directors may grant in their discretion. When issued for payment as
described in their prospectuses, Acquiring Fund shares and Acquired Fund shares
are fully paid and non-assessable by such entities except, in the case of ARK
Funds and Marketvest Funds shares, as required under Massachusetts law.1 Neither
Marketvest Funds, Inc., Marketvest Funds nor ARK Funds is required under
applicable law to hold annual shareholder meetings and each intends to do so
only if required by the 1940 Act. Shareholders have the right to remove trustees
or directors. To the extent required by law, Marketvest Funds, Inc., Marketvest
Funds and ARK Funds will assist in shareholder communications in such matters.

The foregoing is only a summary. Shareholders may obtain copies of the
charter and bylaws of Marketvest Funds, Inc. and the declaration of trust and
bylaws of ARK Funds and Marketvest Funds upon written request at the addresses
shown on the cover page of this Prospectus/Proxy Statement.

INFORMATION RELATING TO THE PROPOSED REORGANIZATIONS

Marketvest Funds, Inc., Marketvest Funds and ARK Funds have entered into an
Agreement and Plan of Reorganization (the "Reorganization Agreement") which
provides that each Acquired Fund is to be acquired by an Acquiring Fund.
Significant provisions of the Reorganization Agreement are summarized below;
however, this summary is qualified in its entirety by reference to the
Reorganization Agreement, a copy of which is attached as Appendix A to this
Prospectus/Proxy Statement.

DESCRIPTION OF THE REORGANIZATION AGREEMENT. The Reorganization Agreement
provides that at the Closing Date (as defined in the Reorganization Agreement)
of the Reorganization of each Acquired Fund, substantially all of the assets and
stated liabilities of such Acquired Fund will be acquired by the Acquiring Fund
identified in the table below opposite its name and the shareholders of such
Acquired Fund shall receive Institutional Class shares of the Acquiring Fund
identified below opposite the name of such Acquired Fund:

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

(1)Under Massachusetts law, shareholders of a business trust could, under
certain circumstances, be held personally liable for the obligations of the
business trust. However, each of the declarations of trust of ARK Funds and
Marketvest Funds disclaims shareholder liability for acts or obligations of
the fund and requires that notice of such disclaimer be given in each
agreement, obligation or instrument entered into or executed by the fund or
its trustees. Each of the declarations of trust provide for indemnification
out of the series property for all losses and expenses of any shareholder
held personally liable for the obligations of the series. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
considered remote since it is limited to circumstances in which a disclaimer
is inoperative and the series or the trust itself would be unable to meet its
obligations.

<S> <C>

Acquired Funds Acquiring Funds
- -------------- ----------------
Marketvest Short-Term Bond Fund ARK Short-Term Bond Portfolio

Marketvest Intermediate U.S. Government ARK U.S. Government Bond Portfolio
Bond Fund

Marketvest Pennsylvania Intermediate ARK Pennsylvania Tax-Free Portfolio
Municipal Bond Fund

Marketvest Equity Fund ARK Value Equity Portfolio

Marketvest International Equity Fund ARK International Equity Selection Portfolio
</TABLE>

In exchange for the transfer of the assets of each Acquired Fund and the
assumption of the stated liabilities of each Acquired Fund, ARK Funds will issue
to each Acquired Fund, at the Closing Date of the Reorganization of such
Acquired Fund, a number of full and fractional Institutional Class shares of the
applicable Acquiring Fund. The number of shares of the Acquiring Fund so issued
will have an aggregate net asset value equal to the value of the assets of the
Acquired Fund. In determining the value of the assets of an Acquired Fund, each
security will be priced in accordance with the policies and procedures of ARK
Funds as described in its then current Prospectus and Statement of Additional
Information and in accordance with applicable provisions of the 1940 Act.

The Reorganization Agreement provides that each Acquired Fund will declare
and pay a dividend on or prior to the Closing Date of the Reorganization of such
Acquired Fund in order to distribute to its shareholders all of its investment
company taxable income and net tax-exempt interest income earned, and all of its
net capital gains realized, up to and including the Closing Date of the
Reorganization of such Acquired Fund.

At the Closing Date each Acquired Fund will liquidate and distribute pro
rata to the record holders of its shares at such Closing Date the Institutional
Class shares of the Acquiring Fund identified in the table above to be received
by the holders of such Acquired Fund. All of the issued and outstanding shares
of each Acquired Fund will be canceled on the books of Marketvest Funds, Inc. or
Marketvest Funds, as the case may be, at the Closing Date of the Reorganization
of that Acquired Fund and will thereafter represent only the right to receive
the Institutional Class shares of the Acquiring Fund identified in the table
above, and the Acquired Fund's transfer book will be closed permanently. As soon
as practicable after the Reorganizations, Marketvest Funds, Inc. and Marketvest
Funds will make all filings and take all other steps as are necessary and proper
to effect their complete dissolution, and will file an application pursuant to
Section 8(f) of the 1940 Act for an order declaring that they have ceased to be
investment companies. After the Closing Date of the Reorganization of an
Acquired Fund, Marketvest Funds, Inc. or Marketvest Funds will not conduct any
business on behalf of that Acquired Fund, and after all of the Reorganizations
have been consummated, Marketvest Funds,

Inc. and Marketvest Funds will not conduct any business, except in connection
with the liquidation of the Acquired Funds, the dissolution of the Marketvest
Funds, Inc. and the termination of the Marketvest Funds, and the deregistration
of Marketvest Funds, Inc. and Marketvest Funds.

The expenses of ARK Funds, Marketvest Funds, Inc. and Marketvest Funds in
connection with the Reorganizations will be borne by First Maryland Bancorp or
its subsidiaries.

The consummation of the Reorganization with respect to each Acquired Fund
is subject to certain conditions. The Reorganization of each Acquired Fund will
be contingent upon the approval of the Reorganization Agreement by the majority
of the shareholders (as described below) of such Acquired Fund. The
Reorganizations are also conditioned upon the issuance of an order by the SEC
permitting the transactions contemplated by the Reorganization Agreement. The
order was requested as a result of the ownership of Dauphin Deposit and First
National Bank of Maryland or their affiliates of 5% or more of the shares of the
Acquired Funds and Acquiring Funds, respectively. In addition, the
Reorganization of each Acquired Fund will be contingent upon: (a) the receipt of
certain legal opinions described in the Reorganization Agreement (see Appendix A
attached hereto), (b) the continuing accuracy of the representations and
warranties in the Reorganization Agreement, and (c) the performance in all
material respects of the agreements in the Reorganization Agreement. If these
conditions are satisfied, the Closing Date of the Reorganization of the
Marketvest Short-Term Bond Fund, Marketvest Intermediate U.S. Government Bond
Fund and Marketvest Pennsylvania Intermediate Municipal Bond Fund is expected to
be March 6, 1998. The Closing Date of the Reorganizations of the Marketvest
Equity Fund and Marketvest International Equity Fund, if these conditions are
met, is expected to be March 13, 1998.

Marketvest Funds, Inc., Marketvest Funds and ARK Funds may mutually agree
to terminate the Reorganization Agreement with respect to a Reorganization at or
prior to the Closing Date of such Reorganization. In addition, either Marketvest
Funds, Inc. or Marketvest Funds, on the one hand, or ARK Funds, on the other
hand, may waive the other party's breach of a provision or failure to satisfy a
condition of the Reorganization Agreement.

At a meeting held on November 11, 1997, the Board of Directors of
Marketvest Funds, Inc. and the Board of Trustees of Marketvest Funds unanimously
approved the Reorganization of each Acquired Fund based upon the belief that
each such Reorganization would be in the best interest of each Acquired Fund and
its shareholders. In approving the Reorganization Agreement, the boards
considered the following factors, among others: (a) the acquisition of Dauphin
Deposit Corporation by First Maryland Bancorp, (b) the fact that the investment
advisers of the Acquired Funds and the Acquiring Funds are under common control,
(c) the fact that shareholder interests would not be diluted in the proposed
Reorganizations, (d) the status of each Reorganization as a tax-free
reorganization, (e) the similarity of the investment objective and policies of
each Acquired Fund and the corresponding Acquiring Fund, (f) the improved
marketing opportunities that could result from each Reorganization, and (g) the
opportunity for

- 25 -
the shareholders of each Acquired Fund to participate in a larger family of
mutual funds through the exchange privilege offered by ARK Funds.

After consideration of the foregoing factors and other relevant
information, the Board of Directors of Marketvest Funds, Inc. and the Board of
Trustees of Marketvest Funds unanimously approved the Reorganization Agreement
and directed that it be submitted to the shareholders of each Acquired Fund for
approval. THE BOARDS RECOMMEND THAT SHAREHOLDERS VOTE IN FAVOR OF THE
REORGANIZATION AGREEMENT.

At a meeting held on November 7, 1997, the Board of Trustees of ARK Funds
also unanimously approved the Reorganization Agreement, finding that each of the
Reorganizations was in the best interests of the Acquiring Fund and the
shareholders of the Acquiring Fund and that the interests of the existing
shareholders of the ARK Funds currently in operation would not be diluted by the
consummation of the Reorganizations.

CAPITALIZATION. Because the Marketvest Pennsylvania Intermediate Bond Fund
will be combined in the Reorganization with the ARK Pennsylvania Tax-Free
Portfolio, the total capitalization after such Reorganization is expected to be
greater than the current capitalization of the Marketvest Pennsylvania
Intermediate Bond Fund. The ARK Short-Term Bond Portfolio, ARK U.S. Government
Bond Portfolio, ARK Value Equity and ARK International Equity Selection
Portfolio will have only nominal assets before their Reorganizations with the
Marketvest Short-Term Bond Fund, Marketvest Intermediate U.S. Government Bond
Fund, Marketvest Equity Fund and Marketvest International Equity Fund,
respectively. After these Reorganizations, these Acquiring Funds will have the
same capitalizations as the corresponding Acquired Funds prior to the
Reorganizations. The following table sets forth as of October 31, 1997: (a) the
capitalization of each Acquired Fund and the Institutional Class of the
corresponding Acquiring Fund, and (b) the pro forma capitalization of the
Institutional Class of each Acquiring Fund as adjusted to give effect to the
Reorganization proposed with respect to such Acquiring Fund. If consummated, the
capitalization of each Acquired Fund and the Institutional Class of the ARK
Pennsylvania Tax-Free Portfolio is likely to be different at the Closing Date of
their Reorganization as a result of daily share purchase and redemption
activity.

Pro Forma
Marketvest Short-Term ARK Short-Term ARK Short-Term
Bond Fund Bond Portfolio(1) Bond Portfolio
--------- -------------- --------------
Total Net Assets $136,304,063 $100 $136,304,163
Shares Outstanding 13,680,653 10 13,680,663
Net Asset Value Per Share $9.96 $10 $9.96

Marketvest Intermediate Pro Forma
U.S. Government ARK U.S. Government ARK U.S. Government
Bond Fund Bond Portfolio(1) Bond Portfolio
--------- -------------- --------------
Total Net Assets $263,490,165 $100 $263,490,265
Shares Outstanding 26,693,086 10 26,693,096
Net Asset Value Per Share $9.87 $10 $9.87

Marketvest Pennsylvania Pro Forma
Intermediate ARK Pennsylvania ARK Pennsylvania
Municipal Fund Tax-Free Portfolio(2) Tax-Free Portfolio(2)
-------------- ------------------ ------------------
Total Net Assets $197,619,533 $24,438,038 $222,057,571
Shares Outstanding 19,301,401 2,370,681 21,688,288
Net Asset Value Per Share $10.24 $10.31 $10.24

Pro Forma
Marketvest ARK Value Equity ARK Value Equity
Equity Fund Portfolio(1) Portfolio(3)
----------- --------- ---------
Total Net Assets $568,417,855 $100 $568,417,955
Shares Outstanding 44,036,913 10 44,036,921
Net Asset Value Per Share $12.91 $10 $12.91

Pro Forma
Marketvest International ARK International Equity ARK International Equity
Equity Fund Selection Portfolio(1) Selection Portfolio
----------- ------------------- -------------------
Total Net Assets $34,487,010 $100 $34,487,110
Shares Outstanding 3,416,259 10 3,416,269
Net Asset Value Per Share $10.09 $10 $10.09
</TABLE>

(1)The ARK Short-Term Bond Portfolio, U.S. Government Bond Portfolio, Value
Equity Portfolio and International Equity Selection Portfolio were created for
purposes of the Reorganizations. Assets and outstanding shares shown reflect
initial seed money that will be infused prior to the Reorganizations.

(2)The information shown for the ARK Pennsylvania Tax-Free Portfolio reflects
amounts for the Institutional Class. The net assets, shares outstanding and net
asset value per share for the Retail Class of the ARK Pennsylvania Tax-Free
Portfolio is $2,335,566, 226,719 and $10.30, respectively. This information on a
pro forma basis will not change.

(3)ARK Value Equity Portfolio has entered into an Agreement and Plan of
Reorganization with the ARK Stock Portfolio. The reorganization, which is
subject to certain conditions including shareholder approval, is expected to
close in March 1998. The pro forma total net assets, shares outstanding and net
asset value per share of the ARK Value Equity Portfolio adjusted to reflect the
closing of the aforementioned reorganization would be $610,301,504, 47,282,207
and $12.91, respectively.

FEDERAL INCOME TAX CONSEQUENCES. The consummation of the Reorganization
of each Acquired Fund is conditioned upon the receipt of an opinion of Piper &
Marbury L.L.P. substantially to the effect that for federal income tax
purposes: (a) the transfer of all of the assets

of such Acquired Fund, and the assumption by the corresponding Acquiring Fund of
stated liabilities of such Acquired Fund, in exchange for Institutional Class
shares of such Acquiring Fund, and the distribution of said shares to the
shareholders of such Acquired Fund, as provided in the Reorganization Agreement,
will constitute a reorganization within the meaning of Section 368(a)(1) of the
Internal Revenue Code of 1986, as amended (the "Code"), and, with respect to
such reorganization, the Acquired Fund and the Acquiring Fund will each be
considered "a party to a reorganization" within the meaning of Section 368(b) of
the Code; (b) in accordance with Sections 361(a), 361(c)(1) and 357(a) of the
Code, no gain or loss will be recognized by such Acquired Fund as a result of
such transactions; (c) in accordance with Section 1032 of the Code, no gain or
loss will be recognized by such Acquiring Fund as a result of such transactions;
(d) in accordance with Section 354(a)(1) of the Code, no gain or loss will be
recognized by the shareholders of such Acquired Fund on the distribution to them
by such Acquired Fund of shares of any class of such Acquiring Fund in exchange
for their shares of such Acquired Fund; (e) in accordance with Section 358(a)(1)
of the Code, the aggregate basis of Acquiring Fund shares received by each
shareholder of such Acquired Fund will be the same as the aggregate basis of the
shareholder's Acquired Fund shares immediately prior to the transaction; (f) in
accordance with Section 362(b) of the Code, the basis of the assets of the
Acquired Fund in the hands of such Acquiring Fund will be the same as the basis
of such assets of the Acquired Fund in the hands of such Acquired Fund
immediately prior to the exchange; (g) in accordance with Section 1223 of the
Code, a shareholder's holding period for Acquiring Fund shares will be
determined by including the period for which the shareholder held the shares of
such Acquired Fund exchanged therefor, provided that the shareholder held such
shares of such Acquired Fund as a capital asset; and (h) in accordance with
Section 1223 of the Code, the holding period of such Acquiring Fund with respect
to the assets of such Acquired Fund will include the period for which such
assets were held by such Acquired Fund.

ARK Funds, Marketvest Funds, Inc. and Marketvest Funds have not sought a
tax ruling from the Internal Revenue Service (the "IRS"), but are acting in
reliance upon the opinion of counsel discussed above. Such opinion of counsel
will rely, as to certain factual matters, on certificates of officers of ARK
Funds, Marketvest Funds, Inc. and Marketvest Funds. That opinion is not binding
on the IRS and does not preclude the IRS from adopting a contrary position.
Shareholders should consult their own advisers concerning the potential tax
consequences to them, including state and local income taxes.

INFORMATION RELATING TO VOTING MATTERS

GENERAL INFORMATION. This Prospectus/Proxy Statement is being provided in
connection with the solicitation of proxies by the Board of Directors of
Marketvest Funds, Inc. and the Board of Trustees of Marketvest Funds in
connection with the Meeting. Solicitation of proxies will occur principally by
mail, but officers and service contractors of Marketvest Funds, Inc. and
Marketvest Funds may also solicit proxies by telephone, telegraph or personal
interview. Any shareholder giving a proxy may revoke it at any time before it is
exercised by submitting to Marketvest Funds, Inc. or Marketvest Funds, as
appropriate, a written notice of revocation or a subsequently executed proxy or
by attending the Meeting and voting in person.

Only shareholders of record at the close of business on February 4, 1998
will be entitled to vote at the Meeting. On that date, there were outstanding
and entitled to be voted: _____ shares of Marketvest Short-Term Bond Fund, _____
shares of Marketvest Intermediate U.S. Government Bond Fund, _____ shares of
Marketvest Pennsylvania Intermediate Municipal Bond Fund, _____ shares of
Marketvest Equity Fund, and _____ shares of Marketvest International Equity
Fund. Each share or fraction thereof is entitled to one vote or fraction
thereof. Shares of each Acquired Fund will be counted separately.

If the accompanying proxy is executed and returned in time for the Meeting,
the shares covered thereby will be voted in accordance with the proxy on all
matters that may properly come before the Meeting or any adjournment thereof.
For information on adjournments of the Meeting, see "Quorum" below.

SHAREHOLDER AND BOARD APPROVALS. The Reorganization Agreement (and the
transactions contemplated thereby) are being submitted for approval at the
Meeting by the shareholders with respect to each Acquired Fund in accordance
with the provisions of the charter of Marketvest Funds, Inc., the declaration of
trust of Marketvest Funds, and the requirements of the 1940 Act. With respect to
the Marketvest Pennsylvania Intermediate Municipal Bond Fund and Marketvest
International Equity Fund, the Reorganizations must be approved by the lesser of
(a) 67% of the shares of the Acquired Fund present at the Meeting, if the
holders of more than 50% of the outstanding shares of the Acquired Fund are
present in person or by proxy, or (b) more than 50% of the outstanding shares of
such Acquired Fund. With respect to the Marketvest Short-Term Bond Fund,
Marketvest Intermediate U.S. Government Bond Fund and Marketvest Equity Fund,
the Reorganizations must be approved by a majority of the outstanding shares
entitled to vote.

In tallying shareholder votes, abstentions and broker non-votes (i.e.,
proxies sent in by brokers and other nominees that cannot be voted on a proposal
because instructions have not been received from the beneficial owners) will be
counted for purposes of determining whether or not a quorum is present for
purposes of convening the Meeting. With respect to each Reorganization proposal,
abstentions and broker non-votes will have the same effect as votes cast against
such Reorganization proposal.

The vote of the shareholders of the Acquiring Funds is not being solicited
because their approval or consent is not necessary for the Reorganizations to be
consummated.

At February 4, 1998, Dauphin Deposit and its affiliates held of record
___%, ___%, ___%, ___% and ___% of the shares of Marketvest Short-Term Bond
Fund, Marketvest Intermediate U.S. Government Bond Fund, Marketvest Pennsylvania
Intermediate Municipal Bond Fund, Marketvest Equity Fund and Marketvest
International Equity Fund, respectively. As a result Dauphin Deposit may be
deemed to be a "controlling person" of each Acquired Fund under the 1940 Act.

At February 4, 1998, the name, address and share ownership of the persons
who beneficially owned 5% or more of the shares of any Acquired Fund are as
follows:

After giving effect to the Reorganizations, Dauphin Deposit and the above
mentioned 5% shareholders of the Acquired Funds will own of record the following
percentages of the outstanding shares of the following Acquiring Funds:

At February 4, 1998, the directors, trustees and officers of Marketvest
Funds, Inc. and Marketvest Funds, as a group, owned less than 1% of the
outstanding shares of each Acquired Fund.

At February 4, 1998, First National and its affiliates held of record ___%
of the shares of ARK Pennsylvania Tax-Free Portfolio. As a result First National
may be deemed to be a "controlling person" of this Acquiring Fund under the 1940
Act.

At February 4, 1998, the name, address, and share ownership of the persons
who beneficially owned 5% or more of the Acquiring Funds' outstanding shares are
as follows:

After giving effect to the Reorganizations, First National and the above
mentioned 5% shareholders will own of record the following percentages of the
outstanding shares of the following Acquiring Funds:

At February 4, 1998, the trustees and officers of ARK Funds owned less than
1% of the outstanding shares of each Acquiring Fund.

QUORUM. In the event that a quorum is not present at the Meeting, or in the
event that a quorum is present at the Meeting but sufficient votes to approve
the Reorganization Agreement and the transactions contemplated thereby are not
received, the persons named as proxies may propose one or more adjournments of
the Meeting to permit further solicitation of proxies. Any such adjournment will
require the affirmative vote of a majority of those shares affected by the
adjournment that are represented at the Meeting in person or by proxy. If a
quorum is present, the persons named as proxies will vote in favor of such
adjournments if they determine that adjournment and additional solicitation is
reasonable and in the best interest of shareholders of the Acquired Funds. A
shareholder vote may be taken with respect to one or more Acquired Funds prior
to any such adjournment if sufficient votes have been received for approval with
respect to any such Acquired Fund. A quorum is constituted with respect to an
Acquired Fund by the presence in person or by proxy of the holders of more than
50% of the outstanding shares of the Acquired Fund entitled to vote at the
Meeting. Abstentions and broker non-votes are not considered votes cast and will
have the effect of votes cast against the proposal. See "Shareholder and Board
Approvals" above.

ANNUAL MEETINGS. Marketvest Funds do not presently intend to hold annual
meetings of shareholders for the election of trustees and other business unless
and until such time as less than a majority of the trustees holding office have
been elected by the shareholders, at which time the trustees then in office will
call a shareholders' meeting for the purpose of electing trustees. Shareholders
have the right to call a meeting of shareholders to consider the removal of one
or more trustees or to act on other matters and such meetings will be called
when requested in writing by the holders of record of 10% or more of Marketvest
Funds' outstanding shares. To the extent required by law, Marketvest Funds will
assist in shareholder communications on such matters.

ADDITIONAL INFORMATION ABOUT ARK FUNDS

Additional information about each of the Acquiring Funds is included in the
Prospectus of ARK Funds which accompanies this Prospectus/Proxy Statement and is
incorporated by reference herein. Additional information may also be obtained
from the Statement of Additional Information relating to this Prospectus/Proxy
Statement and the Statement of Additional Information of ARK Funds and the
Annual Report for the fiscal year ended April 30, 1997 and the Semi-Annual
Report for the six-months ended October 31, 1997, which have been filed with the
SEC and accompany this Prospectus/Proxy Statement. ARK Funds is subject to the
informational requirements of the Securities Exchange Act of 1934 and the 1940
Act, as applicable, and in accordance with such requirements must file reports,
proxy statements and other information with the SEC. These materials can be
inspected and copied at the public reference facilities maintained by the SEC at
450 Fifth Street, N.W., Washington, D.C. 20549 and at the SEC's Regional Offices
at 7 World Trade Center, 13th Floor, New York, New York 10048 and at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511.
Copies of such material can also be obtained from the Public Reference Section
at 450 Fifth Street, N.W., Washington, D.C. at rates prescribed by the SEC or
from the SEC's Internet web site at http://www.sec.gov.

It is expected that following the closing of the Reorganizations, the Board
of Trustees of ARK Funds will consider increasing the number of trustees from
give to six. It is also expected that Mr. Richard Seidel, who is currently a
Director/Trustee of Marketvest Funds, will be considered as a candidate to fill
the vacancy created on the Board of Trustees.

ADDITIONAL INFORMATION ABOUT MARKETVEST FUNDS

Additional information about each of the Acquired Funds is included in the
Combined Prospectus of Marketvest Funds, Inc. and Marketvest Funds which
accompanies this Prospectus/Proxy Statement and is incorporated by reference
herein. Additional information may also be obtained from the Statement of
Additional Information relating to this Prospectus/Proxy Statement and the
Combined Statement of Additional Information of Marketvest Funds, Inc. and
Marketvest Funds, the Annual Reports for the fiscal year ended February 28, 1997
and the Semi-Annual Reports for the six-months ended August 31, 1997, which have
been filed with the SEC and accompany this Prospectus/Proxy Statement.
Marketvest Funds, Inc. and Marketvest Funds are subject to the informational
requirements of the Securities Exchange Act of 1934 and the 1940 Act, as
applicable, and in accordance with such requirements must file reports, proxy
statements and other information with the SEC. These materials can be inspected
and copied at the public reference facilities maintained by the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the SEC's Regional Offices at 7
World Trade Center, 13th Floor, New York, New York 10048 and at Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of
such material can also be obtained from the Public Reference Section at 450
Fifth Street, N.W., Washington, D.C. at rates prescribed by the SEC or from the
SEC's Internet web site at http://www.sec.gov.

MANAGEMENT'S DISCUSSION OF ACQUIRING FUND PERFORMANCE

As of the date of this Prospectus/Proxy Statement, the ARK Short-Term Bond
Portfolio, ARK U.S. Government Bond Portfolio, ARK Value Equity Portfolio and
ARK International Equity Selection Portfolio had not yet commenced operations.
The following discussion relates to the performance of the ARK Pennsylvania
Tax-Free Portfolio for its fiscal year ended April 30, 1997:

The Institutional Class of the ARK Pennsylvania Tax-Free Portfolio was
established on November 18, 1996 and for its fiscal period ended April 30, 1997
returned 1.32%. The Retail Class of the ARK Pennsylvania Tax-Free Portfolio was
established on January 2, 1997 and for its fiscal period ended April 30, 1997
returned 0.60%.

Over the twelve months ended April 30, 1997, municipal investments only
slightly under-performed their taxable counterparts on an absolute basis;
however, on an after-tax basis they substantially outperformed. Yields on
municipal securities, like taxables, have traded during the same period in a
narrow range, with longer-term rates actually falling approximately 10 basis
points. After the issue of tax reform faded in early 1996, performance of the
municipal market

was aided by the narrowing of the trading relationship between municipals and
U.S. Treasuries. The market recovered from trading at close to 90% of the
Treasury market in the first quarter of 1996 to trading its "normal" 75 to 80%
of U.S. Treasuries.

With the back-up in municipal rates due to tax reform concerns early 1996,
the investment advisor of the ARK Pennsylvania Tax-Free Portfolio lengthened the
duration of the Portfolio, taking advantage of the situation on an after-tax
basis. The Portfolio continues to focus on issues specific to Pennsylvania with
little to no exposure to the alternative minimum tax sector. As the market
traded in a narrow range over fiscal 1997 and with the near-term expectation for
higher interest rates, the primary focus in the Portfolio was to gain call
protection where appropriate. This was accomplished by purchasing high coupon
bonds that had a reduced likelihood of being called, and by purchasing somewhat
higher yielding issues with special situations. The maturity focus of the
Portfolio continues to be in the 15 to 20 year sector.

The Portfolio's investment advisor watches the effects that reform will
begin to have on the state and local governments as responsibilities, such as
welfare reform, are shifted away from the federal government. Healthcare reform,
although dead for most of 1996, will most likely come into play again in the
future. The surge in hospital mergers that has occurred over the past several
years should continue to prove positive for some select hospitals and healthcare
organizations. In Pennsylvania, the Portfolio's investment advisor will be
watching to see what the impact on county budgets will be due to recent court
decisions declaring unconstitutional the personal property tax that is levied by
many counties. The Portfolio's investment advisor continues to expect the
municipal market to perform well relative to taxable bonds, as demand from
insurance companies and retail investors alike will most likely continue to
outweigh new issuance supply.

OTHER BUSINESS

The Board of Directors of Marketvest Funds, Inc. and the Board of
Trustees of Marketvest Funds know of no other business to be brought before the
Meeting. However, if any other matters come before the Meeting, it is the
intention that proxies which do not contain specific restrictions to the
contrary will be voted on such matters in accordance with the judgment of the
persons named in the enclosed form of proxy.

SHAREHOLDER INQUIRIES

Shareholder inquiries may be addressed to the Marketvest Group of Funds in
writing at the address on the cover page of this Prospectus/Proxy Statement or
by telephoning 1-800-MKT-VEST.

* * *

SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING ARE REQUESTED TO
DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.

Appendix A

AGREEMENT AND PLAN OF REORGANIZATION

AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") made as of
January 15, 1998, by and among Marketvest Funds, Inc. a Maryland corporation,
Marketvest Funds, a Massachusetts business trust (individually, an "Acquired
Company" and collectively, the "Acquired Companies"), and ARK Funds, a
Massachusetts business trust (the "Acquiring Company").

W I T N E S S E T H:

WHEREAS, the parties hereto desire that substantially all of the assets
and stated liabilities of the separately designated series of the Acquired
Companies (individually, an "Acquired Fund" and collectively, the "Acquired
Funds") be transferred to, and be acquired and assumed by, certain of the
separately designated series of the Acquiring Company (individually, an
"Acquiring Fund" and collectively, the "Acquiring Funds") in exchange for shares
of the Acquiring Funds which shall thereafter be distributed by the Acquired
Companies to the shareholders of the Acquired Funds, all upon the terms and
conditions hereinafter set forth (each such transaction of an Acquired Fund with
the corresponding Acquiring Fund, a "Reorganization"); and

WHEREAS, the parties intend that each of ARK Short-Term Bond Portfolio,
ARK U.S. Government Bond Portfolio, ARK Value Equity Portfolio and ARK
International Equity Selection Portfolio will have nominal assets and
liabilities before its Reorganization with Marketvest Short-Term Bond Fund,
Marketvest Intermediate U.S. Government Bond Fund, Marketvest Equity Fund, and
Marketvest International Equity Fund, respectively, and that each such Acquiring
Fund will continue the investment operations of the corresponding Acquired Fund
after its Reorganization; and

WHEREAS, the parties intend that, in connection with the
Reorganizations, the Acquired Funds and the Acquired Companies will be
terminated and the Acquired Companies will be deregistered as described in this
Agreement; and

WHEREAS, the parties wish to enter into a definitive agreement setting
forth the terms and conditions of the foregoing transactions and to adopt this
Agreement as a "plan of reorganization" within the meaning of Section 368(a)(1)
of the Internal Revenue Code of 1986, as amended (the "Code");

NOW, THEREFORE, in consideration of the respective representations,
warranties, covenants and agreements set forth herein, the parties hereto agree
as follows:

ARTICLE I

TRANSFER OF ASSETS IN EXCHANGE FOR SHARES; ASSUMPTION
OF LIABILITIES; LIQUIDATION OF ACQUIRED FUNDS

Subject to the terms and conditions of this Agreement, the Acquired
Companies and the Acquiring Company agree to effect the following transactions
in respect of the Reorganizations:

1.1 Transfer of Acquired Fund Assets; Issuance of Acquiring Fund
Shares. At the Closing (as defined in Section 1.6) of a Reorganization, an
Acquired Company, on behalf of the Acquired Fund, shall transfer to the
Acquiring Company all of the assets of the Acquired Fund, in exchange for and
against delivery by the Acquiring Company of a number of shares (including
fractional shares) of the Institutional Class of the corresponding Acquiring
Fund specified in Section 1.5 having an aggregate net asset value equal to the
value of the assets of the Acquired Fund so transferred (the "Acquiring Fund
Shares"), in each case determined and adjusted as provided in Section 1.3.
Portfolio securities of an Acquired Fund shall be delivered to FMB Trust
Company, National Association, the custodian for the Acquiring Company (the
"Custodian"), to be held for the account of such Acquired Fund, on the Closing
Date (as defined in Section 1.6) for the Reorganization of such Acquired Fund,
duly endorsed in proper form for transfer and in such condition as to constitute
good delivery thereof, in accordance with the custom of brokers, and shall be
accompanied by all necessary stock transfer stamps, if any, or a check for the
appropriate purchase price thereof. If an Acquired Company shall be unable to
make timely delivery of any portfolio securities of an Acquired Fund as herein
required, the Acquiring Company may, in the exercise of its reasonable
discretion, waive such delivery, provided that the Acquired Company has timely
delivered such documents, including assignment and escrow agreements, due bills,
confirmation slips and the like, as may reasonably be requested by the Acquiring
Company and the Custodian. Cash of an Acquired Fund shall be delivered by an
Acquired Company on the Closing Date for the Reorganization of such Acquired
Fund and shall be in the form of currency or a wire transfer in federal funds,
payable to the order of "FMB Trust Company, National Association, as custodian
for ARK Funds" and indicating the appropriate Acquired Fund to which it relates.
At the Closing of a Reorganization of an Acquired Fund, the Acquiring Company
shall issue and deliver to the Acquired Company a confirmation evidencing the
Acquiring Fund Shares credited to the account of the Acquired Fund, or provide
evidence satisfactory to the Acquired Company that the Acquiring Fund Shares
have been credited to the Acquired Fund's account on the books of the Acquiring
Company. It is expressly agreed that no sales charge will be imposed upon
issuance of the Acquiring Fund Shares or their distribution to shareholders of
the Acquired Funds as provided in Section 1.7.

1.2 Acquired Fund Assets. The assets of an Acquired Fund to be acquired
by the Acquiring Company on behalf of an Acquiring Fund hereunder shall consist
of all property of such Acquired Fund, including, without limitation, all cash,
securities, commodities and futures

interests, dividends or interest receivable, and any deferred or prepaid
expenses shown as an asset on the statement of assets and liabilities of the
Acquired Fund delivered pursuant to Section 2.5.

1.3 Valuation. The value of the assets of an Acquired Fund to be
acquired by the Acquiring Company shall be computed by the Acquiring Company as
of the close of regular trading on the New York Stock Exchange, Inc. (the
"Exchange") on the Closing Date for the Reorganization of such Acquired Fund,
using the valuation policies and procedures set forth in the then-current
prospectus and statement of additional information of the Acquiring Company. The
valuation of such assets by the Acquiring Company shall be subject to review by
the Acquired Company and to such adjustments, if any, as may be agreed to by the
Acquiring Company. The aggregate net asset value of the Acquiring Fund Shares
shall be computed by the Acquiring Company using the net asset value per share
of the Acquiring Fund as of the close of regular trading on the Exchange on such
Closing Date. The share transfer books of the Acquired Company in respect of the
Acquired Fund shall be permanently closed as of the close of business on the
business day immediately preceding the Closing Date and no transfer of shares of
the Acquired Fund shall thereafter be made on such books. An Acquired Company
shall only accept purchase orders or redemption requests for shares of an
Acquired Fund received prior to the close of regular trading on the Exchange on
the business day immediately preceding the Closing Date for its Reorganization;
purchase orders or redemption requests received thereafter shall be deemed to be
orders to purchase or requests for redemption of shares of the corresponding
Acquiring Fund, as the case may be, and shall be executed at the net asset value
per share determined as set forth in the then-current prospectus and statement
of additional information of the Acquiring Company, provided that the
Reorganization of the Acquired Fund is consummated.

1.4 Acquired Fund Liabilities. At the Closing of the Reorganization of
an Acquired Fund, the Acquiring Fund shall assume all liabilities, expenses,
costs, charges and reserves of the Acquired Fund reflected on the statement of
assets and liabilities of the Acquired Fund delivered pursuant to Section 2.5.
Each Acquiring Fund shall assume only such liabilities of the corresponding
Acquired Fund and shall not assume any other liabilities, whether absolute or
contingent, known or unknown, accrued or unaccrued.

1.5 Acquired Funds; Corresponding Acquiring Funds. The assets of each
Acquired Fund shall be acquired by the Acquiring Fund identified opposite its
name in Schedule 1.5 attached hereto.

1.6 Closings; Closing Dates. The closing of the Reorganizations of
Marketvest Short-Term Bond Fund, Marketvest Intermediate U.S. Government Bond
Fund and Marketvest Pennsylvania Intermediate Municipal Bond Fund shall take
place beginning after the close of business on March 6, 1998, and the closing of
the Reorganizations of Marketvest Equity Fund and Marketvest International
Equity Fund shall take place beginning after the close of business on March 13,
1998, at the offices of Piper & Marbury L.L.P., 36 South Charles Street,
Baltimore, Maryland, or at such other time and place as may be agreed upon by
the parties. In the event that

on such date (i) the Exchange is closed or trading thereon is restricted, or
(ii) trading or the reporting of trading on the Exchange or elsewhere is
disrupted so that accurate appraisal of the value of the assets of the Acquired
Fund or the aggregate net asset value of the Acquiring Fund Shares is
impractical, the Reorganization shall be postponed until the business day next
following the day on which trading shall have been fully resumed and reporting
shall have been restored, or such other day as may be agreed upon by the
parties. The closing of a Reorganization is referred to herein as a "Closing"
and the date on which the Closing shall take place is referred to herein as a
"Closing Date."

1.7 Distribution of Acquiring Fund Shares. As soon after the Closing of
the Reorganization of an Acquired Fund as is conveniently practicable, and in
any event within two business days after the Closing, the Acquired Company shall
distribute pro rata to the shareholders of the Acquired Fund of record as of the
close of business on the Closing Date for such Reorganization (the "Acquired
Fund Shareholders"), the Acquiring Fund Shares received by the Acquired Fund
hereunder. The Acquired Company shall accomplish such distribution by delivering
a written instruction, signed by the principal executive officer of the Acquired
Company and certified by an authorized signatory of Federated Shareholder
Services Company, the transfer agent of the Acquired Companies, to State Street
Bank and Trust Company, the transfer agent for the Acquiring Company (the
"Transfer Agent"), directing the Transfer Agent to open accounts on the books of
the Acquiring Company in the names of the Acquired Fund Shareholders and
transfer to such accounts the respective pro rata interest, in full and
fractional (to three decimal places) shares, of each such shareholder in the
Acquiring Fund Shares then credited to the account of the Acquired Fund on the
books of the Acquiring Company. The Acquiring Company agrees to instruct the
Transfer Agent to comply with such instructions. All issued and outstanding
shares of the Acquired Fund and all certificates, if any, indicating ownership
of such shares shall simultaneously be canceled on the books of the Acquired
Company, although from and after the Closing of the Reorganization of an
Acquired Fund each certificate which theretofore represented shares of such
Acquired Fund shall evidence ownership of the corresponding Acquiring Fund
Shares on the basis hereinabove set forth. No redemption or repurchase of any
Acquiring Fund Shares credited to Acquired Fund Shareholders and represented by
unsurrendered certificates shall be permitted until such certificates have been
surrendered for cancellation. The Acquiring Company shall not issue certificates
representing Acquiring Fund Shares in connection with such distributions.
Promptly after the distribution described above, the Acquiring Company shall
cause appropriate notification to be mailed to the Acquired Fund Shareholders
informing each such shareholder of the number of Acquiring Fund Shares credited
to his account and confirming the registration thereof in his name. All
distributions on the Acquiring Fund Shares shall be paid to the Acquired Fund
Shareholders in cash or invested in additional shares of the Acquiring Fund at
the net asset thereof on the respective payment dates in accordance with
instructions previously given by such shareholders to the transfer agent of the
Acquired Company.

1.8 Payment of Transfer Taxes. Any transfer taxes payable upon issuance
of Acquiring Fund Shares in a name other than the name of an Acquired Fund
Shareholder shall, as a

condition of such issuance and transfer, be paid by the person to whom such
Acquiring Fund Shares are to be issued and transferred.

1.9 Liquidation of Acquired Funds. (a) As soon as conveniently
practicable after the distribution required pursuant to Section 1.7 has been
made in respect of an Acquired Fund, an Acquired Company shall take, in
accordance with applicable law, all such action as may be necessary to effect a
complete liquidation of the Acquired Fund.

(b) As soon as conveniently practicable after consummation of the
Reorganizations provided for herein, the Acquired Companies shall, in accordance
with applicable law, make all filings and take all such action as may be
necessary to effect their dissolution or termination, and shall file an
application for an order of the Securities and Exchange Commission (the
"Commission") pursuant to Section 8(f) of the Investment Company Act of 1940, as
amended (the "1940 Act"), declaring that the Acquired Companies have ceased to
be investment companies, and shall take all such other action as may be
necessary to deregister under the 1940 Act. The Acquiring Company shall provide
assistance to the Acquired Company in order to effect the above-mentioned
actions.

1.10 Reporting. Any reporting obligation of an Acquired Company in
respect of an Acquired Fund is and shall remain the responsibility of the
Acquired Company until the Acquired Company is deregistered under the 1940 Act.
The Acquiring Company shall provide assistance to the Acquired Company to the
extent any such reporting obligations relate to the Reorganizations and shall
provide all information regarding the Acquiring Company and the Reorganizations
as may be necessary in order for the Acquired Companies to comply with their
reporting obligations.

ARTICLE II

COVENANTS AND AGREEMENTS

2.1 Conduct of Business. After the date of this Agreement and on or
prior to the Closing Date of the Reorganization of an Acquired Fund, an Acquired
Company and the Acquiring Company will conduct the businesses of the Acquired
Fund and the Acquiring Fund, respectively, only in the ordinary course, it being
understood that such ordinary course of business shall include the declaration
and payment of customary dividends and distributions.

2.2 Shareholders' Meeting. The Acquired Companies shall call, convene
and hold a meeting of shareholders of the Acquired Funds as soon as practicable
in accordance with applicable law, for the purpose of approving this Agreement
and the transactions herein contemplated, and for such other purposes as may be
necessary or desirable, and the directors/trustees of the Acquired Companies
shall, subject to the exercise of their fiduciary

duties, recommend a favorable vote thereon. The Acquired Companies shall solicit
the proxies of shareholders of the Acquired Funds to vote on the matters to be
acted upon at such meeting.

2.3 Registration Statement; Combined Prospectus/Proxy Statement. The
Acquired Companies shall prepare preliminary proxy materials to be filed with
the Commission under the Securities Exchange Act of 1934, as amended (the "1934
Act"), relating to the meeting of shareholders referred to in Section 2.2, in
the form of a combined prospectus/proxy statement and related statement of
additional information included in the registration statement on Form N-14 of
the Acquiring Company filed with the Commission under the Securities Act of
1933, as amended (the "1933 Act"), in connection with this Agreement. Such
registration statement in the form in which it shall become effective and, in
the event any post-effective amendment thereto becomes effective prior to the
Closing Date, such registration statement as amended, is referred to herein as
the "Registration Statement." The combined prospectus/proxy statement and
related statement of additional information in the form first filed with the
Commission pursuant to Rule 497(c) under the 1933 Act is referred to herein as
the "Prospectus/Proxy Statement." The Acquired Companies and the Acquiring
Company will each use its best efforts to cause the Registration Statement to
become effective under the 1933 Act as soon as practicable and agree to
cooperate in such efforts. Upon effectiveness of the Registration Statement, the
Acquired Companies will cause the Prospectus/Proxy Statement to be delivered to
shareholders of the Acquired Funds entitled to vote on this Agreement and the
transactions herein contemplated in accordance with applicable law.

2.4 Information. Throughout the period prior to the Closing, the
Acquired Companies and the Acquiring Company shall furnish to one another, and
the other's accountants, legal counsel and other representatives, all such
information concerning the Acquiring Funds or the Acquired Funds and their
businesses and properties as may reasonably be requested by the other, or by
such representatives.

2.5 Financial Statements. At the Closing of the Reorganization of an
Acquired Fund, an Acquired Company shall deliver to the Acquiring Company a
statement of assets and liabilities of the Acquired Fund, together with a
schedule of portfolio investments as at the close of business on the Closing
Date. These financial statements shall be prepared in accordance with generally
accepted accounting principles and shall be unaudited. The Acquired Company
shall also deliver to the Acquiring Company on or before such Closing Date the
detailed tax-basis accounting records for each security to be transferred to the
Acquiring Fund hereunder, which shall be prepared in accordance with the
requirements for specific identification tax-lot accounting and clearly reflect
the bases used for determination of gain and loss realized on the partial sale
of any security to be transferred to the Acquiring Fund. As promptly as
practicable thereafter, the Acquired Company shall furnish the Acquiring
Company, in such form as is reasonably satisfactory to the Acquiring Company, a
statement of the earnings and profits of the Acquired Fund for federal income
tax purposes, which statement shall be certified by the treasurer of the
Acquired Company.

2.6 Final Dividend. On or before the Closing Date of the Reorganization
of an Acquired Fund, the Acquired Company shall declare and pay a dividend or
dividends on the shares of the Acquired Fund which, together with all previous
dividends, shall have the effect of distributing to the shareholders of the
Acquired Fund all of the Acquired Fund's investment company taxable income and
net tax-exempt interest income for the final taxable period of the Acquired Fund
(computed without regard to any deduction for dividends paid) and all of its net
capital gains realized in the final taxable period of the Acquired Fund (after
reduction for any capital loss carry-forward).

2.7 Other Necessary Action. The Acquired Companies and the Acquiring
Company shall each take all necessary corporate or other action and use its best
efforts to complete all filings (including articles of transfer to be filed as
contemplated in Section 4.3(d) herein) and obtain all governmental and other
consents and approvals required for consummation of the transactions
contemplated by this Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of Acquired Companies. Each
Acquired Company hereby represents and warrants to the Acquiring Company as
follows:

(a) The Acquired Company is a corporation or business trust duly
organized and validly existing in good standing under the laws of its state of
organization and has full corporate power to conduct its business as it is now
being conducted and to own the properties and assets it now owns. The Acquired
Company is qualified to transact business as a foreign corporation in all
jurisdictions in which it conducts any business or owns any properties or
assets, except where the failure to be so qualified does not cause a material
adverse effect on the Acquired Funds.

(b) The Acquired Company is registered with the Commission pursuant to
Section 8 of the 1940 Act as an open-end management investment company.

(c) The audited financial statements for the fiscal year ended February
28, 1997, and unaudited financial statements for the six-months ended August 31,
1997, of the Acquired Funds delivered to the Acquiring Company by the Acquired
Company have been prepared in accordance with generally accepted accounting
principles consistently followed throughout the periods covered by such
statements, and fairly present the financial position and results of operations
of the Acquired Funds at the dates of such statements and for the periods
covered thereby.

(d) Since August 31, 1997, the Acquired Company on behalf of the
Acquired Funds has not incurred any material liabilities or obligations, direct
or contingent, or entered into any material transactions, not in the ordinary
course of business, and there has not been any material adverse change, or any
development involving a prospective material adverse change, in the condition
(financial or other), earnings, business or properties of the Acquired Funds
(other than changes in the ordinary course of business, including, without
limitation, dividends and distributions in the ordinary course and changes in
net asset value per share).

(e) There is no litigation, proceeding or governmental investigation
pending or, to the knowledge of the Acquired Company, threatened or in prospect
against or relating to the Acquired Funds, the properties or business of the
Acquired Funds, or this Agreement.

(f) Each Acquired Fund has qualified and elected to be treated as a
regulated investment company under Subchapter M of the Code for each of its
taxable years. All federal and other tax returns and reports of the Acquired
Funds required by law to have been filed have been filed, and all federal and
other taxes payable pursuant to such returns and reports have been paid so far
as due, or provision has been made for the payment thereof, and, to the Acquired
Company's knowledge, no such return is currently under audit and no assessment
has been asserted with respect to any such return.

(g) The Prospectus/Proxy Statement complies in all material respects
with the applicable requirements of the 1933 Act, the 1934 Act and the 1940 Act
and the applicable rules and regulations of the Commission thereunder; and the
Prospectus/Proxy Statement (and any supplement thereto) does not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the Acquired
Companies make no representations or warranties as to the information contained
in or omitted from the Prospectus/Proxy Statement (or any supplement thereto) in
reliance upon and in conformity with information relating to the Acquiring
Company or the Acquiring Funds and furnished to the Acquired Company by the
Acquiring Companies specifically for use in connection with the Prospectus/Proxy
Statement (or any supplement thereto).

(h) Ernst & Young LLP, who have certified the financial statements of
the Acquired Funds filed with the Commission as part of the Registration
Statement, are, to the knowledge of the Acquired Funds, independent public
accountants as required by the 1933 Act and the rules and regulations of the
Commission thereunder.

(i) The execution, delivery and performance of this Agreement by the
Acquired Company have been duly authorized by its board of directors/trustees,
and this Agreement constitutes a valid and legally binding obligation of the
Acquired Company, enforceable against the Acquired Company in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the rights of creditors generally and the
exercise of judicial discretion in accordance with general principles of equity.

(j) The Acquired Company is not in default under any agreement, lease,
contract, indenture, or other instrument or obligation to which it is a party or
by which it or any of its properties or assets are bound and which default is of
material significance in respect of the business or financial condition of the
Acquired Funds. The consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not conflict with or violate or result in a
breach of any of the terms or provisions of, or constitute a default under, any
agreement or other instrument to which the Acquired Company is a party, or the
charter or bylaws of the Acquired Company, or any order, rule or regulation
applicable to the Acquired Company of any court or of any governmental or other
regulatory body having jurisdiction.

(k) The Acquired Company has good and marketable title to the assets of
the Acquired Funds to be transferred to the Acquiring Funds pursuant to this
Agreement, and, subject to the approval of shareholders of the Acquired Company,
has full right, power and authority to sell, assign, transfer and deliver such
assets hereunder, and upon delivery and payment for such assets, the Acquiring
Funds will acquire good and marketable title thereto, free and clear of all
liens, mortgages, pledges, encumbrances, charges, claims and equities, and
subject to no restrictions on the transfer thereof, except as disclosed to and
accepted by the Acquiring Company.

3.2 Representations and Warranties of Acquiring Company. The Acquiring
Company hereby represents and warrants to each of the Acquired Companies as
follows:

(a) The Acquiring Company is a business trust duly organized and
validly existing in good standing under the laws of the Commonwealth of
Massachusetts and has corporate power to conduct its business as it is now being
conducted and to own the properties and assets it now owns. The Acquiring
Company is qualified to transact business in all jurisdictions in which it
conducts any business or owns any properties or assets, except where the failure
to be so qualified does not cause a material adverse effect on the Acquiring
Funds.

(b) The Acquiring Company is registered with the Commission pursuant to
Section 8 of the 1940 Act as an open-end management investment company.

(c) The authorized capitalization of the Acquiring Company representing
the beneficial interest in the Acquiring Funds consists of an unlimited number
of shares of beneficial interest, without par value, designated as Retail Class
shares and Institutional Class shares of "ARK Short-Term-Term Bond Portfolio,"
"ARK U.S. Government Bond Portfolio," "ARK Pennsylvania Tax-Free Portfolio,"
"ARK Value Equity Portfolio" and "ARK International Equity Selection Portfolio."
All of the issued and outstanding shares of the Acquiring Funds have been duly
and validly issued and are fully paid and non-assessable. The Acquiring Fund
Shares to be issued and delivered by the Acquiring Company pursuant to this
Agreement have been duly authorized for issuance and, when issued and delivered
as provided herein, will be validly issued, fully paid and non-assessable.

(d) The current prospectus and statement of additional information of
the Acquiring Company comply in all material respects with the applicable
requirements of the 1933 Act and the 1940 Act and the applicable rules and
regulations of the Commission thereunder and do not contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading.

(e) The audited financial statements for the fiscal year ended April
30, 1997, and unaudited financial statements for the six-months ended October
31, 1997, of the Acquiring Funds delivered to the Acquired Companies by the
Acquiring Company have been prepared in accordance with generally accepted
accounting principles consistently followed throughout the periods covered by
such statements, and fairly present the financial position and results of
operations of the Acquiring Funds at the dates of such statements and for the
periods covered thereby.

(f) Since October 31, 1997, the Acquiring Company on behalf of the
Acquiring Funds has not incurred any material liabilities or obligations, direct
or contingent, or entered into any material transactions, not in the ordinary
course of business, and there has not been any material adverse change, or any
development involving a prospective material adverse change, in the condition
(financial or other), earnings, business or properties of the Acquiring Funds
(other than changes in the ordinary course of business, including, without
limitation, dividends and distributions in the ordinary course and changes in
net asset value per share).

(g) There is no litigation, proceeding or governmental investigation
pending or, to the knowledge of the Acquiring Company, threatened or in prospect
against or relating to the Acquiring Funds, the properties or business of the
Acquiring Funds, or this Agreement.

(h) The ARK Pennsylvania Tax-Free Portfolio has qualified and elected
to be treated as a regulated investment company under Subchapter M of the Code
for each of its taxable years. Each other Acquiring Fund intends to qualify and
elect to be treated as a regulated investment company under Subchapter M of the
Code for each of its taxable years. All federal and other tax returns and
reports of the Acquiring Funds required by law to have been filed have been
filed, and all federal and other taxes payable pursuant to such returns and
reports have been paid so far as due, or provision has been made for the payment
thereof, and, to the Acquiring Company's knowledge, no such return is currently
under audit and no assessment has been asserted with respect to any such return.

(i) The Registration Statement and Prospectus/Proxy Statement comply in
all material respects with the applicable requirements of the 1933 Act, the 1934
Act and the 1940 Act and the applicable rules and regulations of the Commission
thereunder; and the Prospectus/Proxy Statement (and any supplement thereto) does
not contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of the

circumstances under which they were made, not misleading; provided, however,
that the Acquiring Company makes no representations or warranties as to the
information contained in or omitted from the Prospectus/Proxy Statement (or any
supplement thereto) in reliance upon and in conformity with information relating
to the Acquired Companies or the Acquired Funds and furnished to the Acquiring
Company by the Acquired Companies specifically for use in connection with the
Prospectus/Proxy Statement (or any supplement thereto).

(j) The execution, delivery and performance of this Agreement by the
Acquiring Company have been duly authorized by its board of trustees, and this
Agreement constitutes a valid and legally binding obligation of the Acquiring
Company, enforceable against the Acquiring Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the rights of creditors generally and the exercise of
judicial discretion in accordance with general principles of equity.

(k) The Acquiring Company is not in default under any agreement, lease,
contract, indenture, or other instrument or obligation to which it is a party or
by which it or any of its properties or assets are bound and which default is of
material significance in respect of the business or financial condition of the
Acquiring Funds. The consummation of the transactions herein contemplated and
the fulfillment of the terms hereof will not conflict with or violate or result
in a breach of any of the terms or provisions of, or constitute a default under,
any agreement or other instrument to which the Acquiring Company is a party, or
the charter or by-laws of the Acquiring Company, or any order, rule or
regulation applicable to the Acquiring Company of any court or of any
governmental or other regulatory body having jurisdiction.

ARTICLE IV

CONDITIONS PRECEDENT

4.1 Conditions Precedent to Obligations of Acquired Companies. The
obligations of an Acquired Company to consummate the Reorganization of an
Acquired Fund shall be subject, at its election, to the performance by the
Acquiring Company of all of the obligations to be performed by it hereunder on
or before the Closing Date for the Reorganization of such Acquired Fund and, in
addition thereto, to the following further conditions:

(a) The transactions contemplated by this Agreement shall have been
duly approved by the requisite affirmative vote of the shareholders of the
Acquired Fund.

(b) The Acquiring Company shall have furnished to the Acquired Company
a certificate of the Acquiring Company, signed by the principal executive
officer and the principal financial officer of the Acquiring Company, dated such
Closing Date, to the effect that the signers of such certificate have carefully
examined the Registration Statement, the Prospectus/Proxy Statement (and any
supplement thereto) and this Agreement and that:

(i) the representations and warranties of the Acquiring
Company in this Agreement are true and correct in all material respects
on and as of such Closing Date with the same effect as if made on such
Closing Date and the Acquiring Company has complied with all the
agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to the Closing of the Reorganization of the
Acquired Fund;

(ii) since the date of the most recent financial statements
of the corresponding Acquiring Fund included in the Registration
Statement and Prospectus/Proxy Statement (or any supplement thereto),
there has been no material adverse change in the condition (financial
or other), earnings, business or properties of such Acquiring Fund
(other than changes in the ordinary course of business, including,
without limitation, dividends and distributions in the ordinary course
and changes in net asset value per share), except as set forth in or
contemplated in the Registration Statement and Prospectus/Proxy
Statement.

(iii) the Registration Statement has become effective under
the 1933 Act and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Acquiring Company's knowledge,
threatened.

(c) Prior to such the Closing Date, the Acquiring Company shall have
furnished to the Acquired Company such further information, certificates and
documents, including certified copies of the proceedings of its board of
trustees, as the Acquired Company may reasonably request.

4.2 Conditions Precedent to Obligations of Acquiring Companies. The
obligations of the Acquiring Company to consummate the Reorganization of an
Acquired Fund shall be subject, at its election, to the performance by the
Acquired Company of all of the obligations to be performed by it hereunder on or
before the Closing Date for the Reorganization of such Acquired Fund and, in
addition thereto, to the following further conditions:

(a) The Acquired Company shall have furnished to the Acquiring Company
a certificate of the Acquired Company, signed by the principal financial officer
of the Acquired Company, dated such Closing Date, to the effect that the signer
of such certificate has carefully examined the unaudited financial statements of
the Acquired Fund delivered to the Acquiring Company pursuant to Section 2.5 and
that such financial statements have been prepared in accordance with generally
accepted accounting principles consistently followed throughout the periods
covered by such statements and fairly present the financial position and results
of operations of the Acquired Fund at the dates of such statements and for the
periods covered thereby.

(b) The Acquired Company shall have furnished to the Acquiring Company
a certificate of the Acquired Company, signed by the principal executive officer
and the principal financial

officer of the Acquired Company, dated such Closing Date, to the effect that the
signers of such certificate have carefully examined the Registration Statement,
the Prospectus/Proxy Statement (and any supplement thereto) and this Agreement
and that:

(i) the representations and warranties of the Acquired
Company in this Agreement are true and correct in all material respects
on and as of such Closing Date with the same effect as if made on such
Closing Date and the Acquired Company has compiled with all the
agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to the Closing of the Reorganization of the
Acquired Fund; and

(ii) since the date of the most recent financial statements
of the Acquired Fund included in the Registration Statement and
Prospectus/Proxy Statement (or any supplement thereto), there has been
no material adverse change in the condition (financial or other),
earnings, business or properties of the Acquired Fund (other than
changes in the ordinary course of business, including, without
limitation, dividends and distributions in the ordinary course and
changes in net asset value per share), except as set forth in or
contemplated in the Registration Statement and Prospectus/Proxy
Statement (or any supplement thereto).

(c) The Acquiring Company shall have received (i) a certificate of an
authorized signatory of the Custodian stating that the portfolio securities,
cash and other assets of the Acquired Fund have been delivered as provided in
Section 1.1 and (ii) a certificate of an authorized signatory of the Transfer
Agent stating that its records contain the names and addresses of the Acquired
Fund Shareholders and the number and percentage of ownership of the Acquiring
Fund Shares to be transferred to the accounts of such shareholders upon the
consummation of the Reorganization of the Acquired Fund.

(d) Prior to such Closing Date, the Acquired Company shall have
furnished to the Acquiring Company such further information, certificates and
documents, including certified copies of the proceedings of its board of
directors/trustees and shareholders, as the Acquiring Company may reasonably
request.

4.3 Other Conditions Precedent. The obligations of the parties hereto
to consummate the Reorganization of an Acquired Fund shall be subject to the
fulfillment, prior to or at the Closing of the Reorganization of such Acquired
Fund, of each of the following conditions:

(a) The Acquired Companies and the Acquiring Company shall have
received a legal opinion or opinions satisfactory to the parties and their
counsel, to the effect that, if the transactions contemplated by this Agreement
are consummated in accordance with the terms hereof, for federal income tax
purposes:

(i) the transfer by each Acquired Fund of all of its assets
and liabilities to the corresponding Acquiring Fund in exchange for
shares of the corresponding Acquiring Fund, and the distribution of
such shares to the shareholders of the Acquired Fund, as provided in
this Agreement, will constitute a "reorganization" within the meaning
of Section 368(a)(1) of the Code and each such Fund will be a "a party
to the reorganization" within the meaning of Section 368(b) of the
Code;

(ii) no gain or loss will be recognized by the Acquired Fund
on the transfer of its assets to the corresponding Acquiring Fund in
exchange for the Acquiring Fund Shares and the assumption of the stated
liabilities of the Acquired Fund, and no gain or loss will be
recognized by the Acquired Fund on the distribution of the Acquiring
Fund Shares to the Acquired Fund Shareholders;

(iii) no gain or loss will be recognized by the Acquiring
Fund upon the receipt of the assets of the Acquired Fund in exchange
for the Acquiring Fund Shares and the assumption of the stated
liabilities of the Acquired Fund;

(iv) the adjusted basis of each asset of the Acquired Fund in
the hands of the Acquiring Fund will be the same as the adjusted basis
of such asset in the hands of the Acquired Fund immediately prior to
the Reorganization;

(v) the holding period of each asset of the Acquired Fund in
the hands of the Acquiring Fund will include the holding period of such
asset in the hands of the Acquired Fund immediately prior to the
Reorganization;

(vi) no gain or loss will be recognized by the Acquired Fund
Shareholders upon the receipt of the Acquiring Fund Shares (including
fractional shares) solely in exchange for shares of the Acquired Fund;

(vii) the adjusted basis of the Acquiring Fund Shares
(including fractional shares) received by each Acquired Fund
Shareholder will be the same as the adjusted basis of the shares of the
Acquired Fund surrendered in exchange therefor; and

(viii) the holding period of the Acquiring Fund Shares
(including fractional shares) received by each Acquired Fund
Shareholder will include the holding period of the shares of the
Acquired Fund surrendered in exchange therefor, provided that such
shares were held as a capital asset in the hands of the Acquired Fund
Shareholder on the date of the exchange.

(b) The Acquired Companies and the Acquiring Company shall have
received such legal opinion or opinions, as may be mutually satisfactory to the
parties and their counsel.

(c) The Commission shall have issued an order pursuant to Section 17(b)
of the 1940 Act permitting consummation of the transactions contemplated by this
Agreement.

(d) In the case of the Reorganizations of Marketvest Short-Term Bond
Fund, Marketvest Intermediate U.S. Government Fund and Marketvest Equity Fund,
articles of transfer shall have been filed with and accepted for record by the
Maryland State Department of Assessments and Taxation.

(e) All state securities law and all other governmental approvals
necessary or advisable in the opinion of counsel to consummate the transactions
contemplated by this Agreement shall have been received and shall not contain
any provision which is unduly burdensome.

(f) No suit, action or other proceeding against an Acquired Company or
the Acquiring Company or their respective officers or directors/trustees shall
be threatened or pending before any court or governmental agency in which it
will be, or it is, sought to restrain or prohibit any of the transactions
contemplated by this Agreement or to obtain damages or other relief in
connection with this Agreement or the transactions contemplated hereby.

ARTICLE V

TERMINATION

5.1 Termination. This Agreement may be terminated with respect to
the Reorganization of an Acquired Fund and the transactions contemplated hereby
with respect to such Reorganization abandoned any time prior to the Closing of
such Reorganization (notwithstanding any approval of this Agreement and the
transactions herein contemplated by the shareholders of the Acquired Fund):

(i) by mutual written consent of the Acquired Company and the
Acquiring Company duly authorized by or on behalf of their respective
boards of directors/trustees;

(ii) by either party at any time after June 30, 1998, if the Closing
has not occurred on or prior to such date; provided, however, that the
right to terminate under this clause (ii) shall not be available to a
party whose failure to fulfill any obligation under this Agreement has
been the cause of, or resulted in, the failure of such Closing to occur
on or before such date;

(iii) by either party if there shall be any law or regulation that
makes consummation of the transactions contemplated by this Agreement
illegal or otherwise prohibited or if any judgment, injunction, order
or decree enjoining a party from consummating the transactions herein
contemplated is entered and such judgment, injunction, order or decree
shall become final and nonappealable; or

(iv) by the Acquired Company if the shareholders of the Acquired
Fund shall have voted upon and not approved the transactions
contemplated by this Agreement.

The party desiring to terminate this Agreement pursuant to clause (ii), (iii) or
(iv) shall give notice of such termination to the other party in the manner
specified in Section 6.1.

5.2 Effect of Termination. If this Agreement is validly terminated
as permitted by Section 5.1, this Agreement will forthwith become null and void
and there will be no liability or obligation of either party (or any
shareholder, director/trustee, officer, employee, agent, consultant or
representative thereof) to the other party; provided, however, that nothing
contained in this Section 5.2 shall relieve either party from liability for any
breach of this Agreement, including, but not limited to, any liability of such
party for any and all damages, costs and expenses (including, but not limited
to, reasonable attorneys' fees) sustained or incurred by the other party as a
result of such breach.

ARTICLE VI

MISCELLANEOUS

6.1 Notices. All notices, requests and other communications to a
party hereunder shall be in writing (including facsimile or similar writing),
addressed to such party and given at or sent to the following address:

(a) in the case of the Acquired Companies:

Marketvest Funds, Inc.
Marketvest Funds
Federated Investors Tower
Pittsburgh, PA 15222-3779
Attention: Secretary
Facsimile: (412) 288-8141

with a copy to:

Matthew G. Maloney, Esq.
Dickstein Shapiro Morin & Oshinsky LLP
2101 L Street, N.W.
Washington, DC 20037-1526
Facsimile: (202) 887-0689

(b) in the case of the Acquiring Company:

ARK Funds
One Freedom Valley Drive
Oaks, PA 19456
Attention: Secretary
Facsimile: (610) 676-1040

with a copy to:

Alan C. Porter, Esq.
Piper & Marbury L.L.P.
1200 Nineteenth Street, N.W.
Washington, DC 20036-2430
Facsimile: (202) 223-2085

or such other address or facsimile number as any party may hereafter specify for
the purpose by notice to the other parties. Each such notice, request or other
communication shall be effective (i) if given by facsimile, when such facsimile
is transmitted to the facsimile number specified in this Section 6.1 and the
appropriate answer back is received, or (ii) if given by any other means, when
delivered at the address specified in this Section 6.1.

6.2 Amendments; Waivers. Any provision of this Agreement may be
amended or waived prior to the Closing of the Reorganization of an Acquired
Fund, if, and only if, such amendment or waiver is in writing and signed, in the
case of an amendment, by each party or, in the case of a waiver, by the party
against which the waiver is to be effective; provided that after the adoption of
this Agreement by the shareholders of such Acquired Fund, no such amendment or
waiver shall, without the further approval of such shareholders, alter or change
any of the terms or conditions of this Agreement if such alteration or change
would adversely affect the shareholders of the Acquired Fund.

6.3 Successors. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided that no party may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the
consent of the other party hereto.

6.4 Broker's or Finder's Fees. The parties represent and warrant to
each other that the transactions contemplated by this Agreement have been
negotiated directly between them, without the intervention of any person as a
result of any action by them in such a manner as to give rise to a valid claim
for a brokerage commission, finder's fee or like payment.

6.5 Expenses. The Acquired Companies and the Acquiring Company each
hereby acknowledge that First Maryland Bancorp will pay all expenses incurred in
connection with

entering into and carrying out the transactions contemplated by this Agreement,
whether or not the transactions contemplated hereby are consummated. Such
expenses include, without limitation, (i) expenses associated with the
preparation and filing of the Registration Statement; (ii) fees and expenses for
registration or qualification of the Acquiring Fund Shares under the 1933 Act
and state securities or "blue sky" laws; (iii) fees and disbursements of legal
counsel and accountants; and (iv) postage, printing and proxy solicitation
costs.

6.6 Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of Maryland.

6.7 Survival. The covenants, agreements, representations and
warranties of the parties in respect of the Reorganization of an Acquired Fund
contained herein shall not survive, and shall be extinguished by, the Closing of
such Reorganization.

6.8 Counterparts. This Agreement may be signed in counterparts, each
of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.

6.9 Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, understandings and negotiations, both written
and oral, between the parties with respect to the subject matter of this
Agreement. No representation, inducement, promise, understanding, condition or
warranty not set forth herein has been made or relied upon by either party
hereto.

6.10 Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.

6.11 Parties in Interest. Nothing expressed or implied herein is
intended or shall be construed to confer upon any person, other than the parties
hereto, any rights or remedies under or by reason of this Agreement or the
transactions contemplated hereby.

6.12 Limitation of Liability. (a) A copy of the declaration of trust
of ARK Funds is on file with the Secretary of State of the Commonwealth of
Massachusetts, and it is expressly agreed that this instrument is executed on
behalf of ARK Funds by the trustees or officers thereof in such capacities, and
not individually, and that the obligations of this instrument are not binding
upon any of the trustees, officers or shareholders of ARK Funds personally, but
are binding only upon the assets and property of the Acquiring Funds.

(b) A copy of the declaration of trust of Marketvest Funds is on
file with the Secretary of State of the Commonwealth of Massachusetts, and it is
expressly agreed that this instrument is executed on behalf of Marketvest Funds
by the trustees or officers thereof in such capacities, and not individually,
and that the obligations of this instrument are not binding upon any of the

trustees, officers or shareholders of Marketvest Funds personally, but are
binding only upon the assets and property of the Marketvest Funds.

(c) The parties specifically acknowledge and agree that any
liability under this Agreement, or in connection with the transactions herein
contemplated, to the Acquiring Company with respect to an Acquiring Fund, or to
an Acquired Company with respect to an Acquired Fund, shall be discharged only
out of the assets of that Acquiring Fund or Acquired Fund, as the case may be,
and that no other Acquiring Fund, series of the Acquiring Company or Acquired
Fund shall be liable with respect thereto.

* * *

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.

MARKETVEST FUNDS, INC.

ATTEST:

By /s/ VICTOR R. SICLARI
----------------------------------
/s/ TIMOTHY S. JOHNSON Victor R. Siclari
- ------------------------- Secretary

MARKETVEST FUNDS

ATTEST:
By /s/ VICTOR R. SICLARI
----------------------------------
/s/ TIMOTHY S. JOHNSON Victor R. Siclari
- ------------------------- Secretary

ARK FUNDS

ATTEST:
By /s/ KATHRYN L. STANTON
----------------------------------
/s/ LESLIE KONDZIELA Kathryn L. Stanton
- ------------------------- Secretary

SCHEDULE 1.5

Marketvest Funds ARK Funds
---------------- ---------
Marketvest Short-Term Bond Fund ARK Short-Term Bond Portfolio

Marketvest Intermediate U.S. Government ARK U.S. Government Bond Portfolio
Bond Fund

Marketvest Pennsylvania Intermediate ARK Pennsylvania Tax-Free Portfolio
Municipal Bond Fund

Marketvest Equity Fund ARK Value Equity Portfolio

Marketvest International Equity Fund ARK International Equity Selection
Portfolio