BERWYN INCOME FUND INC, 485APOS, 1999-02-12

BERWYN INCOME FUND INC
485APOS, 1999-02-12

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No. ______

Post-Effective Amendment No. 14

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 16

(Check appropriate box or boxes.)

THE BERWYN FUNDS
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(which by this Amendment is adopting the
Registration Statement under the Securities Act of 1933
and the Investment Company Act of 1940 of Berwyn Income
Fund, Inc.)
(Exact Name of Registrant as Specified in Charter)

1189 LANCASTER AVENUE, BERWYN, PENNSYLVANIA, 19312
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(Address of Principal Executive Offices) (Zip Code)

(610) 296-7222 Ext. 30
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(Registrant's Telephone Number, including Area Code)

KEVIN M. RYAN, 1189 LANCASTER AVENUE, BERWYN, PA 19312
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(Name and Address of Agent for Service)

Approximate date of PROPOSED Public Offering April 30, 1999

It is proposed that this filing will become effective (check appropriate box):

/_/ immediately upon filing pursuant to paragraph (b)
/_/ on (date) pursuant to paragraph (b)
/_/ 60 days after filing pursuant to paragraph (a)(1)
/_/ on (date) pursuant to paragraph (a)(1)
/_/ 75 days after filing pursuant to paragraph (a)(2)
/X/ on April 30, 1999 pursuant to paragraph (a)(2) of rule 485.

If appropriate, check the following box:

this post effective amendment designates a new effective date for a
previously filed post-effective amendment.

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THE BERWYN FUNDS

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BERWYN INCOME FUND
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PROSPECTUS
April 30, 1999

This Prospectus describes shares of Berwyn Income Fund, one of the
series of The Berwyn Funds (the "Trust"). Shares of Berwyn Income
Fund are sold on a no-load basis.

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.

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TABLE OF CONTENTS Page
Risk/Return Summary 1

Carefully review these sections which
summarize the Fund's investments, risks,
performance and fees Performance 2
Fees and Expenses of the Fund 3

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This section contains important additional Investment Objective,
information, including the Fund's principal Principal Investment
investment strategies and risks Strategies and
Related Risks 4

This sections contains details on the Management and Organization 9
management of the Fund

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Shareholder Information 10
Turn to this section for information on how
to open and maintain your account, including Distribution and Taxes 12
how to purchase, sell and exchange Fund shares Distributor 13

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This sections contains important financial Financial Highlights 14
information on the Fund
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RISK/RETURN SUMMARY

Investment Objective of the Fund

Berwyn Income Fund's investment objective is to provide investors with current
income while seeking to preserve capital by taking what the Fund considers
reasonable risks.

Principal Investment Strategies of the Fund

The Fund intends to achieve its objective through investment in corporate bonds,
preferred stocks, U.S. Treasury bonds and notes, debt securities issued by U.S.
Government agencies and dividend paying common stocks. The Fund's investment
adviser (the "Adviser") determines the percentage of each category of security
to hold based upon the prevailing economic and market conditions. The Fund,
however, does allow investment in common stock when the value of the common
stocks in the Fund's portfolio is equal to or less than 30% of the value of the
Fund's net assets.

Principal Risks of Investing in the Fund

|_| Although the Fund will strive to achieve its goal, there is no assurance
that it will. The value of the Fund's investments will fluctuate with
market conditions and as a result the value of your investment in the Fund
will fluctuate. You could lose money on your investment in the Fund, or the
Fund could underperform other investments.

|_| Normally the Fund will invest in a diversified portfolio consisting of a
mix of securities, such as corporate bonds, preferred stocks and common
stocks. The Adviser may invest 100% of the Fund's net assets in corporate
bonds or preferred stocks. If the Adviser decides it is appropriate, the
Adviser may invest all of the Fund's net assets in lower rated, high yield,
high risk bonds or "junk bonds."

|_| High yield bonds entail greater risks than those found in higher rated
bonds. High yield bonds are below investment grade instruments based on the
significant risk of issuer default. High yield bonds and other fixed income
securities are sensitive to interest rate changes. Generally, when interest
rates rise, the prices of fixed income securities fall and when interest
rates fall, the prices of fixed income securities rise. The longer the
maturity of fixed income securities, the greater is the impact from
interest rate changes. The value of the Fund's investment will also vary
with bond market conditions.

|_| Other risks of high yield bonds include the market's relative youth, price
volatility, sensitivity to economic changes, limited liquidity, valuation
difficulties and special tax considerations.

An investment in the Fund is not a deposit of any bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any
other government agency.

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PERFORMANCE

The bar chart and table can help you evaluate the potential risks and rewards of
investing in Berwyn Income Fund. They show changes in the Fund's yearly
performance over the life of the Fund and compare the Fund's average annual
returns for the past one-year, five-year, and ten-year periods. Investment
performance also often reflects the risks associated with the Fund's investment
objective and policies. You should keep in mind that the Fund's past performance
is not necessarily an indication of the Fund's future performance

30.00%|
| 22.99%
20.00%| 21.70% 21.09%
| 11.84% 16.96% 14.12% 13.27%
10.00%|
|
0% | -0.14%
| -1.01% -4.57%
-10.00%|-----------------------------------------------------------------------
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

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Best Quarter: 1Q '92 +10.58%
Worst Quarter: 3Q '98 -6.04%

Average Annual Total Return as of 12/31/98

1 Year 5 Years 10 Years
Fund -4.57% 8.13% 11.20%
BIG*
HYC**
LII+

* Salomon Smith Barney Broad Investment Grade Bond Index ("BIG") is an
unmanaged index of investment grade bonds and does not include the
costs of fund operating or management expenses.

** Salomon Smith Barney High Yield Composite Index ("HYC") is a widely
recognized unmanaged index of high yield securities, and does not
include the costs of fund operating or management expenses.

+ Lipper Income Fund Index ("LII") is an unmanaged index of fixed income
securities and does not include the costs of fund operating or
management expenses.
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FEES AND EXPENSES OF THE FUND

As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below. Shareholder transaction fees are paid
from your account. Annual fund operating expenses are paid out of Fund assets,
so that their effect is included in the share price. The Fund has no sales
charges (loads) or Plan 12b-1 distribution fees and minimal shareholder
transaction fees.

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Shareholder Transaction Fees
(Fees paid directly from your investment)
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Maximum Sales Charge (load) on Purchases (as a None
percentage of offering price)
Sales Charge on Reinvested Dividends None
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Exchange Fees None
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Annual Fund Operating Expenses
(Expenses that are deducted from Fund assets)
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Management Fee 0.50%
Distribution and Service (12b-1) Fees 0.00%
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Other Expenses 0.14%
Total Fund Operating Expenses 0.64%
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This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated and then redeem all of
your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower based on
these assumptions your costs would be:

One Year Three Years Five Years Ten Years
Berwyn Income Fund $64 $207 $364 $824

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INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS

The Berwyn Income Fund's investment objective is to provide investors with
current income while seeking to preserve capital by taking what the Fund
considers reasonable risks. The Fund invests in corporate bonds, U.S. Treasury
bonds and notes, debt securities issued by U.S. Government Agencies, preferred
stocks, and dividend paying common stocks. The Fund may invest any percentage of
its net assets in the foregoing securities the Adviser deems appropriate, except
common stocks. The Adviser may not purchase common stocks when the value of the
common stocks that the Fund owns is equal to 30% or more of the Fund's net
assets. The Adviser would not be required to sell any common stocks owned if the
value of the common stocks exceeded 30% of net assets due to appreciation of the
common stocks or depreciation in the Fund's other securities.

Corporate Bonds -- The Fund seeks to achieve its objective by investing in the
corporate bonds of only those issuers that, in the opinion of the Adviser, have
sufficient net worth and operating cash flow to repay principal and make timely
interest payments. A corporate bond is an interest-bearing debt security issued
by a corporation. The issuer has a contractual obligation to pay interest at a
stated rate on specific dates and to repay principal (the bond's face value) on
a specified date. An issuer may have the right to redeem ("call") a bond before
maturity, and, if the bond is called before maturity, the investor may have to
reinvest the proceeds at lower market rates.

While the bond's annual interest income established by the coupon rate may be
fixed for the life of the bond, its yield (income as a percent of current price)
will reflect current interest rate levels. The bond's price rises and falls so
that its yield remains reflective of current market conditions. Bond prices
usually rise when interest rates fall and conversely, bond prices fall when
interest rates rise.

The Adviser will select corporate bonds on the basis of current yield and
secondarily on the basis of anticipated long term return. When selecting
corporate bonds the Adviser will take into account the rating the bond has
received from S&P and Moody's. The Adviser has the discretion to invest in bonds
with any rating as long as the issuer is not in default in the payment of
interest or principal. The Adviser may also invest in unrated bonds and may
purchase bonds in private transactions.

Bonds rated A or higher by S&P and Moody's are considered high grade securities
and have the three highest ratings for creditworthiness. Bonds rated BBB by S&P
or Baa by Moody's are defined as medium grade securities. These securities are
considered creditworthy and of investment quality but there is a possibility
that the ability of the issuer of the securities to pay interest or repay the
principal in the future may be impaired by adverse economic conditions or
changing circumstances. Bonds rated lower than BBB or Baa are less creditworthy
than investment grade securities with the same maturity and, as a consequence,
may pay higher income. Bond securities rated BB, B, CCC or CC by S & P or Ba, B
or Caa by Moody's are regarded on balance as predominantly speculative with
respect to capacity to pay interest and repay principal.

At December 31, 1998, the Fund's portfolio was invested in investment grade and
high yield, high risk corporate bonds, preferred and common stocks and
closed-end mutual funds. Listed below are the percentages of the portfolio
invested at December 31, 1998, in securities with various bond ratings published
by Moody's and S&P as well as the percentages invested in unrated bonds,
preferred and common stocks and closed end mutual funds:

Moody's Ratings:
A: 8.8%; Baa: 14.2%; BA: 1.7%; B: 20.4%; Caa: 0.2%; Unrated: 17%

S&P Ratings:
AA: 7,3%; BBB: 17.9%; BB: 3.4%; B: 16.7%; Unrated: 17%

Preferred and Common Stocks and Closed-End Investment Companies:
Preferred Stocks: 19.1%; Common Stocks: 18.2%;
Closed-End Investment Companies: 0.4%

Issuers of high yield, high risk bonds are generally smaller, less creditworthy
companies or highly leveraged companies which are generally less able than more
financially stable companies to make scheduled payments of interest and
principal. The risks posed by bonds issued under such circumstances are
substantial. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged companies or smaller, less creditworthy
companies may experience financial stress. During these periods, such companies
may not have sufficient cash flows to meet their interest payment obligations. A
company's ability to service its debt obligations may also be adversely affected
by specific corporate developments, the company's inability to meet specific
projected business forecasts, or the unavailability of additional financing. The
risk of loss due to default by the issuer may be significantly greater for the
holders of high yield, high risk bonds because such securities are unsecured and
are often subordinated to other creditors of the issuer. In addition to the risk
of default, holders of high yield, high risk bonds also face the risk of greater
market volatility than the holders of investment grade bonds. Changes in the
general level of interest rates normally affect the market value and yield of
corporate bonds. As a general rule if the level of interest rates were to
decline, these securities would increase in value and the yield would decline.
Conversely, if the interest rate level rose, bonds would decline in value and
the yield would increase. Fluctuations in the general level of interest rates
would therefore affect the value of the Fund's investments and the value of an
investment in the Fund. However, the market value of high yield, high risk bonds
may also be affected not only by changing interest rates, but also by investors'
perception of credit quality and the outlook for economic growth. When economic
conditions appear to be deteriorating, lower rated bonds may decline due to
investors' heightened concern over credit quality, regardless of prevailing
interest rates. Especially at such times, trading for high yield, high risk
bonds may become thin and market liquidity may be significantly reduced. Even
under normal conditions, the market for high yield, high risk bonds may be less
liquid than the market for investment grade bonds. In periods of reduced market
liquidity, the prices of high yield, high risk bonds may become more volatile
and these securities may experience sudden and substantial price declines.

In addition to bonds that are rated, the Fund also invests in unrated bonds.
These securities may or may not be more speculative than investment grade
securities. The risks of investing in unrated bonds depend upon the
creditworthiness of the issuer, changes in interest rates and economic and
market factors. The Adviser will determine the creditworthiness of an unrated
debt security and the issuer's ability to meet the interest and principal
obligations of such security.

The Fund will not invest in corporate bonds issued to finance a leveraged
buyout. The Fund will also diversify its portfolio and do a credit analysis of
the issuers in which it invests.

Preferred and Common Stocks -- The Fund also invests in preferred stocks and may
invest in common stocks, subject to the 30% limit described above, when the
Adviser deems it appropriate. Preferred stocks are selected from two categories:
(1) stocks offering an above average yield, in the opinion of the Adviser, in
comparison to preferred stocks of the same quality; and (2) stocks offering a
potential for capital appreciation due to the business prospects of the issuer.
The Fund may also purchase preferred stocks in transactions that qualify under
Rule 144A.

Common stocks are selected from three categories: (1) stocks selling
substantially below their book value; (2) stocks selling at low valuations to
their present earnings level; and (3) stocks judged by the Adviser to have above
average growth prospects and to be selling at small premiums to their book value
or at modest valuations to their present earnings level.

The Fund purchases only common stocks that have been paying cash dividends.
Preferred stocks that have a cumulative feature do not have to be paying current
dividends in order to be purchased. If a dividend on a stock is canceled, the
Fund would not be required to sell the stock.

The method of stock selection used by the Fund may result in the Fund selecting
stocks that are not being recommended by other investment advisers or brokerage
firms and the Fund may invest in the securities of lesser known companies. The
Adviser believes, however, that any risks involved in the stocks selected for
the Fund will be minimized by diversification of the Fund's portfolio and daily
monitoring of the stock selection. In addition, the Fund only invests in stocks
listed on national exchanges or on the over-the-counter market and the Fund only
purchases stocks in companies that have been in business at least five years and
have at least $10,000,000 in assets.

Temporary Defensive Positions -- Although the Fund will normally invest
according to its objective as outlined above, the Fund may at times, for
temporary defensive purposes, invest all or a portion of its assets in no load
money market funds, savings accounts and certificates of deposit of domestic
banks with assets in excess of $1,000,000, commercial paper with the highest
investment grade rating (A-1 by S & P and P-1 by Moody's Commercial Paper
Ratings), repurchase agreements, U.S. treasury bills, or treasury notes and
treasury bonds backed by the "full faith and credit" of the U.S. Government, or
the Fund may hold cash. Investment in a no-load money market fund will result in
the Fund paying a management fee on the money invested in such fund in addition
to the operating expenses of the Fund.

Risks of Investing in the Fund

Investing in any mutual fund such as the Fund involves risk, including the risk
that you may receive little or no return on your investment, and the risk that
you may lose part or all of the money you invest. Before you invest in the Fund
you should carefully evaluate the risks. Because of the nature of the Fund, you
should consider an investment to be a long-term investment that typically
provides the best results when held for a number of years. The following are the
chief risks you assume when investing in the Fund.

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Risks How The Fund Manages These Risks

Market Risk is the risk that all or a majority of the The Fund maintains a long-term investment approach
securities in a certain market - like the stock or bond and focus on stocks we believe can appreciate over
market - will decline in value because of factors such as extended time frame regardless of interim market
conomic conditions, future expectations or investor confidence. fluctuations. The Fund does not try to predict
overall market movements and does not trade for
short-term purposes.

Industry and Security Risk is the risk that the value of The Berwyn Income Fund limits its assets invested in
securities in a particular industry or the value of an any one industry and in any individual security.The
individual stock or bond will decline because of changing Adviser also follows rigorous selection process
expectations for the performance of that industry or for for the individual before choosing securities for the Fund.
company issuing the stock or bond.

Lower Rated, High Yield, High Risk Fixed Income Securities The Fund may invest in fixed income securities that
include those securities rated lower than BBB by S&P or are listed in national exchanges or on the over-the
Baa by Moody's. Securities of this type are considered to counter market. The Adviser will attempt to
be of poor standing and predominantly speculative as the minimize the risks of investing in medium grade and
ability to repay interest and principal. high yield, high risk bonds by doing a credit anal-
ysis of the issuer, monitoring the Fund's invest-
ments and the investment environment in general. The
credit rating is not the only criterion for
selection. The Adviser examines the financial
structure of each issuer and with regard to these
securities, makes a determination as to the
issuer's ability to meet its debt obligations.
Achievement of the Fund's investment objective
is more dependent on the Adviser's credit
analysis in selecting high yield, high risk bonds
than is the case in selecting higher quality
securities. However, there can be no guarantee that
the issuer of the bonds in which the Fund invests
will not default or that the securities will not
decline in value.

Portfolio Turnover rates reflect the amount of securities The Fund normally will not invest for short-term
that are replaced from the beginning of the year to the trading purposes. However, the Fund may sell
end of the year by the Fund. The degree of portfolio securities without regard to the length of time they
activity may affect brokerage costs and other transaction have been held. The Fund anticipates that the
costs of the Fund, as well as taxes payable portfolio turnover rate will not exceed 100%.
by shareholders that are subject to federal income tax.

Small Company Investment Risk includes the general risks The securities of companies with small revenues and
of investing in common stocks such as market, economic and capitalizations in which the Fund invests, may offer
business risk that cause their prices to fluctuate over greater opportunity for capital appreciation than
time. Historically, smaller capitalization stocks have larger companies.
been more volatile in price than larger capitalization
stocks. Among the reasons for the greater price
volatility of these securities are the lower degree of
liquidity in the markets for such stocks, and the
potentially greater sensitivity of such small companies to
changes in or failure of management, and in many other
changes in competitive, business, industry and economic
conditions, including risks associated with limited
production, markets, management depth, or financial
resources.

For additional information about the Fund's investment policies please see the
Statement of Additional Information.

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MANAGEMENT AND ORGANIZATION

The Fund commenced operations as a series of shares of The Berwyn Funds, a
Delaware business trust, on April 30, 1999 in a reorganization of its
predecessor, the Berwyn Income Fund, Inc. In the reorganization, the Fund
succeeded to all the business, assets and liabilities of its predecessor.

The Killen Group, Inc. (the "Adviser") is the investment adviser to the Fund.
The Adviser is a Pennsylvania corporation that was formed in September 1982. Its
address is 1189 Lancaster Avenue, Berwyn, Pennsylvania 19312. Robert E. Killen
is Chairman, Chief Executive Officer and sole shareholder of the Adviser. Robert
Killen is also the President and Chairman of the Board of Trustees of the Trust.
Edward A. Killen, II is primarily responsible for the day-to-day management of
the Berwyn Income Fund. He managed the portfolio of the Berwyn Income Fund,
Inc., the predecessor of the Berwyn Income Fund, from July 1, 1994 to April 30,
1999. He has managed the Berwyn Income Fund since April 30, 1999. Edward Killen
has over twenty year's investment management experience. In 1978 he started work
at Compu-Val Management Associates as a portfolio manager. In February 1983, he
assumed his current position as Vice President and Secretary of the Adviser.

As of December 31, 1998, The Killen Group, Inc. was managing 335 individual
investment portfolios worth approximately $367 million. On December 31, 1998,
Berwyn Income Fund had net assets of over $103 million.

Investment Management Fees

Under the contract between the Fund and the Adviser, the Adviser provides the
Fund with investment management services. These services include advice and
recommendations with respect to investments, investment policies, the purchase
and sale of securities and the management of the Fund's resources. In addition,
employees of the Adviser manage the daily operations of the Fund under the
supervision of the Board of Trustees. For its investment advisory services, the
Adviser receives a fee of 0.50% of the Fund's average daily net assets.

Subject to the policies established by the Trust's Board of Trustees, the
Adviser is responsible for the Fund's portfolio decisions. When buying and
selling securities, the Adviser gives consideration to brokers who have assisted
in the distribution of the Fund's shares. The Fund may also pay brokerage
commissions to brokers who are affiliated with the Adviser or the Fund.

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SHAREHOLDER INFORMATION

Buying Shares

You may buy shares of the Fund without a sales charge. Your price for Fund
shares is the Fund's net asset value per share (NAV). Your order will be priced
at the next NAV calculated after your order is received by the Fund's Transfer
Agent. The Fund also has arrangements that permit third parties to accept orders
on the Fund's behalf, so that investors can receive the NAV calculated after the
order is accepted by the third party.

The NAV is calculated as of the close of trading on the New York Stock Exchange
(the "Exchange") (4:00 p.m. Eastern Time) every day the Exchange is open. If we
receive your order after the close of trading, you will pay the next business
day's price. Currently, the Exchange is closed when the following holidays are
observed: New Year's Day, Martin Luther King, Jr.'s Birthday, President Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas.

The NAV is determined by dividing the value of the Fund's securities, cash and
other assets, minus all expense and liabilities, by the number of shares
outstanding. The Fund's securities are valued each day at their market value,
which usually means the last quoted sale price on the security's principal
exchange. If market quotes are not readily available, securities will be priced
at their fair value as determined in good faith by the Board of Trustees.

Minimum Investment

|_| The minimum initial investment for each Fund is $10,000 per investor. This
investment may be divided by a single investor among different investment
accounts in each Fund or between accounts in the Berwyn Income Fund and
Berwyn Fund, another series of the Trust, that total $10,000 in the
aggregate.

|_| Subsequent investments must be at least $250. For an Individual Retirement
Account (IRA), the investment is $1,000. The minimum initial investment for
a spousal IRA is $250. Subsequent investments in IRA accounts must be at
least $250. There are no minimum investment requirements for an investment
by pension or profit sharing plan or a custodial account established for
the benefit of a minor.

The Fund has an Automatic Investment Plan under which an investor may have money
transferred from the investor's checking account to the investor's account in
the Fund. If you wish to use this Plan, please contact the Fund for further
information and an application.

In Kind Purchases

An investor may exchange securities for shares of the Fund. For taxable
investors an exchange of securities for shares of the Fund will be a taxable
exchange. The securities must meet the Fund's investment objectives and
policies. The securities will be valued in the same way that the Fund's
portfolio is valued for purposes of calculating the NAV. Please contact the
Adviser for further information.

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Exchange of Shares

|_| You may exchange your shares of the Fund for shares of another fund managed
by the Adviser. The initial minimums for the fund must be met ($1,000 for
IRAs and no minimum initial investment for pension or profit sharing plans
or custodial accounts for minors.).

|_| Shares may also be exchanged for shares in the Rodney Square Fund or the
Rodney Square Tax-Exempt Fund. These funds are money market funds managed
by Rodney Square Management Corporation and distributed by Rodney Square
Distributors, Inc. Exchanges will be made on the basis of the next NAV of
the funds involved that is determined after a request for an exchange has
been received. The minimum initial investment for each of the Rodney Square
funds is $1,000. A shareholder may request an exchange by calling 1 (800)
992-6757 between (9:00 a.m. and 4:00 p.m. Eastern Time) on any business day
or by writing to the Fund's Transfer Agent.

|_| A shareholder in the Fund, however, will only be permitted to exchange
shares in his or her account for shares of one of the other funds four
times in any twelve-month period. A shareholder in a Rodney Square fund may
exchange shares of the Rodney Square fund for shares of the Fund as often
as he or she wishes. The Fund reserves the right to amend or change the
exchange privilege upon 60 days' notice to shareholders.

Redeeming Shares

|_| You may redeem your shares at any time. The shares will be redeemed at the
next NAV calculated after the redemption request has been received by the
Fund's Transfer Agent. You may redeem your shares by sending a written
request to the Fund's Transfer Agent. If you have selected the telephone
redemption option on your application, you may redeem up to $5,000 worth of
shares by calling the Transfer Agent at 1 (800) 992-6757 on any business
day between the hours of 9:00 a.m. and 4:00 p.m. Eastern Time. The Fund
will use reasonable procedures to confirm that instructions communicated by
telephone are genuine and, if the procedures are followed, will not be
liable for any losses due to unauthorized or fraudulent telephone
transactions.

|_| Generally, there is no sales charge for redeeming shares.

Shareholders may buy and sell shares of the Fund through broker dealers who may
charge a fee for such service. In addition, if a shareholder redeems shares
through the Transfer Agent and requests that the proceeds be wired to the
shareholder, the Transfer Agent may charge the shareholder a wiring fee.

DISTRIBUTION AND TAXES

The Fund distributes annually substantially all of their net investment income
and any net realized capital gains. Dividends from net investment income will be
paid quarterly. Unless a shareholder requests otherwise in the account
application, dividends and capital gains distributions will be automatically
reinvested in shares of the Fund at the NAV on the Fund's ex-dividend date.

In general, Fund distributions are taxable to you as either ordinary income or
capital gains. This is true whether you reinvest your distributions in
additional shares of the Fund or receive them in cash. Any capital gains the
Fund distributes are taxable to you as long-term capial gains no matter how long
you have owned your shares. It is not ordinarily to your advantage to buy
shares in the Fund shortly before the Fund makes a distribution because part of
your investment will come back to you as a taxable distribution.

When you sell or redeem your shares of the Fund, you may have a capital gain or
loss. For tax purposes, an exchange of your Fund shares for shares of the Berwyn
Fund, the Rodney Square Fund or the Rodney Square Tax-Exempt Fund is the same as
a sale. The individual tax rate on any gain from the sale or exchange of your
shares depends on how long you have held your shares.

Fund distributions and gains from the sale or exchagne of your shares will
generally be subject to state and local income tax. Non-U.S. investors may be
subject to U.S. withholding and estate tax. You should consult your tax
advisor about the federal, state, local or foreign tax consequences of your
investment in the Fund.

By law, the Fund is required to withhold 31% of your taxable distributions and
proceeds if you do not provide your correct taxpayer identification number (TIN)
or certify that your TIN is correct, or if the IRS instructs us to do so.

DISTRIBUTOR

Berwyn Financial Services Corp. ("Berwyn Financial"), located at 1189 Lancaster
Avenue, Berwyn, Pennsylvania 19312, serves as the non-exclusive distributor of
the Fund's shares pursuant to a selling agreement between Berwyn Financial and
the Trust. Under the terms of the agreement, Berwyn Financial is a selling agent
for the Fund in certain jurisdictions in order to facilitate the registration of
shares of the Fund under state securities laws and to assist in the sale of
shares. Berwyn Financial does not charge a fee for the services provided under
the selling agreement with the Fund. The Fund continues to bear the expenses of
all filing or notification fees incurred in connection with the registration of
shares under state securities laws.

FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand Berwyn Income
Fund's financial performance and reflects the financial performance of the
Berwyn Income Fund, Inc., the predecessor of the Fund, for the past 5 years.
Certain information reflects financial results for a single Fund share. The
total returns in the table represent the rate that an investor would have earned
or lost on an investment in the Fund (assuming reinvestment of all dividends and
distributions. [To be filed by amendment.]

<PAGE>
(BACK COVER PAGE)

More information about the Fund's investments is available in the Fund's Annual
and Semi-Annual Report to Shareholders. In the Fund's Annual Report to
Shareholders, you will find a discussion of the market conditions and investment
strategies that significantly affected the performance of the Fund's predecessor
during its last fiscal year. You can find more detailed information about the
Fund in the current Statement of Additional Information ("SAI"), which we have
filed with the Securities and Exchange and which is legally a part of this
prospectus. If you want a free copy of the SAI, the Annual or Semi-Annual
Report, or if you have any questions about investing in the Fund, you can write
to us at Berwyn Income Fund, Shareholder Services, c/o PFPC, P. O. Box 8987,
Wilmington, DE 19899 or call toll free 800-992-6757.

You can find reports and other information about the Fund on the SEC web site
(http://www.sec.gov), or you can get copies of this information after payment of
a duplicating fee, buy writing to the Public Reference Section of the SEC,
Washington, DC 20549-6009. Information about the Fund, including the SAI, can be
reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can
get information on the public reference room by calling the SEC at 800-SEC-0330.

Shareholder Services

PFPC Inc.
P.O. Box 8987
Wilmington, Delaware 19899

800-992-6757 (toll-free)

(Investment Company Act File Number 811-4963)

<PAGE>

THE BERWYN FUNDS
- --------------------------------------------------------------------------------

BERWYN FUND

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

PROSPECTUS
April 30, 1999

This Prospectus describes shares of the Berwyn Fund, one of the
series of The Berwyn Funds (the "Trust"). Shares of Berwyn Fund
are sold on a no-load basis.

The Securities and Exchange Commission has not approved or disapproved
these securities or passed upon the adequacy of this prospectus. Any
representation to the contrary is a criminal offense.

TABLE OF CONTENTS Page
Risk/Return Summary 3

Carefully review these sections which
summarizes the Fund's investments, risks, Performance 4
performance and fees Fees and Expenses of the Fund 5

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

This section contains important additional Investment Objective, Principal Investment 6
information, including the Fund's principal Strategies and Related Risks
investment strategies and risks

This sections contains details on the Management and Organization 9
management of the Fund

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

This sections contains important financial Financial Highlights 13
information on the Fund
</TABLE>

<PAGE>

RISK/RETURN SUMMARY

Investment Objective of the Fund
Berwyn Fund seeks to achieve long-term capital appreciation; current income is a
secondary consideration.

Principal Investment Strategies of the Fund
The Fund invests in common stocks and fixed income securities that offer a
potential for capital appreciation. Under normal market conditions at least 80%
of the value of the Fund's net assets will be invested in common stocks. The
Fund invests in common stocks that the Fund's investment adviser (the "Adviser")
believes are undervalued. Although the Fund invests primarily in common stocks,
it may invest up to 20% of the value of its net assets in fixed income
securities (corporate bonds and preferred stocks), including low-rated, high
yield, high risk bonds ("junk bonds").

Principal Risks of Investing in the Fund
|_| Although the Fund will strive to achieve its goal, there is no assurance
that it will. Common stock prices are subject to market, economic and
business risks that will cause their prices to fluctuate over time. While
common stocks have historically been a leading choice of long term
investors, stock prices may decline over short or even extended periods.
Therefore, the value of your investment in the Fund may go up and down and
you could lose money.

|_| Using its investment approach may result in the Fund investing in
securities that are not in favor with other investment advisers or brokers
or securities of lesser known companies. The Fund's investment success
depends on the skill of the Adviser in evaluating, selecting, and
monitoring the Fund's investments. If the Adviser's conclusions about
growth rates or stock values are incorrect, the Fund may not perform as
anticipated.

|_| High yield bonds ("junk bonds") entail greater risks than those found in
higher rated bonds. High yield bonds are below investment grade instruments
based on the significant risk of issuer default. High yield bonds and other
fixed income securities are sensitive to interest rate changes. Generally,
when interest rates rise, the prices of fixed income securities fall and
when interest rates fall, the prices of fixed income securities rise. The
longer the maturity of fixed income securities, the greater is the impact
from interest rate changes. The value of the Fund's investments will also
vary with bond market conditions.

|_| Other risks of high yield bonds include the market's relative youth, price
volatility, sensitivity to economic changes, limited liquidity, valuation
difficulties and special tax considerations.

|_| Lastly, the Fund is considered "non-diversified" under federal laws and
regulations. This means that the Fund may invest a greater portion of its
net assets in the shares of individual companies than a diversified fund
could. Changes in the financial condition or market assessment of these
companies may cause greater fluctuations in the share value of the Fund
than in the share value of a diversified fund.

An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.

<PAGE>

PERFORMANCE

The bar chart and table can help you evaluate the potential risks and rewards of
investing in the Berwyn Fund. They show changes in the Fund's yearly
performance over the life of the Fund and compare the Fund's average annual
returns for the past one-year, five-year, and ten-year periods. Investment
performance also often reflects the risks associated with the Fund's investment
objective and policies. You should keep in mind that the Fund's past performance
is not necessarily an indication of the Fund's future performance.

60.00%|
|
50.00%|
| 43.64%
40.00%|
|
30.00%|
| 22.88% 26.02%
20.00%| 20.60% 19.23%
|16.46% 14.21%
10.00%|
| 3.87%
0% |
|
-10.00%|-----------------------------------------------------------------------
| -18.90%
-20.00%|
| -23.82%
-30.00%|
|
-40.00%|

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

Best Quarter: 1Q '91 +23.91%
Worst Quarter: 3Q '98 -22.73%

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

Average Annual Total Return as of 12/31/98

1 Year 5 Years 10 Years
------ ------- --------
Fund -18.90% 7.65% 10.01%

Russell 2000 Index*

* The Russell 2000 Index is an unmanaged index of securities and does
not include the actual costs of fund operating or management expenses.

<PAGE>

FEES AND EXPENSES OF THE FUND

As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below. Shareholder transaction fees are paid
from your account. Annual fund operating expenses are paid out of Fund assets,
so that their effect is included in the share price. The Fund has no sales
charges (loads) or Rule 12b-1 distribution fees and minimal shareholder
transaction fees.

- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Shareholder Transaction Fees
(Fees paid directly from your investment)
- ------------------------------------------------------------------------------

Maximum Sales Charge (load) on Purchases (as a percentage of None
offering price)

Sales Charge on Reinvested Dividends None

Redemption Fees* 1.00%

Exchange Fees None
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

Management Fee 1.00%

Distribution and Service (12b-1) Fees 0.00%

Other Expenses 0.19%

Total Fund Operating Expenses 1.19%

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

* A redemption fee of 1.00% is assessed if shares are redeemed in less than one
year from the date of purchase.

This Example is intended to help you compare the cost of investing in the Berwyn
Fund with the cost of investing in other mutual funds. The Example assumes that
you invest $10,000 in the Fund for the time periods indicated and then redeem
all of your shares at the end of those periods. The Example also assumes that
your investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:

- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
One Year Three Years Five Years Ten Years
Berwyn Fund $119 $371 $642 $1,417
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

<PAGE>

INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES
AND RELATED RISKS

The investment objective of the Berwyn Fund is to seek long-term (i.e., greater
than one year) capital appreciation; current income is a secondary
consideration. The Fund is a non-diversified, open-end management investment
company. Being non-diversified means that the Fund may invest a greater portion
of its net assets in the shares of individual issuers. Therefore, an investment
in the Fund may be a greater risk than an investment in a diversified fund.

Even though the Fund is considered non-diversified, it has placed restrictions
on its investment policy for purposes of diversification. Two particularly
significant restrictions are: (1) with respect to 50% of the value of its total
assets, the Fund will not, at the time of purchase, invest more than 5% of the
value of its total assets, at market value, in the securities of any one issuer,
except the securities of the U.S. government, and (2) with respect to the other
50% of the market value of its total assets, the Fund will not invest at the
time of purchase more than 15% of the market value of its total assets in any
single issuer. With these two restrictions, hypothetically, the Fund could hold
a portfolio with investments in as few as 14 issuers. The Fund does not
anticipate having a portfolio with as few as 14 issuers. The investment policy
of the Adviser has been to use two basic guidelines in the management of
investment portfolios: (1) the initial investment in any single issuer must
comprise less than 5% of the total value of the assets in a portfolio and (2)
the initial investment in any one industry must comprise less than 20% of the
total value of the assets in a portfolio. (The maximum that the Fund will invest
in any industry will be 25% of the value of its total assets). Under normal
market conditions, the Fund follows the 5% and 20% guidelines of the Adviser.
The Fund will always adhere to this 25% limitation.

The Fund invests in what it believes to be undervalued common stock and fixed
income securities that offer a potential for long-term capital appreciation.
This approach can often result in selecting securities that are not being
recommended by other investment advisers and/or brokerage firms. In addition,
this approach can often result in the selection of securities of lesser known
companies. The Fund, however, only invests in corporations that have been in
business for at least five years and have a minimum of $10,000,000 in assets.
Also, the Fund only invests in securities listed on national exchanges or on the
over-the-counter market.

Common Stocks -- Under normal market conditions, the Fund invests at least 80%
of the value of its net assets in common stocks. The Fund selects common stock
investments from three broad areas: (1) companies selling substantially below
their book value; (2) companies selling at a low valuation to their present
earnings level; and (3) companies judged by the Adviser to have above-average
growth prospects over the next three-to-five year period and to be selling, in
the opinion of the Adviser, at small premiums to their book value, or at modest
valuations to their present earnings level.

The Adviser believes that (i) its strategy of investing in undervalued common
stock offers the potential for long-term capital appreciation above that of the
leading stock market indices (i.e., Dow Jones Industrial Average, Standard &
Poor 500 Index, Russell 2000 and the Value Line Composite), and (ii) use of the
guidelines of the Adviser for portfolio management together with the investment
restrictions previously described will lessen the risks in this investment
approach.

Corporate Bonds -- A corporate bond is an interest-bearing debt security issued
by a corporation. The issuer has a contractual obligation to pay interest at a
stated rate on specific dates and to repay principal (the bond's face value) on
a specified date. An issuer may have the right to redeem ("call") a bond before
maturity, and, if the bond is called before maturity, the investor may have to
reinvest the proceeds at lower market rates.

While the portfolio of the Fund emphasizes investment in common stock, the Fund
may invest up to 20% of the value of its net assets in fixed income securities
(corporate bonds and preferred stocks.) The Fund invests in fixed income
securities when the Adviser believes prevailing interest rates offer long-term
capital appreciation. The fixed income securities selected may include
securities with any of the ratings listed by Standard & Poor's Ratings Group
("S&P") and Moody's Investors Service, Inc. ("Moody's"), including securities
with a S&P D rating, a Moody's C rating and unrated securities that are
determined by the Adviser to be of equivalent quality. (See Appendices A and B
in the Statement of Additional Information for S&P's and Moody's definitions of
bond ratings.) Fixed income corporate debt securities that have a BBB or Baa
rating have speculative characteristics and are riskier investments than debt
securities rated A (S&P's or Moody's rating) and higher. Fixed income securities
that have credit ratings lower than BBB (S&P's rating) or a Baa (Moody's rating)
are commonly referred to as "junk bonds". These lower rated securities are
speculative investments and investment in them is riskier than an investment in
a fixed income security with a rating of BBB or Baa or higher. The ability of
the issuer of a lower rated security to pay income or repay principal in
accordance with the terms of the obligation may be impacted more severely by
adverse economic conditions or a business downturn than the ability of an issuer
of higher rated securities. Unrated securities may or may not be considered more
creditworthy than lower rated securities.

<PAGE>

Risks of Investing in the Fund

<TABLE>
<CAPTION>
<S> <C>
Risks How the Fund Manages These Risks

Market Risk is the risk that all or a majority of the The Fund maintains a long-term investment approach and
securities in a certain market - like the stock or bond focus on stocks we believe can appreciate over an extended
market - will decline in value because of factors such as time frame regardless of interim market fluctuations. The
economic conditions, future expectations or investor Fund does not try to predict overall stock market
confidence. If the value of the majority of common stocks movements and does not trade for short-term purposes.
held by the Fund increases in value, then the net assets
of the Fund and an investment in the Fund would
normally Increase in value. If there is a decline in the
value of a majority of the common stocks of the Fund,
then the net assets of the Fund and investment in the
Fund would normally decline in value.

Industry and Security Risk is the risk that the value of The Adviser follows a rigorous selection process before
securities in a particular industry or the value of an choosing securities for the Fund.
individual stock or bond will decline because of changing
expectations for the performance of that industry
or for the individual company issuing the stock or bond.

Lower Rated, High Yield, High Risk Fixed Income The Fund may invest in fixed income securities that are
Securities include those securities rated lower than BBB listed in national exchanges or on the over-the-counter market
by S&P and Baa by Moody's. Securities of this type are The Adviser will attempt to minimize the risks of investing
considered to be of poor standing and predominantly in medium grade and high yield, high risk bonds by doing a credit
speculative as the ability to repay interest analysis of the issuer, monitoring the Fund's investments and the
and principal. investment environment in general. The credit rating is not the only
criterion for selection. The Adviser examines the financial
structure of each issuer and with regard to these
securities, makes a determination as to the issuer's ability to meet
its debt obligations. Achievement of the Fund's investment objective is
more dependent on the Adviser's credit analysis in selecting high
yield, high risk bonds than is the case in selecting higher quality
securities. However, there can be no guarantee that the issuer
of the bonds in which the Fund invests will not default or that the
securities will not decline in value.

Portfolio Turnover rates reflect the amount of securities The Fund normally will not invest for short-term trading
that are replaced from the beginning of the year to the purposes. However, the Fund may sell securities without
end of the year by the Fund. The degree of portfolio regard to the length of time they have been held. The
activity may affect brokerage costs and othertransaction Fund anticipates that the portfolio turnover rate of the
costs of the Fund, as well as taxes payable by Fund will not exceed 100%.
shareholders that are subject to federal income tax.

Small Company Investment Risk includes the general risks The securities of companies with small revenues and
of investing in common stocks such as market, economic and capitalizations, in which the Fund invests, may offer
business risk that cause their prices to fluctuate over greater opportunity for capital appreciation than larger
time. Historically, smaller capitalization stocks have companies.
been more volatile in price than larger capitalization
stocks. Among the reasons for the greater price
volatility of these securities are the lower degree of
liquidity in the markets for such stocks, and the
potentially greater sensitivity of such small companies to
changes in or failure of management, and in many other
changes in competitive, business, industry and economic
conditions, including risks associated with limited
production, markets, management depth, or financial
resources.

</TABLE>

For additional information about the Fund's investment policies please see the
Statement of Additional Information.

MANAGEMENT AND ORGANIZATION

The Fund commenced operations as a series of shares of The Berwyn Funds, a
Delaware business trust, on April 30, 1999 in a reorganization of its
predecessor, The Berwyn Fund, Inc. In the reorganization, the Fund succeeded to
all the business, assets and liabilities of its predecessor.

Robert Killen is also the President and Chairman of the Board of the Trust. He
is the person primarily responsible for the day-to-day management of the Berwyn
Fund's portfolio. He managed the portfolio of The Berwyn Fund, Inc., the
predecessor of the Berwyn Fund, from May 4, 1984, the date of that Fund's public
offering, until April 30, 1999. Robert Killen has over twenty-five years
experience as an investment adviser. In 1969, Robert Killen cofounded Compu-Val
Management Associates, an investment advisory firm and was a 50% partner until
February 1983. At that time, The Killen Group, Inc., replaced him as the 50%
partner. The partnership of Compu-Val Management Associates was dissolved on
December 31, 1983 and The Killen Group, Inc. continued its advisory business as
a separate entity.

As of December 31, 1998, The Killen Group, Inc. was managing 335 individual
investment portfolios worth approximately $367 million. On December 31, 1998,
The Berwyn Fund, Inc. had over $62 million in net assets.

Investment Management Fees

Under the contract between the Fund and the Adviser, the Adviser provides the
Fund with investment management services. These services include advice and
recommendations with respect to investments, investment policies, the purchase
and sale of securities and the management of the Fund's resources. In addition,
employees of the Adviser manage the daily operations of the Fund under the
supervision of the Board of Trustees. For the advisory services it provides, the
Adviser receives a fee of 1.00% of the Fund's average daily net assets. The
advisory fee payable to the Adviser by the Berwyn Fund is higher than that of
many mutual funds.

SHAREHOLDER INFORMATION

Buying Shares

You may buy shares of the Fund without a sales charge. Your price for Fund
shares is the Fund's net asset value per share (NAV). Your order will be priced
at the next NAV calculated after the Fund's Transfer Agent receives your order.
The Fund also has arrangements that permit third parties to accept orders on the
Fund's behalf, so that investors can receive the NAV calculated after the order
is accepted by the third party.

Minimum Investment

|_| The minimum initial investment for the Fund is $10,000 per investor. This
investment may be divided by a single investor among different investment
accounts in the Fund or between accounts in the Berwyn Fund and Berwyn
Income Fund, another series of the Trust, that total $10,000 in the
aggregate.

In Kind Purchases

<PAGE>

Exchange of Shares

|_| You may exchange your shares of one Fund for shares of Berwyn Income Fund,
another series of the Trust. The initial minimums for the Funds must be met
($1,000 for IRAs and no minimum initial investment for pension or profit
sharing plans or custodial accounts for minors.).

|_| Shares may also be exchanged for shares in the Rodney Square Fund or the
Rodney Square Tax-Exempt Fund. These funds are money market funds managed
by Rodney Square Management Corporation and distributed by Rodney Square
Distributors, Inc. Exchanges will be made on the basis of the next NAV of
the funds involved that is determined after a request for an exchange has
been received. The minimum initial investment for each of the Rodney Square
funds is $1,000. A shareholder may request an exchange by calling 1 (800)
992-6747 between (9:00 a.m. and 4:00 p.m. Eastern Time) on any business day
or by writing to the Fund's Transfer Agent.

Redeeming Shares

|_| You may redeem your shares at any time. The shares will be redeemed at the
next NAV calculated after the Fund's Transfer Agent has received the
redemption request. You may redeem your shares by sending a written request
to the Fund's Transfer Agent. If you have selected the telephone redemption
option on your application, you may redeem up to $5,000 worth of shares by
calling the Transfer Agent at 1 (800) 992-6757 on any business day between
the hours of 9:00 a.m. and 4:00 p.m. Eastern Time. The Fund will use
reasonable procedures to confirm that instructions communicated by
telephone are genuine and, if the procedures are followed, will not be
liable for any losses due to unauthorized or fraudulent telephone
transactions.

|_| Generally, there is no sales charge for redeeming shares. The Fund,
however, does charge a 1% redemption fee on shares held for less than one
year. The fee is charged on the proceeds of the redemption. The fee is paid
to the Fund and included in its net assets for the benefit of the remaining
shares. This fee is waived for those who buy and sell shares of the Fund
through third parties.

<PAGE>

DISTRIBUTION AND TAXES

The Fund distributes annually all of their net investment income and any net
realized capital gains. Unless a shareholder requests otherwise in the account
application, dividends and capital gains distributions will be automatically
reinvested in shares of the Fund at the NAV on the Fund's ex-dividend date.

It is not ordinarily to your advantage to buy shares in the Fund shortly before
the Fund makes a distribution because part of your investment will come back to
you as a taxable distribution.

Every January, you will receive a statement that shows the tax status of
distributions you received for the previous year. Distributions declared in
December but paid in January are taxable as if they were paid in December. The
Adviser expects that the majority of the payments from the Fund will be
long-term capital gains distributions.

When you sell or redeem your shares of the Fund, you may have a capital gain or
loss. For tax purposes, an exchange of your Fund shares for shares of the Berwyn
Income Fund, the Rodney Square Fund or the Rodney Square Tax-Exempt Fund is the
same as a sale. The individual tax rate on any gain from the sale or exchange of
your shares depends on how long you have held your shares.

Fund distributions and gains from the sale or exchange of your shares will
generally be subject to state and local income tax. Non-U.S. investors may be
subject to U.S. withholding and estate tax. You should consult your tax advisor
about the federal, state, local or foreign tax consequences of your investment
in the Fund.

DISTRIBUTOR

<PAGE>

FINANCIAL HIGHLIGHTS -- THE BERWYN FUND

The financial highlights table is intended to help you understand the Fund's
financial performance and reflects the financial performance of The Berwyn Fund,
Inc., the predecessor of the Fund, for the past 5 years. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned or lost on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). [To be filed by amendment.]

<PAGE>

(BACK COVER PAGE)

More information about the Fund's investments is available in the Fund's Annual
and Semi-Annual Reports to Shareholders. In the Fund's Annual Report to
Shareholders, you will find a discussion of the market conditions and investment
strategies that significantly affected the performance of the Fund's predecessor
during its last fiscal year. You can find more detailed information about the
Fund in the current Statement of Additional Information ("SAI"), which we have
filed with the Securities and Exchange and which is legally a part of this
prospectus. If you want a free copy of the SAI, the annual or semi-annual
report, or if you have any questions about investing in the Fund, you can write
to us at The Berwyn Fund, Shareholder Services, c/o PFPC, P. O. Box 8987,
Wilmington, DE 19899 or call toll free 1-800-992-6757.

You can find reports and other information about the Fund on the SEC web site
(http://www.sec.gov), or you can get copies of this information after payment of
a duplicating fee, by writing to the Public Reference Section of the SEC,
Washington, DC 20549-6009. Information about the Fund, including the SAI, can be
reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can
get information on the public reference room by calling the SEC at 800-SEC-0330.

Shareholder Services

PFPC Inc.
P.O. Box 8987
Wilmington, Delaware 19899

800-992-6757 (toll-free)

(Investment Company Act File Number 811-4963)

<PAGE>

THE BERWYN FUNDS
Berwyn Income Fund, a Series of The Berwyn Funds
Shareholder Services
c/o PFPC Inc.
P.O. Box 8987
Wilmington, DE 19899
1 (800) 992-6757

STATEMENT OF ADDITIONAL INFORMATION

April 30, 1999

This Statement of Additional Information ("SAI") is not a Prospectus. The SAI is
a document that relates to the Prospectus of the Berwyn Income Fund series (the
"Fund") of The Berwyn Funds (the "Trust") dated April 30, 1999 and contains
additional information regarding the Fund. This SAI should be read in
conjunction with the Prospectus. The Prospectus may be obtained by writing to
the Fund at the above address or calling the 800 number. [The audited financial
statements and notes thereto for the year ended December 31, 1998 of the Berwyn
Income Fund, Inc. ("BIF"), the predecessor of the Fund, and the [unqualified]
report of PricewaterhouseCoopers LLP, the Fund's independent accountants, on
such financial statements (the "Report"), included in BIF's 1998 Annual Report
to Shareholders will be incorporated by reference in this SAI by amendment to
the Trust's registration statement.]

<PAGE>
TABLE OF CONTENTS

Investment Policies and Risk Factors....................................... 1

Investment Restrictions.................................................... 3

Investment Advisory Arrangements........................................... 5

Expense Limitation......................................................... 5

Trustees and Officers...................................................... 6

Ownership of the Fund...................................................... 8

Portfolio Transactions and Brokerage Commissions........................... 8

Computation of Net Asset Value............................................. 9

Share Purchases............................................................ 9

Distributor................................................................ 10

Redemption of Shares....................................................... 10

Calculation of Performance Data............................................ 10

General Information........................................................ 12

Distribution and Taxes..................................................... 12

Financial Statements....................................................... 15

<PAGE>

INVESTMENT POLICIES AND RISK FACTORS

(See also "Investment Objectives, Principal Investment Strategies and Related
Risks" in the Fund's Prospectus.)

The Fund is a no-load, diversified series of shares of The Berwyn Funds, an
open-end, management investment company. Its investment objective is to provide
investors with current income while seeking to preserve capital by taking what
the Fund considers to be reasonable risks. In pursuing its investment objective,
the Fund may also offer, as a secondary consideration, the potential for capital
appreciation. To achieve its objective, the Fund invests in investment grade
corporate debt securities, securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, high yield, high risk corporate
debt securities (also known as "junk bonds"), unrated corporate debt securities,
and preferred and common stocks. The Adviser determines the percentage of each
category of securities to purchase and hold based upon the prevailing economic
and market conditions. This means, that the Fund may invest up to 100% of its
net assets in high yield, high risk corporate debt securities. The Fund,
however, may not invest in common stock when the value of the common stock in
the Fund's portfolio equals or exceeds 30% of the value of the Fund's net
assets.

Securities rated BBB or higher by Standard & Poor's Rating Group ("S&P") or Baa
or better by Moody's Investors Service, Inc. ("Moody's") are considered
investment grade corporate debt securities. Securities rated lower than BBB or
Baa by these services are considered high yield securities. Appendices A and B
list the definitions of the S&P and Moody's bond ratings.

The Fund may invest in fixed income securities that are not rated. The Fund will
only invest in unrated securities that have a creditworthiness, in the opinion
of the Adviser, that is equal to or better than the creditworthiness of fixed
income securities with S&P ratings of CC or Moody's ratings of Caa.

The Fund may also purchase certain debt securities that have not been registered
with the U.S. Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended ("1933 Act"), and are restricted from sale to
the general public. The Fund will purchase these restricted securities from the
issuer or qualified institutional buyers, and will sell these restricted
securities, exclusively in transactions that are exempt pursuant to Rule 144A
under the 1933 Act. The Fund will limit its investment in such restricted
securities to no more than 10% of the value of its net asset.

There are risks associated with investing in Rule 144A Securities. The
securities may become illiquid if qualified institutional buyers are not
interested in acquiring the securities. Although the Rule 144A Securities may be
resold in negotiated transactions, the price realized from these sales could be
less than the price originally paid by the Fund or less than what may be
considered the fair value of such securities. Furthermore, if such securities
are required to be registered under the securities laws of one or more
jurisdictions before being resold, the Fund may be required to bear the expense
of registration.

In an effort to minimize the risks associated with these securities, the Fund
will only purchase Rule 144A Securities of companies that have publicly traded
securities outstanding, have been in business a minimum of 5 years, and have a
market capitalization of at least $100 million. Finally, the Fund will purchase
Rule 144A Securities only in situations where the Adviser has a reasonable
expectation that the securities will be registered with the Securities and
Exchange Commission within six months.

In addition to corporate debt securities, the Fund may invest in the securities
issued or guaranteed by the U.S. Government and its agencies and in preferred
and common stocks. The securities of the U.S. Government in which the Fund
invests are U.S. Treasury bonds and notes. The Fund may also purchase debt
securities issued by Government agencies or by an instrumentality of the
Government. Some of the Federal agencies that issue or guarantee securities
include, among others, the Export-Import Bank of the United States, Farmers Home
Administration, Federal Housing Administration, Maritime Administration, Small
Business Administration and the Tennessee Valley Authority. An instrumentality
of the U. S. Government is a government agency organized under Federal charter
with government supervision. Instrumentalities issuing or guaranteeing
securities include, among others, the Federal Home Loan Banks, the Federal Land
Banks, Central Bank for Cooperatives, Federal Intermediate Credit Banks and the
Federal National Mortgage Association.

U.S. Treasury bonds and notes are backed by the full faith and credit of the
U.S. Government. Securities issued by Government agencies or instrumentalities
may or may not be backed by the full faith and credit of the United States. In
the case of securities not backed by the full faith and credit of the United
States, an investor must look principally to the agency or instrumentality for
repayment.

The Fund invests in preferred stocks that, in the opinion of the Adviser, are
offering an above average yield in comparison to preferred stocks of the same
quality or in preferred stocks offering a potential for capital appreciation.
The Fund may also purchase preferred stocks that are restricted securities
subject to the limitations under Rule 144A described above.

The Fund invests in common stocks that it considers to be selling at undervalued
prices. The investment approach of the Fund may be deemed "contrarian" in its
selection of common stocks due to the fact that this approach may lead the Fund
to select stocks not recommended by other investment advisers or brokerage
firms. The Fund, however, will purchase only common stocks that pay cash
dividends and will not purchase additional common stocks when common stocks
comprise 30% or more of the Fund's net assets.

Aside from the investments listed above, the Fund may at times, for temporary
defensive purposes, invest all or a portion of its assets in no-load money
market funds, savings accounts and certificates of deposit of domestic banks
with assets in excess of $1,000,000, commercial paper rated A-1, repurchase
agreements or Treasury bills, and may hold cash.

Investment by the Fund in a no-load money market fund will result in the Fund
paying a management fee and other fund expenses on the money invested in such
fund in addition to the operating expenses of the Fund.

The Fund may invest in real estate investment trusts ("REITs") and repurchase
agreements. The Fund limits investment in REITs to 10% of its net assets and
investment in repurchase agreements to 5% of its net assets.

REITs are companies that invest their capital in real estate, long and short
term mortgages and construction loans. These companies normally do not pay
federal income tax but distribute their income to their shareholders who become
liable for the tax. The Fund invests in REITs that generate income and have a
potential for capital appreciation. Some REITs own properties and earn income
from leases and rents. These types of REITs are termed "Equity" REITs. Other
REITs hold mortgages and earn income from interest payments. These REITs are
termed "Mortgage" REITs. Finally, there are "Hybrid" REITs that own properties
and hold mortgages. The Fund may invest in any of the three types of REITs and
may purchase the common stocks, preferred stocks or bonds issued by REITs.

There are risks in investing in REITs. The property owned by a REIT could
decrease in value and the mortgages and loans held by a REIT could become
worthless. The Adviser, however, monitors the investment environment and the
Fund's investments as a means of lessening risks. As of December 31, 1998, 4.9%
of the Fund's net assets were invested in REITs.

In a repurchase agreement a seller of securities, usually a banking institution
or securities dealer, sells securities to the Fund and agrees with the Fund at
the time of sale to repurchase the securities from the Fund at a mutually agreed
upon time and price. The Fund intends to enter into repurchase agreements only
with established banking institutions that deal in Treasury bills and notes. The
Fund intends to invest mostly in overnight repurchase agreements. In the event
of bankruptcy of the seller of a repurchase agreement or the failure of the
seller to repurchase the underlying securities as agreed upon, the Fund could
experience losses. Such losses could include a possible decline in the value of
the underlying securities during the period the Fund seeks to enforce its rights
thereto and a possible loss of all or part of the income from such securities.
The Fund would also incur additional expenses enforcing its rights. As of
December 31, 1998, the Fund had no assets invested in repurchase agreements.

INVESTMENT RESTRICTIONS

The investment restrictions set forth below are fundamental policies of the
Fund. Fundamental policies may not be changed without approval by vote of a
majority of the Fund's outstanding voting securities. As used in this SAI and in
the Prospectus, "a majority of the Fund's outstanding voting securities" means
the lesser of (a) more than 50% of the Fund's outstanding shares, or (b) at
least 67% of the shares present or represented by proxy at a meeting of
shareholders provided that the holders of more than 50% of the Fund's
outstanding shares are present in person or represented by proxy.

When investing its assets, the Fund will not:

(1) invest more than 5% of the value of its total assets in the securities of
any one issuer or purchase more than 10% of the outstanding voting
securities, debt or preferred stock of any one issuer. This restriction
does not apply to obligations issued or guaranteed by the U. S.
Government, its agencies or instrumentalities;

(2) invest more than 25% of the value of its total assets in the securities of
issuers in any one industry;

(3) lend money, provided that for purposes of this restriction, the acquisition
of publicly distributed corporate bonds, and investment in U.S. government
obligations, short-term commercial paper, certificates of deposit and
repurchase agreements shall not be deemed to be the making of a loan;

(4) buy or sell real estate and real estate mortgage loans, commodities,
commodity futures contracts, puts and calls and straddles;

(5) underwrite securities of other issuers, except as the Fund may be deemed to
be an underwriter under the Securities Act of 1933, as amended, in
connection with the purchase and sale of portfolio securities in accordance
with its objectives and policies;

(6) make short sales or purchase securities on margin;

(7) borrow money, except that the Fund may borrow up to 5% of the value of its
total assets at the time of such borrowing from banks for temporary or
emergency purposes (the proceeds of such loans will not be used for
investment or to purchase securities, but will be used to pay expenses);

(8) invest for the purposes of exercising control or management;

(9) invest in restricted securities (securities that must be registered under
the Securities Act of 1933, as amended, before they may be offered and sold
to the public, except that the Fund will be permitted to purchase
restricted securities that are eligible for resale pursuant to Rule 144A
under the Securities Act of 1933, as amended);

(10) participate in a joint investment account; and

(11) issue senior securities.

The Fund has also adopted certain investment restrictions that are not
fundamental policies. These restrictions are that the Fund will not invest in
real estate limited partnerships or oil, gas or other mineral leases and any
investments in warrants will not exceed 5% of the Fund's net assets.
Restrictions that are not fundamental policies may be changed by a vote of the
majority of the Board of Trustees. If any of these non-fundamental restrictions
are changed, however, the Fund will give shareholders at least 60 days' written
notice.

INVESTMENT ADVISORY ARRANGEMENTS

(See also "Management of the Fund" in the Fund's Prospectus)

The Killen Group, Inc., is the investment adviser (the "Adviser") to the Fund.
Robert E. Killen is Chairman, CEO and sole shareholder of the Adviser. He is
also President and Chairman of the Board of the Fund. Edward A. Killen, II is
Vice President, Secretary and a Director of the Adviser and a Trustee of the
Trust.

The Adviser provides the Fund with investment management services. Under the
Contract for Investment Advisory Services between the Trust, on behalf of the
Fund, and the Adviser (the "Contract"), dated [_______, 1999], the Adviser
provides the Fund with advice and recommendations with respect to investments,
investment policies, the purchase and sale of securities and the management of
the Fund's resources. In addition, employees of the Adviser administer the
operation of the Fund. These employees prepare and maintain the accounts, books
and records of the Fund, calculate the daily net asset value per share each day
the New York Stock Exchange is open, prepare and file the documents required of
the Fund under Federal and state laws and prepare all shareholder reports.

The Contract provides that it will continue in effect, after the initial
two-year term of the Contract, from year to year if continuation is specifically
approved annually by either a majority of the Board of Trustees or a vote of a
majority of the outstanding voting securities of the Fund. Continuance of the
Contract must also be approved annually by a majority of Trustees who are not
parties to the Contract or interested persons of any such party cast in person
at a meeting called for the purpose of voting on such approval. The Fund may
terminate the Contract on sixty days' written notice to the Adviser, without
payment of any penalty, provided such termination is authorized by the Board of
Trustees or by a vote of a majority of the outstanding voting securities of the
Fund. The Adviser may terminate the Contract on sixty days' written notice to
the Fund without payment of any penalty. The Contract will be automatically and
immediately terminated in the event of its assignment by the Adviser.

As compensation for its investment management services to the Fund under the
Contract, the Adviser is entitled to receive monthly compensation at the annual
rate of 0.50% of the average daily net assets of the Fund. The fee is computed
daily by multiplying the net assets for a day by the appropriate percentage and
dividing the result by 365. At the end of the month, the daily fees are added
and the sum is paid to the Adviser.

BIF, the predecessor of the Fund, paid the Adviser $789,024 in fees in 1998,
$806,435 in 1997, and $638,212 in 1996.

EXPENSE LIMITATION

The Contract provides that the Adviser's fee payable by the Fund will be reduced
in any fiscal year by any amount necessary to prevent Fund expenses and
liabilities (excluding taxes, interest, brokerage commissions and extraordinary
expenses, determined by the Fund or the Adviser, but inclusive of the Adviser's
fee payable by the Fund) from exceeding 2% of the average daily net assets of
the Fund. In any month that the Fund expenses and liabilities exceed 2%, the
Adviser's fee will be reduced so that expenses and liabilities will be 2%.
Although the Fund expects to maintain expenses within 2% of its average daily
net assets, the Adviser will not be responsible for additional expenses
exceeding its advisory fee payable by the Fund. Once the net assets of the Fund
exceed $100 million, the expense limitation will be reduced to 1.5% of the
average daily net assets of the Fund. The expense limitation has not reduced the
Adviser's fee since 1988. In 1998 the Fund's total annual operating expenses
amounted to 0.64% the average daily net assets of the Fund.

TRUSTEES AND OFFICERS

The Board of Trustees oversees the management of the business of the Trust and
the Fund. The Board is elected initially by shareholders and thereafter Trustees
are elected by the Board or the shareholders from time to time in accordance
with the Trust's Agreement and Declaration of Trust and By-Laws. The Board of
Trustees sets broad policies for the Fund and has responsibility for supervision
of the operations of the Fund. The daily operations of the Fund are administered
by employees of the Adviser under the Board's supervision.

The Trustees and executive officers of the Trust and their ages and principal
occupations for the past five years are set forth below:

<TABLE>
<CAPTION>
Name, Age, Position Principal Occupation for the Past Five Year
and Address
<S> <C>
*Robert E. Killen (57) Director of Westmoreland Coal Co. (a mining company) since
President & Trustee July 1996. Director and shareholder, Berwyn Financial Services
1199 Lancaster Avenue Corp. ("BFS"), a financial services company (registered as a broker-dealer with
Berwyn, Pennsylvania the SEC since December 1993 and a member of the National Association of
Securities Dealers, Inc. (the "NASD") since July 1994) since October 1991. President and
Director of the Berwyn Income Fund, Inc. ("BIF"), the predecessor of the Fund, and
The Berwyn Fund, Inc. ("TBF") (both registered investment companies managed by
the Adviser) from December 1986 to April, 1999 and from February 1983 to April 1999,
respectively. Chairman, Chief Executive Officer and sole shareholder of the Adviser
(an investment advisory firm) since April, 1996. President, Treasurer, Director and
sole shareholder of the Adviser from September 1982 to March 1996.

*Anthony N. Carrelli (50) Director of BIF from December 1996 to April 1999 and TBF from January 1995 to
Trustee April 1999. Vice President of the Adviser since August 1986.
1189 Lancaster Avenue
Berwyn, Pennsylvania

*Edward A. Killen, II (47) Director, Secretary and shareholder of BFS since October 1991. Director of BIF
Trustee from January 1995 to April 1999 and TBF from February 1983 to January 1995 and
1189 Lancaster Avenue from March 1999 to April 1999. Vice President, Secretary and Director of the
Berwyn, Pennsylvania Adviser since February 1983.

Denis P. Conlon (51) Director of BIF and TBF from June 1992 to April 1999.
Trustee President and Chief Executive Officer of CRC Industries (a worldwide
1282 Farm Road manufacturer) since September 1996. Vice President, Corporate
Berwyn, Pennsylvania Development, Berwind Corporation (diversified manufacturing
and financial company) from 1990 to September 1996.

Deborah D. Dorsi (43) Director of BIF and TBF from April 1998 to April 1999. Retired industry
Trustee executive since 1994. Director Worldwide Customer Support, Kulick Soffa
1801 Stanbridge Street Industries, Inc. (Semi Conductor Equipment Manufacturer) from 1993 to 1994.
Norristown, Pennsylvania Corporate Account Manager for Kulick & Soffa Industries, Inc. prior to 1993.

Kevin P. Ryan (51) President, Treasurer, Director and shareholder of BFS since
1199 Lancaster Avenue October 1991. Secretary-Treasurer Director of BIF from December 1986 to January
Berwyn, Pennsylvania 1995. Secretary and Treasurer of TBF from February 1983 to April 1999 and BIF from December
1986 to April 1999, Director of TBF from February 1983 to March 1999. Legal counsel to the
Adviser since September 1985.

* Robert E. Killen, Anthony N. Carrelli, Edward A. Killen, II and Kevin M. Ryan are "interested persons"
of the Fund as defined in the Investment Company Act of 1940, as amended (the "1940 Act"). Consequently, Robert E. Killen,
Anthony N. Carrelli, and Edward A. Killen, II are the "Interested Trustees" of the Fund. Robert E. Killen is an Officer,
Director and sole shareholder of the Adviser.

He is also a Director of BFS, a registered broker-dealer, and owns
one-third of its outstanding shares. Anthony N. Carrelli is a Vice
President of the Adviser. Edward A. Killen, II is an officer and Director
of the Adviser. He is also an officer, Director and the owner of one-third
of the outstanding shares of BFS. Kevin M. Ryan is legal counsel to the
Adviser and an officer, Director and owner of one-third of the outstanding
shares of BFS. In addition, Robert E. Killen and Edward A. Killen, II are
brothers and Kevin M. Ryan is brother-in-law to both. BFS serves as the
distributor for the Fund's shares in certain jurisdictions.

</TABLE>

Mr. Conlon and Ms. Dorsi are the Trustees of the Trust who are not "interested
persons" of the Trust as defined in the 1940 Act (the "Independent Trustees")
and are paid a fee of $800 for each Board or Committee meeting attended and are
reimbursed for any travel expenses by the Trust. If a Board and Committee
meetings are held on the same day, the Independent Trustees receive only one
$800 fee for all meetings on the same day. The Trust has not adopted a pension
or retirement plan or any other plan that would afford benefits to its Trustees.

The Trust estimates that the Trust will pay Ms. Dorsi and Mr. Conlon each $3,200
for the Trust's initial fiscal year ending December 31, 1999. The Trust is not a
part of any fund complex.

Officers of the Trust are not paid compensation by the Trust or any fund complex
for their work as officers and no fees are paid by the Trust or any fund complex
to the Trustees that are not Independent Trustees for the performance of their
duties. (See "Management of the Fund" in the Prospectus for a discussion of
management responsibilities of the Board and officers.)

OWNERSHIP OF THE FUND

As of February 11, 1999, there were no shareholders of the Trust or the Fund. As
of February 1, 1999 there were 9,136,706 shares of BIF, the predecessor of the
Fund, outstanding. Charles Schwab & Co. ("Schwab"), 101 Montgomery Street, San
Francisco, CA was the record owner of 44% of the outstanding shares. Although
Schwab is the record owner of more than 25% of the outstanding shares of the
Fund, Schwab cannot be considered to control the Fund. Schwab holds the shares
in nominee name for its customers and does not have the power to vote the shares
or to sell them. National Financial Services Corp., One World Trade Center, 200
Liberty Street, New York, NY was the record owner of 9% of the Fund's
outstanding shares. National Financial Services Corp. holds the shares for its
customers and does not have the power to vote the shares or to sell them. The
records of the Fund do not indicate that any individual owns more than 5% of the
Fund's outstanding shares. As of February 1, 1999, the Trustees and officers of
BIF, as a group, owned beneficially and of record 143,022 shares of BIF. This
amount constitutes 1.6% of the outstanding shares.

PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS

Subject to policy established by the Trust's Board of Trustees, the Adviser is
responsible for the Fund's portfolio decisions and the buying and selling of the
Fund's portfolio securities. In executing such securities, the Adviser will seek
to obtain the best net results for the Fund, taking into account such factors as
price (including the applicable brokerage commission or dealer spread), size of
order, difficulty of execution and operational facilities and capabilities of
the firm involved. While the Adviser generally seeks reasonably competitive
commission rates, the Adviser is authorized to pay a broker a brokerage
commission in excess of that which another broker might have charged for
effecting the same transaction, in recognition of the value of brokerage and
research services provided by the broker that effects the transaction.

The Adviser may select brokers who, in addition to meeting the primary
requirements of execution and price, have furnished statistical or other factual
information and services which, in the opinion of the Board, are reasonable and
necessary to the Fund's normal operations. The services provided by these
brokerage firms may also be used in dealing with the portfolio transactions of
the Adviser's other clients, and not all such services may be used by the
Adviser in connection with the Fund. Those services may include economic
studies, industry studies, security analysis or reports, sales literature and
statistical services furnished either directly to the Fund or to the Adviser.
The Adviser makes no effort in any given circumstance to determine the value of
these materials or services or the amount they might have reduced expenses of
the Adviser. The Fund considers giving brokerage business to brokers who have
assisted in the distribution of shares of the Fund.

The Board has adopted procedures pursuant to Rule 17e-1 under the 1940 Act that
permit portfolio transactions to be executed through affiliated brokers. In
1996, 1997, and 1998 BIF used an affiliated broker, BFS, pursuant to
substantially the same procedures, and the Fund anticipates using BFS pursuant
to its Rule 17e-1 procedures in its current fiscal year.

BFS is affiliated with the Fund because officers and Trustees of the Fund and
the Adviser are officers, Directors and shareholders of BFS. In addition, BFS
serves as the distributor for the Fund's shares in various jurisdictions
pursuant to a written agreement.

In 1998, BIF paid a total of $185,795 in commissions to BFS. This figure
represents 85% of the total commissions paid by BIF. The percentage of BIF's
aggregate dollar amount of transactions involving the payment of commissions
effected through BFS was 88%.

BIF paid brokerage commissions of $217,957 in 1998, $247,987 in 1997 and
$144,128 in 1996.

The Adviser has other advisory clients which include individuals, trusts,
pension and profit sharing funds, and an investment company, some of which have
similar investment objectives to the Fund. As such, there will be times when the
Adviser may recommend purchases and/or sales of the same portfolio securities
for the Fund and its other clients. In such circumstances, it will be the policy
of the Adviser to allocate purchases and sales as well as expenses incurred in
the transactions among the Fund and its other clients in a manner which the
Adviser deems equitable, taking into consideration such factors as size of
account, concentration of holdings, investment objectives, tax status, cash
availability, purchase cost, holding period and other pertinent factors relative
to each account. Simultaneous transactions could adversely affect the ability of
the Fund to obtain or dispose of the full amount of a security which it seeks to
purchase or sell or the price at which such security can be purchased or sold.

COMPUTATION OF NET ASSET VALUE

(See also "Computation of Net Asset Value" in the Prospectus.)

The net asset value per share of the Fund is determined by dividing the total
value of the Fund's investments and other assets, less any liabilities, by the
total number of outstanding shares of the Fund. Net asset value per share is
determined as of the close of regular trading on the New York Stock Exchange
(the "Exchange") (ordinarily 4:00 p.m. Eastern Time) on each day that the
Exchange is open and is effective as of the time of computation.

SHARE PURCHASES

(See also "Buying Shares" in the Prospectus.)

The Fund offers shares for sale on a continuous basis. The Fund does not impose
sales charge (load) on the purchase of the Fund's shares. The offering price of
shares of the Fund is the net asset value per share next determined after
receipt by the Transfer Agent or a broker authorized by the Fund to receive
orders for the purchase of shares. The net asset value of shares can be expected
to fluctuate daily.

The minimum initial investment is $10,000 per investor. This investment may be
divided by a single investor among different investment accounts in the Fund
that total $10,000 in the aggregate or between accounts in the Fund and the
Berwyn Fund series of the Trust. Subsequent investments must be at least $250
per account. The minimum initial investment for Individual Retirement Accounts
("IRAs") is $1,000. The minimum is $250 for a spousal IRA. Subsequent
investments in IRAs must be at least $250. There are no minimum requirements for
pension and profit sharing plans or custodial accounts for minors.

The Fund reserves the right to reduce or waive the minimum purchase requirements
in certain cases where subsequent and continuing purchases are contemplated.

DISTRIBUTOR

(See also "Distributor" in the Prospectus.)

BFS, a broker-dealer registered with the U.S. Securities and Exchange
Commission, is the current distributor of the Fund's shares, pursuant to a
selling agreement which became effective April 30, 1999 (the "Selling
Agreement"). Under the Selling Agreement, BFS is the non-exclusive agent in
certain jurisdictions for the Fund's continuous offering of shares. Shares of
the Fund are offered to the public at net asset value, without the imposition of
a sales load. The jurisdictions in which BFS is the distributor are Arizona,
Arkansas, Florida, Maryland, North Dakota, Nebraska, Texas, Vermont and West
Virginia.

The Selling Agreement provides that it will continue in effect from year to year
only so long as such continuance is approved at least annually by the Trust's
Board of Trustees and by the vote of a majority of the Trustees who are not
parties to the agreement or interested persons of any such party by vote cast in
person at a meeting called for the purpose of voting on such approval. The
Selling Agreement will terminate automatically in the event of its assignment.

REDEMPTION OF SHARES

(See also "Redemption of Shares" in the Fund's Prospectus.)

The Fund will redeem all full and fractional shares of the Fund upon receipt of
a written request in proper form. The redemption price is the net asset value
per share next determined after receipt of proper notice of redemption.
Shareholders liquidating their holdings will receive upon redemption all
dividends reinvested through the date of redemption.

CALCULATION OF PERFORMANCE DATA

Yield

The Fund's yield for the month ended December 31, 1998 was 8.7%.

The yield was determined based upon the net investment income per share for the
period December 1 to December 31, 1998. Expenses accrued for the period were
subtracted from the interest and dividends accrued and the remainder was divided
by daily average number of shares multiplied by maximum offering price per
share. The number then obtained was annualized.

Total Return

The average annual total return of the Fund for one year, five years and ten
years ended December 31, 1998 are listed below:

One Year: (4.57%)
Five Years: 8.13%
Ten Years: 11.20%

The period of time for one year's performance is from January 1, 1998 to
December 31, 1998. The dates for the five-year period are January 1, 1994 to
December 31, 1998 and for the ten year period are from January 1, 1989 to
December 31, 1998. To obtain the performance listed above, the Fund computed its
average total return for each period of time. The Fund made this calculation by
first determining the total return for a period and then using an exponential
function based upon the number of years involved to obtain an average.

The total return for a period is calculated by determining the redeemable value
of $1,000 initial investment made at the beginning of the period, with dividends
and capital gains reinvested on the reinvestment date, on the last day of the
period and dividing that value by $1,000. The average annual total return for
the period is calculated by taking the total return for the period and
determining the annual average by using an exponential function based upon the
number of years and any fraction thereof in the period.

In addition to an average annual total return, the Fund calculates its total
returns on a calendar year basis. Listed below are the Fund's total returns for
the calendar years 1988 through 1998:

January 1, 1988 - December 31, 1988 l1.3%
January 1, 1989 - December 31, 1989 11.9%
January 1, 1990 - December 31, 1990 -0.13%
January 1, 1991 - December 31, 1991 23.0%
January 1, 1992 - December 31, 1992 21.7%
January 1, 1993 - December 31, 1993 16.9%
January 1, 1994 - December 31, 1994 -1.1%
January 1, 1995 - December 31, 1995 21.0%
January 1, 1996 - December 31, 1996 14.0%
January 1, 1997 - December 31, 1997 13.4%
January 1, 1998 - December 31, 1998 -4.57%

The Fund calculates the total return for a calendar year by determining the
redeemable value of $1,000 investment made at the beginning of the year with
dividends and capital gains reinvested on the reinvestment date, on last day of
the year and dividing that value by $1,000.

Annual average total return and the total returns for calendar year are based on
historical performance and are not intended as an indication of future
performance.

GENERAL INFORMATION

History and Capital Structure

The Fund is a series of shares of The Berwyn Funds, a Delaware business trust
formed under the laws of the State of Delaware on February 4, 1999. The Fund is
the successor to BIF, a corporation organized under the laws of the Commonwealth
of Pennsylvania on December 26, 1986, which was a no-load, diversified, open-end
management investment company. In a reorganization approved by vote of the
shareholders of BIF and accomplished on April 30, 1999, all the assets and
liabilities of BIF were transferred to the Fund and the shareholders of BIF
became the shareholders of the Fund. Thereafter the Fund has carried on the
business of BIF.

The Fund has authorized an unlimited number of shares of beneficial interest,
without par value per share. Each share has equal dividend, distribution and
liquidation rights. There are no conversion or preemptive rights applicable to
any shares of the Fund. All shares issued are fully paid and nonassessable. Fund
shares do not have cumulative voting rights.

Custodian

PFPC Trust Company, 400 Bellevue Parkway, Suite 108, Wilmington, DE 19809 is the
custodian of the Fund. The custodian holds all securities and cash owned by the
Fund and collects all dividends and interest due on the securities.

Independent Accountants

PricewaterhouseCoopers, LLP, 30 South 17th Street, Philadelphia, Pennsylvania
has been selected as the independent accountants for the Fund by the Board of
Trustees and its initial sole shareholder. PricewaterhouseCoopers, LLP, will
perform an annual audit of the financial statements of the Fund.

Litigation

The Fund is not involved in any litigation or other legal proceedings.

DISTRIBUTION AND TAXES

Distributions of Net Investment Income

The Fund receives income generally in the form of dividends and interest on its
investments. This income, less expenses incurred in the operation of the Fund,
constitutes the Fund's net investment income from which dividends may be paid to
you. Any distributions by the Fund from such income will be taxable to you as
ordinary income, whether you take them in cash or in additional shares.

Distributions of Capital Gains

The Fund may derive capital gains and losses in connection with sales or other
dispositions of its portfolio securities. Distributions from net short-term
capital gains will be taxable to you as ordinary income. Distributions from net
long-term capital gains will be taxable to you as long-term capital gain,
regardless of how long you have held your shares in the Fund. Any net capital
gains realized by the Fund generally will be distributed once each year, and may
be distributed more frequently, if necessary, in order to reduce or eliminate
excise or income taxes on the Fund.

Information on the Tax Character of Distributions

The Fund will inform you of the amount of your ordinary income dividends and
capital gains distributions at the time they are paid, and will advise you of
their tax status for federal income tax purposes shortly after the close of each
calendar year. If you have not held Fund shares for a full year, the Fund may
designate and distribute to you, as ordinary income or capital gain, a
percentage of income that is not equal to the actual amount of such income
earned during the period of your investment in the Fund.

Election to Be Taxed as a Regulated Investment Company

The Fund has elected to be treated as a regulated investment company under
Subchapter M of the Internal Revenue Code, has qualified as such for its most
recent fiscal year, and intends to so qualify during the current fiscal year. As
a regulated investment company, the Fund generally pays no federal income tax on
the income and gains it distributes to you. The board reserves the right not to
maintain the qualification of the Fund as a regulated investment company if it
determines such course of action to be beneficial to shareholders. In such case,
the Fund will be subject to federal, and possibly state, corporate taxes on its
taxable income and gains, and distributions to you will be taxed as ordinary
dividend income to the extent of the Fund's earnings and profits.

Excise Tax Distribution Requirements

To avoid federal excise taxes, the Internal Revenue Code requires the Fund to
distribute to you by December 31 of each year, at a minimum, the following
amounts: 98% of its taxable ordinary income earned during the calendar year; 98%
of its capital gain net income earned during the twelve month period ending
October 31; and 100% of any undistributed amounts from the prior year. The Fund
intends to declare and pay these amounts in December (or in January, which
you treat as received in December) to avoid these excise taxes, but can
give no assurances that its distributions will be sufficient to eliminate all
taxes.

Redemption of Fund Shares

Redemptions and exchanges of Fund shares are taxable transactions for federal
and state income tax purposes. If you redeem your Fund shares, or exchange your
Fund shares for shares of the Berwyn Income Fund, the Rodney Square Fund or the
Rodney Square Tax-Exempt Fund, the IRS will require that you report a gain or
loss on your redemption or exchange. If you hold your shares as a capital asset,
the gain or loss that you realize will be capital gain or loss and will
belong-term or short-term, generally depending on how long you hold your shares.
Any loss incurred on the redemption or exchange of shares held for six months or
less will be treated as a long-term capital loss to the extent of any long-term
capital gains distributed to you by the Fund on those shares.

All or a portion of any loss that you realize upon the redemption of your Fund
shares will be disallowed to the extent that you buy other shares in the Fund
(through reinvestment of dividends or otherwise) within 30 days before or after
your share redemption. Any loss disallowed under these rules will be added to
your tax basis in the new shares you buy.

U.S. Government Obligations

Many states grant tax-free status to dividends paid to you from interest earned
on direct obligations of the U.S. government, subject in some states to minimum
investment requirements that must be met by the Fund. Investments in Government
National Mortgage Association or Federal National Mortgage Association
securities, bankers` acceptances, commercial paper and repurchase agreements
collateralized by U.S. government securities do not generally qualify for
tax-free treatment. The rules on exclusion of this income are different for
corporations.

Dividends-Received Deduction for Corporations

If you are a corporate shareholder, you should note that ___% of the dividends
paid by the Fund for the most recent fiscal year qualified for the
dividends-received deduction. In some circumstances, you will be allowed to
deduct these qualified dividends, thereby reducing the tax that you would
otherwise be required to pay on these dividends. The dividends-received
deduction will be available only with respect to dividends designated by the
Fund as eligible for such treatment. All dividends (including the deducted
portion) must be included in your alternative minimum taxable income
calculation.

Investment in Complex Securities

The Fund may investment in complex securities. These investments may be subject
to numerous special and complex tax rules. These rules could affect whether
gains and losses recognized by the Fund are treated as ordinary income or
capital gain, accelerate the recognition of income to the Fund and/or defer the
Fund's ability to recognize losses. In turn, these rules may affect the amount,
timing or character of the income distributed to you by the Fund.

FINANCIAL STATEMENTS

BIF's audited financial statements and notes thereto for the year ended December
31, 1998 and the [unqualified] report of PricewaterhouseCoopers LLP, BIF's
independent accountants, on such financial statements (the "Report"), which are
included in BIF's 1998 Annual Report to Shareholders (the "Annual Report") will
be incorporated by reference in this SAI by amendment to the Trust's
registration statement. A copy of the Annual Report accompanies this SAI and an
investor may obtain a copy of the Annual Report without charge by writing to the
Fund at the address on the cover of the SAI or calling (800) 992-6757.

<PAGE>
APPENDIX A

DEFINITIONS OF STANDARD & POOR'S BOND RATINGS

Standard & Poor's Ratings Group gives ratings to bonds that range from AAA to D.
The Fund may invest in bonds with ratings of CC above. Definitions of these
ratings are set forth below.

AAA Debt rated AAA has the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely
strong.

AA Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small
degree.

A Debt rated A has a strong capacity to pay interest and principal
although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in
higher rated categories.

BBB Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in
higher rated categories.

BB,B,
CCC,CC Debt rated BB, B, CCC and CC is regarded, on balance, as
predominantly speculative with respect to capacity to pay
interest and repay principal in accordance with the terms of
the obligation. BB indicates the lowest degree of speculation
and C the highest degree of speculation. While such debt will
likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures
to adverse conditions.

D Debt rated D is in default, and payment of interest and/or
repayment of principal is in arrears.

<PAGE>

APPENDIX B

MOODY'S BOND RATINGS

Moody's Investors Service, Inc. give ratings to bonds that range from Aaa to D.
Definitions of these ratings are set forth below. The Fund may invest in bonds
with any ratings of Caa or better.

Aaa - These bonds are judged to be of the best quality. They carry the
smallest degree of investment risk. Interest payments are protected
by a large or by an exceptionally stable margin and principal is
secure.

Aa - These bonds are judged to be of high quality by all standards.
They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation
of protective elements may be of greater amplitude or there may be
other elements present which make the long-term risks appear
somewhat larger than in Aaa securities.

A - These are bonds which possess many favorable investment
attributes and are to be considered as upper medium grade
obligations. Factors giving security to principal and interest
are considered adequate but elements may be present which suggest
a susceptibility to impairment sometime in the future.

Baa - These bonds are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Such bonds
lack outstanding investment characteristics and in fact have
speculative characteristics as well.

Ba - These are bonds judged to have speculative elements; their future
cannot be considered as well assured. Uncertainty of position
characterizes bonds in this class.

B - These bonds generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period
of time may be small.

Caa - These are bonds of poor standing. Such issues may be in default
or there may be present elements of danger with respect to
principal or interest.

Ca - These bonds represent obligations which are speculative in a high
degree. Such issues are often in default or have other market
shortcomings.

C - These are the lowest rated class of bonds and issues so rated
can be regarded as having extremely poor prospects of ever
attaining any real investment standing.

<PAGE>

THE BERWYN FUNDS
Berwyn Fund, a Series of The Berwyn Funds
Shareholders Services
c/o PFPC Inc.
P. O. Box 8987
Wilmington, DE 19899
1 (800) 992-6757

STATEMENT OF ADDITIONAL INFORMATION

April 30, 1999

This Statement of Additional Information ("SAI") is not a Prospectus. The SAI is
a document that relates to the Prospectus of the Berwyn Fund series (the "Fund")
of The Berwyn Funds (the "Trust") dated April 30, 1999 and contains additional
information regarding the Fund. This SAI should be read in conjunction with the
Prospectus. The Prospectus may be obtained by writing to the Fund at the above
address or calling the 800 number. [The audited financial statements and notes
thereto for the year ended December 31, 1998 of The Berwyn Fund, Inc. ("TBF"),
the predecessor of the Fund, and the [unqualified] report of
PricewaterhouseCoopers LLP, the Fund's independent accountants, on such
financial statements (the "Report"), included in TBF's 1998 Annual Report to
Shareholders will be incorporated by reference in this SAI by amendment to the
Trust's registration statement].

<PAGE>

TABLE OF CONTENTS

Investment Policies and Risk Factors........................................1

Investment Restrictions.....................................................2

Investment Advisory Arrangements............................................4

Expense Limitation..........................................................5

Trustees and Officers.......................................................5

Ownership of the Fund.......................................................7

Portfolio Transactions and Brokerage Commissions............................7

Computation of Net Asset Value..............................................8

Share Purchases.............................................................8

Distributor.................................................................9

Redemption of Shares........................................................9

Calculation of Performance Data.............................................9

General Information.........................................................10

Distribution and Taxes......................................................11

Financial Statements........................................................12

<PAGE>

INVESTMENT POLICIES AND RISK FACTORS

(See also "Investment Objectives, Principal Investment Strategies and Related
Risks " in the Fund's Prospectus.)

The Fund is a no-load, non-diversified series of shares of The Berwyn Funds, an
open-end management investment company that seeks long term (i.e., greater than
one year) capital appreciation by investing in common stocks and fixed income
securities that offer a potential for capital appreciation. Current income is a
secondary consideration.

Under normal market conditions, the Fund invests at least 80% of the value of
its net assets in common stocks. The Fund invests in common stocks that The
Killen Group, Inc. (the "Adviser") considers to be selling at undervalued
prices. These are stocks selling substantially below their book value or at a
low valuation to present earnings or are stocks of companies, judged by the
Adviser, to have above average growth prospects and to be selling at a small
premium to book value or at modest valuation to their present earnings level.

The investment approach of the Fund may be deemed "contrarian" in that it may
lead the Fund to select stocks not recommended by other investment advisers or
brokerage firms.

While the portfolio of the Fund emphasizes common stocks, the Fund may also
invest up to 20% of the value of its net assets in fixed income securities. The
fixed income securities in which the Fund invests are corporate bonds and
preferred stocks. The Fund selects fixed income securities that have a potential
for capital appreciation due to prevailing interest rates.

There are no restrictions on the Adviser as to the investment rating a fixed
income corporate debt security must have in order to be purchased. The Fund may
purchase fixed income corporate debt securities in any investment grade rating
listed by Standard & Poor's Ratings Group ("Standard & Poor's") and Moody's
Investors Service, Inc. ("Moody's). (See Appendices A and B for Standard &
Poor's and Moody's definitions of Bond ratings.) This means that the Fund may
invest up to 20% of the value of its net assets in high yield, high risk
corporate debt securities that are commonly referred to as "junk bonds". These
are corporate debt securities that are rated lower than BBB by Standard & Poor's
and Baa by Moody's. These securities have a low rating due to the fact that the
issuers of the securities are not considered as creditworthy as the issuers of
investment grade bonds. There is the risk that the issuer of a lower rated
security may default in the payment of interest and principal. On the whole,
these lower rated securities are considered speculative investments.

As of December 31, 1998, 0.60% of the Fund's net assets were invested in lower
rated corporate debt securities.

The Fund may at times, for temporary defensive purposes, invest all or a portion
of its assets in no-load money market funds, savings accounts and certificates
of deposit of domestic banks with assets in excess of $1,000,000, commercial
paper with the highest investment grade rating (i.e., A-l and P-1, as defined in
Standard & Poor's and Moody's Commercial Paper Ratings, respectively),
repurchase agreements, U.S. Treasury bills, notes and bonds, or cash.

The Fund's investment in securities issued by the U. S. Government does not mean
the U.S. Government is required to provide financial support to the Fund.

The Fund may also invest in Real Estate Investment Trusts ("REITs"). REITs are
companies that invest in real estate. REITs normally do not pay federal income
tax but distribute their income to their shareholders who become liable for the
tax. Some REITs own properties and earn income from leases and rents. These
types of REITs are termed "Equity" REITs. Other REITs hold mortgages and earn
income from interest payments. These REITs are termed "Mortgage" REITs. Finally,
there are "Hybrid" REITs that own properties and hold mortgages. The Fund may
invest in any of the three types of REITs and may purchase the common stocks,
preferred stocks or bonds issued by REITs. The Fund invests in REITs that
generate income and have a potential for capital appreciation. There are risks
in investing in REITs. The property owned by a REIT could decrease in value and
the mortgages and loans held by a REIT could become worthless. The Adviser,
however, monitors the investment environment and the Fund's investments as a
means of lessening risks. As of December 31, 1998, the Fund was not invested in
any REITs.

In a repurchase agreement a seller of a security, usually a banking institution
or securities dealer, sells securities to the Fund and agrees with the Fund at
the time of sale to repurchase the securities from the Fund at a mutually agreed
upon time and price. The Fund intends to enter into repurchase agreements only
with established banking institutions that deal in treasury bills and notes. The
Fund intends to invest mostly in overnight repurchase agreements. The Fund will
only invest up to 5% of its net assets in repurchase agreements. In the event of
the bankruptcy of the seller of a repurchase agreement or the failure of a
seller to repurchase the underlying securities as agreed upon, the Fund could
experience losses. Such losses could include a possible decline in the value of
the underlying securities during the period while the Fund seeks to enforce its
rights thereto and a possible loss of all or part of the income from such
securities. The Fund would also incur additional expenses enforcing its rights.
As of December 31, 1998, the Fund had no assets invested in repurchase
agreements.

INVESTMENT RESTRICTIONS

The investment restrictions set forth below are fundamental policies of the
Fund. Fundamental policies may not be changed without approval by vote of a
majority of the Fund's outstanding voting securities. Under the Investment
Company Act of 1940, as amended (the "1940 Act"), such approval requires the
affirmative vote at a meeting of shareholders of the lesser of (a) more than 50%
of the Fund's outstanding shares, or (b) at least 67% of shares present or
represented by proxy at the meeting, provided that the holders of more than 50%
of the Fund's outstanding shares are present in person or represented by proxy.

When investing its assets, the Fund will not:

(1) purchase more than 10% of the outstanding voting securities of a single
issuer;

(2) invest more than 25% of the value of its total assets in any one industry;

(4) buy or sell real estate, real estate mortgage loans, commodities, commodity
futures contracts, puts, calls and straddles;

(5) underwrite securities of other issuers, except as the Fund may be deemed to
be an underwriter under the Securities Act of 1933, as amended (the "1933
Act") in connection with the purchase and sale of portfolio securities in
accordance with its objectives and policies;

(6) make short sales or purchase securities on margin;

(8) invest for the purposes of exercising control or management;

(9) invest in restricted securities (securities that must be registered under
the 1933 Act before they may be offered and sold to the public);

(10) participate in a joint investment account; and

(11) issue senior securities.

In addition, the Fund has the following restrictions:

(1) With respect to 50% of its assets, the Fund will not at time of purchase
invest more than 5% of its gross assets, at market value, in the securities
of any one issuer (except the securities of the United States government);
and

(2) With respect to the other 50% of its assets, the Fund will not invest at
the time of purchase more than 15% of the market value of its total assets
in any single issuer.

The Fund has also adopted certain investment restrictions that are not
fundamental policies. These restrictions are that (i) the Fund will not invest
in real estate limited partnerships or in oil, gas or other mineral leases, and
(ii) the Fund's investments in warrants will not exceed 5% of the Fund's net
assets. Restrictions that are not fundamental may be changed by a vote of the
majority of the Board of Trustees. But if any of these nonfundamental
restrictions are changed, the Fund will give shareholders at least 60 days'
written notice.

INVESTMENT ADVISORY ARRANGEMENTS

(See also "Management of the Fund" in the Fund's Prospectus)

The Killen Group, Inc. is the investment adviser (the "Adviser") to the Fund.
Robert E. Killen is Chairman, Chief Executive Officer ("CEO") and sole
shareholder of the Adviser. Edward A. Killen, II is Vice President and Secretary
of the Adviser. Both Robert E. Killen and Edward A. Killen, II are Directors of
the Adviser and Robert E. Killen is a Trustee of the Trust. In addition, Robert
E. Killen is President of the Trust.

As compensation for its investment management services to the Fund under the
Contract, the Adviser is entitled to receive monthly compensation at the annual
rate of 1% of the average daily net assets of the Fund. The fee is computed
daily by multiplying the net assets for a day by 1% and dividing the result by
365. At the end of the month, the daily fees are added and the resulting sum is
paid to the Adviser.

TBF paid the Adviser $843,125 in fees in 1998, $947, 901 in 1997, and $976,110
in 1996.

EXPENSE LIMITATION

The Contract provides that the Adviser's fee payable by the Fund will be reduced
in any fiscal year by any amount necessary to prevent Fund expenses and
liabilities (excluding taxes, interest, brokerage commissions and extraordinary
expenses, determined by the Fund or the Adviser, but inclusive of the Adviser's
fee payable by the Fund) from exceeding 2% of the average daily net assets of
the Fund. In any month that the Fund expenses and liabilities exceed 2%, the
Adviser's fee will be reduced so that expenses and liabilities will be 2%.
Although the Fund expects to maintain expenses within 2% of its average daily
net assets, the Adviser will not be responsible for additional expenses
exceeding its advisory fee payable by the Fund. Once the net assets of the Fund
exceed $100 million, the expense limitation will be reduced to 1.5% of the
average daily net assets of the Fund. The expense limitation has not reduced the
Adviser's fee since 1985. In 1998, the Fund's ratio of total annual operating
expenses to average net assets was 1.19%.

TRUSTEES AND OFFICERS

The Trustees and executive officers of the Trust and their principal occupations
for the past five years are set forth below:

<TABLE>
<CAPTION>
<S> <C>
Name, Age, Position Principal Occupation for the Past Five Year
and Address
*Robert E. Killen (57) Director of Westmoreland Coal Co. (a mining company) since
President & Trustee July 1996. Director and shareholder, Berwyn Financial Services
1199 Lancaster Avenue Corp. ("BFS"), a financial services company (registered as a broker-dealer with
Berwyn, Pennsylvania the SEC since December 1993 and a member of the National Association of
Securities Dealers, Inc. (the "NASD") since July 1994) since October 1991. President and
Director of the Berwyn Income Fund, Inc. ("BIF"), the predecessor of the Fund, and
The Berwyn Fund, Inc. ("TBF") (both registered investment companies managed by
the Adviser) from December 1986 to April, 1999 and from February 1983 to April 1999,
respectively. Chairman, Chief Executive Officer and sole shareholder of the Adviser
(an investment advisory firm) since April, 1996. President, Treasurer, Director and
sole shareholder of the Adviser from September 1982 to March 1996.

Denis P. Conlon (51) Director of BIF and TBF from June 1992 to April 1999.
Trustee President and Chief Executive Officer of CRC Industries (a worldwide
1282 Farm Road manufacturer) since September 1996. Vice President, Corporate
Development, Berwind Corporation (diversified manufacturing and financial
company) Berwyn, Pennsylvania from 1990 to September 1996.

Kevin P. Ryan (51) President, Treasurer, Director and shareholder of BFS since October 1991. Director of BIF from
Secretary and Treasuer December 1986 to January 1995. Secretary and Treasurer of TBF from February 1983 to April and
1199 Lancaster Avenue BIF from December 1986 to April 1999. Director of TBF from February 1983 to March 1999. Legal
counsel to the Adviser since September 1985.

* Robert E. Killen, Anthony N. Carrelli, Edward A. Killen, II and Kevin M. Ryan are "interested persons" of the Fund as defined in
the Investment Company Act of 1940, as amended (the "1940 Act"). Consequently, Robert E. Killen, Anthony N. Carrelli, and Edward A.
Killen, II are the "Interested Trustees" of the Fund.
</TABLE>

Robert E. Killen is an Officer, Director and sole shareholder of the Adviser. He
is also a Director of BFS, a registered broker-dealer, and owns one-third of its
outstanding shares. Anthony N. Carrelli is a Vice President of the Adviser.
Edward A. Killen, II is an officer and Director of the Adviser. He is also an
officer, Director and the owner of one-third of the outstanding shares of BFS.
Kevin M. Ryan is legal counsel to the Adviser and an officer, Director and owner
of one-third of the outstanding shares of BFS. In addition, Robert E. Killen and
Edward A. Killen, II are brothers and Kevin M. Ryan is brother-in-law to both.
BFS serves as the distributor for the Fund's shares in certain jurisdictions.

The Trust estimates that the Trust will pay Ms. Dorsi and Mr. Conlon each $3,200
for the Trust's initial fiscal year ending December 31, 1999. The Trust is not a
part of any fund complex.

OWNERSHIP OF THE FUND

As of February 11, 1999, there are no shareholders of the Trust or the Fund. As
of February 1, 1999, there were 3,554,799 shares of TBF, the predecessor of the
Fund, outstanding. Charles Schwab & Co., 101 Montgomery Street, San Francisco,
CA was the record owner of 12% of the outstanding shares. National Financial
Services Corp., One World Financial Center, 200 Liberty Street, New York, NY was
the record owner of 9% of the outstanding shares. The records of the Fund do not
indicate that any individual owned more than 5% of the outstanding shares of the
Fund. As of February 1, 1999, the Directors and officers of TBF as a group,
owned beneficially and of record 338,297 shares of TBF. This amount constituted
9.5% of the outstanding shares of TBF.

PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS

Subject to policy established by the Trust's Board of Trustees, the Adviser is
responsible for the Fund's portfolio decisions and the buying and selling of the
Fund's portfolio securities. In executing such transactions, the Adviser seeks
to obtain the best net results for the Fund, taking into account such factors as
price (including the applicable brokerage commission or dealer spread), size of
order, difficulty of execution and operational facilities and capabilities of
the firm involved. While the Adviser generally seeks reasonably competitive
commission rates, the Adviser is authorized to pay a broker a brokerage
commission in excess of that which another broker might have charged for
effecting the same transaction, in recognition of the value of brokerage and
research services provided by the broker that effects the transaction.

The Adviser may select brokers who, in addition to meeting the primary
requirements of execution and price, have furnished statistical or other factual
information and services, which in the opinion of the Board, are reasonable and
necessary to the decision making responsibilities of the Adviser for the Fund.
The services provided by these brokerage firms may also be used in dealing with
the portfolio transactions of the Adviser's other clients and not all such
services may be used by the Adviser in connection with the Fund. Those services
may include economic studies, industry studies, security analysis or reports,
sales literature of the Fund's portfolio securities and statistical services
furnished either directly to the Fund or to the Adviser. No effort is made in
any given circumstance to determine the value of these materials or services or
the amount by which they might have reduced expenses of the Adviser. The Fund
considers giving brokerage business to brokers who have assisted in the
distribution of shares of the Fund.

The Board has adopted procedures pursuant to Rule 17e-1 under the 1940 Act that
permit portfolio transactions to be executed through affiliated brokers. In
1996, 1997, and 1998, BIF used an affiliated broker, BFS, pursuant to
substantially the same procedures, and the Fund anticipates using BFS pursuant
to its Rule 17e-1 procedures in its current fiscal year.

In 1998, TBF paid a total of $109,388 in commissions to BFS. This figure
represents 53% of the total commissions paid by TBF. The percentage of the
Fund's aggregate dollar amount of transactions involving the payment of
commissions effected through BFS was 72%.

TBF paid brokerage Commissions of $207,140 in 1998, $231,239 in 1997, and
$303,958 in 1996. The level of trading in 1998 was similar to the level in
1997.]

The Adviser has other advisory clients which include individuals, trusts,
pension and profit sharing funds, some of which have similar investment
objectives to the Fund. As such, there will be times when the Adviser may
recommend purchases and/or sales of the same portfolio securities for the Fund
and its other clients. In such circumstances, it will be the policy of the
Adviser to allocate purchases and sales as well as expenses incurred in the
transactions among the Fund and its other clients in a manner which the Adviser
deems equitable, taking into consideration such factors as size of account,
concentration of holdings, investment objectives, tax status, cash availability,
purchase cost, holding period and other pertinent factors relative to each
account. Simultaneous transactions could adversely affect the ability of the
Fund to obtain or dispose of the full amount of a security which it seeks to
purchase or sell or the price at which such security can be purchased or sold.

COMPUTATION OF NET ASSET VALUE

(See also "Computation of Net Asset Value" in the Prospectus). The net asset
value per share of the Fund is determined by dividing the total value of the
Fund's investments and other assets, less any liabilities, by the total number
of outstanding shares of the Fund. Net asset value per share is determined at
the close of regular trading on the New York Stock Exchange (the "Exchange")
(ordinarily 4:00 p.m. Eastern Time) on each day that the Exchange is open and is
effective as of the time of computation.

<PAGE>
SHARE PURCHASES

(See also "Buying Shares" in the Prospectus)

The Fund is closed to new investors. This means that only investors who
currently have accounts with the Fund may add to their accounts or open new
accounts.

The offering price of shares of the Fund is the net asset value per share next
determined after receipt by the Transfer Agent or a broker authorized by the
Fund to receive orders for the purchase of shares. There is no sales load and
the net asset value of shares can be expected to fluctuate daily.

DISTRIBUTOR

BFS, a broker-dealer registered with the SEC and a member of the NASD, is the
current distributor of the Fund's shares, pursuant to a selling agreement which
became effective on [April 30], 1999 (the "Selling Agreement"). Under the
Selling Agreement, BFS is the non-exclusive agent in certain jurisdictions for
the Fund's continuous offering of shares. Shares of the Fund are offered to the
public at net asset value, without the imposition of a sales load. The
jurisdictions in which BFS is the distributor are Arizona, Arkansas, Florida,
Maryland, North Dakota, Nebraska, Texas, Vermont and West Virginia.

REDEMPTION OF SHARES

(See "Redemption of Shares" in the Prospectus).

CALCULATION OF PERFORMANCE DATA

The average annual total returns of the Fund for one year, five years and ten
years ended December 31, 1998 are listed below:

One Year: -18.90%
Five Years: 7.65%
Ten Years: 10.01%

The one-year performance is for the period January 1, 1998 to December 31, 1998.
The five-year period runs from January 1, 1994 to December 31, 1998 and the ten
year-period runs from January 1, l988 to December 31, 1997. To obtain the
performance listed above, the Fund computed its average total return for each
period of time. The Fund made this calculation by first determining the total
return for a period and then using an exponential function based upon the number
of years involved to obtain an average.

The total return for a period is calculated by determining the redeemable value
of a $1,000 initial investment made at the beginning of the period, with
dividends and capital gains reinvested on the reinvestment date, on the last day
of the period and dividing the value by $1,000. The average annual total return
for the period is calculated by taking the total return for the period and
determining the annual average by using an exponential function based upon the
number of years and any fraction thereof in the period.

In addition to an average annual total return, the Fund calculates its total
returns on a calendar year basis. Listed below are the Funds total returns for
each calendar year from 1985 through 1998:

January 1, 1985 - December 31, l985 23.6%
January 1, 1986 - December 31, l986 14.6%
January 1, 1987 - December 31, l987 2.9%
January 1, 1988 - December 31, l988 21.6%
January 1, 1989 - December 31, l989 16.5%
January 1, 1990 - December 31, 1990 -23.9%
January 1, 1991 - December 31, 1991 43.7%
January 1, 1992 - December 31, 1992 20.6%
January 1, 1993 - December 31, 1993 22.9%
January 1, 1994 - December 31, 1994 3.9%
January 1, 1995 - December 31, 1995 19.2%
January 1, 1996 - December 31, 1996 14.4%
January 1, 1997 - December 31, 1997 26.1%
January 1, 1998 - December 31, 1998 -18.90%

Annual average total return and the total returns for calendar year are based on
historical performance and are not intended as an indication of future
performance.

GENERAL INFORMATION

History and Capital Structure

The Fund is a series of shares of The Berwyn Funds, a Delaware business trust
formed under the laws of the State of Delaware on February 4, 1999. The Fund is
the successor to TBF, a corporation organized under the laws of the Commonwealth
of Pennsylvania in February, 1983, which was a no-load, diversified, open-end
management investment company. In a reorganization approved by vote of the
shareholders of TBF and accomplished on April 30, 1999, all the assets and
liabilities of TBF were transferred to the Fund and the shareholders of TBF
became the shareholders of the Fund. Thereafter the Fund has carried on the
business of TBF.

Custodian

PNC Bank, 400 Bellevue Parkway, Suite 108, Wilmington, DE 19809 is the custodian
for the Fund. The custodian holds all securities and cash owned by the Fund and
collects all dividends and interest due on the securities.

Independent Accountants

PricewaterhouseCoopers, LLP, 30 South 17th Street, Philadelphia, Pennsylvania,
has been selected as the independent accountants for the Fund by the Board of
Trustees. PricewaterhouseCoopers, LLP performs an annual audit of the financial
statements of the Fund.

Litigation

The Fund is not involved in any litigation or other legal proceedings.

DISTRIBUTION AND TAXES

Distributions of Net Investment Income

Distributions of Capital Gains

Information on the Tax Character of Distributions

Election to Be Taxed as a Regulated Investment Company

The Fund has elected to be treated as a regulated investment company under
Subchapter M of the Internal Revenue Code, has qualified as such for its most
recent fiscal year, and intends to so qualify during the current fiscal year. As
a regulated investment company, the Fund generally pays no federal income tax on
the income and gains it distributes to you. The Board reserves the right not to
maintain the qualification of the Fund as a regulated investment company if it
determines such course of action to be beneficial to shareholders. In such case,
the Fund will be subject to federal, and possibly state, corporate taxes on its
taxable income and gains, and distributions to you will be taxed as ordinary
dividend income to the extent of the Fund's earnings and profits.

Excise Tax Distribution Requirements

To avoid federal excise taxes, the Internal Revenue Code requires the Fund to
distribute to you by December 31 of each year, at a minimum, the following
amounts: 98% of its taxable ordinary income earned during the calendar year; 98%
of its capital gain net income earned during the twelve month period ending
October 31; and 100% of any undistributed amounts from the prior year. The Fund
intends to declare and pay these amounts in December (or in January, which you
treat as received in December) to avoid these excise taxes, but can
give no assurances that its distributions will be sufficient to eliminate all
taxes.

Redemption of Fund Shares

U.S. Government Obligations

Dividends-Received Deduction for Corporations

Investment in Complex Securities

FINANCIAL STATEMENTS

TBF's audited financial statements and notes thereto for the year ended December
31, 1998 and the [unqualified] report of PricewaterhouseCoopers, LLP, TBF's
independent accountants, on such financial statements (the "Report"), which are
included in TBF's 1998 Annual Report to Shareholders (the "Annual Report") will
be incorporated by reference in this SAI by amendment to the Trust's
registration statement. A copy of the Annual Report accompanies this SAI and an
investor may obtain a copy of the annual report by writing to the Fund or
calling (800) 992-6757.

<PAGE>
APPENDIX A

DEFINITIONS OF STANDARD & POOR'S BOND RATINGS

Standard & Poor's Ratings Group gives ratings to bonds that range from AAA to D.
Definitions of these ratings are set forth below. The Fund may invest in bonds
with any of these ratings.

AAA Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.

AA Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.

BB, B,
CCC, CC Debt rated BB, B, CCC and CC is regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and
repay principal in accordance with the terms of the obligation. BB
indicates the lowest degree of speculation and CC the highest degree to
speculation. While such debt will likely have some quality and
protective characteristics, these are outweighed by large uncertainties
or major risk exposures to adverse conditions.

C The rating C is reserved for income bonds on which no interest is being
paid.

D Debt rated D is in default, and payment of interest and/or repayment of
principal is in arrears.

<PAGE>

APPENDIX B

MOODY'S BOND RATINGS

Moody's Investor's Service, Inc. give ratings to bonds that range from Aaa to D.
Definitions of these ratings are set forth below. The Fund may invest in bonds
with any of these ratings.

Aaa - These bonds are judged to be of the best quality. They carry the
smallest degree of investment risk. Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure.

Aa - These bonds are judged to be of high quality by all standards. They
are rated lower than the best bonds because margins of protection may
not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in
Aaa securities.

A - These are bonds which possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements
may be present which suggest a susceptibility to impairment sometime in
the future.

Baa - These bonds are considered as medium grade obligations, i.e., they are
neither highly protected nor poorly secured. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics
as well.

Ba - These are bonds judged to have speculative elements; their future
cannot be considered as well assured. Uncertainty of position
characterizes bonds in this class.

Caa - These are bonds of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or
interest.

Ca - These bonds represent obligations which are speculative in a high
degree. Such issues are often in default or have other market
shortcomings.

C - These are the lowest rated class of bonds and issues so rated can be
regarded as having extremely poor prospects of ever attaining any real
investment standing.

<PAGE>
PART C

Item 23. Exhibits

(a)(1) Agreement and Declaration of Trust is included herein as
Exhibit EX-99.B1.a.

(a)(2) Certificate of Trust is included herein as Exhibit EX-99.B1.b.

(b) By-Laws are included herein as Exhibit EX-99.B2.

(d)(1) Form of Contract for Investment Advisory Services for the
Berwyn Fund series is included herein as Exhibit EX-99.B5.a.

(d)(2) Form of Contract for Investment Advisory Services for the
Berwyn Income Fund series is included herein as Exhibit
EX-99.B5.b.

(e) Form of Selling Agreement between the Fund and Berwyn
Financial Services Corp. is included herein as Exhibit
EX-99.B6.

(f) Not applicable.

(g) Form of Custodian Services Agreement between the Fund and PNC
Trust Company will be filed by Amendment.

(h) Form of Transfer Agency Services Agreement between the
Fund and PFPC Inc. will be filed by Amendment.

(i) Opinion and consent of counsel will be filed by Amendment.

(j) Consent of PricewaterhouseCoopers LLP will be filed by
Amendment.

(k) Not applicable.

(l) Not applicable.

(m) Not applicable.

(n)(1) Financial Data Schedule for The Berwyn Fund, Inc. will be
filed by Amendment.

(n)(2) Financial Data Schedule for the Berwyn Income Fund, Inc. will
be filed by Amendment.

(o) Not applicable.

(p)(1) Power of Attorney for Robert E. Killen is included herein as
Exhibit EX-99.B17.a.

(p)(2) Power of Attorney for Edward A. Killen, II, Anthony N.
Carrelli, Deborah D. Dorsi, Denis P. Conlon and the Fund is
included herein as Exhibit EX-99.B17.b.

Item 24. Persons Controlled by or Under Common Control with the Fund.

The Fund is not under common control with any person and does not control
directly or indirectly any person.

Item 25. Indemnification.

Article VII, Section 2 of the Fund's Agreement and Declaration of Trust and
Article VI of the By-Laws set forth the rules on indemnification of officers and
Trustees. Article VII, Section 2 of the Agreement and Declaration of Trust
provides:

(a) To the fullest extent that limitations on the liability of Trustees
and officers are permitted by the DBTA, the officers and Trustees shall
not be responsible or liable in any event for any act or omission of
any agent, employee, Investment Adviser or Principal Underwriter of the
Trust; or with respect to each Trustee and officer, the act or omission
of any other Trustee or officer, respectively. The Trust, out of the
Trust Property, shall indemnify and hold harmless each and every
officer and Trustee from and against any and all claims and demands
whatsoever arising out of or related to such officer's or Trustee's
performance of his or her duties as an officer or Trustee of the Trust.
This limitation on liability applies to events occurring at the time a
Person serves as a Trustee or officer of the Trust whether or not such
Person is a Trustee or officer at the time of any proceeding in which
liability is asserted. Nothing herein contained shall indemnify, hold
harmless or protect any officer or Trustee from or against any
liability to the Trust or any Shareholder to which such Person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of such Person's office.

(b) Every note, bond, contract, instrument, certificate or undertaking
and every other act or document whatsoever issued, executed or done by
or on behalf of the Trust, the officers or the Trustees or any of them
in connection with the Trust shall be conclusively deemed to have been
issued, executed or done only in such Person's capacity as Trustee
and/or as officer, and such Trustee or officer, as applicable, shall
not be personally liable therefore, except as described in the last
sentence of the first paragraph of this Section 2 of this Article VII.

Article VI, Section 2 of the By-Laws provides:

ACTIONS OTHER THAN BY TRUST. The Trust shall indemnify any person who
was or is a party or is threatened to be made a party to any proceeding
(other than an action by or in the right of the Trust) by reason of the
fact that such person is or was an agent of the Trust, against
expenses, judgments, fines, settlements and other amounts actually and
reasonably incurred in connection with such proceeding if such person
acted in good faith and in a manner that such person reasonably
believed to be in the best interests of the Trust and in the case of a
criminal proceeding, had no reasonable cause to believe the conduct of
such person was unlawful. The termination of any proceeding by
judgment, order, settlement, conviction or plea of nolo contendere or
its equivalent shall not of itself create a presumption that the person
did not act in good faith or in a manner which the person reasonably
believed to be in the best interests of the Trust or that the person
had reasonable cause to believe that the person's conduct was unlawful.

Article VI, Section 3 of the By-Laws provides:

ACTIONS BY TRUST. The Trust shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action by or in the right of the Trust to procure a judgment
in its favor by reason of the fact that the person is or was an agent
of the Trust, against expenses actually and reasonably incurred by that
person in connection with the defense or settlement of that action if
that person acted in good faith, in a manner that person believed to be
in the best interests of the Trust and with such care, including
reasonable inquiry, as an ordinarily prudent person in a like position
would use under similar circumstances.

Article VI, Section 4 of the By-Laws provides:

EXCLUSION OF INDEMNIFICATION. Notwithstanding any provision to the
contrary contained herein, there shall be no right to indemnification
for any liability arising by reason of willful misfeasance, bad faith,
gross negligence, or the reckless disregard of the duties involved in
the conduct of the agent's office with the Trust.

Item 26. Business and Other Connections of the Investment Adviser.

Robert E. Killen, President and a Trustee of the Fund, is Chairman and Chief
Executive Officer of The Killen Group, Inc., the investment adviser (the
"Adviser") to the Fund. He is a Director and Shareholder of Berwyn Financial
Services Corp. ("BFS"), a registered broker-dealer.

Edward A. Killen, II is Vice President and a Director of the Adviser. He is also
a Director, officer and shareholder of BFS.

For information as to any other business, profession, vocation or employment of
a substantial nature in which each Director or officer of the Adviser is or has
been engaged for his own account or in the capacity of Director, officer,
employee, partner or trustee within the last two fiscal years of the Fund,
reference is made to the Adviser's Form ADV (File #801-18770) currently on file
with the U.S. Securities and Exchange Commission as required by the Investment
Advisers Act of 1940, as amended.

Item 27. Principal Underwriters.

(a) None.

<PAGE>

(b)
Name & Principal Position & Offices Positions & Offices
Business Address with BFS with the Fund
Robert E. Killen Director President and Trustee
1199 Lancaster Avenue
Berwyn, PA 19132

Edward A. Killen, II Secretary and Director Trustee
1189 Lancaster Avenue
Berwyn, PA 19132

Kevin M. Ryan President, Treasurer Secretary and Treasurer
1199 Lancaster Avenue and Director
Berwyn, PA 19132

Item 28. Location of Accounts and Records

Accounts, books and other documents that are required to be maintained under
Section 31(a) of the Investment Company Act of 1940, as amended, and the
regulations thereunder are maintained as follows:

1) Journals detailing the purchase and sale of securities, the receipt and
delivery of securities, receipt and disbursement of cash and all other
debits and credits will be in the physical possession of Kevin M. Ryan at
1189 Lancaster Avenue, Berwyn, PA 19312.

2) Ledgers reflecting all asset, liability, reserve, capital, income and
expense accounts as well as ledgers containing the information required for
each portfolio security, for each broker-dealer, bank or other person
through whom transactions in portfolio securities are effected and for each
shareholder of record in the investment company will be maintained in the
physical possession of Kevin M. Ryan, 1189 Lancaster Avenue, Berwyn, PA
19312.

3) The Agreement and Declaration of Trust, the By-Laws, the minutes of
shareholders and Trustees' meetings will be maintained under the control of
Kevin M. Ryan, 1189 Lancaster Avenue, Berwyn, PA 19312.

4) A record of all brokerage orders and a record of all portfolio purchases
and sales will be maintained under the control of Kevin M. Ryan, 1189
Lancaster Avenue, Berwyn, PA 19312.

5) Monthly trial balances for all ledger accounts, a quarterly record of
broker commissions, a record identifying persons authorizing the purchase
or sale of portfolio securities and files of all advisory material received
from the Adviser will be under the control of Kevin M. Ryan, 1189 Lancaster
Avenue, Berwyn, PA 19312.

6) Records required to be maintained by the Adviser will be under the control
of Robert E. Killen, 1189 Lancaster Avenue, Berwyn, PA 19312.

Item 29. Management Services.

None.

Item 30. Undertakings.

The Fund has placed information required by Item 5 of the Form N-1A in the
latest annual report to shareholders and undertakes to furnish each person to
whom a prospectus is delivered with a copy of the Fund's latest annual report to
shareholders upon request and without charge.

<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act and the Investment Company
Act, the Fund has duly caused this registration statement to be signed on its
behalf by the undersigned, duly authorized, in the City of Berwyn, and the
Commonwealth of Pennsylvania on the 11th day of February, 1999.

THE BERWYN FUNDS

By: /S/ ROBERT E. KILLEN
Robert E. Killen, President

Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
on the date indicated.

Signature Title Date

/S/ ROBERT E. KILLEN President and Trustee February 11, 1999
ROBERT E. KILLEN

/S/ KEVIN M. RYAN Treasurer (chief financial officer) February 11, 1999
KEVIN M. RYAN

/S/ ANTHONY N. CARRELLI* Trustee February 11, 1999
ANTHONY N. CARRELLI

/S/ DENIS P. CONLON* Trustee February 11, 1999
DENIS P. CONLON

/S/ DEBORAH D. DORSI* Trustee February 11, 1999
DEBORAH D. DORSI

/S/ EDWARD A. KILLEN, II* Trustee February 11, 1999
EDWARD A. KILLEN, II

* By /S/ KEVIN M. RYAN
Kevin M. Ryan, as attorney-in-fact for such person, pursuant to a
Power of Attorney filed herewith with the U.S. Securities
and Exchange Commission.

<PAGE>

EXHIBIT INDEX

EDGAR EXHIBIT FORM N-1A EXHIBIT
NUMBER NUMBER

EX-99.B1.a. Agreement and Declaration of Trust Exhibit 23(a)(1)

EX-99.B1.b. Certificate of Trust Exhibit 23(a)(2)

EX-99.B2 By-laws Exhibit 23(b)

EX-99.B5.a. Form of Contract for Investment Advisory Exhibit 23(d)(1)
Services for Berwyn Fund series.

EX-99.B5.b. Form of Contract for Investment Advisory Exhibit 23(d)(2)
Services for Berwyn Income Fund series.

EX-99.B6 Selling Agreement Exhibit 23(e)

EX-99.B17.a. Power of Attorney for Robert E. Killen Exhibit 23(p)(1)

EX-99.B17.b. Power of Attorney for Edward A. Killen, II, Exhibit 23(p)(2)
Anthony N. Carrelli, Deborah D. Dorsi,
Denis P. Conlon and the Fund.

AGREEMENT AND DECLARATION OF TRUST

The Berwyn Funds

a Delaware Business Trust

February 4, 1999

<PAGE>

TABLE OF CONTENTS

Page

ARTICLE I. Name and Definitions..................................1
Section 1. Name............................................1
Section 2. Registered Agent and Registered Office; Principal
Place of Business...............................2
(a) Registered Agent and Registered Office............2
(b) Principal Place of Business.......................2
Section 3. Definitions.....................................2
(a) "1940 Act"........................................2
(b) "Affiliate".......................................2
(c) "Board of Trustees"...............................2
(d) "By-Laws".........................................2
(e) "Certificate of Trust"............................2
(f) "Code"............................................2
(g) "Commission"......................................2
(h) "DBTA"............................................3
(i) "Declaration of Trust"............................3
(j) "General Liabilities".............................3
(k) "Interested Person"...............................3
(l) "Investment Adviser" or "Adviser".................3
(m) "National Financial Emergency"....................3
(n) "Person"..........................................3
(o) "Principal Underwriter"...........................3
(p) "Series"..........................................3
(q) "Shares"..........................................3
(r) "Shareholder".....................................4
(s) "Trust"...........................................4
(t) "Trust Property"..................................4
(u) "Trustee" or "Trustees"...........................4

ARTICLE II. Purpose of Trust.....................................4

ARTICLE III. Shares..............................................7
Section 1. Division of Beneficial Interest.................7
Section 2. Ownership of Shares.............................9
Section 3. Investments in the Trust........................9
Section 4. Status of Shares and Limitation of Personal
Liability.......................................9
Section 5. Power of Board of Trustees to Change Provisions
Relating to Shares.............................10
Section 6. Establishment and Designation of Series........11
(a) Assets Held with Respect to a Particular
Series...........................................11
(b) Liabilities Held with Respect to a Particular
Series...........................................11
(c) Dividends, Distributions, Redemptions and
Repurchases......................................12
(d) Voting...........................................13
(e) Equality.........................................13
(f) Fractions........................................13
(g) Exchange Privilege...............................13
(h) Combination of Series............................13
(i) Elimination of Series............................14
Section 7. Indemnification of Shareholders................14

ARTICLE IV. The Board of Trustees...............................14
Section 1. Number, Election and Tenure....................14
Section 2. Effect of Death, Resignation, Removal, etc.
of a Trustee.................................
Section 3. Powers.........................................15
Section 4. Payment of Expenses by the Trust...............16
Section 5. Payment of Expenses by Shareholders............17
Section 6. Ownership of Trust Property....................17
Section 7. Service Contracts..............................17

ARTICLE V. Shareholders' Voting Powers and Meetings.............19
Section 1. Voting Powers..................................19
Section 2. Meetings.......................................19
Section 3. Quorum and Required Vote.......................19
Section 4. Shareholder Action by Written Consent without a
Meeting........................................20
Section 5. Record Dates...................................20
Section 6. Additional Provisions..........................21

ARTICLE VI. Net Asset Value, Distributions and Redemptions......21
Section 1. Determination of Net Asset Value, Net Income
and Distributions..............................21
Section 2. Redemptions at the Option of a Shareholder.....22
Section 3. Redemptions at the Option of the Trust.........23

ARTICLE VII. Compensation and Limitation of Liability of
Officers and Trustees......................................23
Section 1. Compensation...................................23
Section 2. Indemnification and Limitation of Liability....23
Section 3. Officers and Trustees' Good Faith Action, Expert
Advice, No
Bond or Surety....................................24
Section 4. Insurance......................................24

ARTICLE VIII. Miscellaneous.....................................25
Section 1. Liability of Third Persons Dealing with
Trustees.......................................25
Section 2. Dissolution of Trust or Series.................25
Section 3. Merger and Consolidation; Conversion...........25
(a) Merger and Consolidation.........................26
(b) Conversion.......................................26
Section 4. Reorganization.................................26
Section 5. Amendments.....................................27
Section 6. Filing of Copies, References, Headings.........27
Section 7. Applicable Law.................................28
Section 8. Provisions in Conflict with Law or Regulations.28
Section 9. Business Trust Only............................28

<PAGE>

AGREEMENT AND DECLARATION OF TRUST

The Berwyn Funds

AGREEMENT AND DECLARATION OF TRUST made as of this 4th day of February
1999, by the Trustees hereunder, and by the holders of shares of beneficial
interest to be issued hereunder as hereinafter provided. This Agreement and
Declaration of Trust shall be effective upon the filing of the Certificate of
Trust in the office of the Secretary of State of the State of Delaware.

W I T N E S S E T H:

WHEREAS this Trust has been formed to carry on the business
of an investment company; and

WHEREAS this Trust is authorized to issue its shares of beneficial
interest in separate Series, and to issue classes of Shares of any Series or
divide Shares of any Series into two or more classes, all in accordance with the
provisions hereinafter set forth; and

WHEREAS the Trustees have agreed to manage all property coming into their
hands as trustees of a Delaware business trust in accordance with the provisions
of the Delaware Business Trust Act (12 Del. C. ss.3801, et seq.), as from time
to time amended and including any successor statute of similar import (the
"DBTA"), and the provisions hereinafter set forth;

NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same upon the
following terms and conditions for the benefit of the holders from time to time
of shares of beneficial interest in this Trust and the Series created hereunder
as hereinafter set forth.

ARTICLE I.

Name and Definitions

Section 1. Name. This trust shall be known as "The Berwyn Funds" and the
Trustees shall conduct the business of the Trust under that name, or any other
name as they may from time to time determine.

Section 2. Registered Agent and Registered Office; Principal Place
of Business.

(a) Registered Agent and Registered Office. The name of the registered
agent of the Trust and the address of the registered office of the Trust are as
set forth on the Certificate of Trust.

(b) Principal Place of Business. The principal place of business of the
Trust is 1189 Lancaster Avenue, Berwyn, Pennsylvania 19312 or such other
location within or outside of the State of Delaware as the Board of Trustees may
determine from time to time.

Section 3. Definitions. Whenever used herein, unless
otherwise required by the context or specifically provided:

(a) "1940 Act" shall mean the Investment Company Act of 1940 and the rules
and regulations thereunder, all as adopted or amended from time to time.

(b) "Affiliate" shall have the meaning given to "Affiliated Person" in
Section 2(a)(3) of the 1940 Act when used with reference to a specified Person.

(d) "By-Laws" shall mean the By-Laws of the Trust, as amended from time to
time in accordance with Article X of the By-Laws, and incorporated herein by
reference.

(e) "Certificate of Trust" shall mean the certificate of trust filed with
the Office of the Secretary of State of the State of Delaware as required under
the DBTA to form the Trust.

(f) "Code" shall mean the Internal Revenue Code of 1986, and the rules and
regulations thereunder, all as adopted or amended from time to time.

(g) "Commission" shall have the meaning given to it in Section 2(a)(7) of
the 1940 Act.

(h) "DBTA" shall mean the Delaware Business Trust Act, (12 Del. C.
ss.3801, et seq.), as amended from time to time.

(i) "Declaration of Trust" shall mean this Agreement and Declaration of
Trust, as amended or restated from time to time.

(j) "General Liabilities" shall have the meaning given it in Article III,
Section 6(b) of this Declaration Trust.

(k) "Interested Person" shall have the meaning given to it in Section
2(a)(19) of the 1940 Act.

(l) "Investment Adviser" or "Adviser" shall mean a party furnishing
services to the Trust pursuant to any contract described in Article IV, Section
7(a) hereof.

(m) "National Financial Emergency" shall mean the whole or any part of any
period set forth in Section 22(e) of the 1940 Act. The Board of Trustees may, in
its discretion, declare that the suspension relating to a National Financial
Emergency shall terminate, as the case may be, on the first business day on
which the New York Stock Exchange shall have reopened or the period specified in
Section 22(e) of the 1940 Act shall have expired (as to which, in the absence of
an official ruling by the Commission, the determination of the Board of Trustees
shall be conclusive).

(n) "Person" shall include a natural person, partnership, limited
partnership, trust, estate, association, corporation, custodian, nominee or any
other individual or entity in its own or any representative capacity.

(o) "Principal Underwriter" shall have the meaning given to it in Section
2(a)(29) of the 1940 Act.

(p) "Series" shall refer to each Series of Shares established and
designated under or in accordance with the provisions of Article III and shall
mean an entity such as that described in Section 18(f)(2) of the 1940 Act, and
subject to Rule 18f-2 thereunder.

(q) "Shares" shall mean the outstanding shares of beneficial interest into
which the beneficial interest in the Trust shall be divided from time to time,
and shall include fractional and whole shares.

(r) "Shareholder" shall mean a record owner of Shares.

(s) "Trust" shall refer to the Delaware business trust established by this
Declaration of Trust, as amended from time to time.

(t) "Trust Property" shall mean any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust or one or more of any Series, including, without limitation, the rights
referenced in Article VIII, Section 2 hereof.

(u) "Trustee" or "Trustees" shall refer to each signatory to this
Declaration of Trust as a trustee, so long as such signatory continues in office
in accordance with the terms hereof, and all other Persons who may, from time to
time, be duly elected or appointed, qualified and serving on the Board of
Trustees in accordance with the provisions hereof. Reference herein to a Trustee
or the Trustees shall refer to such Person or Persons in their capacity as
trustees hereunder.

ARTICLE II.

Purpose of Trust

The purpose of the Trust is to conduct, operate and carry on the business
of a registered management investment company registered under the 1940 Act
through one or more Series investing primarily in securities and, in addition to
any authority given by law, to exercise all of the powers and to do any and all
of the things as fully and to the same extent as any private corporation
organized for profit under the general corporation law of the State of Delaware,
now or hereafter in force, including, without limitation, the following powers:

(a) To invest and reinvest cash, to hold cash uninvested, and to subscribe
for, invest in, reinvest in, purchase or otherwise acquire, own, hold, pledge,
sell, assign, mortgage, transfer, exchange, distribute, write options on, lend
or otherwise deal in or dispose of contracts for the future acquisition or
delivery of fixed income or other securities, and securities or property of
every nature and kind, including, without limitation, all types of bonds,
debentures, stocks, preferred stocks, negotiable or non-negotiable instruments,
obligations, evidences of indebtedness, certificates of deposit or indebtedness,
commercial paper, repurchase agreements, bankers' acceptances, and other
securities of any kind, issued, created, guaranteed, or sponsored by any and all
Persons, including, without limitation, states, territories, and possessions of
the United States and the District of Columbia and any political subdivision,
agency, or instrumentality thereof, any foreign government or any political
subdivision of the U.S. Government or any foreign government, or any
international instrumentality, or by any bank or savings institution, or by any
corporation or organization organized under the laws of the United States or of
any state, territory, or possession thereof, or by any corporation or
organization organized under any foreign law, or "when issued" contracts for any
such securities, or to change the investments of the assets of the Trust;

(b) To exercise any and all rights, powers and privileges with reference
to or incident to ownership or interest, use and enjoyment of any of such
securities and other instruments or property of every kind and description,
including, but without limitation, the right, power and privilege to own, vote,
hold, purchase, sell, negotiate, assign, exchange, lend, transfer, mortgage,
hypothecate, lease, pledge or write options with respect to or otherwise deal
with, dispose of, use, exercise or enjoy any rights, title, interest, powers or
privileges under or with reference to any of such securities and other
instruments or property, the right to consent and otherwise act with respect
thereto, with power to designate one or more Persons, to exercise any of said
rights, powers, and privileges in respect of any of said instruments, and to do
any and all acts and things for the preservation, protection, improvement and
enhancement in value of any of such securities and other instruments or
property;

(c) To sell, exchange, lend, pledge, mortgage, hypothecate, lease or write
options with respect to or otherwise deal in any property rights relating to any
or all of the assets of the Trust or any Series, subject to any requirements of
the 1940 Act;

(d) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and deliver
proxies or powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power and discretion with
relation to securities or property as the Trustees shall deem proper;

(e) To exercise powers and right of subscription or otherwise which in any
manner arise out of ownership of securities;

(f) To hold any security or property in a form not indicating that it is
trust property, whether in bearer, unregistered or other negotiable form, or in
its own name or in the name of a custodian or subcustodian or a nominee or
nominees or otherwise or to authorize the custodian or a subcustodian or a
nominee or nominees to deposit the same in a securities depository, subject in
each case to proper safeguards according to the usual practice of investment
companies or any rules or regulations applicable thereto;

(g) To consent to, or participate in, any plan for the reorganization,
consolidation or merger of any corporation or issuer of any security which is
held in the Trust; to consent to any contract, lease, mortgage, purchase or sale
of property by such corporation or issuer; and to pay calls or subscriptions
with respect to any security held in the Trust;

(h) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit any
security with, or transfer any security to, any such committee, depositary or
trustee, and to delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the Trustees shall deem
proper, and to agree to pay, and to pay, such portion of the expenses and
compensation of such committee, depositary or trustee as the Trustees shall deem
proper;

(i) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including but not limited to
claims for taxes;

(j) To enter into joint ventures, general or limited partnerships and any
other combinations or associations;

(k) To endorse or guarantee the payment of any notes or other obligations
of any Person; to make contracts of guaranty or suretyship, or otherwise assume
liability for payment thereof;

(l) To purchase and pay for entirely out of Trust Property such insurance
as the Trustees may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the assets
of the Trust or payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, Investment Advisers, Principal Underwriters, or
independent contractors of the Trust, individually against all claims and
liabilities of every nature arising by reason of holding Shares, holding, being
or having held any such office or position, or by reason of any action alleged
to have been taken or omitted by any such Person as Trustee, officer, employee,
agent, Investment Adviser, Principal Underwriter, or independent contractor, to
the fullest extent permitted by this Declaration of Trust, the Bylaws and by
applicable law;

(m) To adopt, establish and carry out pension, profit-sharing, share
bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans, trusts and provisions, including the purchasing of life insurance
and annuity contracts as a means of providing such retirement and other
benefits, for any or all of the Trustees, officers, employees and agents of the
Trust;

(n) To purchase or otherwise acquire, own, hold, sell, negotiate,
exchange, assign, transfer, mortgage, pledge or otherwise deal with, dispose of,
use, exercise or enjoy, property of all kinds;

(o) To buy, sell, mortgage, encumber, hold, own, exchange, rent or
otherwise acquire and dispose of, and to develop, improve, manage, subdivide,
and generally to deal and trade in real property, improved and unimproved, and
wheresoever situated; and to build, erect, construct, alter and maintain
buildings, structures, and other improvements on real property;

(p) To borrow or raise moneys for any of the purposes of the Trust, and to
mortgage or pledge the whole or any part of the property and franchises of the
Trust, real, personal, and mixed, tangible or intangible, and wheresoever
situated;

(q) To enter into, make and perform contracts and undertakings of every
kind for any lawful purpose, without limit as to amount; and

(r) To issue, purchase, sell and transfer, reacquire, hold, trade and deal
in Shares, bonds, debentures and other securities, instruments or other property
of the Trust, from time to time, to such extent as the Board of Trustees shall,
consistent with the provisions of this Declaration of Trust, determine; and to
repurchase, re-acquire and redeem, from time to time, its Shares or, if any, its
bonds, debentures and other securities.

The Trust shall not be limited to investing in obligations maturing before the
possible dissolution of the Trust or one or more of its Series. The Trust shall
not in any way be bound or limited by any present or future law or custom in
regard to investment by fiduciaries. Neither the Trust nor the Trustees shall be
required to obtain any court order to deal with any assets of the Trust or take
any other action hereunder.

The foregoing clauses shall each be construed as purposes, objects and powers,
and it is hereby expressly provided that the foregoing enumeration of specific
purposes, objects and powers shall not be held to limit or restrict in any
manner the powers of the Trust, and that they are in furtherance of, and in
addition to, and not in limitation of, the general powers conferred upon the
Trust by the DBTA and the other laws of the State of Delaware or otherwise; nor
shall the enumeration of one thing be deemed to exclude another, although it be
of like nature, not expressed.

ARTICLE III.

Section 1. Division of Beneficial Interest. The beneficial interest in the Trust
shall at all times be divided into Shares, all without par value. The number of
Shares authorized hereunder is unlimited. The Board of Trustees may authorize
the division of Shares into separate and distinct Series and the division of any
Series into separate classes of Shares. The different Series and classes shall
be established and designated, and the variations in the relative rights and
preferences as between the different Series and classes shall be fixed and
determined by the Board of Trustees without the requirement of Shareholder
approval. If no separate Series or classes shall be established, the Shares
shall have the rights and preferences provided for herein and in Article III,
Section 6 hereof to the extent relevant and not otherwise provided for herein,
and all references to Series and classes shall be construed (as the context may
require) to refer to the Trust. The fact that a Series shall have initially been
established and designated without any specific establishment or designation of
classes (i.e., that all Shares of such Series are initially of a single class)
shall not limit the authority of the Board of Trustees to establish and
designate separate classes of said Series. The fact that a Series shall have
more than one established and designated class, shall not limit the authority of
the Board of Trustees to establish and designate additional classes of said
Series, or to establish and designate separate classes of the previously
established and designated classes.

The Board of Trustees shall have the power to issue Shares of the Trust, or any
Series or class thereof, from time to time for such consideration (but not less
than the net asset value thereof) and in such form as may be fixed from time to
time pursuant to the direction of the Board of Trustees.

The Board of Trustees may hold as treasury shares, reissue for such
consideration and on such terms as they may determine, or cancel, at their
discretion from time to time, any Shares of any Series reacquired by the Trust.
The Board of Trustees may classify or reclassify any unissued Shares or any
Shares previously issued and reacquired of any Series or class into one or more
Series or classes that may be established and designated from time to time.
Notwithstanding the foregoing, the Trust and any Series thereof may acquire,
hold, sell and otherwise deal in, for purposes of investment or otherwise, the
Shares of any other Series of the Trust or Shares of the Trust, and such Shares
shall not be deemed treasury shares or cancelled.

Subject to the provisions of Section 6 of this Article III, each Share shall
have voting rights as provided in Article V hereof, and the Shareholders of any
Series shall be entitled to receive dividends and distributions, when, if and as
declared with respect thereto in the manner provided in Article IV, Section 3
hereof. No Share shall have any priority or preference over any other Share of
the same Series or class with respect to dividends or distributions paid in the
ordinary course of business or distributions upon dissolution of the Trust or of
such Series or class made pursuant to Article VIII, Section 2 hereof. All
dividends and distributions shall be made ratably among all Shareholders of a
particular class of Series from the Trust Property held with respect to such
Series according to the number of Shares of such class of such Series held of
record by such Shareholders on the record date for any dividend or distribution.
Shareholders shall have no preemptive or other right to subscribe to new or
additional Shares or other securities issued by the Trust or any Series. The
Trustees may from time to time divide or combine the Shares of any particular
Series into a greater or lesser number of Shares of that Series. Such division
or combination may not materially change the proportionate beneficial interests
of the Shares of that Series in the Trust Property held with respect to that
Series or materially affect the rights of Shares of any other Series.

Any Trustee, officer or other agent of the Trust, and any organization in which
any such Person is interested, may acquire, own, hold and dispose of Shares of
the Trust to the same extent as if such Person were not a Trustee, officer or
other agent of the Trust; and the Trust may issue and sell or cause to be issued
and sold and may purchase Shares from any such Person or any such organization
subject only to the general limitations, restrictions or other provisions
applicable to the sale or purchase of such Shares generally.

Section 2. Ownership of Shares. The ownership of Shares shall be recorded on the
books of the Trust kept by the Trust or by a transfer or similar agent for the
Trust, which books shall be maintained separately for the Shares of each Series
and class thereof that has been established and designated. No certificates
certifying the ownership of Shares shall be issued except as the Board of
Trustees may otherwise determine from time to time. The Board of Trustees may
make such rules not inconsistent with the provisions of the 1940 Act as they
consider appropriate for the issuance of Share certificates, the transfer of
Shares of each Series or class and similar matters. The record books of the
Trust as kept by the Trust or any transfer or similar agent, as the case may be,
shall be conclusive as to who are the Shareholders of each Series or class
thereof and as to the number of Shares of each Series or class thereof held from
time to time by each such Shareholder.

Section 3. Investments in the Trust. Investments may be accepted by the Trust
from such Persons, at such times, on such terms, and for such consideration as
the Board of Trustees may, from time to time, authorize. Each investment shall
be credited to the individual Shareholder's account in the form of full and
fractional Shares of the Trust, in such Series or class as the purchaser may
select, at the net asset value per Share next determined for such Series or
class after receipt of the investment; provided, however, that the Principal
Underwriter may, in its sole discretion, impose a sales charge upon investments
in the Trust.

Section 4. Status of Shares and Limitation of Personal Liability. Shares shall
be deemed to be personal property giving to Shareholders only the rights
provided in this Declaration of Trust and under applicable law. Every
Shareholder by virtue of having become a Shareholder shall be held to have
expressly assented and agreed to the terms hereof and to have become a party
hereto. The death of a Shareholder during the existence of the Trust shall not
operate to dissolve the Trust or any Series, nor entitle the representative of
any deceased Shareholder to an accounting or to take any action in court or
elsewhere against the Trust or the Trustees or any Series, but entitles such
representative only to the rights of said deceased Shareholder under this
Declaration of Trust. Ownership of Shares shall not entitle the Shareholder to
any title in or to the whole or any part of the Trust Property or right to call
for a partition or division of the same or for an accounting, nor shall the
ownership of Shares constitute the Shareholders as partners. Neither the Trust
nor the Trustees, nor any officer, employee or agent of the Trust, shall have
any power to bind personally any Shareholder, nor, except as specifically
provided herein, to call upon any Shareholder for the payment of any sum of
money or assessment whatsoever other than such as the Shareholder may at any
time personally agree to pay. All Shares, when issued on the terms determined by
the Board of Trustees, shall be fully paid and nonassessable. As provided in the
DBTA, Shareholders of the Trust shall be entitled to the same limitation of
personal liability extended to stockholders of a private corporation organized
for profit under the general corporation law of the State of Delaware.

Section 5. Power of Board of Trustees to Change Provisions Relating to Shares.
Notwithstanding any other provisions of this Declaration of Trust and without
limiting the power of the Board of Trustees to amend this Declaration of Trust
or the Certificate of Trust as provided elsewhere herein, the Board of Trustees
shall have the power to amend this Declaration of Trust, or the Certificate of
Trust, at any time and from time to time, in such manner as the Board of
Trustees may determine in its sole discretion, without the need for Shareholder
action, so as to add to, delete, replace or otherwise modify any provisions
relating to the Shares contained in this Declaration of Trust; provided that
before adopting any such amendment without Shareholder approval, the Board of
Trustees shall determine that it is consistent with the fair and equitable
treatment of all Shareholders and that Shareholder approval is not otherwise
required by the 1940 Act or other applicable law. If Shares have been issued,
Shareholder approval shall be required to adopt any amendments to this
Declaration of Trust which would adversely affect to a material degree the
rights and preferences of the Shares of any Series or class already issued;
provided, however, that in the event that the Board of Trustees determines that
the Trust shall no longer be operated as an investment company in accordance
with the provisions of the 1940 Act, the Board of Trustees may adopt such
amendments to this Declaration of Trust to delete those terms the Board of
Trustees identifies as being required by the 1940 Act.

Subject to the foregoing Paragraph, the Board of Trustees may amend the
Declaration of Trust to amend any of the provisions set forth in paragraphs (a)
through (i) of Section 6 of this Article III.

The Board of Trustees shall have the power, in its discretion, to make such
elections as to the tax status of the Trust as may be permitted or required
under the Code as currently in effect or as amended, without the vote of any
Shareholder.

Section 6. Establishment and Designation of Series. The establishment and
designation of any Series or class of Shares shall be effective upon the
resolution by a majority of the then Board of Trustees, adopting a resolution
which sets forth such establishment and designation and the relative rights and
preferences of such Series or class. Each such resolution shall be incorporated
herein by reference upon adoption.

Each Series shall be separate and distinct from any other Series and shall
maintain separate and distinct records on the books of the Trust, and the assets
and liabilities belonging to any such Series shall be held and accounted for
separately from the assets and liabilities of the Trust or any other Series.

Shares of each Series or class established pursuant to this Section 6, unless
otherwise provided in the resolution establishing such Series, shall have the
following relative rights and preferences:

(a) Assets Held with Respect to a Particular Series. All consideration received
by the Trust for the issue or sale of Shares of a particular Series, together
with all assets in which such consideration is invested or reinvested, all
income, earnings, profits, and proceeds thereof from whatever source derived,
including, without limitation, any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably be held with respect to that Series for all purposes, subject only
to the rights of creditors with respect to that Series, and shall be so recorded
upon the books of account of the Trust. Such consideration, assets, income,
earnings, profits and proceeds thereof, from whatever source derived, including,
without limitation, any proceeds derived from the sale, exchange or liquidation
of such assets, and any funds or payments derived from any reinvestment of such
proceeds, in whatever form the same may be, are herein referred to as "assets
held with respect to" that Series. In the event that there are any assets,
income, earnings, profits and proceeds thereof, funds or payments which are not
readily identifiable as assets held with respect to any particular Series
(collectively "General Assets"), the Board of Trustees shall allocate such
General Assets to, between or among any one or more of the Series in such manner
and on such basis as the Board of Trustees, in its sole discretion, deems fair
and equitable, and any General Asset so allocated to a particular Series shall
be held with respect to that Series. Each such allocation by the Board of
Trustees shall be conclusive and binding upon the Shareholders of all Series for
all purposes.

(b) Liabilities Held with Respect to a Particular Series. The assets of the
Trust held with respect to each particular Series shall be charged against the
liabilities of the Trust held with respect to that Series and all expenses,
costs, charges and reserves attributable to that Series, and any liabilities,
expenses, costs, charges and reserves of the Trust that are not readily
identifiable as being held with respect to any particular Series (collectively
"General Liabilities") shall be allocated and charged by the Board of Trustees
to and among any one or more of the Series in such manner and on such basis as
the Board of Trustees in its sole discretion deems fair and equitable. The
liabilities, expenses, costs, charges, and reserves so charged to a Series are
herein referred to as "liabilities held with respect to" that Series. Each
allocation of liabilities, expenses, costs, charges and reserves by the Board of
Trustees shall be conclusive and binding upon the Shareholders of all Series for
all purposes. All Persons who have extended credit that has been allocated to a
particular Series, or who have a claim or contract that has been allocated to
any particular Series, shall look, and shall be required by contract to look
exclusively, to the assets of that particular Series for payment of such credit,
claim, or contract. In the absence of an express contractual agreement so
limiting the claims of such creditors, claimants and contract providers, each
creditor, claimant and contract provider will be deemed nevertheless to have
impliedly agreed to such limitation unless an express provision to the contrary
has been incorporated in the written contract or other document establishing the
creditor, claimant or contract provider relationship.

Subject to the right of the Board of Trustees in its discretion to allocate
General Liabilities as provided herein, the debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect to a
particular Series, whether such Series is now authorized and existing pursuant
to this Declaration of Trust or is hereafter authorized and existing pursuant to
this Declaration of Trust, shall be enforceable against the assets held with
respect to that Series only, and not against the assets of any other Series or
the Trust generally and none of the debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to the Trust
generally or any other Series thereof shall be enforceable against the assets
held with respect to such Series. Notice of this limitation on liabilities
between and among Series shall be set forth in the Certificate of Trust of the
Trust (whether originally or by amendment) as filed or to be filed in the Office
of the Secretary of State of the State of Delaware pursuant to the DBTA, and
upon the giving of such notice in the Certificate of Trust, the statutory
provisions of Section 3804 of the DBTA relating to limitations on liabilities
between and among Series (and the statutory effect under Section 3804 of setting
forth such notice in the Certificate of Trust) shall become applicable to the
Trust and each Series.

(c) Dividends, Distributions, Redemptions and Repurchases. Notwithstanding any
other provisions of this Declaration of Trust, including, without limitation,
Article VI, no dividend or distribution, including without limitation, any
distribution paid upon dissolution of the Trust or of any Series with respect
to, nor any redemption or repurchase of, the Shares of any Series or class shall
be effected by the Trust other than from the assets held with respect to such
Series, nor, except as specifically provided in Section 7 of this Article III,
shall any Shareholder of any particular Series otherwise have any right or claim
against the assets held with respect to any other Series or the Trust generally
except to the extent that such Shareholder has such a right or claim hereunder
as a Shareholder of such other Series. The Board of Trustees shall have full
discretion, to the extent not inconsistent with the 1940 Act, to determine which
items shall be treated as income and which items as capital, and each such
determination and allocation shall be conclusive and binding upon the
Shareholders.

(d) Voting. All Shares of the Trust entitled to vote on a matter shall vote on
the matter, separately by Series and, if applicable, by class; provided that (1)
where the 1940 Act requires all Shares of the Trust to be voted in the
aggregate, without differentiation between the separate Series or classes, on
any matter, then all of the Trust's Shares shall be entitled to vote in the
aggregate on the matter; and (2) if any matter affects only the interests of
some but not all Series or classes, then only the Shares of such affected Series
or classes shall be entitled to vote on the matter.

(e) Equality. All Shares of each particular Series shall represent an equal
proportionate undivided beneficial interest in the assets held with respect to
that Series (subject to the liabilities held with respect to that Series and
such rights and preferences as may have been established and designated with
respect to classes of Shares within such Series), and each Share of any
particular Series shall be equal to each other Share of that Series (subject to
the rights and preferences with respect to separate classes of such Series).

(f) Fractions. Any fractional Share of a Series shall carry proportionately to
the fractional amount of such Share all the rights and obligations of a whole
Share of that Series, including rights with respect to voting, receipt of
dividends and distributions, redemption of Shares and dissolution of the Trust
or that Series.

(g) Exchange Privilege. The Board of Trustees shall have the authority to
provide that the holders of Shares of any Series shall have the right to
exchange said Shares for Shares of one or more other Series in accordance with
such requirements and procedures as may be established by the Board of Trustees,
and in accordance with the 1940 Act and the rules and regulations thereunder.

(h) Combination of Series. The Board of Trustees shall have the authority,
without the approval of the Shareholders of any Series unless otherwise required
by applicable law, to combine the assets and liabilities held with respect to
any two or more Series into assets and liabilities held with respect to a single
Series; provided that upon completion of such combination of Series, the
proportionate interest of each Shareholder of each Series that is combined, in
the assets and liabilities held with respect to the combined Series shall equal
the proportionate interest that such Shareholder held in the assets and
liabilities held with respect to the Series that is combined.

(i) Elimination of Series. At any time that there are no Shares outstanding of
any particular Series or class previously established and designated, the Board
of Trustees may by resolution of a majority of the then Board of Trustees
abolish that Series or class and rescind the establishment and designation
thereof. Each such resolution shall be incorporated herein by reference upon
adoption.

Section 7. Indemnification of Shareholders. If any Shareholder or former
Shareholder shall be exposed to liability by reason of a claim or demand
relating solely to his or her being or having been a Shareholder of the Trust
(or by having been a Shareholder of a particular Series), and not because of
such Person's acts or omissions, the Shareholder or former Shareholder (or, in
the case of a natural person, his or her heirs, executors, administrators, or
other legal representatives or, in the case of a corporation or other entity,
its corporate or other general successor) shall be entitled to be held harmless
from, and indemnified out of the assets of the Trust or out of the assets of the
applicable Series (as the case may be) against, all loss and expense arising
from such claim or demand; provided, however, that there shall be no liability
or obligation of the Trust (or any particular Series) arising hereunder to
reimburse any Shareholder for taxes paid by reason of such Shareholder's
ownership of any Shares.

ARTICLE IV.

The Board of Trustees

Section 1. Number, Election and Tenure. The number of Trustees constituting the
Board of Trustees may be fixed from time to time by a written instrument signed,
or by resolution approved at a duly constituted meeting, by a majority of the
Board of Trustees, provided, however, that the number of Trustees shall in no
event be less than one (1) nor more than fifteen (15). The Board of Trustees, by
action of a majority of the then Trustees at a duly constituted meeting, may
fill vacancies in the Board of Trustees or remove any Trustee with or without
cause. The Shareholders may elect Trustees, including filling any vacancies in
the Board of Trustees, at any meeting of Shareholders called by the Board of
Trustees for that purpose. A meeting of Shareholders for the purpose of electing
one or more Trustees may be called by the Board of Trustees or, to the extent
provided by the 1940 Act and the rules and regulations thereunder, by the
Shareholders. Shareholders shall have the power to remove a Trustee only to the
extent provided by the 1940 Act and the rules and regulations thereunder.

Each Trustee shall serve during the continued lifetime of the Trust until he or
she dies, resigns, is declared bankrupt or incompetent by a court of appropriate
jurisdiction, or is removed, or, if sooner than any of such events, until the
next meeting of Shareholders called for the purpose of electing Trustees and
until the election and qualification of his or her successor. Any Trustee may
resign at any time by written instrument signed by him or her and delivered to
any officer of the Trust or to a meeting of the Board of Trustees. Such
resignation shall be effective upon receipt unless specified to be effective at
some later time. Except to the extent expressly provided in a written agreement
with the Trust, no Trustee that resigns or is removed shall have any right to
any compensation for any period following any such event or any right to damages
on account of such events or any actions taken in connection therewith following
his or her resignation or removal.

Section 2. Effect of Death, Resignation, Removal, etc. of a Trustee. The death,
declination, resignation, retirement, removal, declaration as bankrupt or
incapacity of one or more Trustees, or of all of them, shall not operate to
dissolve the Trust or any Series or to revoke any existing agency created
pursuant to the terms of this Declaration of Trust. Whenever a vacancy in the
Board of Trustees shall occur, until such vacancy is filled as provided in this
Article IV, Section 1, the Trustee(s) in office, regardless of the number, shall
have all the powers granted to the Board of Trustees and shall discharge all the
duties imposed upon the Board of Trustees by this Declaration of Trust. In the
event of the death, declination, resignation, retirement, removal, declaration
as bankrupt or incapacity of all of the then Trustees, the Trust's Investment
Adviser or Advisers is or are, as the case may be, empowered to appoint new
Trustees subject to the provisions of Section 16(a) of the 1940 Act.

Section 3. Powers. Subject to the provisions of this Declaration of Trust, the
business of the Trust shall be managed by the Board of Trustees, and such Board
of Trustees shall have all powers necessary or convenient to carry out that
responsibility, including, without limitation, the power to engage in securities
or other transactions of all kinds on behalf of the Trust. The Board of Trustees
shall have full power and authority to do any and all acts and to make and
execute any and all contracts and instruments that it may consider necessary or
appropriate in connection with the administration of the Trust. The Trustees
shall not be bound or limited by present or future laws or customs with regard
to investment by trustees or fiduciaries, but shall have full authority and
absolute power and control over the assets of the Trust and the business of the
Trust to the same extent as if the Trustees were the sole owners of the assets
and business of the Trust in their own right, including such authority, power
and control to do all acts and things as they, in their sole discretion, shall
deem proper to accomplish the purposes of this Trust. Without limiting the
foregoing, the Trustees may (1) adopt, amend and repeal By-Laws, not
inconsistent with this Declaration of Trust, that provide for the regulation and
management of the affairs of the Trust; (2) fill vacancies in or remove from
their number in accordance with this Declaration of Trust or the By-Laws, and
may elect and remove such officers and appoint and terminate such agents as they
consider appropriate; (3) appoint from their own number and establish and
terminate one or more committees consisting of two or more Trustees which may
exercise the powers and authority of the Board of Trustees to the extent that
the Board of Trustees determine; (4) employ one or more custodians of the Trust
Property and may authorize such custodians to employ subcustodians and to
deposit all or any part of such Trust Property in a system or systems for the
central handling of securities or with a Federal Reserve Bank; (5) retain a
transfer agent, dividend disbursing agent, a shareholder servicing agent or
administrative services agent, or all of them; (6) provide for the issuance and
distribution of Shares by the Trust directly or through one or more Principal
Underwriters or otherwise; (7) retain one or more Investment Advisers; (8)
redeem, repurchase or transfer Shares pursuant to applicable law; (9) set record
dates for the determination of Shareholders with respect to various matters, in
the manner provided in Article V, Section 5 of this Declaration of Trust; (10)
declare and pay dividends and distributions to Shareholders from the Trust
Property; (11) establish from time to time, in accordance with the provisions of
Article III, Section 6 hereof, any Series or class of Shares, each such Series
to operate as a separate and distinct investment medium and with separately
defined investment objectives and policies and distinct investment purposes; and
(12) in general delegate such authority as they consider desirable to any
officer of the Trust, any committee of the Board of Trustees, any agent or
employee of the Trust, or any such custodian, transfer agent, dividend
disbursing agent, shareholder servicing agent, administrative services agent,
Principal Underwriter or Investment Adviser. Any determination as to what is in
the best interests of the Trust made by the Board of Trustees in good faith
shall be conclusive.

In construing the provisions of this Declaration of Trust, the presumption shall
be in favor of a grant of power to the Trustees. Unless otherwise specified
herein or required by law, any action by the Board of Trustees shall be deemed
effective if approved or taken by a majority of the Trustees then in office.

Any action required or permitted to be taken by the Board of Trustees, or a
committee thereof, may be taken without a meeting if a majority of the members
of the Board of Trustees, or committee thereof, as the case may be, shall
individually or collectively consent in writing to that action. Such action by
written consent shall have the same force and effect as a majority vote of the
Board of Trustees, or committee thereof, as the case may be. Such written
consent or consents shall be filed with the minutes of the proceedings of the
Board of Trustees, or committee thereof, as the case may be.

The Trustees shall devote to the affairs of the Trust such time as may be
necessary for the proper performance of their duties hereunder, but the Trustees
are not expected to devote their full time to the performance of such duties.
The Trustees, or any Affiliate partner or employee thereof, may engage in, or
possess an interest in, any other business or venture of any nature and
description, independently or with or for the account of others.

Section 4. Payment of Expenses by the Trust. The Board of Trustees is authorized
to pay or cause to be paid out of the principal or income of the Trust or any
particular Series or class of Shares, or partly out of the principal and partly
out of the income of the Trust or any particular Series or class of Shares and
to charge or allocate the same to, between or among such one or more of the
Series or classes of Shares, as the Board of Trustees deems fair and in
compliance with this Declaration of Trust, including particularly Article III,
Section 6 hereof, all expenses, fees, charges, taxes and liabilities incurred by
or arising in connection with the maintenance or operation of the Trust or a
particular Series or class of Shares, or in connection with the management
thereof, including, but not limited to, the Trustees' compensation and such
expenses, fees, charges, taxes and liabilities for the services of the Trust's
officers, employees, Investment Adviser, Principal Underwriter, auditors,
counsel, custodian, sub-custodian (if any), transfer agent, dividend disbursing
agent, shareholder servicing agent, administrative services agent, and such
other agents or independent contractors and such other expenses, fees, charges,
taxes and liabilities as the Board of Trustees may deem necessary or proper to
incur.

Section 5. Payment of Expenses by Shareholders. The Board of Trustees shall have
the power, as frequently as it may determine, to cause each Shareholder of the
Trust, or each Shareholder of any particular Series, to pay directly, in advance
or arrears, for charges of the Trust's custodian or transfer, dividend
disbursing, shareholder servicing, administrative services or similar agent, an
amount fixed from time to time by the Board of Trustees, by setting off such
charges due from such Shareholder from declared but unpaid dividends or
distributions owed such Shareholder and/or by reducing the number of Shares in
the account of such Shareholder by that number of full and/or fractional Shares
which represents the outstanding amount of such charges due from such
Shareholder.

Section 6. Ownership of Trust Property. Legal title to all of the Trust Property
shall at all times be considered to be vested in the Trust, except that the
Board of Trustees shall have the power to cause legal title to any Trust
Property to be held by or in the name of any Person as nominee, on such terms as
the Board of Trustees may determine, in accordance with applicable law.

Section 7. Service Contracts.
(a) Subject to such requirements and restrictions as may be set forth in the
By-Laws and/or the 1940 Act, the Board of Trustees may, at any time and from
time to time, contract for exclusive or nonexclusive advisory, management and/or
administrative services for the Trust or for any Series with any corporation,
trust, association or other organization, including any Affiliate; and any such
contract may contain such other terms as the Board of Trustees may determine,
including without limitation, authority for the Investment Adviser or
administrator to determine from time to time without prior consultation with the
Board of Trustees what securities and other instruments or property shall be
purchased or otherwise acquired, owned, held, invested or reinvested in, sold,
exchanged, transferred, mortgaged, pledged, assigned, negotiated, or otherwise
dealt with or disposed of, and what portion, if any, of the Trust Property shall
be held uninvested and to make changes in the Trust's or a particular Series'
investments, or such other activities as may specifically be delegated to such
party.

(b) The Board of Trustees may also, at any time and from time to time, contract
with any corporation, trust, association or other organization, including any
Affiliate, appointing it or them as the exclusive or nonexclusive distributor or
Principal Underwriter for the Shares of the Trust or one or more of the Series
or classes thereof or for other securities to be issued by the Trust, or
appointing it or them to act as the custodian, transfer agent, dividend
disbursing agent and/or shareholder servicing agent for the Trust or one or more
of the Series or classes thereof.

(c) The Board of Trustees is further empowered, at any time and from time to
time, to contract with any Persons to provide such other services to the Trust
or one or more of its Series, as the Board of Trustees determines to be in the
best interests of the Trust or one or more of its Series.

(d) The fact that:

(i) any of the Shareholders, Trustees, employees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, manager,
Adviser, Principal Underwriter, distributor, or Affiliate or agent of or
for any corporation, trust, association, or other organization, or for any
parent or Affiliate of any organization, with which an Adviser's,
management or administration contract, or Principal Underwriter's or
distributor's contract, or custodian, transfer, dividend disbursing,
shareholder servicing or other type of service contract may have been or
may hereafter be made,

(ii) any such organization, or any parent or Affiliate thereof, is a Shareholder
or has an interest in the Trust, or

(iii)any corporation, trust, association or other organization with which an
Adviser's, management or administration contract or Principal Underwriter's
or distributor's contract, or custodian, transfer, dividend disbursing,
shareholder servicing or other type of service contract may have been or
may hereafter be made also has an Adviser's, management or administration
contract, or Principal Underwriter's or distributor's contract, or
custodian, transfer, dividend disbursing, shareholder servicing or other
service contract with one or more other corporations, trusts, associations,
or other organizations, or has other business or interests, shall not
affect the validity of any such contract or disqualify any Shareholder,
Trustee, employee or officer of the Trust from voting upon or executing the
same, or create any liability or accountability to the Trust or its
Shareholders, provided that the establishment of and performance under each
such contract is permissible under the provisions of the 1940 Act.

(e) Every contract referred to in this Section 7 shall comply with such
requirements and restrictions as may be set forth in the By-Laws or the
1940 Act or stipulated by resolution of the Board of Trustees. Any such
contract may contain such other terms as the Board of Trustees may
determine.

ARTICLE V.

Shareholders' Voting Powers and Meetings

Section 1. Voting Powers. Subject to the provisions of Article III, Section
6(d), the Shareholders shall have power to vote only (i) for the election of
Trustees, including the filling of any vacancies in the Board of Trustees, as
provided in Article IV, Section 1; (ii) with respect to such additional matters
relating to the Trust as may be required by this Declaration of Trust, the
By-Laws, the 1940 Act or any registration statement of the Trust filed with the
Commission; and (iii) on such other matters as the Board of Trustees may
consider necessary or desirable. The Shareholder of record (as of the record
date established pursuant to Section 5 of this Article V) of each Share shall be
entitled to one vote for each full Share, and a fractional vote for each
fractional Share. Shareholders shall not be entitled to cumulative voting in the
election of Trustees or on any other matter. Shares may be voted in person or by
proxy.

Section 2. Meetings. Meetings of the Shareholders may be called by the Board of
Trustees for the purpose of electing Trustees as provided in Article IV, Section
1 and for such other purposes as may be prescribed by law, this Declaration of
Trust or the By-Laws. Meetings of the Shareholders may also be called by the
Board of Trustees from time to time for the purpose of taking action upon any
other matter deemed by the Board of Trustees to be necessary or desirable.

Section 3. Quorum and Required Vote. Except when a larger quorum is required by
applicable law, the By-Laws or this Declaration of Trust, thirty-three and
one-third percent (33-1/3%) of the Shares present in person or represented by
proxy and entitled to vote at a Shareholders' meeting shall constitute a quorum
at such meeting. When a separate vote by one or more Series or classes is
required, thirty-three and one-third percent (33-1/3%) of the Shares of each
such Series or class present in person or represented by proxy and entitled to
vote shall constitute a quorum at a Shareholders' meeting of such Series or
class. Subject to the provisions of Article III, Section 6(d), Article VIII,
Section 4 and any other provision of this Declaration of Trust, the By-Laws or
applicable law which requires a different vote: (1) in all matters other than
the election of Trustees, the affirmative vote of the majority of votes cast at
a Shareholders' meeting at which a quorum is present shall be the act of the
Shareholders; and (2) Trustees shall be elected by a plurality of the votes cast
at a Shareholders' meeting at which a quorum is present.

Section 4. Shareholder Action by Written Consent without a Meeting. Any action
which may be taken at any meeting of Shareholders may be taken without a meeting
and without prior notice if a consent in writing setting forth the action so
taken is signed by the holders of Shares having not less than the minimum number
of votes that would be necessary to authorize or take that action at a meeting
at which all Shares entitled to vote on that action were present and voted. All
such consents shall be filed with the secretary of the Trust and shall be
maintained in the Trust's records. Any Shareholder giving a written consent, the
Shareholder's proxy holders, a transferee of the Shares (prior to the record
date), a personal representative of the Shareholder or its respective
proxy-holder may revoke the consent by a writing received by the secretary of
the Trust before written consents of the number of Shares required to authorize
the proposed action have been filed with the secretary.

If the consents of all Shareholders entitled to vote have not been solicited in
writing and if the unanimous written consent of all such Shareholders shall not
have been received, the secretary shall give prompt notice of the action taken
without a meeting to such Shareholders. This notice shall be given in the manner
specified in the By-Laws.

Section 5. Record Dates. For purposes of determining the Shareholders entitled
to notice of any meeting, to vote at any meeting, or to give consent to action
without a meeting, the Board of Trustees may fix in advance a record date which
shall not be more than one hundred eighty (180) days nor less than seven (7)
days before the date of any such meeting.

If the Board of Trustees does not so fix a record date:

(a) The record date for determining Shareholders entitled to notice of or to
vote at a meeting of Shareholders shall be at the close of business on the
business day next preceding the day on which notice is given or, if notice is
waived, at the close of business on the business day which is five (5) business
days next preceding to the day on which the meeting is held.

(b) The record date for determining Shareholders entitled to give consent to
action in writing without a meeting, (i) when no prior action by the Board of
Trustees has been taken, shall be the day on which the first written consent is
given, or (ii) when prior action of the Board of Trustees has been taken, shall
be at the close of business on the day on which the Board of Trustees adopts the
resolution taking such prior action or the seventy-fifth (75th) day before the
date of such other action, whichever is later.

For the purpose of determining the Shareholders of any Series or class who are
entitled to receive payment of any dividend or of any other distribution, the
Board of Trustees may from time to time fix a date, which shall be before the
date for the payment of such dividend or such other distribution, as the record
date for determining the Shareholders of such Series or class having the right
to receive such dividend or distribution. Nothing in this Section shall be
construed as precluding the Board of Trustees from setting different record
dates for different Series or classes.

Section 6. Additional Provisions. The By-Laws may include further provisions for
Shareholders' votes, meetings and related matters.

ARTICLE VI.

Net Asset Value, Distributions and Redemptions

Section 1. Determination of Net Asset Value, Net Income and Distributions.
Subject to Article III, Section 6 hereof, the Board of Trustees shall have the
power to fix an initial offering price for the Shares of the Trust, or any
Series or class thereof which shall yield to the Trust, such Series or class not
less than the net asset value thereof, at which price the Shares of the Trust,
such Series or class shall be offered initially for sale, and to determine from
time to time thereafter the offering price which shall yield to the Trust, such
Series or class not less than the net asset value thereof from sales of the
Shares of the Trust, such Series or class; provided, however, that no Shares of
the Trust or Series or class thereof shall be issued or sold for consideration
which shall yield to the Trust, such Series or class less than the net asset
value of the Shares of the Trust, such Series or class next determined after the
receipt of the order (or at such other times set by the Board of Trustees),
except in the case of Shares of the Trust, such Series or class issued in
payment of a dividend properly declared and payable.

Subject to Article III, Section 6 hereof, the Board of Trustees, in their
absolute discretion, may prescribe and shall set forth in the By-laws or in a
duly adopted vote of the Board of Trustees such bases and time for determining
the per Share or net asset value of the Shares of the Trust, any Series or class
of a Series or net income attributable to the Shares of the Trust, any Series or
class of a Series, or the declaration and payment of dividends and distributions
on the Shares of the Trust, any Series or class of a Series, as they may deem
necessary or desirable.

Section 2. Redemptions at the Option of a Shareholder. Unless otherwise provided
in the prospectus of the Trust relating to the Shares of the Trust or Series
thereof, as such prospectus may be amended from time to time ("Prospectus"):

(a) The Trust shall purchase such Shares as are offered by any Shareholder for
redemption, upon the presentation of a proper instrument of transfer together
with a request directed to the Trust or a Person designated by the Trust that
the Trust purchase such Shares or in accordance with such other procedures for
redemption as the Board of Trustees may from time to time authorize; and the
Trust will pay therefor the net asset value thereof, in accordance with the
By-Laws and applicable law. Payment for said Shares shall be made by the Trust
to the Shareholder within seven days after the date on which the request is
received in proper form. The obligation set forth in this Section 2 is subject
to the provision that (i) in the event that the New York Stock Exchange (the
"Exchange") is closed for other than weekends or holidays, (ii) if permitted by
the Rules of the Commission during periods when trading on the Exchange is
restricted or during any National Financial Emergency which makes it
impracticable for the Trust to dispose of the investments of the Trust or
applicable Series or to determine fairly the value of the net assets of the
Trust or held with respect to such Series, or (iii) during any other period
permitted by order of the Commission for the protection of investors, such
obligations may be suspended or postponed by the Board of Trustees. If
certificates have been issued to a Shareholder, any such request by such
Shareholder must be accompanied by surrender of any outstanding certificate or
certificates for such Shares in form for transfer, together with such proof of
the authenticity of signatures as may reasonably be required on such Shares and
accompanied by proper stock transfer stamps, if applicable.

(b) Payments for Shares so redeemed by the Trust shall be made in cash, except
payment for such Shares may, at the option of the Board of Trustees, or such
officer or officers as the Board of Trustees may duly authorize in its complete
discretion, be made in kind, or partially in cash and partially in kind. In case
of any payment in kind, the Board of Trustees, or its delegate, shall have
absolute discretion as to what security or securities of the Trust shall be
distributed in kind and the amount of the same; and the securities distributed
shall be valued for purposes of distribution at the value at which they were
appraised in computing the then current net asset value of the Shares, provided
that any Shareholder who cannot legally acquire securities so distributed in
kind by reason of the prohibitions of the 1940 Act or the provisions of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), shall
receive cash. Shareholders shall bear the expenses of in-kind transactions,
including, but not limited to, transfer agency fees, custodian fees and costs of
disposition of such securities.

(c) Payment for Shares so redeemed by the Trust shall be made by the Trust as
provided above within seven days after the date on which the redemption request
is received in good order; provided, however, that if payment shall be made
other than exclusively in cash, any securities to be delivered as part of such
payment shall be delivered as promptly as any necessary transfers of such
securities on the books of the several corporations whose securities are to be
delivered practicably can be made, which may not necessarily occur within such
seven-day period. Moreover, redemptions may be suspended in the event of a
National Financial Emergency. In no case shall the Trust be liable for any delay
of any corporation or other Person in transferring securities selected for
delivery as all or part of any payment in kind.

(d) The right of Shareholders to receive dividends or other distributions on
Shares may be set forth in a Plan adopted by the Board of Trustees and amended
from time to time pursuant to Rule 18f-3 under the 1940 Act. The right of any
Shareholder of the Trust to receive dividends or other distributions on Shares
redeemed and all other rights of such Shareholder with respect to the Shares so
redeemed by the Trust, except the right of such Shareholder to receive payment
for such Shares, shall cease at the time as of which the purchase price of such
Shares shall have been fixed, as provided above.

Section 3. Redemptions at the Option of the Trust. The Board of Trustees may,
from time to time, without the vote or consent of the Shareholders, and subject
to the 1940 Act, redeem Shares or authorize the closing of any Shareholder
account, subject to such conditions as may be established by the Board of
Trustees.

ARTICLE VII.

Compensation and Limitation of Liability of
Officers and Trustees

Section 1. Compensation. Except as set forth in the last sentence of this
Section 1, the Board of Trustees may, from time to time, fix a reasonable amount
of compensation to be paid by the Trust to the Trustees and officers of the
Trust. Nothing herein shall in any way prevent the employment of any Trustee for
advisory, management, legal, accounting, investment banking or other services
and payment for the same by the Trust.

Section 2. Indemnification and Limitation of Liability.

(a) To the fullest extent that limitations on the liability of Trustees and
officers are permitted by the DBTA, the officers and Trustees shall not be
responsible or liable in any event for any act or omission of any agent,
employee, Investment Adviser or Principal Underwriter of the Trust; or with
respect to each Trustee and officer, the act or omission of any other Trustee or
officer, respectively. The Trust, out of the Trust Property, shall indemnify and
hold harmless each and every officer and Trustee from and against any and all
claims and demands whatsoever arising out of or related to such officer's or
Trustee's performance of his or her duties as an officer or Trustee of the
Trust. This limitation on liability applies to events occurring at the time a
Person serves as a Trustee or officer of the Trust whether or not such Person is
a Trustee or officer at the time of any proceeding in which liability is
asserted. Nothing herein contained shall indemnify, hold harmless or protect any
officer or Trustee from or against any liability to the Trust or any Shareholder
to which such Person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such Person's office.

(b) Every note, bond, contract, instrument, certificate or undertaking and every
other act or document whatsoever issued, executed or done by or on behalf of the
Trust, the officers or the Trustees or any of them in connection with the Trust
shall be conclusively deemed to have been issued, executed or done only in such
Person's capacity as Trustee and/or as officer, and such Trustee or officer, as
applicable, shall not be personally liable therefore, except as described in the
last sentence of the first paragraph of this Section 2 of this Article VII.

Section 3. Officers and Trustees' Good Faith Action, Expert Advice, No Bond or
Surety. The exercise by the Trustees of their powers and discretions hereunder
shall be binding upon everyone interested. An officer or Trustee shall be liable
to the Trust and to any Shareholder solely for such officer's or Trustee's own
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of such officer or Trustee, and for
nothing else, and shall not be liable for errors of judgment or mistakes of fact
or law. The officers and Trustees may obtain the advice of counsel or other
experts with respect to the meaning and operation of this Declaration of Trust
and their duties as officers or Trustees. No such officer or Trustee shall be
liable for any act or omission in accordance with such advice and no inference
concerning liability shall arise from a failure to follow such advice. The
officers and Trustees shall not be required to give any bond as such, nor any
surety if a bond is required.

Section 4. Insurance. To the fullest extent permitted by applicable law, the
officers and Trustees shall be entitled and have the authority to purchase with
Trust Property, insurance for liability and for all expenses reasonably
incurred, paid or expected to be paid by a Trustee or officer in connection with
any claim, action, suit or proceeding in which such Person becomes involved by
virtue of such Person's capacity or former capacity with the Trust, whether or
not the Trust would have the power to indemnify such Person against such
liability under the provisions of this Article.

ARTICLE VIII.

Miscellaneous

Section 1. Liability of Third Persons Dealing with Trustees. No person dealing
with the Trustees shall be bound to make any inquiry concerning the validity of
any actions made or to be made by the Trustees.

Section 2. Dissolution of Trust or Series. Unless dissolved as provided herein,
the Trust shall have perpetual existence. The Trust may be dissolved at any time
by vote of a majority of the Shares of the Trust entitled to vote or by the
Board of Trustees by written notice to the Shareholders. Any Series may be
dissolved at any time by vote of a majority of the Shares of that Series or by
the Board of Trustees by written notice to the Shareholders of that Series.

Upon dissolution of the Trust (or a particular Series, as the case may be), the
Trustees shall (in accordance with ss. 3808 of the DBTA) pay or make reasonable
provision to pay all claims and obligations of the Trust and/or each Series (or
the particular Series, as the case may be), including all contingent,
conditional or unmatured claims and obligations known to the Trust, and all
claims and obligations which are known to the Trust but for which the identity
of the claimant is unknown. If there are sufficient assets held with respect to
the Trust and/or each Series of the Trust (or the particular Series, as the case
may be), such claims and obligations shall be paid in full and any such
provisions for payment shall be made in full. If there are insufficient assets
held with respect to the Trust and/or each Series of the Trust (or the
particular Series, as the case may be), such claims and obligations shall be
paid or provided for in accordance with Article III, Section 6, according to
their priority and, among claims and obligations of equal priority, ratably to
the extent of assets available therefor. Any remaining assets (including without
limitation, cash, securities or any combination thereof) held with respect to
the Trust and/or each Series of the Trust (or the particular Series, as the case
may be) shall be distributed to the Shareholders of the Trust and/or such Series
(or the particular Series) in accordance with Article III, Section 6, and
ratably according to the number of Shares of the Trust and/or such Series (or
the particular Series) held by the several Shareholders on the record date for
such dissolution distribution.

Section 3. Merger and Consolidation; Conversion.

(a) Merger and Consolidation. Pursuant to an agreement of merger or
consolidation, the Trust, or any one or more Series, may, by act of a majority
of the Board of Trustees, merge or consolidate with or into one or more business
trusts or other business entities formed or organized or existing under the laws
of the State of Delaware or any other state or the United States or any foreign
country or other foreign jurisdiction. Any such merger or consolidation shall
not require the vote of the Shareholders affected thereby, unless such vote is
required by the 1940 Act, or unless such merger or consolidation would result in
an amendment of this Declaration of Trust which would otherwise require the
approval of such Shareholders. In accordance with Section 3815(f) of the DBTA,
an agreement of merger or consolidation may effect any amendment to this
Declaration of Trust or the By-Laws or effect the adoption of a new declaration
of trust or by-laws of the Trust if the Trust is the surviving or resulting
business trust. Upon completion of the merger or consolidation, the Trustees
shall file a certificate of merger or consolidation in accordance with Section
3810 of the DBTA.

(b) Conversion. A majority of the Board of Trustees may, without the vote or
consent of the Shareholders, cause (i) the Trust to convert to a common-law
trust, a general partnership, limited partnership or a limited liability company
organized, formed or created under the laws of the State of Delaware as
permitted pursuant to Section 3821 of the DBTA; (ii) the Shares of the Trust or
any Series to be converted into beneficial interests in another business trust
(or series thereof) created pursuant to this Section 3 of this Article VIII, or
(iii) the Shares to be exchanged under or pursuant to any state or federal
statute to the extent permitted by law; provided, however, that if required by
the 1940 Act, no such statutory conversion, Share conversion or Share exchange
shall be effective unless the terms of such transaction shall first have been
approved at a meeting called for that purpose by the "vote of a majority of the
outstanding voting securities," as such phrase is defined in the 1940 Act, of
the Trust or Series, as applicable; provided, further, that in all respects not
governed by statute or applicable law, the Board of Trustees shall have the
power to prescribe the procedure necessary or appropriate to accomplish a sale
of assets, merger or consolidation including the power to create one or more
separate business trusts to which all or any part of the assets, liabilities,
profits or losses of the Trust may be transferred and to provide for the
conversion of Shares of the Trust or any Series into beneficial interests in
such separate business trust or trusts (or series thereof).

Section 4. Reorganization.
A majority of the Board of Trustees may cause the Trust to sell, convey and
transfer all or substantially all of the assets of the Trust, or all or
substantially all of the assets held with respect to any one or more Series (the
"Acquired Series"), to another trust, business trust, partnership, limited
partnership, limited liability company, association or corporation organized
under the laws of any state, or to one or more separate series thereof, or to
the Trust to be held as assets held with respect to one or more other Series of
the Trust, in exchange for cash, shares or other securities (including, without
limitation, in the case of a transfer to another Series of the Trust, Shares of
such other Series) with such transfer either (a) being made subject to, or with
the assumption by the transferee of, the liabilities of the Trust or the
liabilities held with respect to each Acquired Series, or (b) not being made
subject to, or not with the assumption of, such liabilities; provided, however,
that, if required by the 1940 Act, no assets held with respect to any particular
Series shall be so sold, conveyed or transferred unless the terms of such
transaction shall first have been approved at a meeting called for that purpose
by the "vote of a majority of the outstanding voting securities," as such phrase
is defined in the 1940 Act, of that Series. Following such sale, conveyance and
transfer, the Board of Trustees shall distribute such cash, shares or other
securities (giving due effect to the assets and liabilities held with respect to
the Acquired Series, and any other differences between or among the Acquired
Series), ratably among the Shareholders of the Trust or the Acquired Series,
(giving due effect to the differences among the various classes within the Trust
or each such Acquired Series); and if all of the assets of the Trust have been
so sold, conveyed and transferred, the Trust shall be dissolved.

Section 5. Amendments.
Subject to the provisions of the second paragraph of this Section 5 of this
Article VIII, this Declaration of Trust may be restated and/or amended at any
time by an instrument in writing signed by a majority of the then Board of
Trustees and, if required, by approval of such amendment by Shareholders in
accordance with Article V, Section 3 hereof. Any such restatement and/or
amendment hereto shall be effective immediately upon execution and approval or
upon such future date and time as may be stated therein. The Certificate of
Trust of the Trust may be restated and/or amended by a similar procedure, and
any such restatement and/or amendment shall be effective immediately upon filing
with the Office of the Secretary of State of the State of Delaware or upon such
future date as may be stated therein.

Notwithstanding the above, the Board of Trustees expressly reserves the right to
amend or repeal any provisions contained in this Declaration of Trust or the
Certificate of Trust, in accordance with the provisions of Section 5 of Article
III hereof, and all rights, contractual and otherwise, conferred upon
Shareholders are granted subject to such reservation. The Board of Trustees
further expressly reserves the right to amend or repeal any provision of the
By-Laws pursuant to Article X of the By-Laws.

Section 6. Filing of Copies, References, Headings. The original or a copy of
this Declaration of Trust and of each restatement and/or amendment hereto shall
be kept at the principal executive office of the Trust where it may be inspected
by any Shareholder. Anyone dealing with the Trust may rely on a certificate by
an officer of the Trust as to whether or not any such restatements and/or
amendments have been made and as to any matters in connection with the Trust
hereunder; and, with the same effect as if it were the original, may rely on a
copy certified by an officer of the Trust to be a copy of this instrument or of
any such restatements and/or amendments. In this Declaration of Trust and in any
such restatements and/or amendments, references to this instrument, and all
expressions of similar effect to "herein," "hereof" and "hereunder," shall be
deemed to refer to this instrument as amended or affected by any such
restatements and/or amendments. Headings are placed herein for convenience of
reference only and shall not be taken as a part hereof or control or affect the
meaning, construction or effect of this instrument. Whenever the singular number
is used herein, the same shall include the plural; and the neuter, masculine and
feminine genders shall include each other, as applicable. This instrument may be
executed in any number of counterparts, each of which shall be deemed an
original.

Section 7. Applicable Law. This Declaration of Trust is created under and is to
be governed by and construed and administered according to the laws of the State
of Delaware and the applicable provisions of the 1940 Act and the Code. The
Trust shall be a Delaware business trust pursuant to the DBTA, and without
limiting the provisions hereof, the Trust may exercise all powers that are
ordinarily exercised by such a business trust.

Section 8. Provisions in Conflict with Law or Regulations. (a) The provisions of
this Declaration of Trust are severable, and if the Board of Trustees shall
determine, with the advice of counsel, that any of such provisions is in
conflict with the 1940 Act, the Code, the DBTA, or with other applicable laws
and regulations, the conflicting provision shall be deemed not to have
constituted a part of this Declaration of Trust from the time when such
provisions became inconsistent with such laws or regulations; provided, however,
that such determination shall not affect any of the remaining provisions of this
Declaration of Trust or render invalid or improper any action taken or omitted
prior to such determination.

(b) If any provision of this Declaration of Trust shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Declaration of Trust in any jurisdiction.

Section 9. Business Trust Only. It is the intention of the Trustees to create a
business trust pursuant to the DBTA, and thereby to create the relationship of
trustee and beneficial owners within the meaning of the DBTA between the
Trustees and each Shareholder. It is not the intention of the Trustees to create
a general or limited partnership, limited liability company, joint stock
association, corporation, bailment, or any form of legal relationship other than
a business trust pursuant to the DBTA. Nothing in this Declaration of Trust
shall be construed to make the Shareholders, either by themselves or with the
Trustees, partners or members of a joint stock association.

IN WITNESS WHEREOF, the Trustees named below do hereby make and enter into this
Declaration of Trust as of the date first written above.

/s/ Robert E. Killen /s/ Edward A. Killen, II
Robert E. Killen Edward A. Killen, II
Trustee Trustee

/s/ Denis P. Conlon /s/ Anthony N. Carrelli
Denis P. Conlon Anthony N. Carrelli
Trustee Trustee

/s/ Deborah D. Dorsi
Deborah D. Dorsi
Trustee

CERTIFICATE OF TRUST

The Berwyn Funds

This Certificate of Trust of The Berwyn Funds, a business trust (the "Trust"),
executed by the undersigned trustees, and filed under and in accordance with the
provisions of the Delaware Business Trust Act (12 Del. C. ss. 3801 et seq.) (the
"Act"), sets forth the following: FIRST: The name of the business trust formed
hereby is
The Berwyn Funds.

SECOND: The address of the registered office of the Trust in the State of
Delaware is at 1209 Orange Street, Wilmington, Delaware 19801 and the name
and address of the registered agent for service of process on the Trust in
the State of Delaware is The Corporation Trust Company, 1209 Orange
Street, Wilmington, Delaware 19801.

THIRD: The Trust formed hereby is or will become an
investment company registered under the Investment Company
Act of 1940, as amended (15 U.S.C. ss.80a-1 et seq.).

FOURTH: Pursuant to Section 3804 of the Act, the debts, liabilities,
obligations and expenses incurred, contracted for, or otherwise existing
with respect to, a particular series, whether such series is now
authorized and existing pursuant to the governing instrument of the Trust
or is hereafter authorized and existing pursuant to said governing
instrument, shall be enforceable against the assets associated with such
series only, and not against the assets of the Trust generally or any
other series of the Trust, and, except as otherwise provided in the
governing instrument of the Trust, none of the debts, liabilities,
obligations and expenses incurred, contracted for, or otherwise existing
with respect to, the Trust generally or any other series of the Trust
shall be enforceable against the assets of such series.

In witness whereof, the undersigned, being all of the trustees of The
Berwyn Funds have duly executed this Certificate of Trust as of the 4th day of
February 1999.

By /s/ Robert E. Killen By /s/ Edward A. Killen, II
Robert E. Killen Edward A. Killen, II
Trustee Trustee

By /s/ Denis P. Conlon By /s/ Anthony N. Carrelli
Denis P. Conlon Anthony N. Carrelli
Trustee Trustee

By /s/ Deborah D. Dorsi
Deborah D. Dorsi
Trustee

CONTRACT FOR
INVESTMENT ADVISORY SERVICES

Agreement made March ___, 1999 between The Berwyn Funds, a Delaware business
trust, having its principal place of business at 1189 Lancaster Avenue, Berwyn,
Pennsylvania, herein referred to as the Fund, on behalf of the Berwyn Fund
series of the Fund, herein referred to as the Series, and The Killen Group,
Inc., a Pennsylvania corporation, having its principal place of business at 1189
Lancaster Avenue, Berwyn, Pennsylvania, herein referred to as the Adviser.

1. The Fund is registered with the U.S. Securities and Exchange
Commission as an open-end management investment company under the
provisions of the Investment Company Act of 1940, as amended (the
"Act"), and is qualified to engage in business under the Act and
other applicable federal and state statutes.

2. The Adviser is registered under the Investment Advisers Act of 1940,
as amended (the "Advisers Act") and is engaged in the business of
acting as an investment adviser and rendering research and advisory
services.

3. The Fund desires to retain the Adviser to render such services to the
Fund with respect to the Series in the manner and on the terms and
conditions hereinafter set forth.

4. Nothing contained herein shall be deemed to require the Fund to take
any action contrary to its Certificate of Trust, Agreement and
Declaration of Trust or any applicable statute or regulation, or to
relieve or deprive the Board of Trustees of the Fund of its
responsibility for, and control of, the conduct of the affairs of the
Fund.

For the reasons recited above, and in consideration of the mutual promises
contained herein, the Fund and Adviser agree as follows:

SECTION ONE
INVESTMENT ADVICE AND OTHER SERVICES

a. Adviser shall to the extent reasonably required in the conduct of the
business of the Fund with respect to the Series, place at the disposal of the
Series, its judgment and experience and furnish to the Series advice and
recommendations with respect to investments, investment policies, the purchase
and sale of securities, and the management of the resources of the Series.
Adviser shall also, from time to time, furnish to or place at the disposal of
the Series such reports and information relating to industries, businesses,
corporations or securities as may be reasonably required by the Series or as
Adviser may deem to be helpful to the Series in the administration of its
investments.

b. Adviser agrees to use its best efforts in the furnishing of such advice
and recommendations and in the preparation of such reports and information, and
for this purpose Adviser shall at all times maintain a staff of officers and
other trained personnel for the performance of its obligations under this
agreement. Adviser, may at its expense, employ other persons to furnish to
Adviser statistical and other factual information, advice regarding economic
factors and trends, information with respect to technical and scientific
developments and such other information, advice and assistance as Adviser may
desire.

c. The Fund will from time to time furnish to Adviser detailed statements
of the investments and resources of the Series and information as to its
investment strategies and problems, and will make available to Adviser such
registration statements, financial reports, proxy statements, and legal and
other information relating to the investments of the Series as may be in
possession of the Fund or available to it.

SECTION TWO
COMPENSATION TO INVESTMENT ADVISER

a. The Fund agrees to pay to Adviser and Adviser agrees to accept, as full
compensation for all services rendered by Adviser hereunder, a fee at an annual
rate equal to 1.00% of the average daily net assets of the Series. The fee will
be paid monthly in arrears.

b. Adviser agrees that neither it nor any of its officers or trustees
shall take any long or short position in the shares of beneficial interest in
the Fund; provided that the Adviser or any of its officers or Trustees may
purchase shares of beneficial interest in the Fund at the price at which such
shares are available to the public at the moment of purchase; and provided
further that (1) such purchase is made for investment purposes only and (2) if
any shares of beneficial interest in the Fund so purchased are resold within two
months after the date of purchase, such fact will be immediately reported to the
Fund.

SECTION THREE
PAYMENT OF EXPENSES

a. The Adviser shall provide and furnish office space to the Fund and
provide personnel to administer the operations of the Fund with respect to the
Series. The Adviser shall pay all expenses associated with the sales promotion
of shares of the Series. The Fund will pay all other expenses incurred in the
operation of the Fund with respect to the Series.

b. The Adviser hereby agrees to reduce its fee hereunder in any fiscal
year of the Fund by any amount necessary to prevent expenses and liabilities of
the Series (excluding taxes, interest, brokerage commissions and extraordinary
expenses, determined by the Fund or Adviser for the Series, but inclusive of the
Adviser's fee for the Series) from exceeding an annual rate of 2.00% of the
average daily net assets of the Series. When the average daily net assets of the
Series exceed $100 million, the Adviser hereby agrees to reduce its fee for the
Series in any fiscal year by any amount necessary to prevent expenses and
liabilities of the Series (excluding taxes, interest, brokerage commissions and
extraordinary expenses, determined by the Fund or Adviser for the Series, but
inclusive of the Adviser's fee for the Series) from exceeding an annual rate of
1.50% of the average daily net assets of the Series.

SECTION FOUR
DURATION; TERMINATION

a. This agreement shall begin on the day and year first above written and
shall continue in effect for a period of two years, if approved by vote of a
majority of the outstanding voting securities of the Series. After the initial
two years of this agreement, this agreement shall continue in effect from year
to year, subject to the provisions for termination and all of the other terms
and conditions hereof; provided that such continuation shall be specifically
approved at least annually (i) by vote of a majority of the Board of Trustees of
the Fund or by vote of a majority of the outstanding voting securities of the
Series, and (ii) by vote of a majority of the trustees of the Fund who are not
parties to this agreement or "interested persons" of any such party, cast in
person at a meeting called for the purpose of voting on such approval.

b. This agreement may be terminated by the Fund or the Adviser on sixty
days' notice in writing to the other party hereto, without the payment of any
penalty; provided that such termination on the part of the Fund is authorized by
resolution of the Board of Trustees of the Fund or by vote of a majority of the
outstanding voting securities of the Series.

c. This agreement shall automatically and immediately terminate in the
event of its assignment.

d. For the purposes of this agreement, the terms "interested persons,"
"vote of a majority of the outstanding voting securities," and "assignment"
shall have the meanings as provided in the Act and the rules and regulations
thereunder.

SECTION FIVE
AMENDMENT OF AGREEMENT

This agreement may be amended or modified to the extent, and in the manner,
permitted by the Act and the rules and regulations adopted thereunder; provided
that no amendment or modification of this agreement shall be effective unless
the same shall be in writing and signed by all of the parties hereto.

In witness whereof, the parties hereto have caused this agreement to be signed
by their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affixed, the day and year first above written.

THE BERWYN FUNDS, THE KILLEN GROUP, INC.
on behalf of its Berwyn Fund series By
By
Name: Kevin M. Ryan Name: Robert E. Killen
Title: Secretary and Treasurer Title: President

CONTRACT FOR
INVESTMENT ADVISORY SERVICES

Agreement made March ___, 1999 between The Berwyn Funds, a Delaware business
trust, having its principal place of business at 1189 Lancaster Avenue, Berwyn,
Pennsylvania, herein referred to as the Fund, on behalf of the Berwyn Income
Fund series of the Fund, herein referred to as the Series, and The Killen Group,
Inc., a Pennsylvania corporation, having its principal place of business at 1189
Lancaster Avenue, Berwyn, Pennsylvania, herein referred to as the Adviser.

3. The Fund desires to retain the Adviser to render such services to the
Fund with respect to the Series in the manner and on the terms and
conditions hereinafter set forth.

For the reasons recited above, and in consideration of the mutual promises
contained herein, the Fund and Adviser agree as follows:

SECTION ONE
INVESTMENT ADVICE AND OTHER SERVICES

SECTION TWO
COMPENSATION TO INVESTMENT ADVISER

a. The Fund agrees to pay to Adviser and Adviser agrees to accept, as full
compensation for all services rendered by Adviser hereunder, a fee at an annual
rate equal to 0.50% of the average daily net assets of the Series. The fee will
be paid monthly in arrears.

SECTION THREE
PAYMENT OF EXPENSES

SECTION FOUR
DURATION; TERMINATION

c. This agreement shall automatically and immediately terminate in the
event of its assignment.

SECTION FIVE
AMENDMENT OF AGREEMENT

In witness whereof, the parties hereto have caused this agreement to be
signed by their respective officers thereunto duly authorized and their
respective corporate seals to be hereunto affixed, the day and year first above
written.

THE BERWYN FUNDS, THE KILLEN GROUP, INC.
on behalf of its Berwyn Income
Fund series

By By
Name: Kevin M. Ryan Name: Robert E. Killen
Title: Secretary and Treasurer Title: President

4-4
SELLING AGREEMENT
BETWEEN
THE BERWYN FUNDS
AND
BERWYN FINANCIAL SERVICES

THIS AGREEMENT entered into the 4th day of February, 1999 by and between
The Berwyn Funds, a Delaware Business Trust with its principal office located at
1189 Lancaster Avenue, Berwyn, Pennsylvania 19312 (the "Fund") and Berwyn
Financial Services, Inc., a Pennsylvania corporation with its principal office
located at 1189 Lancaster Avenue, Berwyn Pennsylvania 19312 (the "Distributor").

W I T N E S S E T H :

In consideration of the mutual convenants and agreements of the parties
hereto, the parties intending to be bound, mutually covenant and agree with each
other as follows:

1. The Fund hereby appoints the Distributor as agent of the Fund to effect
the sale and public distribution of portfolio series of the Fund.

2. The Distributor shall not be the exclusive agent for the Fund in sale
of its shares. The Distributor shall be a selling agent for the Fund in all
jurisdictions that require the shares of the Fund to be sold through
broker-dealers and/or issuer-dealers. In those jurisdictions, however, the Fund
may also sell shares through other broker-dealers. Also, where permitted by law
the Fund will sell its shares directly to the public.

3. The Fund hereby authorizes the Distributor to sell its
shares in accordance with the following schedule of prices;

The applicable price will be the net asset value per share next effective
after receipt and acceptance by the Fund of a proper offer to purchase,
determined in accordance with the Declaration of Turst, By-Laws,
Registration Statement and
Prospectus of the Fund.

4. Orders for the purchase of shares placed by the Distributor shall be
subject to the provisions of paragraphs (f) and (g) of Section 26 of the Rules
of Fair Practice of the NASD, the provisions of which are hereby incorporated by
reference.

5. The Fund agrees to prepare and file registration statements with the
Securities and Exchange Commission and the Securities Departments of the various
states and other jurisdictions in which the shares may be offered, at its own
expense, and do such other things and to take such other actions as may be
mutually agreed upon by and between the parties as shall be reasonably necessary
in order to effect the registration and the sale of the Fund's shares. The
Distributor shall cooperate with the Fund in the Preparation and filing of
applications for registration and qualification of the shares under applicable
law.

6. At its own expense, the Fund shall print and provide the Distributor
with such quantities of its current Prospectus, Statements of Additional
Information and reports to stockholders as the Distributor may reasonably
request in connection with its responsibilities under this Agreement.

7. Normally, the Fund shall not exercise any direction or control over the
time and place of solicitation, the persons to be solicited, or the manner of
solicitation; but the Distributor agrees that solicitations shall be in a form
acceptabe to the Fund and shall be subject to such terms and conditions as may
be prescribed from time to time by the Fund, the Registration Statement, the
Prospectus, the Articles of Incorporation, and By-Laws, and shall not violate
any provision of the laws of the Untied States or any jurisdictions to which
solicitations are subject, or violate any rule or regulation promulgated by any
lawfully constituted authority to which the Fund or Distributor may be subject.

8. (a) The Fund appoints and designates the Distributor as agent of the
Fund and the Distributor accepts such appointment as such agent, to repurchase
shares of the Fund in accordance with the provisions of the Articles of
Incorporation and its By-Laws. The Distributor shall not be the exclusive agent
for repurchase of shares.

(b) In connection with such redemptions or repurchases the Fund
authorizes and designates the Distributor to take any action, to make any
adjustments in net asset value, and to make any arrangements for the payment of
the redemption or repurchase price authorized or permitted to be taken or made
in accordance with the Investment Company Act of 1940 and as set forth in the
By-Laws and then current Prospectus.

(c) The authority of the Distributor under this paragraph 8 may, with
the consent of the Fund, be redelegated in whole or in party to another person
or firm.

(d) The authority granted in this paragraph 8 may be suspended by the
Fund at any time or from time to time pursuant to the provisions of its Articles
of Incorporation until further notice to the Distributor. The President or
Secretary of the Fund shall have the power granted by said provisions. After any
such suspension the authority granted to the Distributor by this paragraph 8
shall be reinstated only by a written instrument executed by the Fund's
President or Secretary.

9. The Distributor shall keep and maintain adequate records in respect of
its activities which further the sale of shares.

10. The Distributor agrees that it will not place orders for more shares
than are required to fill the requests received by it as agent of the Fund and
that it will expeditiously transmit all such orders to the Fund.

11. This Agreement shall become effective April 1, 1999 and shall continue
in effect for a period of more than one year from its effective date only as
long as such continuance is approved, at least annually, by the Board of
Trustees of the Fund, including a majority of those Trustees who are not
"interested persons" of any party to this Agreement voting person at a meeting
called for the purpose of voting or such approval. This Agreement may be
terminated by either party hereto upon thirty (30) days' written notice to the
other party. This Agreement shall automatically terminate in the event of its
assignment by the Distributor unless the United States Securities and Exchange
Commission has issued an order exempting the Fund and Distributor from the
provisions of the Investment Company Act of 1940, as amended, which would
otherwise have effected the termination of this Agreement.

12. No amendment to this Agreement shall be executed or become effective
unless its terms have been approved: (a) by a majority of the trustees of the
Fund or by the vote of a majority of the outstanding voting securities of the
Fund, and (b) by a majority of those trustees who are not interested persons of
the Fund or of any party to this Agreement.

13. The Fund and the Distributor hereby each agree that all literature and
publicity issued by either of them referring directly or indirectly to the Fund
or to the Distributor shall be submitted and receive the approval of the Fund
and the Distributor before the same may be used by either party.

14. The Distributor agrees to use its best efforts in effecting the sale
and public distribution of the shares of the Fund and to perform its duties in
redeeming the shares of the Fund, but nothing contained in this Agreement shall
make the Distributor or any of its officers and trustees or shareholders liable
for any loss sustained by the Fund or the Fund's officers, trustees or
shareholders, or by any other person on account of any act done or omitted to be
done by the Distributor under this Agreement; provided, that nothing herein
contained shall protect the Distributor against any liability to the Fund or to
any of its shareholders to which the Distributor would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the performance
of its duties as Distributor or gross negligence in the performance of its
duties as Distributor or by reason of its reckless disregard of its obligations
or duties as Distributor under this Agreement. Nothing in this Agreement shall
protect the Distributor from any liabilities which it may have under the
Securities Act of 1933 or the Investment Company Act of 1940.

15. As used in this Agreement the terms `interested persons,"
"assignment," and "majority of the outstanding voting securities" shall have the
respective meanings specified in the Investment Company Act of 1940 as now in
effect.

16. This Agreement shall be construed in accordance with the Laws of the
Commonwealth of Pennsylvania, except to the extent such laws are preempted by
the Investment Company Act of 1940.

17. Any notice required to be given thereunder shall be sent via first
class mail to the address of the party as set forth above.

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

Attest: The Berwyn Funds

Kevin M. Ryan Robert E. Killen
Secretary President

Attest: Berwyn Financial Services, Inc.

Edward A. Killen Kevin M. Ryan
Secretary President

POWER OF ATTORNEY

The undersigned, Robert E. Killen, hereby constitutes and appoints Edward
A. Killen, II and Kevin M. Ryan and each of them, with full power to act without
the other, as his true and lawful attorney-in-fact and agent, with full and
several power of substitution, with authority to take any appropriate action to
execute in the name of and on behalf of such undersigned person, and to file
with the U.S. Securities and Exchange Commission (the "Commission"), any and all
amendments (including without limitation post-effective amendments) to a
registration statement, any and all applications for exemptive relief from state
or federal regulations, and any and all amendments thereto, or any other forms
of documents, including without limitation, any registration statement on Form
N-14, and any and all amendments thereto, and to perform any and all such acts
as such attorney-in-fact may deem necessary or advisable to enable The Berwyn
Funds, which is registered with the Commission (the "Registrant"), to comply
with the applicable laws of the United States, any individual state or similar
jurisdiction of the United States, and in connection therewith to execute and
file all requisite papers and documents, including but not limited to,
applications, reports, notices, surety bonds, irrevocable consents and
appointments of attorneys for service of process; granting to such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act requisite and necessary to be done in connection
therewith, as fully as the Registrant and undersigned person might or could do
himself or in person, hereby ratifying and confirming all that such
attorneys-in-fact and agents or any of them, or their substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.

The undersigned person has executed this Power of Attorney in the capacity and
on the date indicated opposite his name.

NAME TITLE DATE
/s/ Robert E. Killen Trustee and President February 4,
Robert E. Killen 1999

POWER OF ATTORNEY

Each person (as such term is defined in the Securities Act of 1933, as amended)
whose signature appears below hereby constitutes and appoints Robert E. Killen
and Kevin M. Ryan and each of them, with full power to act without the other, as
the true and lawful attorney-in-fact and agent, with full and several power of
substitution, of such undersigned person with authority to take any appropriate
action to execute in the name of and on behalf of such undersigned person, and
to file with the U.S. Securities and Exchange Commission (the "Commission"), any
and all amendments (including without limitation post-effective amendments) to a
registration statement, any and all applications for exemptive relief from state
or federal regulations, and any and all amendments thereto, or any other forms
of documents, including without limitation, any registration statement on Form
N-14, and any and all amendments thereto, and to perform any and all such acts
as such attorney-in-fact may deem necessary or advisable to enable The Berwyn
Funds, which is registered with the Commission (the "Registrant"), to comply
with the applicable laws of the United States, any individual state or similar
jurisdiction of the United States, and in connection therewith to execute and
file all requisite papers and documents, including but not limited to,
applications, reports, notices, surety bonds, irrevocable consents and
appointments of attorneys for service of process; granting to such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act requisite and necessary to be done in connection
therewith, as fully as the Registrant and undersigned person might or could do
herself, himself or itself or in person, hereby ratifying and confirming all
that such attorneys-in-fact and agents or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

Each of the undersigned persons has executed this Power of Attorney in the
capacity and on the date indicated opposite the name of the undersigned person.

NAME TITLE DATE
/s/ Edward A. Killen, II Trustee and Executive February 4,
Edward A. Killen, II Vice President 1999

/s/ Anthony N. Carrelli Trustee February 4,
Anthony N. Carrelli 1999

/s/ Denis P. Conlon Trustee February 4,
Denis P. Conlon 1999

/s/ Deborah D. Dorsi Trustee February 4,
Deborah D. Dorsi 1999

The Berwyn Funds
By /s/ Robert E. Killen
Robert E. Killen President February 4,
1999