INITIAL CAPITAL AGREEMENT Board of Trustees of Black Pearl Funds 125 Market Street, Suite 1200 San Jose, California 95113 Ladies and Gentlemen: The undersigned hereby subscribes for 10,000 Shares of Beneficial Interest, no par value, of the Black...

                           INITIAL CAPITAL AGREEMENT


                                                                   _______, 2005


Board of Trustees of
Black Pearl Funds
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Ladies and Gentlemen:

     The undersigned hereby subscribes for 10,000 Shares of Beneficial Interest,
no par value,  of the Black  Pearl  _______  Fund,  a series of the Black  Pearl
Funds, a Delaware statutory trust, at $10.00 per share for an aggregate purchase
price of $100,000. Our payment in full is confirmed.

     The  undersigned  represents and agrees that it is purchasing  these Shares
for investment purposes, for its own account and risk and not with a view to any
sale,  division  or  other  distribution  thereof  within  the  meaning  of  the
Securities  Act of 1933,  nor with any  present  intention  of  distributing  or
selling such shares.


                                                 Very truly yours,

                                                 ____________________________

                                                 By: ________________________




Confirmed and Accepted:

BLACK PEARL FUNDS

By: ________________________