LOAN AGREEMENT

                                    between

                          U.S. GLOBAL INVESTORS, INC.

                                      and

                                  BANK ONE, NA

                                February 1, 2001

<PAGE>

                                 LOAN AGREEMENT

     This Loan Agreement (the "Loan Agreement") is entered into effective this
1st day of February, 2001, by and between U.S. GLOBAL INVESTORS, INC.
("Borrower), and BANK ONE, NA, with its main office in Chicago, Illinois,
("Bank").

                              W I T N E S S E T H:

     In consideration of the mutual promises herein contained and for other
valuable consideration, Borrower and Bank agree as follows:

                                    ARTICLE 1

                               DEFINITION OF TERMS

     1.01. DEFINED TERMS. For the purposes of this Loan Agreement, unless the
context otherwise requires, the terms set forth in Appendix A attached hereto,
which is incorporated by reference herein and made a part hereof, shall have the
respective meanings assigned to them in said Appendix A or in the section
referred to in said Appendix A.

     1.02. OTHER DEFINITIONAL PROVISIONS.

          (a) All terms defined in this Loan Agreement shall have the meanings
     defined in said Appendix A when used in the Notes or any Loan Documents,
     certificate, report or other document made or delivered pursuant to this
     Loan Agreement, unless the context therein shall otherwise require.

          (b) Defined terms used herein in the singular shall mean the plural
     and vice versa.

          (c) The words "hereof", "herein", "hereunder" and similar terms when
     used in this Loan Agreement shall refer to this Loan Agreement as a whole
     and not to any particular provision of this Loan Agreement.

                                    ARTICLE 2

                                CREDIT FACILITIES

     2.01 CREDIT FACILITIES

     (a) REAL ESTATE LOAN. Subject to the terms and conditions and relying on
the representations and warranties contained in this Loan Agreement and other
Loan Documents, Bank agrees to extend to Borrower a term loan in the amount of
ONE MILLION ONE HUNDRED NINE


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THOUSAND EIGHT HUNDRED TWENTY SEVEN AND 14/100 DOLLARS ($1,109,827.14), the
proceeds of which will be used to renew and extend the amounts left owing and
unpaid on that certain Promissory Note dated June 30, 1994, as previously
extended and modified in the stated principal amount of $1,375,385.38 (the "Real
Estate Loan"). The Real Estate Loan made by Bank under this Section 2.01(a)
shall be evidenced by a promissory note (the "Real Estate Note") of even date
herewith. The Real Estate Note shall be repayable as follows;

     (1) commencing March 1, 2001 and continuing through the installment due
     August 1, 2001, in equal monthly installments of principal including
     interest in the amount of $12,319.70; and

     (2) commencing September 1, 2001, and continuing on the 1st day of each
     month thereafter until the Maturity Date, monthly principal including
     interest installments shall be due in an amount necessary to amortize the
     balance of principal and accrued but unpaid interest over a twelve (12)
     year period. The unpaid principal amount of the Real Estate Note shall be
     due and payable on the "Maturity Date" as defined therein.

          (b) REVOLVING CREDIT LOAN. Subject to the terms and conditions and
     relying on the representations and warranties contained in this Loan
     Agreement and the other Loan Documents, Bank agrees to extend to Borrower a
     revolving line of credit, the proceeds of which will be used to support
     Borrower's working capital needs, and the amount of which outstanding at
     any time shall not exceed the Commitment Amount (the "Revolving Credit
     Loan"). Subject to the limits and conditions hereof, Borrower may borrow,
     repay and reborrow hereunder. Each request for an advance under the
     Revolving Credit Loan shall be made on a Business Day and shall specify the
     aggregate amount of the advance which Borrower desires for Bank to make and
     the requested date of such advance, which date must be a Business Day. The
     Borrower shall make a request for an advance in writing or by telephone
     before 1:00 p.m. on the requested date of such advance. Each advance shall
     be in the aggregate principal amount of $5,000.00 or an integral multiple
     thereof. After receiving notice of a request for an advance in the manner
     provided herein, Bank shall, to the extent Borrower is entitled to receive
     such advance, make the funds available to Borrower on the requested
     borrowing date at Bank's principal banking office in San Antonio, Texas.
     The Revolving Credit Loan made by Bank under this Section 2.01(b) shall be
     evidenced by a revolving line of credit note (the "Revolving Credit Note")
     of even date herewith. If at any time the aggregate principal amount
     outstanding under the Revolving Credit Loan shall exceed the Borrowing
     Base, Borrower agrees to immediately repay Bank such excess amount, plus
     all accrued but unpaid interest thereon. Interest on the unpaid principal
     amount of each advance shall be payable monthly as it accrues on the 1st
     day of each month hereafter commencing March 1, 2001, and on the "Maturity
     Date" as defined therein. The unpaid principal balance of the Revolving
     Credit Note shall be due and payable on the Maturity Date.


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<PAGE>

     2.02. INTEREST RATE.

          a) REVOLVING CREDIT NOTE. The Revolving Credit Note shall bear
interest from the date thereof until maturity at a fluctuating rate per annum
which shall from day to day be equal to the lesser of (i) the Maximum Rate (as
hereinafter defined), or (ii) the Prime Rate of interest ("PRIME RATE") defined
as a rate per annum equal to the prime rate of interest announced from time to
time by Bank (which is not necessarily the lowest rate charged any customer or
its parent), changing when as the Prime Rate changes.

          b) REAL ESTATE NOTE.Through August 31, 2001, the Real Estate Note
shall bear interest at a fluctuating rate per annum which shall from day to day
be equal to the lesser of (i) the Maximum Rate (as hereinafter defined), or (ii)
the Prime Rate of interest ("PRIME RATE") defined as a rate per annum equal to
the prime rate of interest announced from time to time by Bank (which is not
necessarily the lowest rate charged any customer or its parent), changing when
as the Prime Rate changes. Commencing September, 2001, the Real Estate Note
shall bear interest at a fixed rate per annum equal to the lesser of (i) the
Maximum Rate (as hereinafter defined) or (ii) the Prime Rate as announced by
Bank on September 1, 2001.

     2.03. PAYMENT PROCEDURE. All payments and prepayments under the Notes or
this Loan Agreement shall be made to Bank. All payments under the Notes shall be
made at Bank's address set forth in the Notes in immediately available funds
before 2:00 p.m., San Antonio, Texas time, on the date that such payment is
required to be made. Any payment received and accepted by Bank after such time
shall be considered for all purposes (including the calculation of interest, to
the extent permitted by law) as having been made on Bank's next following
Business Day.

     2.04. BUSINESS DAY. If the date for any payment hereunder falls on a day
which is not a Business Day, then for all purposes of the Notes, this Loan
Agreement and the other Loan Documents the same shall be deemed to have fallen
on the next following Business Day, and such extension of time shall in such
case be included in the computation of payments of interest or fees, as the case
may be.

     2.05. PREPAYMENTS.

          (a) OPTIONAL PREPAYMENTS. The Borrower may, without premium or
     penalty, prepay all or part of the principal of the Notes then outstanding,
     in whole or in part, at any time or from time to time.

          (b) GENERAL PREPAYMENT PROVISIONS. Any prepayment of the Notes
     hereunder shall be made together with interest accrued (through the date of
     such prepayment) on the principal amount prepaid, and applied to the
     indebtedness owing under such Notes in such order and manner as Bank may
     from time to time determine in its sole discretion.


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<PAGE>

     2.06. CALCULATION OF INTEREST RATE. Interest on the unpaid principal of the
Notes shall be calculated using a daily rate equal to 1/360 of the applicable
rate of interest per annum, not to exceed, however, the Maximum Rate.

     2.07. MANNER AND APPLICATION OF PAYMENTS. Except for prepayments, which are
applied in accordance with Section 2.05, all payments made on the Notes shall be
credited, to the extent of the amount thereof, in the following manner: (i)
first, against the amount of interest accrued and unpaid on the respective Note
as of the date of such payment; (ii) second, against all principal (if any) due
and owing on the respective Note as of the date of such payment; and (iii)
third, as a prepayment of principal not yet due and owing under the respective
Note.

                                    ARTICLE 3

                             SECURITY FOR THE NOTES

     As collateral and security for the indebtedness evidenced by the Revolving
Credit Note:

     3.01. SECURITY AGREEMENT. Borrower shall execute and deliver to Bank a
Security Agreement of even date herewith (the "Security Agreement") granting to
Bank a first and prior lien and security interest in:

          all present and future accounts of Borrower, defined as accounts
          receivable, including any right to payment for services rendered, work
          done or labor performed by Borrower, together with any and all books
          of account, customer lists and other records relating in any way to
          the foregoing (including, without limitation, computer software,
          whether on tape, disk, card, strip, cartridge or any other form), but
          excluding mutual fund shareholder lists, records, files and accounts,
          (the "Accounts").

including all PRODUCTS and PROCEEDS of all of the foregoing (including without
limitation, insurance payable by reason of loss or damage to the foregoing
property) and any property, securities, guaranties or monies of Borrower which
may at any time come into the possession of Bank.

     3.02 DEED OF TRUST. As collateral and security for the indebtedness
evidenced by the Real Estate Note, Borrower shall execute and deliver to Bank a
Deed of Trust, Security Agreement and Assignment of Rents and Leases (the "Deed
of Trust ") granting to Bank a first and prior lien and security interest in the
Mortgaged Property including an assignment of any leases on any portion of the
Mortgaged Property.


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<PAGE>


                                    ARTICLE 4

                         REPRESENTATIONS AND WARRANTIES

     To induce Bank to make the Real Estate Loan and the Revolving Credit Loan
hereunder, Borrower represents and warrants to Bank that:

     4.01. ORGANIZATION AND GOOD STANDING. Borrower is a corporation duly
formed, validly existing and in good standing under the laws of the State of
Texas, and all other states where it is doing business and has the requisite
power and authority to own its properties and assets and to transaction their
business in which it is engaged and is or will be qualified in those states
wherein it purposes to transact business in the future.

     4.02. AUTHORIZATION AND POWER. Borrower, has the power and requisite
authority to execute, deliver and perform this Loan Agreement, the Notes, and
the other Loan Documents to be executed by and on behalf of Borrower, is duly
authorized to, and has taken all action necessary to, execute, deliver and
perform this Loan Agreement, the Notes, and such other Loan Documents, and is
and will continue to be duly authorized to perform this Agreement, the Notes,
and such other Loan Documents.

     4.03. NO CONFLICTS OR CONSENTS. Neither the execution and delivery of this
Loan Agreement, the Notes, or the other Loan Documents, nor the consummation of
any of the transactions herein or therein contemplated, nor compliance with the
terms and provisions hereof or with the terms and provisions thereof, will
contravene or materially conflict with any provision of law, statute or
regulation to which Borrower is subject, or any judgment, license, order or
permit applicable to Borrower, or any indenture, loan agreement, mortgage, deed
of trust, or other agreement or instrument to which Borrower is a party or by
which Borrower may be bound, or to which Borrower may be subject, or violate any
provision of the articles of incorporation or bylaws of Borrower. No consent,
approval, authorization or order of any court or Governmental Authority or third
party is required in connection with the execution and delivery by Borrower of
the Loan Documents or to consummate the transactions contemplated hereby or
thereby.

     4.04. ENFORCEABLE OBLIGATIONS. This Loan Agreement, the Notes, and the
other Loan Documents are the legal and binding obligations of Borrower,
enforceable in accordance with their respective terms, except as limited by
bankruptcy, insolvency or other laws of general application relating to the
enforcement of creditors' rights.

     4.05. NO LIENS. Except for Permitted Liens, all of the properties and
assets of Borrower are free and clear of all mortgages, liens and encumbrances
and other adverse claims of any nature.


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<PAGE>


     4.06. NO LEGAL BAR OR RESULTANT LIEN. Neither the execution, the delivery
nor the performance by Borrower of the Notes, or any of the Loan Documents
(including this Agreement) to which it is a party will violate any contract,
agreement, instrument or governmental requirement to which Borrower is subject,
or result in the creation or imposition of any Lien upon any of its properties,
other than those permitted by this Agreement.

     4.07. FINANCIAL CONDITION. Each financial statement of Borrower supplied to
Bank is true and correct, in all material respects fairly presents the financial
condition of Borrower as of such date and has been prepared in accordance with
sound accounting principles applied on a basis consistent with that of prior
periods; as of the date hereof, there are no obligations, liabilities or
indebtedness (including contingent and indirect liabilities and obligations or
unusual forward or long-term commitments) of Borrower which are (separately or
in the aggregate) material and are not reflected in such financial statements or
returns; no changes having a Material Adverse Effect have occurred in the
financial condition of Borrower or business of Borrower since the date of the
most recent comprehensive financial information supplied by Borrower to Bank.

     4.08. FULL DISCLOSURE. There is no material fact that Borrower has not
disclosed to Bank which could have a Material Adverse Effect on the properties,
business, prospects or condition (financial or otherwise) of Borrower. To the
best of Borrower's actual knowledge, neither the financial statements and
returns referred to in Section 4.07 hereof, nor any certificate or statement
delivered herewith or heretofore by Borrower to Bank in connection with
negotiations of this Loan Agreement, contain any untrue statement of a material
fact or omits to state any material fact necessary to keep the statements
contained herein or therein from being misleading.

     4.09. NO DEFAULT. No event has occurred and is continuing which constitutes
an Event of Default or which, with the lapse of time or giving of notice or
both, would constitute an Event of Default.

     4.10. MATERIAL AGREEMENTS. The Borrower is not in default in any material
respect under any loan agreement, indenture, mortgage, security agreement or
other material agreement or obligation to which it is a party or by which any of
its properties are bound.

     4.11. NO LITIGATION. To the best of Borrower's actual knowledge, there are
no actions, suits or legal, equitable, arbitration or administrative proceedings
pending, or to the knowledge of Borrower threatened, against Borrower, other
than those arising out of Borrower's ordinary course of business or that has not
otherwise been disclosed on Borrower's Form 10-Q or Form 10-K filings with the
Securities and Exchange Commission.

     4.12. LICENSES. Borrower has received all registrations, permits,
authorizations, and licenses (collectively called "Licenses") necessary for the
operation of its business as presently conducted, and there are no actions
pending which will subject any Licenses to revocation, forfeiture or
restriction.


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<PAGE>


     4.13. USE OF PROCEEDS; MARGIN STOCK. The proceeds of the loans represented
by the Notes will be used by Borrower solely for the purposes specified in this
Loan Agreement. None of such proceeds will be used for the purpose of purchasing
or carrying any "Margin Stock" as defined in Regulation U or G of the Board of
Governors of the Federal Reserve System (12 C.F.R. Part 221 and 207), or for the
purpose of reducing or retiring any indebtedness which was originally incurred
to purchase or carry a margin stock or for any other purpose which might
constitute this transaction a "purpose credit" within the meaning of Regulation
U or G.

     4.14. TAXES. All tax returns required to be filed by Borrower in any
jurisdiction have been filed and all taxes (including mortgage recording taxes),
assessments, fees and other governmental charges upon Borrower or upon any of
its properties, income or franchises have been paid prior to the time that such
taxes could give rise to a Lien thereon. There is no proposed tax assessment
against Borrower and there is no basis for such assessment.

     4.15. PRINCIPAL OFFICE, ETC. The principal office and place of business of
Borrower is 7900 Callaghan Road, San Antonio, Texas 78229. The Borrower
maintains its principal records and books at such address.

     4.16. COMPLIANCE WITH LAW. To the best of Borrower's knowledge, Borrower
is, in all material respects, in compliance with all laws, rules, regulations,
orders and decrees which are applicable to Borrower, or its properties
(collectively, "Applicable Laws").

     4.17. TITLES, ETC. The Borrower has good title to all its properties which
are, individually or in the aggregate, material to its business and operations,
in each case free and clear of all Liens except (i) Liens referred to in the
financial statements from time to time, (ii) Current or future Liens granted in
compliance with this Loan Agreement and as disclosed to Bank, (iii) Liens and
minor irregularities in title which do not materially interfere with the
occupation, use and enjoyment by Borrower of its properties in the normal course
of business as presently conducted or materially impair the value thereof for
such business, or (iv) Liens otherwise permitted or contemplated by this Loan
Agreement or the other Loan Documents.

     4.18. EXISTENCE OF REPRESENTATIONS AND WARRANTIES. Each request for
borrowing by Borrower under the Revolving Credit Loan shall constitute, without
the necessity of specifically containing a written statement, a representation
and warranty by Borrower that no Event of Default exists other than as disclosed
to Bank, and that all representations and warranties contained in this Article 4
or in any of the other Loan Documents are true and correct at and as of the date
the borrowing is to be made.

     4.19. SURVIVAL OF REPRESENTATIONS, ETC. All representations and warranties
by Borrower herein shall survive delivery of the Notes and the making of the
Loans, and any investigation at any time made by or on behalf of Bank shall not
diminish Bank's right to rely thereon.


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<PAGE>

     4.20. NO MATERIAL MISSTATEMENTS. No information, exhibit or report
furnished to Bank by Borrower in connection with the negotiation of this Loan
Agreement contains any material misstatement of fact or omits to state a
material fact or any fact necessary to make the statement contained therein not
misleading.

     4.21. FINANCIAL CAPABILITIES. As of the date hereof, and after giving
effect to this Loan Agreement and the Loan Documents and the obligations
evidenced hereby and thereby, (i) Borrower is and will be solvent, (ii) the fair
saleable value of Borrower's assets exceeds and will continue to exceed its
liabilities (both fixed and contingent), and (iii) Borrower has and will
continue to have sufficient capital to carry on its business and all businesses
in which it is about to engage.

                                    ARTICLE 5

                              CONDITIONS PRECEDENT

     5.01. LOANS. The obligation of Bank to make the Loans hereunder, is subject
to the condition precedent that, on or before the date of such Loans, Bank shall
have received the following, in form and substance satisfactory to Bank and its
counsel:

          (a) REAL ESTATE LOAN. The duly executed Real Estate Note made payable
     to the order of Bank described in Section 2.01(a).

          (b) REVOLVING CREDIT LOAN. The duly executed Revolving Credit Note
     made payable to the order of Bank described in Section 2.01(b).

          (c) SECURITY AGREEMENT. The duly executed Security Agreement described
     in Section 3.01.

          (d) FINANCING STATEMENTS. UCC-1 Financing Statements and other such
     documents as may be necessary or appropriate to create and perfect the
     security interest described in Article 3.

          (e) CORPORATE RESOLUTIONS. Resolutions duly adopted by the Board of
     Directors of Borrower in form satisfactory to Bank, approving the
     execution, delivery and performance of this Loan Agreement, the Notes, and
     the other Loan Documents, and the transactions contemplated herein and
     therein, which sets forth the identity of all of the officers of Borrower
     and accompanied by a certificate of its Secretary stating that the
     resolutions are true and correct, have not been altered or repealed and are
     in full force and effect.


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<PAGE>


          (f) BUSINESS ACCOUNTS. Borrower's business checking accounts and other
     operating accounts will be established with Bank no later than closing, and
     will be maintained with Bank until such time as the Notes are paid in full.

          (g) COMMITMENT FEE. Payment to Bank by Borrower in immediately
     available funds at closing, the sum $1,000.00.

          (h) CERTIFICATES OF INSURANCE. Receipt by Bank of certificates of
     insurance evidencing the existence of the insurance coverage required in
     Section 6.12 of this Loan Agreement. Bank shall be named as an additional
     insured under such policies of insurance with the exception of any errors
     and omission and directors and officers policies, and fidelity bonds
     carried by the Borrower.

          (i) ADDITIONAL INFORMATION. Such other information and documents as
     may reasonably be required by Bank.

     5.02. ALL ADVANCES. The obligation of Bank to make any advance under the
Notes and this Loan Agreement (including the initial advance) shall be subject
to the following conditions precedent:

          (a) NO DEFAULTS. As of the date of the making of such advance, there
     exists no Event of Default or event which with notice or lapse of time or
     both could constitute an Event of Default.

          (b) COMPLIANCE WITH LOAN AGREEMENT. The Borrower shall have performed
     and complied with all agreements and conditions contained herein which are
     required to be performed or complied with by Borrower before or at the date
     of such advance unless waived by Bank from time to time.

          (c) NO MATERIAL ADVERSE CHANGE. As of the date of making such advance,
     no material adverse change has occurred in the business or financial
     condition of Borrower except as may be disclosed to Bank.

          (d) BORROWING BASE AND COMPLIANCE CERTIFICATES. With respect to
     advances requested under the Revolving Credit Loan, Bank shall have
     received from Borrower a Borrowing Base Certificate in the form attached
     hereto as EXHIBIT B signed by a duly authorized officer of Borrower, and a
     Compliance Certificate, in the form attached hereto as EXHIBIT A, attached
     hereto, signed by a duly authorized officer of Borrower, all of the
     statements of which shall be true and correct, certifying that, as of the
     date thereof, (i) all of the representations and warranties of Borrower
     contained in this Loan Agreement and each of the Loan Documents executed by
     Borrower are true and correct, (ii) no event has occurred and is
     continuing, or would result from the Borrowing, which constitutes an Event
     of Default


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<PAGE>


     or which, with the lapse of time or giving of notice of both, would
     constitute an Event of Default, (iii) an affirmative statement by Borrower
     that no portion of an advance requested under the Revolving Credit Note
     will be used to purchase securities, and (iv) such other facts as Bank may
     reasonably request.

          (e) REPRESENTATIONS AND WARRANTIES. The representations and warranties
     contained in Article 4 hereof shall be true in all respects on the date of
     making of such advance, with the same force and effect as though made on
     and as of that date.

          (f) BANKRUPTCY PROCEEDINGS. No proceeding or case under the United
     States Bankruptcy Code or similar insolvency proceedings shall have been
     commenced by or against Borrower.

                                    ARTICLE 6

                              AFFIRMATIVE COVENANTS

     6.01. FINANCIAL STATEMENTS AND REPORTS

          (a) ANNUAL FINANCIAL STATEMENTS. As soon as available, but in no event
     later than one hundred twenty (120) days after the end of each fiscal year,
     a statement of condition or balance sheet, a cash flow statement and a
     statement of contingent liabilities of Borrower as of the end of each
     fiscal year.

          (b) COMPLIANCE CERTIFICATE. As soon as available, but in no event
     later than ninety (90) days following the end of each quarter, and one
     hundred twenty days (120) following the end of Borrower's fiscal year end,
     Borrower shall deliver to Bank a certificate in the form attached hereto as
     EXHIBIT A, signed by an authorized officer of Borrower, stating that
     Borrower is in full compliance with all of its obligations under this Loan
     Agreement and all of the Loan Documents and is not in default of any term
     or provision hereof or thereof, and demonstrating compliance with all of
     the financial covenants set forth in this Loan Agreement.

          (c) BORROWING BASE CERTIFICATE. As soon as available, but in no event
     later than forty five (45) days following the end of each month, Borrower
     shall deliver to Bank a borrowing base certificate in the form attached
     hereto as EXHIBIT B, signed by an authorized officer of Borrower, along
     with such supporting documentation as Bank may request, including without
     limitation, an accounts receivable aging report and/or a list or schedule
     of Borrower's accounts receivable.



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<PAGE>


     6.02. FINANCIAL COVENANTS.

          (a) DEBT SERVICE COVERAGE. Borrower will maintain, as of the end of
     each fiscal quarter, a ratio of (a) net income, plus amortization,
     depreciation, and interest expense, plus or minus, as applicable,
     unrealized losses or gains on securities, minus cash paid for taxes, for
     Borrower's fiscal year-to-date, to (b) principal paid on all debt
     instruments including capitalized leases and annuities, plus interest
     expense, plus dividend payments, for Borrower's fiscal year-to-date, of not
     less than 1.50:1.00.

          (b) TANGIBLE NET WORTH. While this Loan Agreement is in effect,
     Borrower will maintain, as of the last day of each fiscal quarter
     commencing June 30, 2001, its Tangible Net Worth in an amount not less than
     (i) $6,000,000.00.

          (c) TOTAL LIABILITIES/TANGIBLE NET WORTH. Borrower will maintain, as
     of the last day of each fiscal quarter, a ratio of (a) total liabilities to
     (b) Tangible Net Worth, of less than: .75 :1.00.

          (d) SEC REPORT. Borrower further covenants and agrees with Bank that,
     while this Loan Agreement is in effect, (i) within 120 days after the end
     of each fiscal year end, Borrower will furnish to Bank a copy of Borrower's
     annual 10-K report filed with the Securities Exchange Commission (`SEC"),
     and (ii) within 45 days after the end of each fiscal quarter, Borrower will
     furnish to Bank a copy of Borrower's quarterly 10-Q report filed with the
     SEC.

     6.03. PAYMENT OF TAXES AND OTHER INDEBTEDNESS. The Borrower will pay and
discharge and promptly thereafter provide Bank receipts evidencing payment and
discharge of (i) all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits, or upon any property belonging to
it, before delinquent, (ii) all lawful claims (including claims for labor,
materials and supplies), which, if unpaid, might become a Lien upon any of its
property, and (iii) all of its other Indebtedness.

     6.04. MAINTENANCE OF EXISTENCE AND RIGHTS; CONDUCT OF BUSINESS. The
Borrower will preserve and maintain its existence and all of its rights,
privileges and franchises necessary or desirable in the normal conduct of its
business, and conduct its business in an orderly and efficient manner consistent
with good business practices, and in accordance in all material respects with
all valid regulations and orders of any Governmental Authority.

     6.05. NOTICE OF DEFAULT. The Borrower will furnish to Bank, immediately
upon becoming aware of the existence of any condition or event which constitutes
an Event of Default or which, with the lapse of time or giving of notice, or
both, would become an Event of Default, a written


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<PAGE>


notice specifying the nature and period of existence thereof and the action
which Borrower is taking or proposes to take with respect thereto.

     6.06. OTHER NOTICES. The Borrower will promptly notify Bank of (a) any
material adverse change in its financial condition or its business, (b) any
default under any material agreement, contract or other instrument to which
Borrower is a party or by which any of their properties are bound, or any
acceleration of the maturity of any Indebtedness owing by Borrower, (c) any
actual or potential material adverse claim against or affecting Borrower or any
of its properties, including contingent liabilities, involving an amount or
amounts, in the aggregate, exceeding $100,000.00, and (d) the commencement of,
and any material determination in, any litigation with any third party or any
proceeding before any Governmental Authority affecting Borrower involving an
amount or amounts, in the aggregate, exceeding $100,000.00.

     6.07. COMPLIANCE WITH LOAN DOCUMENTS. The Borrower will promptly comply
with any and all covenants and provisions of this Loan Agreement, the Notes, and
the Loan Documents.

     6.08. COMPLIANCE WITH MATERIAL AGREEMENTS. The Borrower will comply in all
material respects with all material agreements, indentures, mortgages or
documents binding on it or affecting its properties or business.

     6.09. OPERATIONS AND PROPERTIES. The Borrower will act prudently and in
accordance with customary standards in managing or operating its assets,
properties, business and investments; Borrower will keep in good working order
and condition, ordinary wear and tear excepted, all of its assets and properties
which are necessary to the conduct of its business.

     6.10. BOOKS AND RECORDS; ACCESS. Upon written notice, Borrower will give an
authorized representative of Bank access during all business hours to, and
permit such representative to examine, copy or make excerpts from, any and all
books, records and documents in the possession of Borrower and relating to its
affairs, and to inspect any of the properties of Borrower in accordance with
applicable law. In this regard, Borrower shall allow such representative of Bank
access to all computer hardware and/or software used by Borrower to maintain
such books and records, and shall provide an employee of Borrower to cooperate
with such representative of Bank in accessing information stored using such
computer hardware and/or software in accordance with applicable law. The
Borrower will maintain complete and accurate books and records of its
transactions in accordance with Generally Accepted Accounting Principles.

     6.11. COMPLIANCE WITH LAW. The Borrower will comply with all applicable
laws, rules, regulations, and all orders of any Governmental Authority
applicable to it or any of its property, business operations or transactions.

     6.12. INSURANCE. During the term of this Loan Agreement, Borrower will
maintain public liability insurance and insurance on its properties, assets and
business, now owned or hereafter


                                       13
<PAGE>


acquired, against such casualties, risks and contingencies, and in such types
and amounts, as are consistent with customary practices and standards of
companies engaged in similar businesses.

     6.13. AUTHORIZATIONS AND APPROVALS. The Borrower will promptly obtain, from
time to time at its own expense, all such governmental licenses, authorizations,
consents, permits and approvals as may be required to enable it to comply with
its obligations hereunder and under the other Loan Documents.

     6.14. ERISA COMPLIANCE. Borrower will (i) at all times, make prompt payment
of all contributions required under all Plans as is required to meet the minimum
funding standard set forth in ERISA with respect to its Plans; (ii) upon the
request of Bank, furnish to Bank each annual report/return (Form 5500 Series),
as well as all schedules and attachments required to be filed with the
Department of Labor and/or the Internal Revenue Service pursuant to ERISA, and
the regulations promulgated thereunder, in connection with each of its Plans for
each Plan Year; (iii) notify Bank immediately of any fact, including, but not
limited to, any reportable event arising in connection with any of its Plans,
which might constitute grounds for termination thereof by the PBGC or for the
appointment by the appropriate United States District Court of a trustee to
administer such Plan, together with a statement, if requested by Bank, as to the
reason therefor and the action, if any, proposed to be taken with respect
thereto; (iv) furnish to Bank, upon its request, such additional information
concerning any of its Plans as may be reasonably requested.

     6.15. FURTHER ASSURANCES. The Borrower will make, execute or endorse, and
acknowledge and deliver or file or cause the same to be done, all such vouchers,
invoices, notices, certifications and additional agreements, undertakings, or
other assurances, and take and all such other action, as Bank may, from time to
time, deem reasonably necessary or proper in connection with the Loan Agreement
or any of the other Loan Documents, the obligations of Borrower hereunder or
thereunder, or for better assuring and confirming unto Bank all or any part of
the security for any of such obligations, or for granting to Bank any security
for the Obligation which Bank may request from time to time.

     6.16 AVAILABILITY FEE. The Borrower shall pay to Bank an availability fee
(the `Availability Fee") with respect to each calendar quarter during the term
of the Revolving Credit Note, based on the unused amount of such Note. The
Availability Fee shall be an amount equal to A x (B-C) x (D/E), where A is equal
1/4%; B equals the original amount of the Revolving Credit Note; C equals the
average daily outstanding principal balance of the Revolving Credit Loan during
the calendar quarter; D equal the actual number of days elapsed during the
calendar quarter; and E equals 360. Each Availability Fee shall be due and
payable to Bank quarterly, in arrears, within fifteen (15) days after Borrower's
receipt of an invoice for the Availability Fee from Bank.

     6.17 REVOLVING CREDIT LOAN CLEARANCE. The Borrower shall, at least once
during the term of the Revolving Credit Note ending on each anniversary date
hereof, reduce and maintain the


                                       14
<PAGE>


outstanding principal balance of the Revolving Credit Note at $0.00 for a period
of at least thirty (30) consecutive calendar days.

                                    ARTICLE 7

                               NEGATIVE COVENANTS

     So long as the Notes shall remain unpaid, (unless Bank shall otherwise
consent in writing):

     7.01. NEGATIVE PLEDGE. Except for Permitted Liens, Borrower will not create
or suffer to exist any mortgage, pledge, security interest, conditional sale or
other title retention agreement, charge, encumbrance or other Lien (whether such
interest is based on common law, statute, other law or contract) upon any of the
property or assets designated as security for the Notes under Sections 3.01 and
3.02, unless Bank shall otherwise consent in writing.

     7.02. LIMITATIONS ON SALE OF PROPERTIES. The Borrower will not (a) sell,
assign, convey, exchange, lease or otherwise dispose of any of its properties,
rights, assets or business, whether now owned or hereafter acquired, except in
the ordinary course of its business and for a fair consideration; or (b) sell,
assign or discount any accounts receivable unless Bank shall otherwise consent
in writing.

     7.03 FISCAL YEAR AND ACCOUNTING METHOD. The Borrower will not change its
fiscal year or method of accounting without first advising Bank of such change.

     7.04. CHANGE IN MANAGEMENT. The Borrower will not permit a change in its
chief executive officer without advising Bank of such change.

     7.05. LIQUIDATION, MERGERS, CONSOLIDATIONS AND DISPOSITIONS OF SUBSTANTIAL
ASSETS. The Borrower will not dissolve or liquidate, or become a party to any
merger or consolidation, or acquire by purchase, lease or otherwise all or
substantially all of the assets or capital stock of any Person, or sell,
transfer, lease, or otherwise dispose of all or any substantial part of its
property or assets or business without first advising Bank of such change or
transaction.

     7.06. NATURE OF BUSINESS. The Borrower will not make any material change in
the nature of its business as carried on as of the date of this Loan Agreement
without first advising Bank of such change.

     7.07 TRANSACTIONS WITH AFFILIATES. Borrower will not enter into any
transaction, including, without limitation, the purchase, sale, or exchange of
property or the rendering of any service, with any Affiliate, except in the
ordinary course of business and upon fair and reasonable terms no less favorable
to Borrower than Borrower would obtain in a comparable arm's length transaction
with a Person not an Affiliate. ARTICLE 8



                                       15
<PAGE>


                                   ARTICLE 8

                                EVENTS OF DEFAULT

     8.01. EVENTS OF DEFAULT. An "Event of Default" shall exist if any one or
more of the following events (herein collectively called "Events of Default")
shall occur and be continuing:

          (a) Borrower shall fail to pay any principal or interest on the Notes,
     or shall fail to pay any fee, expense or other payment required hereunder
     and such failure shall continue for a period of fifteen (15) days following
     the date such payment is due;

          (b) any representation or warranty made under this Loan Agreement, or
     any of the other Loan Documents, or in any certificate or statement
     furnished or made to Bank pursuant hereto or in connection herewith or with
     the Loan hereunder, shall prove to be untrue or inaccurate in any material
     respect as of the date on which such representation or warranty is made;

          (c) default shall occur in the performance of any of the covenants or
     agreements of Borrower contained herein, or in any of the other Loan
     Documents (except for defaults specified in Section 8.01(a) hereof);
     provided, however, Borrower shall have thirty (30) days after Bank notifies
     Borrower in writing of such default within which to cure such default;

          (d) default shall occur in the payment of any Indebtedness of Borrower
     and such default shall continue for more than the period of grace, if any,
     specified therein; and any such Indebtedness shall become due before its
     stated maturity by acceleration of the maturity thereof or shall become due
     by its terms and shall not be paid or extended;

          (e) any of the Loan Documents shall cease to be legal, valid, binding
     agreements enforceable against any party executing the same in accordance
     with the respective terms thereof or shall in any way be terminated or
     become or be declared ineffective or inoperative or shall in any way
     whatsoever cease to give or provide the respective liens, security
     interest, rights, titles, interest, remedies, powers or privileges intended
     to be created thereby;

          (f) Borrower shall (i) apply for or consent to the appointment of a
     receiver, trustee, custodian, intervenor or liquidator of itself or of all
     or a substantial part of its assets, (ii) file a voluntary petition in
     bankruptcy or admit in writing that it is unable to pay its debts as they
     become due, (iii) make a general assignment for the benefit of creditors,
     (iv) file a petition or answer seeking reorganization of an arrangement
     with creditors or to take advantage of any bankruptcy or insolvency laws,
     (v) file an answer admitting the material allegations of, or consent to, or
     default in answering, a petition filed against it in any bankruptcy,
     reorganization or insolvency proceeding, or (vi) take corporate action for
     the purpose of effecting any of the foregoing;



                                       16
<PAGE>


          (g) an involuntary petition or complaint shall be filed against
     Borrower seeking bankruptcy or reorganization of such Borrower or the
     appointment of a receiver, custodian, trustee, intervenor or liquidator of
     such Borrower, or all or substantially all of its assets, without being
     permanently dismissed or discharged within sixty (60) days following the
     date of its filing, or an order, order for relief, judgment or decree shall
     be entered by any court of competent jurisdiction or other competent
     authority approving a petition or complaint seeking reorganization of such
     Borrower or appointment a receiver, custodian, trustee, intervenor or
     liquidator of such Borrower, or of all or substantially all of its assets
     without being vacated within ten (10) days following the date of its entry;

          (h) any final judgment(s) for the payment of money in excess of the
     sum of TWO HUNDRED FIFTY THOUSAND AND NO/ DOLLARS ($250,000.00) in the
     aggregate shall be rendered against Borrower and such judgment or judgments
     shall not be satisfied or discharged at least ten (10) days prior to the
     date on which any of its assets could be lawfully sold to satisfy such
     judgment.

     8.02. REMEDIES UPON EVENT OF DEFAULT. If an Event of Default shall have
occurred and be continuing following the expiration of any applicable cure
period, then Bank shall and may exercise any one or more of the following rights
and remedies, and any other remedies provided in any of the Loan Documents, as
Bank in its sole discretion may deem necessary or appropriate: (i) declare the
principal of, and all interest then accrued on, the Notes and any other
liabilities hereunder to be forthwith due and payable, whereupon the same shall
forthwith become due and payable without presentment, demand, protest, notice of
default, notice of acceleration or of intention to accelerate or other notice of
any kind all of which Borrower hereby expressly waives, anything contained
herein or in the Note to the contrary notwithstanding, (ii) reduce any claim to
judgment, and/or (iii) without notice of default or demand, pursue and enforce
any of Bank's rights and remedies under the Loan Documents, or otherwise
provided under or pursuant to any applicable law or agreement.

     8.03. PERFORMANCE BY BANK. Should Borrower fail to perform any covenant,
duty or agreement contained herein or in any of the Loan Documents, Bank may, at
its option, perform or attempt to perform such covenant, duty or agreement on
behalf of Borrower. In such event, Borrower shall, at the request of Bank,
promptly pay any amount expended by Bank in such performance or attempted
performance to Bank at its principal office in San Antonio, Texas together with
interest thereon at the highest lawful rate from the date of such expenditure
until paid. Notwithstanding, the foregoing, it is expressly understood that Bank
does not assume any liability or responsibility for the performance of any
duties of Borrower hereunder or under any of the Loan Documents or other control
over the management and affairs of Borrower.


                                       17
<PAGE>


                                    ARTICLE 9

                                  MISCELLANEOUS

     9.01. MODIFICATION. All modifications, consents, amendments or waivers of
any provision of any Loan Document, or consent to any departure by Borrower
therefrom, shall be effective only if the same shall be in writing and concurred
in by Bank and then shall be effective only in the specific instance and for the
purpose for which given.

     9.02. ACCOUNTING TERMS AND REPORTS. All accounting terms not specifically
defined in this Loan Agreement shall be construed in accordance with Generally
Accepted Accounting Principles consistently applied on the basis used by
Borrower in prior years. All financial reports furnished by Borrower to Bank
pursuant to this Loan Agreement shall be prepared in such form and such detail
as shall be reasonably satisfactory to Bank, and shall be prepared on the same
basis as those prepared by Borrower in prior years.

     9.03. WAIVER. No failure to exercise, and no delay in exercising, on the
part of Bank, any right hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other further exercise
thereof or the exercise of any other right. The rights of Bank hereunder and
under the Loan Documents shall be in addition to all other rights provided by
law. No modification or waiver of any provision of this Loan Agreement, the
Notes or any Loan Documents, nor consent to departure therefrom, shall be
effective unless in writing and no such consent or waiver shall extend beyond
the particular case and purpose involved. No notice or demand given in any case
shall constitute a waiver of the right to take other action in the same, similar
or other instances without such notice or demand.

     9.04. PAYMENT OF EXPENSES. The Borrower agrees to pay all costs and
expenses of Bank (including without limitation, the reasonable attorney's fees
of Bank's legal counsel) incurred by Bank in connection with the preservation
and enforcement of and Bank's rights under this Loan Agreement, the Notes, and
the other Loan Documents. Borrower will also pay the legal fees incurred by Bank
in connection with the preparation of this Loan Agreement and the other Loan
Documents prepared by Bank's legal counsel.

     9.05. NOTICES. Any notices or other communications required or permitted to
be given by this Loan Agreement or any other documents and instruments referred
to herein must be (i) given in writing and personally delivered or mailed by
prepaid first class, certified or registered mail, or (ii) made by facsimile
transmission delivered or transmitted to the party to whom such notice or
communication is directed, to the address of such party as follows:


                                       18
<PAGE>


          (a) Borrower:       U.S. Global Investors, Inc.
                              7900 Callaghan Road
                              San Antonio, Texas 78229
                              Attn.: Chief Financial Officer

          with a copy to:     President

          (b) Bank:           Bank One, Texas, N.A.
                              105 S. St. Mary's
                              P.O. Box 900
                              San Antonio, Texas 78293
                              Facsimile (210) 271-6588
                              Attn: Mr. Clay D. Jett, Vice President

          with a copy to:     Barry G. Benton
                              Benton Clark & Taylor, P.C.
                              105 S. St. Mary's Street, Suite 905
                              San Antonio, Texas 78205
                              Facsimile (210) 472-1872

     9.06. GOVERNING LAW. This Loan Agreement has been prepared, is being
executed and delivered, and is intended to be performed in the State of Texas,
and the substantive laws of such state and the applicable federal laws of the
United States of America shall govern the validity, construction, enforcement
and interpretation of this Loan Agreement and all of the other Loan Documents.

     9.07. CHOICE OF FORUM AND JURISDICTION. Subject to the terms of the
arbitration provision in Section 9.15, any suit, action or proceeding against
Borrower with respect to this Loan Agreement, the Notes or any judgment entered
by any court in respect thereof, may be brought in the courts of the State of
Texas, County of Bexar, or in the United States courts located in the State of
Texas as Bank in its sole discretion may elect and Borrower hereby submits to
the non-exclusive jurisdiction of such courts for the purpose of any such suit
action or proceeding. The Borrower hereby irrevocably waives any objections
which it may now or hereafter have to placing venue of any suit, action or
proceeding arising out of or relating to this Loan Agreement, the Notes or the
any of the Loan Documents brought in the courts located in the State of Texas,
County of Bexar, and hereby further irrevocably waives any claim that any such
suit, action or proceeding brought in any such court has been brought in any
inconvenient forum.

     9.08. INVALIDITY. If any provision of any Loan Document is held to be
illegal, invalid or unenforceable under present or future laws during the term
of this Loan Agreement, such provision shall be fully severable; such Loan
Document shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of such Loan Document; and
the


                                       19
<PAGE>


remaining provisions of such Loan Document shall remain in full force and effect
and shall not be affected by the illegal, invalid or unenforceable provision or
by its severance from such Loan Document. Furthermore, in lieu of each such
illegal, invalid or unenforceable provision there shall be automatically added
as part of such Loan Document a provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible and such provision shall
be legal, valid and enforceable, provided that such automatically added
provision shall not be more burdensome upon Borrower as such illegal, invalid or
unenforceable provision.

     9.09. MAXIMUM INTEREST RATE. Regardless of any provision contained in any
of the Loan Documents, Bank shall never be entitled to receive, collect or apply
as interest on the Notes or any obligation hereunder any amount in excess of the
Maximum Rate, and, in the event that Bank receives, collects or applies as
interest any such excess, the amount which would be excessive interest shall be
deemed to be a partial prepayment of principal and treated hereunder as such;
and, if the principal amount of the Obligations is paid in full, any remaining
excess shall forthwith be paid to Borrower. In determining whether or not the
interest paid or payable under any specific contingency exceeds the Maximum
Rate, Borrower and Bank shall, to the maximum extent permitted under applicable
law, (i) characterize any nonprincipal payment as an expense, fee or premium
rather than as interest; (ii) exclude voluntary prepayments and the effects
thereof; and (iii) amortize, prorate, allocate and spread, in equal parts, the
total amount of interest throughout the entire contemplated term of the Notes so
that the interest rate is uniform throughout the entire term; provided that, if
the Notes are paid and performed in full prior to the end of the full
contemplated term thereof, and if the interest received for the actual period of
existence thereof exceeds the Maximum Rate, Bank shall refund to Borrower the
amount of such excess or credit the amount of such excess against the principal
amount of the Notes and, in such event, Bank shall not be subject to any
penalties provided by any laws for contracting for, charging, taking, reserving
or receiving interest in excess of the Maximum Rate.

     9.10. BINDING EFFECT. The Loan Documents shall be binding upon and inure to
the benefit of Borrower, Bank and their respective successors, assigns and legal
representatives; provided, however, that the Borrower may not, without the prior
written consent of Bank, assign any rights, powers, duties or obligations
hereunder.

     9.11. ENTIRETY. The Loan Documents embody the entire agreement between the
parties and supersede all prior agreements and understandings, if any, relating
to the subject matter hereof and thereof.

     9.12. HEADINGS. Section headings are for convenience of reference only and
shall in no way affect the interpretation of this Loan Agreement.

     9.13. SURVIVAL. All representations and warranties made by Borrower herein
shall survive delivery of the Notes and the making of the Loan.


                                       20
<PAGE>


     9.14. NO THIRD PARTY BENEFICIARY. The parties do not intend the benefits of
this Agreement to inure to any third party, nor shall this Agreement be
construed to make or render Bank liable to any materialman, supplier,
contractor, subcontractor, purchaser or lessee of any property owned by
Borrower, or for debts or claims accruing to any such Persons against Borrower.
Notwithstanding anything contained herein or in the Notes, or in any other Loan
Document, or any conduct or course of conduct by any or all of the parties
hereto, before or after signing this Agreement or any of the other Loan
Documents, neither this Agreement nor any other Loan Document shall be construed
as creating any right, claim or cause of action against Bank, or any of its
officers, directors, agents or employees, in favor of any materialman, supplier,
contractor, subcontractor, purchaser or lessee of any property owned by
Borrower, nor to any other Person or entity other than Borrower.

     9.15. ARBITRATION. BANK AND BORROWER AGREE THAT UPON THE WRITTEN DEMAND OF
EITHER PARTY, WHETHER MADE BEFORE OR AFTER THE INSTITUTION OF ANY LEGAL
PROCEEDINGS, BUT PRIOR TO THE RENDERING OF ANY JUDGMENT IN THAT PROCEEDING, ALL
DISPUTES, CLAIMS AND CONTROVERSIES BETWEEN THEM, WHETHER INDIVIDUAL, JOINT, OR
CLASS IN NATURE, ARISING FROM THIS LOAN AGREEMENT, ANY NOTE OR OTHER LOAN
DOCUMENT OR OTHERWISE, INCLUDING WITHOUT LIMITATION CONTRACT DISPUTES AND TORT
CLAIMS, SHALL BE RESOLVED BY BINDING ARBITRATION PURSUANT TO THE COMMERCIAL
RULES OF THE AMERICAN ARBITRATION ASSOCIATION, ("AAA"). ANY ARBITRATION
PROCEEDING HELD PURSUANT TO THIS ARBITRATION PROVISION SHALL BE CONDUCTED IN THE
CITY NEAREST THE BORROWER'S ADDRESS HAVING AN AAA REGIONAL OFFICE, OR AT ANY
OTHER PLACE SELECTED BY MUTUAL AGREEMENT OF THE PARTIES. NO ACT TO TAKE OR
DISPOSE OF ANY COLLATERAL (AS DEFINED IN THE LOAN AGREEMENT) SHALL CONSTITUTE A
WAIVER OF THIS ARBITRATION AGREEMENT OR BE PROHIBITED BY THIS ARBITRATION
AGREEMENT. THIS ARBITRATION PROVISION SHALL NOT LIMIT THE RIGHT OF EITHER PARTY
DURING ANY DISPUTE, CLAIM OR CONTROVERSY TO SEEK, USE, AND EMPLOY ANCILLARY, OR
PRELIMINARY RIGHTS AND/OR REMEDIES, JUDICIAL OR OTHERWISE, FOR THE PURPOSES OF
REALIZING UPON, PRESERVING, PROTECTING, FORECLOSING UPON OR PROCEEDING UNDER
FORCIBLE ENTRY AND DETAINER FOR POSSESSION OF, ANY REAL OR PERSONAL PROPERTY,
AND ANY SUCH ACTION SHALL NOT BE DEEMED AN ELECTION OF REMEDIES. SUCH REMEDIES
INCLUDE, WITHOUT LIMITATION, OBTAINING INJUNCTIVE RELIEF OR A TEMPORARY
RESTRAINING ORDER, INVOKING A POWER OF SALE UNDER ANY DEED OF TRUST OR MORTGAGE,
OBTAINING A WRIT OF ATTACHMENT OR IMPOSITION OF A RECEIVERSHIP, OR EXERCISING
ANY RIGHTS RELATING TO PERSONAL PROPERTY, INCLUDING EXERCISING THE RIGHT OF
SET-OFF, OR TAKING OR DISPOSING OF SUCH PROPERTY WITH OR WITHOUT JUDICIAL
PROCESS PURSUANT TO THE UNIFORM COMMERCIAL CODE. ANY DISPUTES, CLAIMS OR
CONTROVERSIES CONCERNING THE LAWFULNESS OR REASONABLENESS OF AN ACT, OR EXERCISE
OF ANY RIGHT OR REMEDY CONCERNING ANY COLLATERAL, INCLUDING ANY CLAIM TO
RESCIND,


                                       21
<PAGE>


REFORM, OR OTHERWISE MODIFY ANY AGREEMENT RELATING TO THE COLLATERAL, SHALL ALSO
BE ARBITRATED; PROVIDED, HOWEVER, THAT NO ARBITRATOR SHALL HAVE THE RIGHT OR THE
POWER TO ENJOIN OR RESTRAIN ANY ACT OF EITHER PARTY. JUDGMENT UPON ANY AWARD
RENDERED BY ANY ARBITRATOR MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. THE
STATUTE OF LIMITATIONS, ESTOPPEL, WAIVER, LACHES AND SIMILAR DOCTRINES WHICH
WOULD OTHERWISE BE APPLICABLE IN AN ACTION BROUGHT BY A PARTY SHALL BE
APPLICABLE IN ANY ARBITRATION PROCEEDING, AND THE COMMENCEMENT OF AN ARBITRATION
PROCEEDING SHALL BE DEEMED THE COMMENCEMENT OF ANY ACTION FOR THESE PURPOSES.
THE FEDERAL ARBITRATION ACT (TITLE 9 OF THE UNITED STATES CODE) SHALL APPLY TO
THE CONSTRUCTION, INTERPRETATION AND ENFORCEMENT OF THIS ARBITRATION PROVISION.

     JURY WAIVER. THE UNDERSIGNED AND BANK (BY ITS ACCEPTANCE HEREOF) HEREBY
VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT
OR OTHERWISE) BETWEEN OR AMONG THE UNDERSIGNED AND BANK ARISING OUT OF OR IN ANY
WAY RELATED TO THIS DOCUMENT, ANY OTHER RELATED DOCUMENT, OR ANY RELATIONSHIP
BETWEEN BANK AND THE UNDERSIGNED. THIS PROVISION IS A MATERIAL INDUCEMENT TO
BANK TO PROVIDE THE FINANCING DESCRIBED HEREIN OR IN THE OTHER LOAN DOCUMENTS.

     9.16. NO ORAL AGREEMENTS. THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

     IN WITNESS WHEREOF, the undersigned have executed this Loan Agreement as of
the day and year first above written.

                                       "Borrower"

                                       U.S. GLOBAL INVESTORS, INC.



                                       By:     /s/ Frank E. Holmes
                                               --------------------------------
                                       Name:   Frank E. Holmes
                                       Title:  Chairman and Chief Executive
                                                Officer


                                       22
<PAGE>


                                       "Bank"

                                       BANK ONE, NA



                                       By:     /s/ Clay D. Jett, Vice President
                                               --------------------------------
                                               Clay D. Jett, Vice-President


LIST OF EXHIBITS

Exhibit A         Compliance Certificate
Exhibit B         Borrowing Base Certificate




                                       23
<PAGE>


                                   APPENDIX A

                               DEFINITION OF TERMS

     1. "Accounts": Section 3.01(ii).

     2. "Affiliate" of any person shall mean any Person which, directly or
indirectly, controls, is controlled by, or is under common control with, such
Person. For the purposes of this definition, "control" (including the terms
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of interest in such Person or by contract or
otherwise.

     3. "Applicable Laws": Section 4.16.

     4. "Availability Fee": Section 6.16

     5. "Borrowing Base" shall mean eighty percent (80%) of the Eligible
Accounts Receivable.

     6. "Business Day" shall mean a day other than a Saturday or Sunday or legal
holiday for commercial banks under the laws of the State of Texas in San
Antonio, Texas.

     7. "Commitment Amount" shall mean the amount available to Borrower for
borrowing under the Revolving Credit Note which shall not exceed, at any time,
the lesser of (i) $1,000,000.00, or (ii) the Borrowing Base.

     8. "Deed of Trust": shall mean the Deed of Trust, Security Agreement and
Assignment of Rents and Leases of even date herewith by Borrower to Barbara D.
Christian, Trustee, covering real property more particularly described therein.

     9. "Eligible Accounts" shall mean at any time, an amount equal to the
aggregate net invoice or ledger amount owing on all of Borrower's trade accounts
receivable of Borrower for goods sold or leased or services rendered in the
ordinary course of business, in which Bank has a perfected, first priority lien,
after deducting (without duplication): (i) each such account that is unpaid 60
days or more after the original invoice date thereof, (ii) the amount of all
discounts, allowances, rebates, credits and adjustments to such accounts, (iii)
the amount of all contra accounts, setoffs, defenses or counterclaims asserted
by or available to the account debtors, (iv) all accounts with respect to which
goods are placed on consignment or subject to a guaranteed sale or other term by
reason of which payment by the account debtor may be conditional, (v) all
accounts owing by account debtors for which there has been instituted a
proceeding in bankruptcy or reorganization under the United States Bankruptcy
Code or other law, whether state or federal, now or hereafter


                                       24
<PAGE>


existing for relief of debtors, (vi) all accounts owing by any subsidiary of
Borrower, or related to Borrower's officers or directors, or in which the
account debtor is an officer, employee or agent of Borrower, (vii) all accounts
in which the account debtor is the United States or any department, agency or
instrumentality of the United States, except to the extent an acknowledgment of
assignment to Bank of such account in compliance with the Federal Assignment of
Claims Act and other applicable laws has been received by Bank, (viii) all
accounts due Borrower by any account debtor whose principal place of business is
located outside the United States of America and its territories (ix) all
accounts subject to any provision prohibiting assignment or requiring notice of
or consent to such assignment, and (x) all accounts with respect to which Bank,
in its sole discretion, deems the creditworthiness or financial condition of the
account debtor to be unsatisfactory.

     10. "ERISA" means the Employee Retirement Income Act of 1974, as amended,
together with all regulations issued pursuant thereto.

     11. "Event of Default": Section 8.01.

     12. "Generally Accepted Accounting Principles" shall mean those generally
accepted accounting principles and practices which are recognized as such by the
American Institute of Certified Public Accountants acting through its Accounting
Principles Board or by the Financial Accounting Standards Board or through other
appropriate boards or committees thereof and which are consistently applied for
all periods after the date hereof so as to properly reflect the financial
condition, and the results of operations and changes in financial position, of
Borrower, except that any accounting principle or practice required to be
changed by the said Accounting Principles Board or Financial Accounting
Standards Board (or other appropriate board or committee of the said Boards) in
order to continue as a generally accepted accounting principle or practice may
so be changed.

     13. "Governmental Authority" shall mean any government (or any political
subdivision or jurisdiction thereof), court, bureau, agency or other
governmental authority having jurisdiction over Borrower or a subsidiary or any
of its business, operations or properties.

     14. "Indebtedness" shall mean the indebtedness evidenced by the Notes,
including all principal and accrued interest thereon, together with all
liabilities, costs, and expenses for which Borrower is responsible under this
Loan Agreement or under any of the Loan Documents.

     15. "Investment" in any Person shall mean any investment, whether by means
of share purchase, loan, advance, extension of credit, capital contribution or
otherwise, in or to such Person, the Guaranty of any Indebtedness of such
Person, or the subordination of any claim against such Person to other
Indebtedness of such Person.

     16. "Licenses": Section 4.12


                                       25
<PAGE>


     17. "Lien" shall mean any lien, mortgage, security interest, tax lien,
pledge, encumbrance, conditional sale or title retention arrangement, or any
other interest in property designed to secure the repayment of Indebtedness,
whether arising by agreement or under any statute or law, or otherwise.

     18. "Loan Documents" shall mean this Loan Agreement, the Notes (including
any renewals, extension and refundings thereof), the Security Agreement, the
Deed of Trust, and any agreements (including, without limitation, security
agreements), certificates or documents (and with respect to this Loan Agreement,
and such other agreements and documents, any amendments or supplements thereto
or modifications thereof) executed or delivered pursuant to the terms of this
Loan Agreement.

     19. "Material Adverse Effect" shall mean any circumstance or event which
(i) could have any adverse effect upon the validity, performance or
enforceability of any Loan Documents, (ii) is or might be material and adverse
to the financial condition or business operations of Borrower, (iii) could
impair the ability of Borrower to fulfill its obligations under the Loan
Documents, or (iv) causes an Event of Default or any event which, with notice or
lapse of time or both, could become an Event of Default.

     20. "Maximum Rate" shall mean on any day, the highest nonusurious rate of
interest (if any) permitted by applicable law on such day. Bank hereby notifies
the Borrower that, and discloses to the Borrower that, for purposes of this
Note, the "applicable rate ceiling" shall be the "weekly rate" ceiling from time
to time in effect referred to and as limited by Section 303.21 of the Texas
Finance Code, as supplemented by the Texas Credit Title provided, however, that
to the extent permitted by applicable law, Bank reserves the right to change the
"applicable rate ceiling" from time to time by further notice and disclosure to
the Borrower and, provided further, that the highest nonusurious rate of
interest permitted by applicable law for purposes of this Note shall not be
limited to the applicable rate ceiling under Section 303.21 of the Texas Finance
Code if federal laws or other state laws now or hereafter in effect and
applicable to this Note (and the interest contracted for, charged and collected
hereunder) shall permit a higher rate of interest.

     21. "Notes" shall mean the Real Estate Note and the Revolving Credit Note.

     22. "Obligation" shall mean all present and future indebtedness,
obligations and liabilities of Borrower to Bank, and all renewals and extensions
thereof, or any part thereof, arising pursuant to this Loan Agreement or
represented by the Notes, and all interest accruing thereon, and attorneys' fees
incurred in the enforcement or collection thereof, regardless of whether such
indebtedness, obligations and liabilities are direct, indirect, fixed,
contingent, joint, several or joint and several; together with all indebtedness,
obligations and liabilities of Borrower evidenced or arising pursuant to any of
the other Loan Documents, and all renewals and extensions thereof, or part
thereof.



                                       26
<PAGE>


     23. "PBGC" shall mean the Pension Benefit Guaranty Corporation, and any
successor to all or any of the Pension Benefit Guaranty Corporation's functions
under ERISA.

     24. "Permitted Liens" shall mean: (i) pledges or deposits made to secure
payment of Worker's Compensation (or to participate in any fund in connection
with Worker's Compensation), unemployment insurance, pensions or Social Security
programs; (ii) Liens imposed by mandatory provision of law such as for
materialmen's mechanics, warehousemen's and other like Liens arising in the
ordinary course of business, securing Indebtedness whose payment is not yet due;
(iii) Liens for taxes, assessments and governmental charges or levies imposed
upon a Person or upon such Person's income or profits or property, if the same
are not yet due and payable or if the same are being contested in good faith and
as to which adequate reserves have been provided; (iv) good faith deposits in
connection with leases, real estate bids or contracts (other than contracts
involving the borrowing of money), pledges or deposits to secure public or
statutory obligations, deposits to secure (or in lieu of) surety, stay, appeal
or customs bonds and deposits to secure the payment of taxes, assessments,
customs duties or other similar charges; (v) current or future Liens granted in
compliance with this Loan Agreement and as disclosed to Bank, or (vi)
encumbrances consisting of zoning restrictions, easements, or other restrictions
on the use of real property, provided that such do not impair the use of such
property for the uses intended, and none of which is violated by existing or
proposed structures or land use.

     25. "Person" shall include an individual, a corporation, a joint venture, a
partnership, a trust, an unincorporated organization or any agency or political
subdivision thereof.

     26. "Plan" shall mean an employee benefit plan or other plan maintained by
Borrower for its employees and covered by Title IV of ERISA, or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code of
1954, as amended.

     27. "Prime Rate": Section 2.02.

     28. "Real Estate Loan"; Section 2.01(a).

     29. "Real Estate Note": Section 2.01(a).

     30. "Revolving Credit Loan": Section 2.01(b).

     31. "Revolving Credit Note": Section 2.01(b).

     32. "Security Agreement": Section 3.01

     33. "Tangible Net Worth" shall mean, as of any date, Borrower's stated book
equity minus intangible assets.


                                       27
<PAGE>


     34. "Temporary Cash Investment" shall mean any Investment (i) in direct
obligations of the United States of America or any agency thereof, or
obligations fully guaranteed by the United States of America or any agency
thereof, provided that such obligations mature within 90 days of the date of
acquisition thereof, (ii) commercial paper rated in the highest grade by two or
more national credit rating agencies and maturing not more than 90 days from the
date of creation thereof, and (iii) time deposits with, and certificates of
deposit and banker's acceptances issued by, any United States bank whose
deposits are insured by the Federal Deposit Insurance Corporation.



                                       28
<PAGE>

                                  EXHIBIT "A"

                BORROWING BASE (COVENANT) COMPLIANCE CERTIFICATE
                      (FOR THE MONTH/QUARTER/YEAR ENDING )

     Pursuant to the Business Loan Agreement/Credit Agreement dated February 1,
2001 (the "Agreement") between U.S. Global Investors, Inc. ("Borrower") and Bank
One, NA ("Bank One"), the undersigned hereby certifies as follows. Unless
otherwise defined herein, the terms used in this Certificate have the meaning(s)
assigned to it/them in the Agreement.

     1. I am the duly appointed President or Chief Financial Officer of
Borrower;

     2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision a detailed review of the transactions and
condition of the Borrower during the accounting period covered by the financial
statements being furnished concurrently with this Certificate;

     3. The Borrower is in full compliance with all terms, conditions, covenants
and provisions of the Agreement, except as follows:

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

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

     4. The Borrower reports its compliance with the financial covenants
contained in the Agreement as follows:

     SECTION COVENANT                REQUIRED / PERMITTED             ACTUAL
     ------- --------                --------   ----------------      ------
     Tangible Net Worth ("TNW")           $6,000,000.00

     Ratio of Debt to TNW                 <  .75 : 1.00
                                          -

     Debt Service Coverage Ratio          >  1.5 : 1.00
                                          -

     5. Each of the representations contained in the Agreement are correct as of
this date.

     6. The financial statements of Borrower as of ______________, 20____, and
for the fiscal year then ended, and the financial statements as of
______________, 20____, and for the partial fiscal year then ended, present
fairly the financial condition of Borrower and the results of its operations as
of the dates of such statements and for the fiscal periods then ended, and since
the date of the latest of such statements there has been no material adverse
change in its financial position or its operations.



                                       29
<PAGE>


     7. No Event of Default has occurred and Borrower is not aware of any facts
which might result in an Event of Default.


Dated:                                 Borrower:
      -------------------

                                       U.S. Global Investors, Inc.


                                       By:
                                           ------------------------------------
                                       Its:
                                           ------------------------------------



                                       30
<PAGE>

                                   EXHIBIT "B"

                  BORROWING BASE COMPLIANCE (DRAW) CERTIFICATE

1. Total Accounts Receivable (AR) $ -------------------------------------------

     a)   Less: Accounts more than 60 days past DOI $ -------------------------

     b)   Less: Accounts with 10% of balance 60 days $ ------------------------

     c)   Less: Accounts representing 25% of total AR $ -----------------------

     d)   Less: 100% of uninsured Foreign Accounts $ --------------------------

     e)   Total Eligible Accounts Receivable $ --------------------------------

2. Available borrowing advance

     A.   Accounts Receivable @ 80% of line 1(e) $ ----------------------------

3. Total Eligible Collateral (line 2A) $ --------------------------------------

4. Amount of Promissory Note $ -------------------------------------------

5. Lesser of line 3 or line 4 $ -------------------------------------------

6. Present Promissory Note balance (principal outstanding) $ ------------------

7. Principal Balance available for borrowing $---------------------------------
   (line 5 minus line 6) (If line 7 is a negative number, then a "pay down" in
   accordance with the Agreement is required)

Pursuant to that certain Business Loan Agreement/Credit Agreement dated February
2, 2001 ("Agreement") as entered into by and between U.S. Global, Investors,
Inc. ("Borrower") and Bank One, NA ("Bank One"), Borrower submits the foregoing
information for the purpose of inducing Bank One to advance money to Borrower
from the balance of funds available (if any) under Borrower's Promissory Note
dated February 1, 2001 in the original principal amount of $1,000,000.00.
Borrower hereby certifies and affirms that the information contained in this
Borrowing Base Compliance (Draw) Certificate is true, complete and correct
according to the financial records of the Borrower and is properly available as
collateral for advances pursuant to the Agreement and the representations and
warranties set forth therein. As of the date of this Certificate Borrower is in
full compliance with all terms, conditions, covenants and provisions of the
Business


                                       31
<PAGE>


Loan Agreement/Credit Agreement. Borrower is not aware of any Event of Default
under the Agreement or any facts or circumstances which might give rise to any
Event of Default. The terms used in this Certificate have the same meaning as
assigned to them in the Agreement. Borrower further certifies that all
withholding taxes and FICA Taxes have been paid in full as of the date of this
Certificate.

                                       Borrower:

                                       U.S. Global Investors, Inc.

                                       By:
                                            -----------------------------------
                                       Its:
---------------------------------           -----------------------------------
          (date)

                                       32