Document:

exv10w10

 

Exhibit 10.10 ___

BANK1ONE

			
	     A Division of JPMorgan Chase Bank, N.A.
	 	Notice of Final Agreement

Dated as of June 3, 2005

To: U.S. Global Investors, Inc. (collectively, whether one or more, the “Borrower”)

As of the effective date of this Notice, the Borrower and JPMorgan Chase Bank, N.A., (the
“Bank”) have consummated a transaction pursuant to which the Bank has agreed to make a loan
or loans to the Borrower, to renew and extend an existing loan or loans to the Borrower
and/or to otherwise extend credit or make financial accommodations to or for the benefit of
the Borrower, in an aggregate amount up to $1,000,000.00 (collectively, whether one or
more, the “Loan”).

In connection with the Loan, the Borrower and the Bank and the undersigned guarantors and
other obligors, if any (collectively, whether one or more, the “Other Obligors”) have
executed and delivered and may hereafter execute and deliver certain agreements,
instruments and documents (collectively hereinafter referred to as the “Written Loan
Agreement”).

It is the intention of the Borrower, the Bank and the Other Obligors that this Notice be
incorporated by reference into each of the written agreements, instruments and documents
comprising the Written Loan Agreement. The Borrower, the Bank and the Other Obligors each
warrants and represents that the entire agreement made and existing by or among the
Borrower, the Bank and the Other Obligors with respect to the Loan is and shall be
contained within the Written Loan Agreement, as amended and supplemented hereby, and that
no agreements or promises exist or shall exist by or among the Borrower, the Bank and the
Other Obligors that are not reflected in the Written Loan Agreement.

THE 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.

	 	 	 	 	 
	 

	 	JPMorgan Chase Bank, N.A.
	 	 
	 
	 	 	 	 
	 

	 	By: /s/ John L. Dochendorf II.	 	 
	 
	 	 	 	 
	 

	 	John L. Dochendorf II, Vice President	 	 
	 

	 	 	 	 
	 

	 	Printed Name          Title	 	 
	 
	 	 	 	 
	 

	 	Date Signed:   6/17/05	 	 

	 	 	 
	ACKNOWLEDGED AND AGREED:

	 	 
	BORROWER:
	 	 
	 
	 	 
	U.S. Global Investors, Inc.
	 	 
	 
	 	 
	By: /s/ Frank E. Holmes
	 	 
	 
	 	 
	Frank E. Holmes, CEO
	 	 
	 

Printed Name   Title

	 	 
	 
	 	 
	OTHER OBLIGORS
	 	 

59

 

BANK1ONE

			
	     A
Division of JPMorgan Chase Bank, N.A.
	 	Continuing Security Agreement

Dated as of June 3, 2005

Grant of Security Interest. U.S. Global Investors, Inc. (the “Borrower”) grants to JPMorgan Chase
Bank, N.A., whose address is 1020 NE Loop 410, San Antonio, TX 78209, on behalf of itself and its
successors and assigns (the “Bank”), as secured party, a continuing security interest in all of
the Collateral (as hereinafter defined) to secure the payment and performance of the Liabilities.

The term “Liabilities” means all obligations, indebtedness and liabilities of the Borrower to any
one or more of the Bank, JPMorgan Chase & Co., and any of their subsidiaries, affiliates or
successors, now existing or later arising, including, without limitation, all loans, advances,
interest, costs, overdraft indebtedness, credit card indebtedness, lease obligations, or
obligations relating to any Rate Management Transaction, all monetary obligations incurred or
accrued during the pendency of any bankruptcy, insolvency, receivership or other similar
proceedings, regardless of whether allowed or allowable in such proceeding, and all renewals,
extensions, modifications, consolidations or substitutions of any of the foregoing, whether the
Borrower may be liable jointly with others or individually liable as a debtor, maker, co-maker,
drawer, endorser, guarantor, surety or otherwise, and whether voluntarily or involuntarily
incurred, due or not due, absolute or contingent, direct or indirect, liquidated or unliquidated.
The term “Rate Management Transaction” in this agreement means any transaction (including an
agreement with respect thereto) now existing or hereafter entered into among the Borrower, the
Bank or JPMorgan Chase & Co., or any of its subsidiaries or affiliates or their successors, which
is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or
equity index swap, equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency option or any other
similar transaction (including any option with respect to any of these transactions) or any
combination thereof, whether linked to one or more interest rates, foreign currencies, commodity
prices, equity prices or other financial measures.

The term “Collateral” means all of the Borrower’s “accounts”; “chattel paper”; “general
intangibles” and any right to a refund of taxes paid at any time to any governmental entity;
“instruments”; all as defined in the UCC, whether now owned or hereafter acquired, whether now
existing or hereafter arising, and wherever located. In addition, the term “Collateral” includes
all “proceeds”, “products” and “supporting obligations” (as such terms are defined in the UCC) of
the Collateral, including but not limited to all stock rights, subscription rights, dividends,
stock dividends, stock splits, or liquidating dividends, and all cash, accounts, chattel paper,
“instruments,” “investment property,” and “general intangibles” (as such terms are defined in the
UCC) arising from the sale, rent, lease, casualty loss or other disposition of the Collateral, and
any Collateral returned to, repossessed by or stopped in transit by the Borrower, and all
insurance claims relating to any of the Collateral. The term “Collateral” further includes all of
the Borrower’s right, title and interest in and to all books, records and data relating to the
Collateral, regardless of the form of media containing such information or data, and all software
necessary or desirable to use any of the Collateral or to access, retrieve, or process any of such
information or data. Where the Collateral is in the possession of the Bank or the Bank’s agent,
the Borrower agrees to deliver to the Bank any property that represents an increase in the
Collateral or profits or proceeds of the Collateral.

The term “UCC” means the Uniform Commercial Code of Texas, as in effect from time to time.

Representations, Warranties and Covenants. The Borrower represents and warrants to, and covenants
and agrees with the Bank that:

	1.	 	At its own expense, it shall maintain comprehensive casualty insurance on the Collateral
against such risks, in such amounts, with such deductibles and with such companies as may be
satisfactory to the Bank. Each insurance policy on the Collateral shall contain a lender’s
loss payable endorsement satisfactory to the Bank and a prohibition against cancellation or
amendment of the policy or removal of the Bank as loss payee without at least thirty (30) days
prior written notice to the Bank. In all events, the amounts of such insurance coverages on
the Collateral shall be in such minimum amounts that the Borrower will not be deemed a
co-insurer. The policies on the Collateral, or certificates evidencing them, shall, if the
Bank so requests, be deposited with the Bank.

	2.	 	It shall permit the Bank, at the Borrower’s expense, to inspect and examine the Collateral
and to check and test the same as to quality, quantity, value, and condition.

	3.	 	It shall maintain the Collateral in good repair; use the Collateral in accordance with law
and in compliance with any policy of insurance thereon; and exhibit the Collateral to the Bank
on demand.

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	4.	 	Until the Bank gives notice to the Borrower to the contrary or until the Borrower is in
default, it may use the funds collected in its business. Upon notice from the Bank or upon
default, the Borrower agrees that all sums of money it receives on account of or in payment or
settlement of the accounts, chattel paper, general intangibles and instruments shall be held
by it as trustee for the Bank without commingling with any of the Borrower’s other funds, and
shall immediately be delivered to the Bank with endorsement to the Bank’s order of any check
or similar instrument. It is agreed that, at any time the Bank so elects, the Bank shall be
entitled, in its own name or in the name of the Borrower or otherwise, but at the expense and
cost of the Borrower, to collect, demand, receive, sue for or compromise any and all accounts,
chattel paper, general intangibles, and instruments, and to give good and sufficient releases,
to endorse any checks, drafts or other orders for the payment of money payable to the Borrower
and, in the Bank’s discretion, to file any claims or take any action or proceeding which the
Bank may deem necessary or advisable. It is expressly understood and agreed, however, that the
Bank shall not be required or obligated in any manner to make any demand or to make any
inquiry as to the nature or sufficiency of any payment received by it or to present or file
any claim or take any other action to collect or enforce the payment of any amounts which may
have been assigned to the Bank or to which the Bank may be entitled at any time or times. All
notices required in this paragraph will be immediately effective when sent. Such notices need
not be given prior to the Bank’s taking action. The Borrower appoints the Bank or the Bank’s
designee as the Borrower’s attorney-in-fact to do all things with reference to the Collateral
as provided for in this agreement including without limitation (1) to sign the Borrower’s name
on any invoice or bill of lading relating to any Collateral, on assignments and verifications
of account and on notices to the Borrower’s customers, and (2) to do all things necessary to
carry out this agreement, (3) to notify the post office authorities to change the Borrower’s
mailing address to one designated by the Bank, and (4) to receive, open and dispose of mail
addressed to the Borrower. The Borrower ratifies and approves all acts of the Bank as
attorney-in-fact. The Bank shall not be liable for any act or omission, nor any error of
judgment or mistake of fact or law, but only for its gross negligence or willful misconduct.
This power being coupled with an interest is irrevocable until all of the Liabilities have
been fully satisfied. Immediately upon its receipt of any Collateral evidenced by an
agreement, “instrument,” “chattel paper,” certificated “security” or “document” (as such terms
are defined in the UCC) (collectively, “Special Collateral”), it shall mark the Special
Collateral to show that it is subject to the Bank’s security interest and shall deliver the
original to the Bank together with appropriate endorsements and other specific evidence of
assignment in form and substance satisfactory to the Bank.

	5.	 	It will not, sell, lease, license or offer to sell, lease, license, grant as security to
anyone other than the Bank, or otherwise transfer the Collateral or any rights in or to the
Collateral, without the written consent of the Bank, except in the ordinary course of
business; or change the location of the Collateral from the locations of the Collateral
disclosed to the Bank, without providing at least ten (10) days prior written notice to the
Bank.

	6.	 	No financing statement covering all or any part of the Collateral or any proceeds is on file
in any public office, unless the Bank has approved that filing.

	7.	 	When the Collateral is located at, used in or attached to a facility leased by the Borrower,
the Borrower will, at the request of the Bank, obtain from the lessor a consent to the
granting of this security interest and a release or subordination of the lessor’s interest in
any of the Collateral, in form acceptable to the Bank.

Remedies Regarding Collateral. The Bank shall have the right to require the Borrower to assemble
the Collateral and make it available to the Bank at a place to be designated by the Bank which is
reasonably convenient to both parties, the right to take possession of the Collateral with or
without demand and with or without process of law, and the right to sell and dispose of it and
distribute the proceeds according to law. The Borrower agrees that upon default the Bank may
dispose of any of the Collateral in its then present condition, that the Bank has no duty to repair
or clean the Collateral prior to sale, and that the disposal of the Collateral in its present
condition or without repair or clean-up shall not affect the commercial reasonableness of such sale
or disposition. The Bank’s compliance with any applicable state or federal law requirements in
connection with the disposition of the Collateral will not adversely affect the commercial
reasonableness of any sale of the Collateral. The Bank may disclaim warranties of title,
possession, quiet enjoyment, and the like, and the Borrower agrees that any such action shall not
affect the commercial reasonableness of the sale. In connection with the right of the Bank to take
possession of the Collateral, the Bank may take possession of any other items of property in or on
the Collateral at the time of taking possession, and hold them for the Borrower without liability
on the part of the Bank. The Borrower expressly agrees that the Bank may enter upon the premises
where the Collateral is believed to be located without any obligation of payment to the Borrower,
and that the Bank may, without cost, use any and all of the Borrower’s “equipment” (as defined in
the UCC) in the manufacturing or processing of any “inventory” (as defined in the UCC) or in
growing, raising, cultivating, caring for, harvesting, loading and transporting of any of the
Collateral that constitutes “farm products” (as defined in the UCC). If there is any statutory
requirement for notice, that requirement shall be met if the Bank sends notice to the Borrower at
least ten (10) days prior to the date of sale, disposition or other event giving rise to the
required notice, and such notice shall be deemed commercially reasonable. Without limiting any
other remedy, the Borrower is liable for any deficiency remaining after disposition of the
Collateral. The Bank is authorized to cause all or any part of the Collateral to be transferred to
or registered in its name or in the name of any other person or

61

 

business entity, with or without designating the capacity of that nominee. At its option the Bank
may, but shall be under no duty or obligation to, discharge taxes, liens, security interests or
other encumbrances at any time levied or placed on the Collateral, pay for insurance on the
Collateral, and pay for the maintenance and preservation of the Collateral, and the Borrower agrees
to reimburse the Bank on demand for any such payment made or expense incurred by the Bank with
interest at the highest rate at which interest may accrue under any of the instruments evidencing
the Liabilities. The Borrower authorizes the Bank to endorse on the Borrower’s behalf and to
negotiate drafts reflecting proceeds of insurance of the Collateral, provided that the Bank shall
remit to the Borrower such surplus, if any, as remains after the proceeds have been applied, at the
Bank’s option, to the satisfaction of all of the Liabilities (in such order of application as the
Bank may elect) or to the establishment of a cash collateral account for the Liabilities. The Bank
shall have the right now, and at any time in the future in its sole and absolute discretion,
without notice to the Borrower to (a) prepare, file and sign the Borrower’s name on any proof of
claim in bankruptcy or similar document against any owner of the Collateral and (b) prepare, file
and sign the Borrower’s name on any notice of lien, assignment or satisfaction of lien or similar
document in connection with the Collateral.

Miscellaneous. A carbon, photographic or other reproduction of this agreement is sufficient as,
and can be filed as, a financing statement. Additionally, the Borrower authorizes the Bank to file
one or more financing statements containing the collateral description “All of the Borrower’s
assets whether now owned or hereafter acquired.” or such lesser amount of assets as the Bank may
determine, or the Bank may, at its option, file financing statements containing any collateral
description which reasonably describes the Collateral, and the Borrower will pay the cost of
filing them in all public offices where filing is deemed by the Bank to be necessary or desirable.
In addition, the Borrower shall execute and deliver, or cause to be executed and delivered, such
other documents as the Bank may from time to time request to perfect or to further evidence the
security interest created in the Collateral by this agreement. If any provision of this agreement
cannot be enforced, the remaining portions of this agreement shall continue in effect. This
agreement constitutes an amendment and a restatement of that certain Security Agreement dated
February 1, 2001 (the “Prior Security Agreement”) executed by the Borrower in favor of the Bank in
its entirety. The lien and security interest granted under the Prior Security Agreement continues
and subsists under this agreement.

	 	 	 	 	 	 	 
	 	 	Borrower:	 	 
	 
	 	 	 	 	 	 
	 	 	U.S. Global Investors, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By: /s/
	 	Frank E. Holmes	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Frank E. Holmes, CEO	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Printed Name     Title	 	 
	 
	 	 	 	 	 	 
	 	 	Date Signed: 6/17/05	 	 

62

 

BANK1ONE

	 	 	 
	A Division of JPMorgan Chase Bank, N.A.

	 	Line of Credit Note
	 
	 	 
	 

	 	$1,000,000.00 
	 

	 	Date: June 3, 2005

Due: February 1, 2007

Promise to Pay. On or before February 1, 2007, for value received, U.S. Global Investors, Inc.
(the “Borrower”) promises to pay to JPMorgan Chase Bank, N.A., whose address is 1020 NE Loop 410,
San Antonio, TX 78209 (the “Bank”) or order, in lawful money of the United States of America, the
sum of One Million and 00/100 Dollars ($1,000,000.00) or such lesser sum as is indicated on Bank
records, plus interest computed on the basis of the actual number of days elapsed in a year of 360
days at the rate of 0% per annum above the Prime Rate (the “Note Rate”), and at the rate of 3.00%
per annum above the Note Rate, at the Bank’s option, upon the occurrence of any default under this
Note, whether or not the Bank elects to accelerate the maturity of this Note, from the date such
increased rate is imposed by the Bank. In this Note, “Prime Rate” means a rate per annum equal to
the prime rate of interest announced from time to time by the Bank or its parent (which rate is
not necessarily the lowest rate charged to any customer), changing when and as the prime rate
changes.

In no event shall the interest rate exceed the maximum rate allowed by law. Any interest payment
that would for any reason be unlawful under applicable law shall be applied to principal.

Interest will be computed on unpaid principal balance from the date of each borrowing.

Until maturity, the Borrower will pay consecutive monthly installments of interest only commencing
July 1, 2005.

The Borrower will pay, without setoff, deduction, or counterclaim, the Bank at the Bank’s address
above or at such other place as the Bank may designate in writing. If any payment of principal or
interest on this Note shall become due on a day that is not a Business Day, the payment will be
made on the next succeeding Business Day. The term “Business Day” in this Note means a day other
than a Saturday, Sunday or any other day on which national banking associations are authorized to
be closed. Payments shall be allocated among principal, interest and fees at the discretion of the
Bank unless otherwise agreed or required by applicable law. Acceptance by the Bank of any payment
that is less than the payment due at that time shall not constitute a waiver of the Bank’s right
to receive payment in full at that time or any other time.

Late Fee. If any payment is not received by the Bank within ten (10) days after its due date, the
Bank may assess and the Borrower agrees to pay a late fee equal to the greater of: (a) five
percent (5.00%) of the past due amount or (b) Twenty Five and 00/100 Dollars ($25.00), up to the
maximum amount of One Thousand Five Hundred and 00/100 Dollars ($1,500.00) per late charge.

Credit Facility. The Bank has approved a credit facility to the Borrower in a principal amount not
to exceed the face amount of this Note. The credit facility is in the form of advances made from
time to time by the Bank to the Borrower. This Note evidences the Borrower’s obligation to repay
those advances. The aggregate principal amount of debt evidenced by this Note is the amount
reflected from time to time in the records of the Bank. Until the earliest of maturity, the
occurrence of any default, or the occurrence of any event that would constitute a default but for
the giving of notice or the lapse of time or both until the end of any grace or cure period, the
Borrower may borrow, pay down and reborrow under this Note subject to the terms of the Related
Documents.

Renewal and Extension. This Note is given in replacement, renewal and/or extension of, but not
extinguishing the indebtedness evidenced by, that Promissory Note (Revolving Credit Note) dated
February 1, 2003 executed by the Borrower in the original principal amount of One Million and
00/100 Dollars ($1,000,000.00), including previous renewals or modifications thereof, if any (the
“Prior Note”), and is not a novation thereof. All interest evidenced by the Prior Note shall
continue to be due and payable until paid. If applicable, all Collateral continues to secure the
payment of this Note and the Liabilities. The provisions of this Note are effective on February
1,2005.

Usury. The Bank does not intend to charge, collect or receive any interest that would exceed the
maximum rate allowed by law. If the effect of any applicable law is to render usurious any amount
called for under this Note or the other Related Documents, or if any amount is charged or received
with respect to this Note, or if any prepayment by the Borrower results in the Borrower having paid
any interest in excess of that permitted by law, then all excess amounts collected by the Bank
shall be credited on the principal balance of this Note (or, if this Note and all other
indebtedness arising under or pursuant to the other

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Related Documents have been paid in full, refunded to the Borrower), and the provisions of this
Note and the other Related Documents immediately shall be deemed reformed and the amounts
thereafter collectable reduced, without the necessity of the execution of any new document, so as
to comply with the then applicable law. All sums paid, or agreed to be paid, by the Borrower for
the use, forbearance, or detention of money under this Note or the other Related Documents shall,
to the maximum extent permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term indebtedness until payment in full so that the rate or amount of interest
on account of such indebtedness does not exceed the usury ceiling from time to time in effect and
applicable to such indebtedness for so long as such indebtedness is outstanding. To the extent
federal law permits the Bank to contract for, charge or receive a greater amount of interest, the
Bank will rely on federal law instead of the Texas Finance Code. In no event shall Chapter 346 of
the Texas Finance Code apply to this Note. To the extent that Chapter 303 of the Texas Finance Code
is applicable to this Note, the “weekly ceiling” specified in Chapter 303 is the applicable
ceiling.

Miscellaneous. This Note binds the Borrower and its successors, and benefits the Bank, its
successors and assigns. Any reference to the Bank includes any holder of this Note. This Note
is issued pursuant and entitled to the benefits of that certain Credit Agreement by and between
the Borrower and the Bank, dated May 6, 2005, and all replacements thereof (the “Credit
Agreement”) to which reference is hereby made for a more complete statement of the terms and
conditions under which the loan evidenced hereby is made and is to be repaid. The terms and
provisions of the Credit Agreement are hereby incorporated and made a part hereof by this
reference thereto with the same force and effect as if set forth at length herein. No reference
to the Credit Agreement and no provisions of this Note or the Credit Agreement shall alter or
impair the absolute and unconditional obligation of the Borrower to pay the principal and
interest on this Note as herein prescribed. Capitalized terms not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement.

	 	 	 	 	 	 	 
	 

	 	 	 	Borrower:
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	U.S. Global Investors, Inc.	 	 
	Address:

	 	7900 Callaghan Road	 	 	 	 
	 

	 	San Antonio, TX 78229
	 	By: /s/ Frank E. Holmes	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Frank E. Holmes, CEO	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Printed Name   Title	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Date Signed: 6/17/05	 	 

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BANK1ONE

			
	     A Division of JPMorgan Chase Bank, N.A.
	 	Resolution of Board of Directors
	 
	 	(Resolution to Borrow)

By

U.S. Global Investors, Inc.,

A Texas corporation (the “Corporation”).

Dated: June 3, 2005

The Corporation desires to engage in financial transactions from time to time with JPMorgan Chase
Bank, N.A., and its successors and assigns (the “Bank”); and

The Corporation desires to authorize certain of its officers to engage in these transactions for
the Corporation; and

The Corporation desires to ratify all past transactions and eliminate the necessity of presenting
separate individual resolutions to the Bank in the future; and

The Corporation has found that the transactions authorized by the resolutions are or will be in the
Corporation’s interest and to its financial benefit.

Resolved: That any                      [if this blank is not completed then those authorized herein can act singly on
behalf of the Corporation] of

the following named officers, of this Corporation whose actual signatures are shown below:

	 	 	 	 	 	 	 
	Title	 	Printed Name	 	Signature	 	 
	 	 	 
	Chief Executive Officer

	 	Frank E. Holmes
	 	/s/ Frank E. Holmes
	 	 

are authorized from time to time for the Corporation to enter into any agreements of any nature
with the Bank, and those agreements will bind the Corporation. Specifically, but without
limitation, the authorized person is authorized, empowered, and directed to do the following for
and on behalf of the Corporation:

	1.	 	Borrow and incur any indebtedness, negotiate and procure loans, lines of credit, letters of
credit, discounts, and any other credit or financial accommodations from the Bank in any form
and in any amount and on any terms as may be agreed upon between the Corporation and the Bank.

	2.	 	Subordinate, in all respects, any and all present and future indebtedness, obligations,
liabilities, claims, rights, demands, notes and leases, of any kind which may be owed, now or
hereafter, from any person or entity to the Corporation to all present and future
indebtedness, obligations, liabilities, claims, rights and demands of any kind which may be
owed, now or hereafter, from such person or entity to the Bank (“Subordinated Indebtedness”),
together with subordination by the Corporation of any and all security interests, liens and
mortgages, of any kind, whether now existing or hereafter acquired, securing payment of the
Subordinated Indebtedness, all on such terms as may be agreed upon between the Corporation’s
officers and the Bank and in such amounts as in his or her judgment should be subordinated.

	3.	 	Mortgage, pledge, transfer, endorse, hypothecate, or otherwise encumber and deliver to the
Bank any property now or hereafter belonging to the Corporation or in which the Corporation
now or hereafter may have an interest, including without limitation, all real property and all
personal property, tangible or intangible, of the Corporation, as security for the payment of
any credits, loans, or other financial accommodations so obtained by the Corporation or any
promissory notes so executed, including any amendments to or modifications, renewals, and
extensions of such promissory notes, or any other or further indebtedness of the Corporation,
however the same may be evidenced. Such property may be mortgaged, pledged, transferred,
endorsed, hypothecated, or encumbered at the time such loans are obtained or such indebtedness
is incurred, or at any other time or times, and may be either in addition to or in lieu of any
property theretofore mortgaged, pledged, transferred, endorsed, hypothecated or encumbered.

65

 

	4.	 	Lease personal property as lessee and elect as to tax credit and depreciation deductions.
	 
	5.	 	Sell, assign, pledge or transfer all or any present or future stocks or securities registered in
the Corporation’s name.
	 
	6.	 	Enter into any agreement for any rate swap, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity or equity index option, bond
option, interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, forward transaction, currency swap transaction,
cross-currency swap transaction, currency option or any other similar transaction, including
any option with respect to any of these transactions, or any combination thereof, whether
linked to one or more interest rates, foreign currencies, commodity prices, equity prices or
other financial measures.
	 
	7.	 	Draw, endorse, and discount with the Bank all drafts, trade acceptances, promissory notes, or
other evidences of indebtedness payable to or belonging to the Corporation or in which the
Corporation may have an interest, and either receive cash for the same or cause such proceeds
to be credited to the Corporation’s account with the Bank, or cause such other disposition of
the proceeds derived therefrom as he or she may deem advisable.
	 
	8.	 	Sign and deliver to the Bank, promissory notes or notes, drafts, acceptances, guaranties,
subordination agreements, assignments, applications and reimbursement agreements for letters
of credit, security agreements, financing statements, mortgages, deeds of trust, pledges,
hypothecations, transfers, leases and any other instrument or document deemed necessary or
required to carry out the authority contained in this resolution, and any one or more
renewals, extensions, modifications, refinancings, consolidations or substitutions of any of
the foregoing.
	 
	9.	 	In the case of lines of credit, to designate additional or alternate individuals as being
authorized to request advances under such lines.
	 
	10.	 	Negotiate, consent to, and sign any instrument, writing, document or other agreement with the
Bank containing a provision or provisions for waiver of the right to a trial before a jury;
provisions for resolution of any and all disputes, claims, actions, issues, complaints, suits,
or controversies, of any kind or nature, by arbitration; and provisions for cognovit, and
confession of judgment and warrant of attorney for any indebtedness, or for any guaranty of
indebtedness of the Company to the Bank.
	 
	11.	 	Do and perform such other acts and things, pay any and all fees and costs, and execute and
deliver such other documents and agreements as any authorized officer of the Corporation may
in his or her discretion deem reasonably necessary or proper to carry into effect the
provisions of this resolution.

Further Resolved: The Corporation authorizes any one of the persons authorized above or any other
person designated in writing by any of those persons to pay the proceeds of any action taken
pursuant to these resolutions in the manner directed by any of the persons authorized to act,
including (but not in limitation) directing the payment of such proceeds: (i) to any deposit or
loan account of the Corporation; (ii) to the order of any of such persons in an individual
capacity; or (iii) to the individual credit of any such person or the individual credit of any
other person; and further to direct the payment from any of the Corporation’s accounts in
satisfaction of any of its obligations. These requests or authorizations may be made by telephone,
facsimile, or any other means of communication. The Bank is released from any liability for
following the instructions that the Bank believes in good faith to have been given by a person
authorized to act under this resolution.

Further Resolved: The authority given is retroactive, and any acts referred to which were
performed prior to the adoption of these resolutions are ratified and affirmed. This resolution
shall be continuing, shall remain in full force and effect, and the Bank may rely on it until
written notice of its revocation shall have been delivered to and received by the Bank. Any such
notice shall not affect any of the Corporation’s agreements or commitments in effect at the time
notice is given. The Corporation does indemnify and hold harmless the Bank from any loss or damage
incurred by the Bank by acting in reliance upon this resolution.

Further Resolved: The Corporation will notify the Bank prior to any (i) change in the
Corporation’s name; (ii) change in the Corporation’s assumed business name(s); (iii) change in the
management of the Corporation; (iv) change in the authorized signers; (v) change in the
Corporation’s chief executive office address; (vi) change in the jurisdiction under which the
Corporation’s business organization is formed or organized; (vii) conversion of the Corporation to
a new or different type of business entity; or (viii) change in any other aspect of the
Corporation that directly or indirectly relates to any agreements between the Corporation and the
Bank. No change in the Corporation’s name will take effect until after the Bank has been notified.

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I Certify that I am the duly elected and qualified Secretary, Assistant Secretary or President of
the Corporation and the keeper of the records and the corporate seal of the Corporation, and that
the above is a true and correct copy of resolutions duly adopted at a meeting of the Board of
Directors of the Corporation held in accordance with its by-laws, or by a legally effective
instrument of action in lieu of a meeting, and that they are in full force and effect. This
resolution now stands of record on the books of the Corporation, and has not been modified or
revoked in any manner whatsoever.

I Further Certify that the individuals whose signatures appear above have been duly elected and
are presently the incumbents of the offices set next to their respective signatures, and that the
signatures are the genuine original signatures of each respectively.

I Further Certify that all statements and representations made in this resolution are true and
correct.

	 	 	 	 	 
	 

	 	/s/ Laura Bogert
	 	 
	 

	 	 	 	 
	 

	 	(Signature)	 	 
	 
	 	 	 	 
	 

	 	Laura Bogert	 	 
	 

	 	 	 	 
	 

	 	(Printed Name)	 	 
	 
	 	 	 	 
	 

	 	Secretary	 	 
	 

	 	 	 	 
	 

	 	(Title)	 	 
	 
	 	 	 	 
	 

	 	6/28/05	 	 
	 

	 	 	 	 
	 

	 	(Date Signed)	 	 

Complete this section only if the person certifying this resolution by signature and with the
title stated above is the only officer of the Corporation authorized to act on its behalf. In such
case, complete this section by the signature of a different officer or director of the Corporation.

The undersigned as an officer or director of the Corporation hereby acknowledges the authority of
the person certifying this resolution by the signature and title stated above to act alone for and
on behalf of the Corporation as described in this resolution.

	 	 	 
	 

	 	 
	 

	 	(Signature)
	 
	 	 
	 

	 	 
	 

	 	(Printed Name)
	 
	 	 
	 

	 	 
	 

	 	(Title)
	 
	 	 
	 

	 	 
	 

	 	(Date Signed)

Complete this section only if the Corporation is organized with only one Officer-Director. As
permitted by law of the state of incorporation, there are no other individuals who are either
officers or directors.

	 	 	 
	 

	 	 
	 

	 	(Signature)
	 
	 	 
	 

	 	 
	 

	 	(Printed Name)
	 
	 	 
	 

	 	 
	 

	 	(Title)
	 
	 	 
	 

	 	 
	 

	 	(Date Signed)

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BANK1ONE

			
	     A Division of JPMorgan Chase Bank, N.A.
	 	Credit Agreement

This agreement dated as of June 3, 2005 between JPMorgan Chase Bank, N.A., and its successors and
assigns, (the “Bank”), whose address is 1020 NE Loop 410, San Antonio, TX 78209, and U.S. Global
Investors, Inc. (the “Borrower”), whose address is 7900 Callaghan Road, San Antonio, TX 78229.

1. Credit Facilities.

	 	1.1	 	Scope. This agreement governs Facility A, and, unless otherwise agreed to in
writing by the Bank and the Borrower or prohibited by applicable law, governs the
Credit Facilities.
	 
	 	1.2	 	Facility A (Line of Credit). The Bank has approved a credit facility to the
Borrower in the principal sum not to exceed $1,000,000.00 in the aggregate at any one
time outstanding (“Facility A”). Credit under Facility A shall be repayable as set
forth in a Line of Credit Note executed concurrently with this agreement, and any
renewals, modifications or extensions thereof. The proceeds of Facility A shall be
used for the following purpose: Support Accounts Receivable.
	 
	 	 	 	Non Usage Fee. The Borrower shall pay to the Bank a non-usage fee on the average
daily unused portion of Facility A at a rate of 0.35% per annum, payable in arrears
within ten (10) days of the end of each calendar quarter for which the fee is
owing.
	 
	 	1.3	 	Borrowing Base. The aggregate principal amount of advances outstanding at any
one time under Facility A (the “Aggregate Outstanding Amount”) shall not exceed the
Borrowing Base or the maximum principal amount then available under the Line of Credit
Note (and any renewals, modifications or extensions thereof) evidencing Facility A,
whichever is less (the “Maximum Available Amount”). If at any time the Aggregate
Outstanding Amount exceeds the Maximum Available Amount, the Borrower shall
immediately pay the Bank an amount equal to such excess. “Borrowing Base” means the
aggregate of:

	 	A.	 	80% of the book value of all Eligible Accounts;
	 
	 	B.	 	100% of the aggregate amount of all Eligible Cash;
	 
	 	C.	 	80% of the aggregate current market value of all Eligible Major
Exchange Traded Securities; and
	 
	 	D.	 	85% of the aggregate current market value of
Eligible U.S. Government Securities.

	 	1.4	 	Condition to Certain Advances. Notwithstanding in other provision of this
agreement or the Notes, it shall be a condition precedent to any advance under
Facility A which is based in whole or in part upon Eligible Cash. Eligible Major
Exchange Traded Securities, and/or Eligible U.S. Government Securities, that Borrower
shall have presented its request for such advance to Bank not less than three (3)
business days prior to the date of such advance, and that Borrower shall have executed
such documentation, including a Reg. U Purpose Statement, as shall be required by
Bank.

	2.	 	Definitions. As used in this agreement, the following terms have the following respective
meanings:

	 	2.1	 	“Credit Facilities” means all extensions of credit from the Bank to the
Borrower, whether now existing or hereafter arising, including but not limited to those
described in Section 1.
	 
	 	2.2	 	“Liabilities” means all obligations, indebtedness and liabilities of the
Borrower to any one or more of the Bank, JPMorgan Chase & Co., and any of their
subsidiaries, affiliates or successors, now existing or later arising, including,
without limitation, all loans, advances, interest, costs, overdraft indebtedness,
credit card indebtedness, lease obligations, or obligations relating to any Rate
Management Transaction, all monetary obligations incurred or accrued during the
pendency of any bankruptcy, insolvency, receivership or other similar proceedings,
regardless of whether allowed or allowable in such proceeding, and all renewals,
extensions,

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	 	 	 	modifications, consolidations or substitutions of any of the foregoing, whether the
Borrower may be liable jointly with others or individually liable as a debtor,
maker, co-maker, drawer, endorser, guarantor, surety or otherwise, and whether
voluntarily or involuntarily
incurred, due or not due, absolute or contingent, direct or indirect, liquidated or
unliquidated. The term “Rate Management Transaction” in this agreement means any
transaction (including an agreement with respect thereto) now existing or hereafter
entered into among the Borrower, the Bank or JPMorgan Chase & Co., or any of its
subsidiaries or affiliates or their successors, which is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity index
swap, equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
forward transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including any option
with respect to any of these transactions) or any combination thereof, whether
linked to one or more interest rates, foreign currencies, commodity prices, equity
prices or other financial measures.
	 
	 	2.3	 	“Notes” means all promissory notes, instruments and/or contracts evidencing the
terms and conditions of any of the Credit Facilities.
	 
	 	2.4	 	“Account” means a trade account, account receivable, other receivable, or other
right to payment for goods sold or leased or services rendered owing to the Borrower
(or to a third party grantor acceptable to the Bank).
	 
	 	2.5	 	“Account Debtor” means the person or entity obligated upon an Account.
	 
	 	2.6	 	“Affiliate” means any person, corporation or other entity directly or
indirectly controlling, controlled by or under common control with the Borrower and any
director or officer of the Borrower or any subsidiary of the Borrower.
	 
	 	2.7	 	“Eligible Accounts” means, at any time, all of the Borrower’s Accounts which
contain selling terms and conditions acceptable to the Bank, are payable on ordinary
trade terms, and are not evidenced by a promissory note or chattel paper. The net
amount of any Eligible Account against which the Borrower may borrow shall exclude all
returns, discounts, credits, and offsets of any nature. Unless otherwise agreed to by
the Bank in writing, Eligible Accounts do not include Accounts: (1) which are not owned
by the Borrower free and clear of all security interests, liens, encumbrances, and
claims of third parties, except the Bank; (2) with respect to which the Account Debtor
is an employee or agent of the Borrower; (3) with respect to which the Account Debtor
is affiliated with or related to the Borrower; (4) with respect to which goods are
placed on consignment, guaranteed sale, or other terms by reason of which the payment
by the Account Debtor may be conditional; (5) with respect to which the Account Debtor
is not a resident of the United States, except to the extent such Accounts are
otherwise Eligible Accounts and are supported by insurance, bonds or other assurances
satisfactory to the Bank; (6) subject to the U.S. Office of Foreign Asset Control
Special Designated Nationals and Blocked Person’s List, or with respect to which the
Account Debtor is otherwise a person or entity with whom the Borrower or the Bank is
prohibited from doing business by any applicable law, regulation, executive order or
other legal directive; (7) which are not payable in U.S. Dollars; (8) with respect to
which the Borrower is or may become liable to the Account Debtor for goods sold or
services rendered by the Account Debtor to the Borrower; (9) which are subject to
dispute, counterclaim, withholding, defense, or setoff; (10) with respect to which the
goods have not been shipped or delivered, or the services have not been rendered, to
the Account Debtor, or which otherwise constitute pre-billed Accounts; (11) which
constitute retainage, or are bonded Accounts; (12) with respect to which the Bank, in
its sole discretion, deems the creditworthiness or financial condition of the Account
Debtor to be unsatisfactory; (13) of any Account Debtor who has filed or has had filed
against it a petition in bankruptcy or an application for relief under any provision of
any state or federal bankruptcy, insolvency, or debtor-in-relief acts; or who has had
appointed a trustee, custodian, or receiver for the assets of such Account Debtor; or
who has made an assignment for the benefit of creditors or has become insolvent or
fails generally to pay its debts (including its payrolls) as such debts become due;
(14) with respect to which the Account Debtor is the United States government or any
department or agency of the United States; and (15) which have not been paid in full
within ninety (90) days from the invoice date.

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	 	2.8	 	“Eligible Major Exchange Traded Security” means, at any time, any stock owned
by Borrower which is not JPMorgan Chase & Co. stock, and which is listed and traded at
a price per share of not less than $10 on the New York Stock Exchange, the NASDAQ, or
the AMEX, and the shares of any mutual fund and/or unit investment trust owned by
Borrower which is not a JPMorgan Chase & Co. mutual fund, that invests solely in stocks
which are listed and traded on the New York Stock Exchange, the NASDAQ, or the AMEX ,in
which the Bank has a perfected first priority security interest.
	 
	 	2.9	 	“Eligible Cash” means, at any time, the aggregate of the balances of Borrower’s
savings and certificate of deposit accounts at Bank upon which Bank has a perfected
first priority security interest.
	 
	 	2.10	 	“Eligible U.S. Government Securities” means, at any time, U.S. Government and
U.S. Government Agency securities owned by Borrower, and the shares of any mutual fund
and/or unit investment trust owned by Borrower which invests solely in the foregoing,
in which Bank has a perfected first priority security interest.
	 
	 	2.11	 	“Intangible Assets” means the aggregate amount of: (1) all assets classified as
intangible assets under generally accepted accounting principles, including,
without limitation, goodwill, trademarks, patents, copyrights, organization
expenses, franchises, licenses, trade names, brand names, mailing lists, catalogs,
excess of cost over book value of assets acquired, and bond discount and underwriting
expenses; and (2) loans or advances to, investments in, or receivables from (i)
Affiliates, officers, directors, employees or shareholders of the Borrower or (ii) any
person or entity if such loan, advance, investment or receivable is outside the
Borrower’s normal course of business.
	 
	 	2.12	 	“Tangible Net Worth” means total assets less the sum of Intangible Assets and total
liabilities.
	 
	 	2.13	 	“Related Documents” means all loan agreements, credit agreements,
reimbursement agreements, security agreements, mortgages, deeds of trust, pledge
agreements, assignments, guaranties, or any other instrument or document executed in
connection with this agreement or in connection with any of the Liabilities.

	3.	 	Affirmative Covenants. The Borrower shall:

	 	3.1	 	Insurance. Maintain insurance with financially sound and reputable insurers
covering its properties and business against those casualties and contingencies and in
the types and amounts as are in accordance with sound business and industry practices,
and furnish to the Bank, upon request of the Bank, reports on each existing insurance
policy showing such information as the Bank may reasonably request.
	 
	 	3.2	 	Existence. Maintain its existence and business operations as presently in
effect in accordance with all applicable laws and regulations, pay its debts and
obligations when due under normal terms, and pay on or before their due date, all
taxes, assessments, fees and other governmental monetary obligations, except as they
may be contested in good faith if they have been properly reflected on its books and,
at the Bank’s request, adequate funds or security has been pledged to insure payment.
	 
	 	3.3	 	Financial Records. Maintain proper books and records of account, in accordance
with generally accepted accounting principles, and consistent with financial statements
previously submitted to the Bank.
	 
	 	3.4	 	Inspection. Permit the Bank, its assigns or agents, at such times and at such
intervals as the Bank may reasonably require: (1) to inspect, examine, audit and copy
the Borrower’s business records, and to discuss the Borrower’s business, operations,
and financial condition with the Borrower’s officers and accountants; (2) to inspect
the Borrower’s business operations and sites; (3) to perform audits or other
inspections of any collateral securing any of the Liabilities, including records and
other documents relating to that collateral and the Borrower shall promptly compensate
the Bank for all costs and expenses associated with any such inspection or audit
(including in-house costs and expenses charged within the Bank for such inspection or
audit) after receiving the Bank’s invoice(s) therefor; and (4) at the Borrower’s
expense, to

70

 

	 	 	 	confirm with Account Debtors the accuracy of Accounts.
	 
	 	3.5	 	Financial Reports. Furnish to the Bank whatever information, books and records
the Bank may from time to time reasonably request, including at a minimum:

A. Within forty-five (45) days after each quarterly period, publicly traded 10-Q
reports.

B. Within one hundred and twenty (120) days after and as of the end of each of its
fiscal years, a detailed financial statement including a balance sheet and
statements of income, cash flow and retained earnings, such financial statement, to
be audited by an independent certified public accountant of recognized standing
acceptable to the Bank in the Bank’s sole discretion.

C. A list of accounts receivable, aged from date of invoice and certified as correct
by one of its authorized agents, with each request of an advance under Facility A
and within forty-five (45) days after and as of the end of each calendar month
during which there is a balance outstanding under Facility A.

D. A borrowing base certificate, in form and detail satisfactory to the Bank, along
with such supporting documentation as the Bank may request, with each request of an
advance under Facility A and within forty-five (45) days after and as of the end of
each calendar month during which there is a balance outstanding under Facility A.

	 	3.6	 	Notices of Claims, Litigation, Defaults, etc. Promptly inform the Bank in
writing of (1) all existing and all threatened litigation, claims, investigations,
administrative proceedings and similar actions affecting the Borrower which could
materially affect the financial condition of the Borrower; (2) the occurrence of any
event which gives rise to the Bank’s option to terminate the Credit Facilities; (3) the
institution of steps by the Borrower to withdraw from, or the institution of any steps
to terminate, any employee benefit plan as to which the Borrower may have liability;
(4) any additions to or changes in the locations of the Borrower’s businesses; and (5)
any alleged breach of any provision of this agreement or of any other agreement related
to the Credit Facilities by the Bank.
	 
	 	3.7	 	Other Agreements. Comply with all terms and conditions of all other agreements,
whether now or hereafter existing, between the Borrower and any other party.
	 
	 	3.8	 	Title to Assets and Property. Maintain good and marketable title to all of the
Borrower’s assets and properties, and defend such assets and properties against all
claims and demands of all persons at any time claiming any interest in them.
	 
	 	3.9	 	Additional Assurances. Make, execute and deliver to the Bank such other
agreements as the Bank may reasonably request to evidence the Credit Facilities and to
perfect any security interests.
	 
	 	3.10	 	Employee Benefit Plans. Maintain each employee benefit plan as to which the
Borrower may have any liability, incompliance with all applicable requirements of law
and regulations.
	 
	 	3.11	 	Banking Relationship. Maintain its primary banking depository and disbursement
relationship with the Bank and establish such accounts and maintain balances therein
with the Bank sufficient to cover the cost of all the Bank’s services provided;
provided, however, that nothing herein shall require the Borrower to keep and maintain
a specific minimum balance in such accounts.
	 
	 	3.12	 	Compliance Certificates. Provide the Bank, within forty-five (45) days after
the end of each fiscal quarter, with a certificate executed by the Borrower’s chief
financial officer, or other officer or a person acceptable to the Bank, certifying
that, as of the date of the certificate, no default exists under any provision of this
agreement.
	 
	 	3.13	 	Brokerage Accounts. Maintain all Eligible Major Exchange Traded Securities
and Eligible U.S. Government Securities in either safekeeping accounts with Bank or
brokerage accounts with an affiliate of JPMorgan Chase &Co.

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	4.	 	Negative Covenants.

	 	4.1	 	Unless otherwise noted, the financial requirements set forth in this section
will be computed in accordance with generally accepted accounting principles applied on
a basis consistent with financial statements previously submitted by the Borrower to
the Bank.
	 
	 	4.2	 	Without the written consent of the Bank, the Borrower will not:

A. Sale of Shares. Issue, sell or otherwise dispose of any shares of its capital
stock or other securities, or rights, warrants or options to purchase or acquire
those shares or securities.

B. Debt. Incur, contract for, assume, or permit to remain outstanding, indebtedness
for borrowed money, installment obligations, or obligations under capital leases or
operating leases, other than (1) unsecured trade debt incurred in the ordinary
course of business, (2) indebtedness owing to the Bank, (3) indebtedness reflected
in the latest financial statement of the Borrower furnished to the Bank prior to
execution of this agreement and that is not to be paid with proceeds of borrowings
under the Credit Facilities, and (4) indebtedness outstanding as of the date hereof
that has been disclosed to the Bank in writing and that is not to be paid with
proceeds of borrowings under the Credit Facilities.

C. Guaranties. Guarantee or otherwise become or remain secondarily liable on the
undertaking of another, except for endorsement of drafts for deposit and collection
in the ordinary course of business.

D. Liens. Create or permit to exist any lien on any of its property, real or
personal, except: existing liens known to the Bank; liens to the Bank; liens
incurred in the ordinary course of business securing current non-delinquent
liabilities for taxes, worker’s compensation, unemployment insurance, social
security and pension liabilities.

E. Use of Proceeds. Use, or permit any proceeds of the Credit Facilities to be used,
directly or indirectly, for: (1) any personal, family or household purpose; or (2)
the purpose of “purchasing or carrying any margin stock” within the meaning of
Federal Reserve Board Regulation U. At the Bank’s request, the Borrower will furnish
a completed Federal Reserve Board Form U-1.

F. Continuity of Operations. (1) Engage in any business activities substantially
different from those in which the Borrower is presently engaged; (2) cease
operations, liquidate, merge, transfer, acquire or consolidate with any other
entity, change its name, dissolve, or sell any assets out of the ordinary course of
business; (3) enter into any arrangement with any person providing for the leasing
by the Borrower or any subsidiary of real or personal property which has been sold
or transferred by the Borrower or subsidiary to such person; or (4) change its
business organization, the jurisdiction under which its business organization is
formed or organized, or its chief executive office, or any places of its businesses.

G. Limitation on Negative Pledge Clauses. Enter into any agreement with any person
other than the Bank which prohibits or limits the ability of the Borrower or any of
its subsidiaries to create or permit to exist any lien on any of its property,
assets or revenues, whether now owned or hereafter acquired.

H. Conflicting Agreements. Enter into any agreement containing any provision which
would be violated or breached by the performance of the Borrower’s obligations under
this agreement.

I. Current Ratio. Permit as of each fiscal quarter end, its ratio of current assets
to current liabilities to be less than 2.00 to 1.00.

J. Leverage Ratio. Permit as of each fiscal quarter end, its ratio of total
liabilities to Tangible Net Worth to be greater than 0.75 to 1.00.

K. Liquidity. Permit at any time its total of cash, marketable securities and
accounts receivable (net of reserves), to be less than $1,000,000.00.

72

 

L. Government Regulation. (1) Be or become subject at any time to any law,
regulation, or list of any government agency (including, without limitation, the
U.S. Office of Foreign Asset Control list) that prohibits or limits Bank from making
any advance or extension of credit to Borrower or from otherwise conducting business
with Borrower, or (2) fail to provide documentary and other evidence of Borrower’s
identity as may be requested by Bank at any time to enable Bank to verify Borrower’s
identity or to comply with any applicable law or regulation, including, without
limitation, Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318.

	5.	 	Representations.

	 	5.1	 	Representations by the Borrower. The Borrower represents and warrants to the
Bank that: (a) its principal residence or chief executive office is at the address
shown above, (b) its name as it appears in this agreement is its exact name as it
appears in its organizational documents, as amended, including any trust documents, (c)
the execution and delivery of this agreement and the Notes, and the performance of the
obligations they impose, do not violate any law, conflict with any agreement by which
it is bound, or require the consent or approval of any governmental authority or other
third party, (d) this agreement and the Notes are valid and binding agreements,
enforceable according to their terms, (e) all balance sheets, profit and loss
statements, and other financial statements and other information furnished to the Bank
in connection with the Liabilities are accurate and fairly reflect the financial
condition of the organizations and persons to which they apply on their effective
dates, including contingent liabilities of every type, which financial condition has
not changed materially and adversely since those dates, (f) no litigation, claim,
investigation, administrative proceeding or similar action (including those for unpaid
taxes) against the Borrower is pending or threatened, and no other event has occurred
which may in any one case or in the aggregate materially adversely affect the
Borrower’s financial condition and properties, other than litigation, claims, or other
events, if any, that have been disclosed to and acknowledged by the Bank in writing,
(g) all of the Borrower’s tax returns and reports that are or were required to be
filed, have been filed, and all taxes, assessments and other governmental charges have
been paid in full, except those presently being contested by the Borrower in good faith
and for which adequate reserves have been provided, (h) the Borrower is not an
“investment company” or a company “controlled” by an “investment company”, within the
meaning of the Investment Company Act of 1940, as amended, (i) the Borrower is not a
“holding company”, or a “subsidiary company” of a “holding company” or an “affiliate”
of a “holding company” or of a “subsidiary company” of a “holding company” within the
meaning of the Public Utility Holding Company Act of 1935, as amended, (j) there are no
defenses or counterclaims, offsets or adverse claims, demands or actions of any kind,
personal or otherwise, that the Borrower could assert with respect to this agreement or
the Credit Facilities, (k) the Borrower owns, or is licensed to use, all trademarks,
trade names, copyrights, technology, know-how and processes necessary for the conduct
of its business as currently conducted, (1) the execution and delivery of this
agreement and the Notes and the performance of the obligations they impose, if the
Borrower is other than a natural person (i) are within its powers, (ii) have been duly
authorized by all necessary action of its governing body, and (iii) do not contravene
the terms of its articles of incorporation or organization, its by-laws, or any
partnership, operating or other agreement governing its affairs; and (m) with respect
to the Borrowing Base, (i) each asset represented by the Borrower to be eligible for
Borrowing Base purposes of this agreement conforms to the eligibility definitions set
forth in this agreement (ii) all asset values delivered to the Bank will be true and
correct, subject to immaterial variance; and be determined on a consistent accounting
basis; (iii) except as agreed to the contrary by the Bank in writing, each asset is now
and at all times hereafter will be in the Borrower’s physical possession and shall not
be held by others on consignment, sale or approval, or sale or return; (iv) except as
reflected in schedules delivered to the Bank, each asset is now and at all times
hereafter will be of good and merchantable quality, free from defects; and (v) each
asset is not now and will not at any time hereafter be stored with a bailee,
warehouseman, or similar party without the Bank’s prior written consent, and in such
event, the Borrower will concurrently at the time of bailment cause any such bailee,
warehouseman, or similar party to issue and deliver to the Bank, warehouseman receipts
in the Bank’s name evidencing the storage of the assets.
	 
	 	5.2	 	Continuing Representations. Each request for an advance or conversion or
continuation of an advance under any of the Credit Facilities shall constitute a
representation and warranty by the Borrower that all of the representations and
warranties set forth in this agreement shall be true and correct on and as of such
date with the same effect as though such representations and

73

 

	 	 	 	warranties had been made on such date, except to the extent that such
representations and warranties are stated to expressly relate solely to an earlier
date.

	6.	 	Default/Remedies.

	 	6.1	 	Events of Default/Acceleration. If any of the following events occurs the
Notes shall become due immediately, without notice, at the Bank’s option, and the
Borrower hereby waives notice of intent to accelerate maturity of the Notes and notice
of acceleration of the Notes upon any of the following events:

A. The Borrower, or any guarantor of the Notes (the “Guarantor”), fails to pay when
due any amount payable under the Notes, under any of the Liabilities, or under any
agreement or instrument evidencing debt to any creditor.

B. The Borrower or any Guarantor (1) fails to observe or perform any other term of
the Notes; (2) makes any materially incorrect or misleading representation,
warranty, or certificate to the Bank; (3) makes any materially incorrect or
misleading representation in any financial statement or other information delivered
to the Bank; or (4)defaults under the terms of any agreement or instrument relating
to any debt for borrowed money (other than the debt evidenced by the Notes) and the
effect of such default will allow the creditor to declare the debt due before its
maturity.

C. In the event (1) there is a default under the terms of any Related Document, (2)
any guaranty of the loan evidenced by the Notes is terminated or becomes
unenforceable in whole or in part, (3) any Guarantor fails to promptly perform under
its guaranty, or (4) the Borrower fails to comply with, or pay, or perform under any
agreement, now or hereafter in effect, between the Borrower and JPMorgan Chase &
Co., or any of its subsidiaries or affiliates or their successors.

D. There is any loss, theft, damage, or destruction of any collateral securing the
Credit Facilities not covered by insurance.

E. A “reportable event” (as defined in the Employee Retirement Income Security Act
of 1974 as amended) occurs that would permit the Pension Benefit Guaranty
Corporation to terminate any employee benefit plan of the Borrower or any affiliate
of the Borrower.

F. The Borrower or any Guarantor becomes insolvent or unable to pay its debts as
they become due.

G. The Borrower or any Guarantor (1) makes an assignment for the benefit of
creditors; (2) consents to the appointment of a custodian, receiver, or trustee for
itself or for a substantial part of its assets; or (3) commences any proceeding
under any bankruptcy, reorganization, liquidation, insolvency or similar laws of any
jurisdiction.

H. A custodian, receiver, or trustee is appointed for the Borrower or any Guarantor
or for a substantial part of its assets without its consent.

I. Proceedings are commenced against the Borrower or any Guarantor under any
bankruptcy, reorganization, liquidation, or similar laws of any jurisdiction, and
they remain undismissed for thirty (30) days after commencement; or the Borrower or
the Guarantor consents to the commencement of those proceedings.

J. Any judgment exceeding $50,000.00 is entered against the Borrower or any
Guarantor, or any attachment, levy, or garnishment is issued against any property of
the Borrower or any Guarantor.

K. The Borrower or any Guarantor dies, or a guardian or conservator is appointed for
the Borrower or any Guarantor or all or any portion of the Borrower’s assets, any
Guarantor’s assets, or the Collateral.

74

 

L. The Borrower or any Guarantor, without the Bank’s written consent (1) is
dissolved, (2) merges or consolidates with any third party, (3) leases, sells or
otherwise conveys a material part of its assets or business outside the ordinary
course of its business, (4) leases, purchases, or otherwise acquires a material part
of the assets of any other business entity, except in the ordinary course of its
business, or (5) agrees to do any of the foregoing (notwithstanding the foregoing,
any subsidiary may merge or consolidate with any other subsidiary, or with the
Borrower, so long as the Borrower is the survivor).

	 	6.2	 	Cure Periods. Except as expressly provided to the contrary in the Notes or any
of the Related Documents, no condition, event or occurrence shall constitute the
occurrence of a default under the Notes, of a default under any of the Liabilities or
of a default under any of the Related Documents unless: (a) the Bank has notified the
Borrower of such condition, event or occurrence in writing (a “Default Notice”); and
(b) such condition, event, or occurrence has not been fully cured (i) within five (5)
days after the Borrower’s receipt of a Default Notice, if the condition, event or
occurrence giving rise to such Default Notice can be cured by the payment of money, or
(ii) within thirty (30) days after the Borrower’s receipt of a Default Notice, if the
condition, event or occurrence giving rise to such Default Notice is of a nature that
it can be cured only by the means other than payment of money.
	 
	 	 	 	Provided, however, that the Borrower shall have no notice and cure rights under
this section if: (a) the condition, event or occurrence giving rise to the
occurrence of a default under the Notes, of a default under the Liabilities or of a
default under the Related Documents (i) is a condition, event or occurrence
described in any of clauses C(2), (F), (G), (H), (I), (K) or (L) of the section
captioned Events of Default/Acceleration section above or (ii) constitutes a breach
of any covenant in any Related Document prohibiting the sale or transfer of (1) any
assets of any Borrower, Mortgagor, Pledgor, Debtor, Assignor, Trustor or any
similar pledging or borrowing party or (2) any of the Collateral; or (b) the
Borrower, during the twelve (12) month period immediately preceding any Default
Notice, has been given either (i) any other Default Notice covering the same
condition, event or occurrence or (ii) three (3) or more other Default Notices of
any nature.
	 
	 	6.3	 	Remedies.

A. Generally. If any of the Liabilities are not paid at maturity, whether by
acceleration or otherwise, or if a default by anyone occurs under the terms of any
agreement related to any of the Liabilities, then the Bank shall have the rights and
remedies provided by law or this agreement. The Borrower is liable to the Bank for
all reasonable costs and expenses of every kind incurred in the collection of the
Notes, or in connection with the enforcement or preservation of rights under this
agreement, or any amendment, supplement, or modification thereto, including without
limitation reasonable attorneys’ fees and court costs. These costs and expenses
include without limitation any costs or expenses incurred by the Bank in any
bankruptcy, reorganization, insolvency or other similar proceeding.

B. Bank’s Right of Setoff. The Borrower grants to the Bank a security interest in,
and the Bank is authorized to setoff and apply, all Deposits, Securities and Other
Property, and Bank Debt against any and all Liabilities of the Borrower. This right
of setoff may be exercised at any time and from time to time, and without prior
notice to the Borrower. This security interest and right of setoff may be enforced
or exercised by the Bank regardless of whether or not the Bank has made any demand
under this paragraph or whether the Liabilities are contingent, matured, or
unmatured. Any delay, neglect or conduct by the Bank in exercising its rights under
this paragraph will not be a waiver of the right to exercise this right of setoff or
enforce this security interest. The rights of the Bank under this paragraph are in
addition to other rights the Bank may have in the Related Documents or by law. In
this paragraph: (a) the term “Deposits” means any and all accounts and deposits of
the Borrower (whether general, special, time, demand, provisional or final) at any
time held by the Bank (including all Deposits held jointly with another, but
excluding any IRA or Keogh Deposits, or any trust or other Deposits in which a
security interest would be prohibited by law); (b) the term “Securities and Other
Property” means any and all securities and other property of the Borrower in the
custody, possession or control of the Bank (other than property held by the Bank in
a fiduciary capacity); and (c) the term “Bank Debt” means all indebtedness at any
time owing by the Bank, to or for the credit or account of the Borrower.

75

 

	7.	 	Miscellaneous.

	 	7.1	 	Notice. Any notices and demands under or related to this document shall be in
writing and delivered to the intended party at its address stated herein, and if to the
Bank, at its main office if no other address of the Bank is specified herein, by one of
the following means: (a) by hand, (b) by a nationally recognized overnight courier
service, or (c) by certified mail, postage prepaid, with return receipt requested.
Notice shall be deemed given: (a) upon receipt if delivered by hand, (b) on the
Delivery Day after the day of deposit with a nationally recognized courier service, or
(c) on the third Delivery Day after the notice is deposited in the mail. “Delivery Day”
means a day other than a Saturday, a Sunday or any other day on which national banking
associations are authorized to be closed. Any party may change its address for purposes
of the receipt of notices and demands by giving notice of such change in the manner
provided in this provision.
	 
	 	7.2	 	No Waiver. No delay on the part of the Bank in the exercise of any right or
remedy waives that right or remedy. No single or partial exercise by the Bank of any
right or remedy precludes any other future exercise of it or the exercise of any other
right or remedy. No waiver or indulgence by the Bank of any default is effective unless
it is in writing and signed by the Bank, nor shall a waiver on one occasion bar or
waive that right on any future occasion.
	 
	 	7.3	 	Integration. This agreement, the Notes, and any agreement related to the Credit
Facilities embody the entire agreement and understanding between the Borrower and the
Bank and supersede all prior agreements and understandings relating to their subject
matter. If any one or more of the obligations of the Borrower under this agreement or
the Notes is invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining obligations of the Borrower shall not in
any way be affected or impaired, and the invalidity, illegality or unenforceability in
one jurisdiction shall not affect the validity, legality or enforceability of the
obligations of the Borrower under this agreement or the Notes in any other
jurisdiction.
	 
	 	7.4	 	Governing Law and Venue. This agreement is delivered in the State of Texas and
governed by Texas law (without giving effect to its laws of conflicts). The Borrower
agrees that any legal action or proceeding with respect to any of its obligations under
this agreement may be brought by the Bank in any state or federal court located in the
State of Texas, as the Bank in its sole discretion may elect. By the execution and
delivery of this agreement, the Borrower submits to and accepts, for itself and in
respect of its property, generally and unconditionally, the non-exclusive jurisdiction
of those courts. The Borrower waives any claim that the State of Texas is not a
convenient forum or the proper venue for any such suit, action or proceeding.
	 
	 	7.5	 	Captions. Section headings are for convenience of reference only and do not
affect the interpretation of this agreement.
	 
	 	7.6	 	Survival of Representations and Warranties. The Borrower understands and agrees
that in extending the Credit Facilities, the Bank is relying on all representations,
warranties, and covenants made by the Borrower in this agreement or in any certificate
or other instrument delivered by the Borrower to the Bank under this agreement. The
Borrower further agrees that regardless of any investigation made by the Bank, all such
representations, warranties and covenants will survive the making of the Credit
Facilities and delivery to the Bank of this agreement, shall be continuing in nature,
and shall remain in full force and effect until such time as the Borrower’s
indebtedness to the Bank shall be paid in full.
	 
	 	7.7	 	Non-Liability of the Bank. The relationship between the Borrower on one hand
and the Bank on the other hand shall be solely that of borrower and lender. The Bank
shall have no fiduciary responsibilities to the Borrower. The Bank undertakes no
responsibility to the Borrower to review or inform the Borrower of any matter in
connection with any phase of the Borrower’s business or operations.
	 
	 	7.8	 	Indemnification of the Bank. The Borrower agrees to indemnify, defend and hold
the Bank and JPMorgan Chase &Co., or any of its subsidiaries or affiliates or their
successors, and each of their respective shareholders, directors, officers, employees
and agents (collectively, the “Indemnified Persons”) harmless from any and all
obligations, claims, liabilities, losses, damages, penalties, fines, forfeitures,
actions, judgments, suits, costs, expenses and

76

 

	 	 	 	disbursements of any kind or nature (including, without limitation, any Indemnified
Person’s attorneys’ fees)(collectively, the “Claims”) which may be imposed upon,
incurred by or assessed against any Indemnified Person(whether or not caused by any
Indemnified Person’s sole, concurrent, or contributory negligence) arising out of or
relating to this agreement; the exercise of the rights and remedies granted under
this agreement (including, without limitation, the enforcement of this agreement and
the defense of any Indemnified Person’s action or inaction in connection with this
agreement); and in connection with the Borrower’s failure to perform all of the
Borrower’s obligations under this agreement, except to the limited extent that the
Claims against any such Indemnified Person are proximately caused by such
Indemnified Person’s gross negligence or willful misconduct. The indemnification
provided for in this section shall survive the termination of this agreement and
shall extend to and continue to benefit each individual or entity who is or has at
any time been an Indemnified Person. The Borrower’s indemnity obligations under this
section shall not in any way be affected by the presence or absence of covering
insurance, or by the amount of such insurance or by the failure or refusal of any
insurance carrier to perform any obligation on its part under any insurance policy
or policies affecting the Borrower’s assets or the Borrower’s business activities.
Should any Claim be made or brought against any Indemnified Person by reason of any
event as to which the Borrower’s indemnification obligations apply, then, upon any
Indemnified Person’s demand, the Borrower, at its sole cost and expense, shall
defend such Claim in the Borrower’s name, if necessary, by the attorneys for the
Borrower’s insurance carrier (if such Claim is covered by insurance), or otherwise
by such attorneys as any Indemnified Person shall approve. Any Indemnified Person
may also engage its own attorneys at its reasonable discretion to defend the
Indemnified Person and to assist in its defense and the Borrower agrees to pay the
fees and disbursements of such attorneys.
	 
	 	 	 	WITHOUT LIMITATION OF THE FOREGOING, IT IS THE INTENTION OF BORROWER AND BORROWER
AGREES THAT THE FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNIFIED PERSON WITH
RESPECT TO CLAIMS, OBLIGATIONS, DAMAGES, LOSSES, COSTS, EXPENSES (INCLUDING, WITHOUT
LIMITATION, ATTORNEYS’ FEES), DEMANDS, LIABILITIES, PENALTIES, FINES AND FORFEITURES
WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH
(AND/OR ANY OTHER) INDEMNIFIED PERSON.
	 
	 	7.9	 	Counterparts. This agreement may be executed in multiple counterparts, each of
which, when so executed, shall be deemed an original, but all such counterparts, taken
together, shall constitute one and the same agreement.
	 
	 	7.10	 	Advice of Counsel. The Borrower acknowledges that it has been advised by
counsel, or had the opportunity to be advised by counsel, in the negotiation, execution
and delivery of this agreement and any documents executed and delivered in connection
with the Credit Facilities.
	 
	 	7.11	 	Conflicting Terms. If this agreement is inconsistent with any provision in any
agreement related to the Credit Facilities, the Bank shall determine, in the Bank’s
sole and absolute discretion, which of the provisions shall control any such in
consistency.
	 
	 	7.12	 	Expenses. The Borrower agrees to pay or reimburse the Bank for all its
out-of-pocket costs and expenses and reasonable attorneys’ fees incurred in connection
with the preparation and execution of this agreement, any amendment, supplement, or
modification thereto, and any other documents prepared in connection herewith or
therewith.
	 
	 	7.13	 	Reinstatement. All parties liable on the Notes agree that to the extent any
payment is received by the Bank in connection with the Liabilities, and all or any part
of such payment is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid by the Bank or paid over to a trustee, receiver or
any other entity, whether under any bankruptcy act or otherwise (any such payment is
hereinafter referred to as a “Preferential Payment”), then the Notes shall continue to
be effective or shall be reinstated, as the case may be, and whether or not the Bank is
in possession of the Notes, and, to the extent of such payment or repayment by the
Bank, the Liabilities or part thereof intended to be satisfied by such Preferential
Payment shall be revived and continued in full force and effect as if said Preferential
Payment had not been made.

77

 

	 	7.14	 	Severability. If any provision of this agreement cannot be enforced, the
remaining portions of this agreement shall continue in effect.
	 
	 	7.15	 	Assignments. The Borrower agrees that the Bank may provide any information or
knowledge the Bank may have about the Borrower or about any matter relating to the
Notes or the Related Documents to JPMorgan Chase & Co., or any of its subsidiaries or
affiliates or their successors, or to any one or more purchasers or potential
purchasers of the Notes or the Related Documents. The Borrower agrees that the Bank may
at any time sell, assign or transfer one or more interests or participations in all or
any part of its rights and obligations in the Notes to one or more purchasers whether
or not related to the Bank.
	 
	 	7.16	 	Waivers. Any party liable on the Notes waives (a) any right to receive notice
of the following matters before the Bank enforces any of its rights: (i) any demand,
diligence, presentment, dishonor and protest, or (ii) any action that the Bank takes
regarding anyone else, any collateral, or any of the Liabilities, that it might be
entitled to by law or under any other agreement; (b) any right to require the Bank to
proceed against any other obligor or guarantor of the Liabilities, or any collateral,
or pursue any remedy in the Bank’s power to pursue; (c) any defense based on any claim
that any endorser or other parties’ obligations exceed or are more burdensome than
those of the Borrower; (d) the benefit of any statute of limitations affecting
liability of any endorser or other party liable hereunder or the enforcement hereof;
(e) any defense arising by reason of any disability or other defense of the Borrower or
by reason of the cessation from any cause whatsoever (other than payment in full) of
the obligation of the Borrower for the Liabilities; and (f) any defense based on or
arising out of any defense that the Borrower may have to the payment or performance of
the Liabilities or any portion thereof. Any party liable on the Notes consents to any
extension or postponement of time of its payment without limit as to the number or
period, to any substitution, exchange or release of all or any part of any collateral,
to the addition of any other party, and to the release or discharge of, or suspension
of any rights and remedies against, any person who may be liable for the payment of the
Notes. The Bank may waive or delay enforcing any of its rights without losing them. Any
waiver affects only the specific terms and time period stated in the waiver. No
modification or waiver of any provision of the Notes is effective unless it is in
writing and signed by the party against whom it is being enforced.

	8.	 	USA PATRIOT ACT NOTIFICATION. The following notification is provided to Borrower pursuant to
Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318:
	 
	 	 	IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the government
fight the funding of terrorism and money laundering activities, Federal law requires all
financial institutions to obtain, verify, and record information that identifies each person
or entity that opens an account, including any deposit account, treasury management account,
loan, other extension of credit, or other financial services product. What this means for
Borrower: When Borrower opens an account, if Borrower is an individual Bank will ask for
Borrower’s name, taxpayer identification number, residential address, date of birth, and
other information that will allow Bank to identify Borrower, and if Borrower is not an
individual Bank will ask for Borrower’s name, taxpayer identification number, business
address, and other information that will allow Bank to identify Borrower. Bank may also ask,
if Borrower is an individual to see Borrower’s driver’s license or other identifying
documents, and if Borrower is not an individual to see Borrower’s legal organizational
documents or other identifying documents.
	 
	9.	 	WAIVER OF SPECIAL DAMAGES. THE BORROWER WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY
LAW, ANY RIGHT THE UNDERSIGNED MAY HAVE TO CLAIM OR RECOVER FROM THE BANK IN ANY LEGAL
ACTION OR PROCEEDING ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.
	 
	10.	 	JURY WAIVER. THE BORROWER AND THE BANK HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND
UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE
(WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) BETWEEN THE BORROWER AND THE BANKARISING
OUT OF OR IN ANY WAY RELATED TO THIS DOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT TO
THE BANK TO PROVIDE THE FINANCING DESCRIBED HEREIN.

78

 

	 	 	 	 	 	 	 	 	 	 	 
	Address(es) for Notices:	 	 	 	Borrower:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	7900 Callaghan Road	 	 	 	U.S. Global Investors, Inc.	 	 
	San Antonio, TX 78229	 	 	 	 	 	 	 	 
	Attn:

	 	Catherine Rademacher, CFO
	 	 	 	By:
	 	/s/ Frank E. Holmes	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Frank E. Holmes, CEO	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Printed Name   Title	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Date Signed: 6/17/05	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Address for Notices:	 	 	 	Bank:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1020 NE Loop 410,	 	 	 	JPMorgan Chase Bank, N.A.	 	 
	San Antonio, TX 78209	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Attn:

	 	 	 	 	 	By:
	 	/s/ John L. Dochendorf II.	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	John L. Dochendorf II, Vice President	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Printed Name     Title	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Date Signed: 6/17/05	 	 

79exv10w17

 

Exhibit 10.17 — Amendment to Custodian Agreement

AMENDMENT TO CUSTODIAN AGREEMENT

This Amendment to the Custodian Agreement is dated as of April 23, 2006 by and between U.S.
Global Investors Funds, a Massachusetts business trust, on behalf of each of the portfolios listed
on Appendix C to the Custodian Agreement (the “Fund”) and attached hereto and Brown Brothers
Harriman & Co., a limited partnership organized under the laws of the State of New York (“BBH”)
(the Fund and BBH collectively known as the “Parties”).

Whereas pursuant to a Custodian Agreement dated as of November 1, 1997, by and between the Fund and
BBH, as amended to date (the “Agreement”) the latter has been appointed (i) custodian, (ii)
administrator, and (iii) fund accounting agent;

Whereas the Parties have agreed to make certain modifications to the Agreement in order to update
and amend the administrative services to be provided by BBH;

Now therefore, for good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties hereby agree to amend the Agreement as follows:

I. Amendment to the Agreement

1. The Agreement is hereby amended by deleting the second paragraph of Section 8.5 in
its entirety and substituting therefor with the following:

          “In computing the net asset value, the Custodian may rely upon any information
furnished by Proper Instructions, including without limitation any information (1) as to
accrual of liabilities of the Fund and as to liabilities of the Fund not appearing on the
books of account kept by the Custodian, (2) as to the existence, status and proper treatment
of reserves, if any, authorized by the Fund, (3) as to the sources of quotations which BBH
was authorized to rely upon in computing the net asset value, including those listed in
Appendix B, (4) as to the fair value to be assigned to any securities or other property for
which price quotations are not readily available, and (5) as to the sources of information
with respect to “corporate actions” affecting portfolio securities of the Fund, which
sources BBH in its reasonable judgment shall have deemed appropriate for such information.
(Information as to “corporate actions” shall include information as to dividends,
distributions, stock splits, stock dividends, rights offerings, conversions, exchanges,
recapitalizations, mergers, redemptions, calls, maturity dates and similar transactions,
including the ex- and record dates and the amounts or other terms thereof.) The Fund may
instruct the Custodian to utilize a particular source for the valuation of a specific
Security or other Property and the Custodian shall be protected in utilizing the valuation
provided by such source without further inquiry (save for its usual and customary automated
review of price disparities) in order to effect calculation of the Fund’s net asset value.
Notwithstanding anything in this Agreement to the contrary, provided the Custodian shall
perform its duties under Sections 8.6(3) and 8.6(6) with reasonable care and diligence, the
Custodian shall not be responsible for the failure of the Fund or the Investment Adviser to
provide the Custodian with Proper Instructions regarding liabilities which ought to be
included in the calculation of the Fund’s net asset value.”

2. The Agreement is hereby amended by deleting Section 8.6 in its entirety and substituting
therefore with the following:

“8.6 Appointment as Administrator.

The Custodian is hereby appointed administrator of the Funds with responsibility for
performing the services set forth in this Section 8.6, subject to the supervision and
direction of the Trustees of the Funds, and subject to any changes or modifications to such
services that the Funds and Custodian shall from time to time agree in writing. In
performing its duties and obligations hereunder, the Custodian shall act in accordance with
the Funds’ Declaration of Trust, By-laws (or comparable documents) and Prospectus and
Statement of Additional Information and with the Proper Instructions of its Trustees,
Treasurer and any other person reasonably believed by the Custodian to be authorized to act
on behalf of the Funds. It is agreed and understood, however, that the Custodian shall not
be responsible for compliance of any Fund’s

80

 

investments with any applicable documents, laws
or regulations, or for losses, costs or expenses arising out
of such Fund’s failure to comply with said documents, laws, regulations, or for losses,
costs, or expenses arising out of the Fund’s failure or inability to correct any
non-compliance therewith and shall be protected in acting on any direction from the Funds’
Investment Advisor, Trustees, Treasurer and any other person reasonably believe by the
Custodian to be authorized to act on behalf of the Funds.

(1) Shareholder Reports. The Custodian shall accumulate information for and prepare
one annual and one semi-annual shareholder report for the Funds per fiscal year, such
preparation includes but is not limited to, the coordination of all printer and author
edits, the review of printer drafts and the coordination of the audit of the Funds by its
independent public auditor (e.g. manage open items lists, host weekly audit meeting, etc.)

(2) Regulatory Filings to the Securities and Exchange Commission. The Custodian
shall accumulate information for and prepare one annual report and one semi-annual report on
Form N-SAR, one first fiscal quarter report and one third fiscal quarter report on Form N-Q
and one annual Rule 24f-2 Notice for the Funds, as requested by the Funds’ Treasurer. Upon
acceptance of these reports by each of the Funds, the Custodian shall edgarize and file such
reports, including the edgarizing and filing of any applicable executed officer
certifications.

(3) Treasurer Support Services. The Custodian shall provide the following support
services to the Treasurer of the Funds:

a. Expenses. The Custodian shall prepare all expense invoices for
authorization by the Funds and shall process all such authorized expenses. The
Custodian shall review all contractual expenses of the Funds submitted by the
Investment Advisor prior to processing such expenses. The Custodian shall prepare
and periodically review the expense accruals for all fixed vendor expenses of the
Funds.

b. Budgets. The Custodian shall prepare and provide an analysis of each
Fund’s budget at the end of each fiscal quarter, which shall include a review of
each Fund’s fixed expenses accruals and recommendations, if any, for budget
adjustments.

c. Monthly Expense Reports. The Custodian shall prepare and review Monthly
Expense Reports, which shall consist of for each Fund, (i) a reconciliation of fund
accounting monthly expenses to fund administration monthly expenses, (ii) a basis
point summary sheet, (iii) a cash disbursements journal, (iv) an expense accrual
analysis worksheet and (v) an average net assets worksheet.

d. Quarterly Reporting. In the Funds’ preparation of its quarterly
reporting to its Board of Trustees, the Custodian shall prepare various quarterly
reports, which shall consist of (i) a cost versus market value analysis for the
applicable portfolios listed on Appendix C attached hereto, (ii) an expense ratio
report, (iii) an exit fee calculation report and (iv) a portfolio turnover
calculation report and shall provide the broker reports that are electronically
downloaded from the Custodian’s accounting system and have been requested by the
Funds.

(4) Compliance Support. The Custodian shall perform, in accordance with operating
procedures as the Custodian and the Funds shall from time to time agree in writing,
administrative compliance monitoring of the Funds with respect to the investment objectives,
restrictions and policies set forth in (i) the Fund’s current prospectus and statement of
additional information provided by the Funds, or otherwise available to the Custodian, (ii)
the 1940 Act and (iii) applicable IRS rules and regulations, using both manual compliance
testing and an automatic compliance system currently utilized by the Custodian through an
unaffiliated third party vendor. Any changes or modifications to the administrative
compliance monitoring provided by the Custodian shall be agreed upon by the Funds and the
Custodian in writing. In performing its compliance monitoring services, the Custodian shall
use post net asset value compliance monitoring.

a. The Custodian and the Funds agreed that each shall promptly notify the other of
any possible non-compliance by the Funds of their investment restrictions and
policies.

b. The Custodian agrees that it shall provide the Investment Advisor with a
compliance summary report for the Funds for each fiscal month end.

81

 

c. The Funds agree that they shall remain fully responsible for ensuring compliance
of the investments of the Funds with their investment restrictions and policies and
that assistance provided by the Custodian in monitoring investment restrictions and
policies shall not be deemed to be a delegation of responsibility to the Custodian.
In addition, the Funds agree that the Custodian shall not be liable for the
accuracy, completeness or use of any information or data other compliance systems
generate in connection with such administrative compliance monitoring on any given
date.

d. The Funds acknowledge that the compliance monitoring of the investments of the
Funds with respect to investment restrictions and policies is subject to parameters
that may vary over time and that may be beyond the control or knowledge of the
Custodian. Consequently, the results of the monitoring as notified by the Custodian
to the Funds are to be considered merely as an indication of possible non-compliance
with the investment restrictions and policies of the Funds rather than an
affirmative statement as to non-compliance with the investment restrictions and
policies. Moreover, the Custodian might not detect a breach and consequently may
not notify the Funds thereof if information or data in its possession are
inaccurate, incomplete or ambiguous.

(5) Performance Information. The Custodian shall prepare the Funds’ performance
analysis reports (including yield and total return information) calculated in accordance
with applicable U.S. securities laws and in reporting portfolio holdings information to
external databases as may reasonably be requested.

(6) Tax Reporting. The Custodian shall assist the Funds’ Treasurer in preparing and
reporting all required information under the Federal, state and applicable local tax laws,
which shall consist of preparing fiscal and excise tax distribution calculations, preparing
and filing federal, state and any local income tax returns, including tax return extension
requests, preparing shareholder year end reporting statements, providing the appropriate
amounts and characterization of distributions declared during the calendar year for Forms
1099 reporting, periodically reviewing and determining the distributions to be paid to
shareholders, consulting with the Funds’ Treasurer regarding potential passive foreign
investment companies, and consulting with the Funds’ Treasurer on various tax issues as they
arise and with the Funds’ outside auditors, as appropriate.

(7) Blue Sky Compliance. The Custodian shall select and monitor an independent
service supplier to provide for reasonable and necessary monitoring of compliance with the
securities regulations of the fifty states of the United States on such terms as the Funds
may direct, or in the absence of such direction, as the Custodian shall reasonably deem
appropriate, provided however, that such arrangement shall require that such service
supplier act with reasonable care in the discharge of its duties. The Custodian shall
deliver to the Funds, or cause to be delivered to the Funds, regular reports and notices
with respect to blue sky compliance and shall be responsible to use reasonable efforts to
enforce the terms of the agreement with the service supplier on the Funds’ behalf. The
Funds shall be responsible to provide copies of its prospectus and other relevant documents
and information relating to the Funds as may be reasonably required for the performance of
state securities law compliance.

(8) Other Assistance. The Custodian shall consult with and assist the Funds’
Treasurer, officers and Investment Advisor in such as other matters as the Funds and the
Custodian shall from time to time agree in writing.

3. The Amendment is hereby amended by deleting Section 12 in its entirety and substituting
therefore with the following:

“12. Compensation. The Fund shall pay the Custodian such fee for custody,
administrative and fund accounting services as set forth in that certain Fee Agreement
between the Fund and the Custodian dated as of June 2005, as may be amended from time to
time by the Custodian and the Fund. Such fee, together with all out-of-pocket expenses for
which the Custodian is to be reimbursed, shall be billed to the Fund and be paid by cash or
wire transfer to the Custodian.”

4. The Agreement is amended by replacing the existing Appendix B with the attached Appendix B,
which document shall list the sources of quotations approved by the Parties to be used in computing
the net asset value.

82

 

5. The Agreement is further amended by replacing the existing Appendix C with the attached Appendix
C, which document shall list the funds served under the Agreement.

II. Miscellaneous

1. As amended and appended hereby, all terms and provisions of the Agreement are hereby ratified
and affirmed as of the date hereof and are hereby extended to give effect to the terms hereof.

2. Terms not otherwise defined herein shall have the definitions set forth in the Agreement.

3. By signing below where indicated, the Fund hereby ratifies and affirms each of the
representations and warranties set forth in the Agreement and confirms that each representation and
warranty remains true and correct as of the date hereof.

4. This Amendment, the Agreement and the other agreements, documents and certificates referred to
herein or therein constitute the entire understanding of the parties with respect to the subject
matter hereof and thereof and supersede all prior or current understandings and agreements, whether
written or oral.

5. Upon receipt by BBH of a fully executed copy of this Amendment, this Amendment shall be deemed
to be executed as an instrument under seal and governed by such laws as provided in Section 14.6 of
the Agreement. This Amendment may be executed in original counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same Amendment.

	 	 	 	 	 	 	 	 	 	 	 
	U.S. GLOBAL INVESTORS FUNDS	 	BROWN BROTHERS HARRIMAN & CO.
	AS THE FUND	 	AS SERVICE PROVIDER
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Susan B. McGee
 

Name: Susan B. McGee
	 	 	 	By:
	 	/s/ James R. Kent
 

Name: James R. Kent
	 	 
	 

	 	Title: Executive Vice President
	 	 	 	 	 	Title: Managing Director	 	 

83

 

APPENDIX B

DATED AS OF MARCH 23, 2006

TO

CUSTODIAN AGREEMENT

WITH RESPECT TO

ADMINISTRATIVE AND FUND ACCOUNTING AGENCY SERVICES

THE FOLLOWING AUTHORIZED SOURCES ARE TO BE USED FOR PRICING:

AUTHORIZED SOURCES

BLOOMBERG

Fund Managers/Advisor

INTERACTIVE DATA CORPORATION

REPUTABLE BROKERS

REUTERS

SUBCUSTODIAN BANKS

TELEKURS

REPUTABLE FINANCIAL PUBLICATIONS

STOCK EXCHANGES

JJ KENNY

FRI CORPORATION

BRIDGE

ITG (effective September 8, 2005)

FOREIGN EXCHANGE QUOTATIONS

PRICES ARE RETRIEVED DAILY @ 12 PM EST

AUTHORIZED SOURCE:

REUTERS

	 	 	 	 	 	 	 	 	 
	APPROVED:

	 	/s/ Susan B. McGee
 

	
 
	
 
	 
	5/25/06
 

	 	 
	 	 	 	 	 	 	
DATE
	 	 

84

 

APPENDIX C

TO

ADMINISTRATIVE AND FUND ACCOUNTING AGENCY AGREEMENT

DATED AS OF MARCH 23, 2006

The following is a list of Investment Companies for which BBH shall perform services
under a Custodian Agreement dated as of November 1, 1997, as amended.

U.S. Global Investors Funds, a Massachusetts Business Trust on behalf of each of the
following series:

U.S. Treasury Securities Cash Fund

U.S. Government Securities Savings Fund

Near-Term Tax Free Fund

Tax Free Fund

All American Equity Fund

China Region Opportunity Fund

Global Resources Fund

World Previous Minerals Fund

Gold Shares Fund

85

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