TRANSFER AGENCY AGREEMENT

THIS AGREEMENT is made as of the 21st day of February 2001 by and between U.S. Global Investors Funds, an unincorporated business trust organized under the laws of the Commonwealth of Massachusetts, having its principal office and place of business at 7900 Callaghan Road, San Antonio, Texas 78229 (hereinafter referred to as the "Trust"), and United Shareholder Services, Inc., a Texas corporation authorized to do business at 7900 Callaghan Road, San Antonio, Texas 78229 (hereinafter referred to as the "Transfer Agent").

WITNESSETH:

That for and in consideration of the mutual promises hereinafter set forth, the Trust on behalf of each Sub-Trust and the Transfer Agent agree as follows:

1. DEFINITIONS. Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings:

(a) "Authorized Person" includes the President, any Vice President, the Secretary, Treasurer, the persons listed in Appendix A hereto, or any other person, whether or not the person is an Officer or employee of the Trust, duly authorized to give Oral Instructions and Written Instructions on behalf of the Trust as indicated in a certification pursuant to Section 7(d) or 7(e) hereof as the Transfer Agent may receive from time to time;

(b) "Certificate" means any notice, instruction, or other instrument in writing, authorized or required by this Agreement to be given to the Transfer Agent, which the Transfer Agent actually receives and which any two Officers of the Trust have signed on its behalf;

(c) "Commission" has the meaning given it in the 1940 Act;

(d) "Custodian" refers to the custodian of all of the securities and other moneys the Trust owns;

(e) "Declaration of Trust" means the Master Trust Agreement and Declaration of Trust of United Services Funds dated July 31, 1984, as it is amended from time to time;

(f) "Officer" means the President, Vice President, Secretary, and Treasurer;

(g) "Oral Instructions" means instructions orally communicated to and actually received by the Transfer Agent from an Authorized Person or from a person the Transfer Agent reasonably believes to be an Authorized Person;

(h) "Prospectus" means the most current effective prospectus relating to the particular Sub-Trust's Shares under the Securities Act of 1933, as amended;

(i) "Shares" refers to the transferable units of interest into which the beneficial interest in the Trust or any Sub-Trust of the Trust (as the context may require) shall be divided from time to time;

(j) "Shareholder" means a record owner of Shares;

(k) "Sub-Trust" means each series of Shares established and designated under or in accordance with the provisions of Article IV of the Declaration of Trust, as listed in Appendix C, as the Trust may modify from time to time;

(l) "Trust" refers to the Massachusetts business trust established under the Declaration of Trust;

(m) "Trustees" or "Board of Trustees" refers to the duly elected Trustees of the Trust;

(n) "Written Instruction" means a written communication the Transfer Agent actually receives from an Authorized Person or from a person the Transfer Agent reasonably believes to be an Authorized Person by telex or any other system whereby the receiver of a communication is able to verify through codes or otherwise with a reasonable degree of certainty the authenticity of the sender of the communication; and

(o) The "1940 Act" refers to the Investment Company Act of 1940 and the regulations thereunder.

2. REPRESENTATION OF TRANSFER AGENT. The Transfer Agent does hereby represent and warrant to the Trust that it is duly registered as a transfer agent as provided in Section 17A(c) of the Securities Exchange Act of 1934, as amended. The Transfer Agent represents that it is duly organized and existing and in good standing under the laws of the state of Texas; that it is empowered under applicable laws and by its organizational documents and By-laws to enter into and perform this agreement; that all necessary filings with the states will have been made and will be current during the term of this agreement; and that no legal or administrative proceedings have been instituted or threatened that would impair the Transfer Agent's ability to perform its duties and obligations under this Agreement.

3. REPRESENTATIONS OF THE TRUST. The Trust represents to the Transfer Agent that, as of the date hereof, all outstanding Shares are validly issued, fully paid, and non-assessable by the Trust. The Trust may hereafter issue an unlimited number of Shares of each Sub-Trust presently existing or hereafter created. When Shares are hereafter issued in accordance with the terms of the Prospectus, the Shares shall be validly issued, fully paid, and non-assessable by the Trust. The Trust represents that it is validly existing under the laws of the Commonwealth of Massachusetts; that it is empowered under applicable laws and by its Declaration of Trust and By-laws to enter into and perform this agreement; that it is registered under the 1940 Act; that a registration statement on Form N-1A has been filed and will be effective during the term of this agreement; that all necessary filings with the states (including all registration or filing fees) will have been made and will be current during the term of this agreement; and that no legal or administrative proceedings have been instituted or threatened that would impair the Fund's ability to perform its duties and obligations under this Agreement.

4. APPOINTMENT OF THE TRANSFER AGENT. The Trust hereby appoints and constitutes the Transfer Agent as transfer agent for all of the Shares of each Sub-Trust of the Trust in existence as of the date hereof, and as shareholder-servicing agent for the Trust and the Transfer Agent accepts these appointments and agrees to perform the duties herein set forth. If the Board of Trustees, pursuant to Article IV of the Declaration of the Trust, hereafter designates and establishes one or more new Sub-Trusts, the Transfer Agent agrees that it will act as transfer agent and shareholder servicing agent for the new Sub-Trust(s) on the terms set forth herein. The Trust shall cause a written notice to be sent to the Transfer Agent to the effect that it has established a new Sub-Trust and that it appoints the Transfer Agent as transfer agent and shareholder servicing agent for the new Sub-Trust. Compensation of the Transfer

Agent shall be established pursuant to Section 5 hereof. The Trust shall provide any documents as are specified in Sections 6 and 7 hereof as the Transfer Agent may reasonably request.

5. COMPENSATION.

(a) Each Sub-Trust will compensate the Transfer Agent for its services rendered under this Agreement in accordance with the fees set forth in the Fee Schedule annexed hereto and incorporated herein for the existing Sub-Trusts, except as provided in paragraph 5(e) of this Agreement. The Fee Schedule shall specify out-of-pocket disbursements of the Transfer Agent for which the Transfer Agent shall be entitled to bill separately. No Sub-Trust shall be liable for any expenses, debts, or obligations arising under this Agreement of any other Sub-Trust.

(b) The parties will agree upon the compensation for acting as Transfer Agent for any Sub-Trust hereafter designated and established at the time that the Transfer Agent commences serving as transfer agent for that Sub-Trust, and this agreement shall be reflected in a Fee Schedule for that Sub-Trust, dated and signed by an authorized officer of each party, to be attached to this Agreement.

(c) Any compensation to be paid under this agreement may be adjusted by attaching to this Agreement a revised Fee Schedule, approved by the Board of Trustees of the Trust and dated and signed by an Officer of each party.

(d) The Transfer Agent will bill the Trust for each Sub-Trust as soon as practicable after the end of each calendar month, and the billings will be detailed in accordance with the Fee Schedule for each Sub-Trust. The Trust promptly will pay the amount of the bill to the Transfer Agent.

(e) From time to time the Transfer Agent may request that the Trust pay for part or all of the services or products provided through, or maintenance or improvements made to, the Trust's website. These costs include, but are not limited to, providing online account access and banking transactions, shareholder communications via e-mail, online NAV information, and responding to online requests from current investors for a prospectus or other fund information. The Trust shall pay for that portion of the costs which represents the portion of website visitors who are shareholders accessing the website to obtain or change account information, to engage n transactions related to their existing accounts, or to obtain or request information about the Trust. These costs shall be allocated pursuant to reasonable procedures or formulae mutually agreed upon from time to time, which procedures or formulae shall to the extent practicable reflect studies of relevant empirical data.

6. DOCUMENTS. In connection with the appointment of the Transfer Agent, the Trust shall, on or before the date this Agreement goes into effect, provide copies of the following documents to the Transfer Agent:

(a) A copy of the Declaration of Trust as then in effect;

(b) A copy of the By-laws of the Trust, as then in effect;

(c) A copy of the resolution of the Trustees authorizing this Agreement;

(d) If applicable, a specimen of the certificate for Shares of each Sub-Trust of the Trust in the form the Trustees approved, with a certificate of the Secretary of the Trust as to this approval;

(e) All account application forms and other documents relating to Shareholder accounts or relating to any plan, program or service the Trust offers;

(f) If applicable, a list of Shareholders of the existing Sub-Trusts with the name, address, and tax identification number of each Shareholder, and the number of Shares of the existing Sub-Trusts each Shareholder holds, certificate numbers and denominations (if any certificates have been issued), lists of any accounts against which stops have been placed, together with the reasons for the stops, and the number of Shares the Sub-Trusts redeemed; and

(g) A copy of the opinion of counsel for the Trust on the validity of the Shares and the status of the shares under the Securities Act of 1933.

7. FURTHER DOCUMENTATION. The Trust will also furnish to the Transfer Agent from time to time the following documents:

(a) Each resolution of the Trustees authorizing the original issue of Shares or establishing a new Sub-Trust;

(b) Each Registration Statement filed with the Commission, and all amendments and orders pertaining to the Registration Statement, in effect for the sale of Shares of the Trust;

(c) A copy of each amendment to the Declaration of Trust by the By-laws of the Trust;

(d) Copies of each vote of the Trustees designating Authorized Persons to give instructions to the Transfer Agent;

(e) Certificates as to any change in an Officer or Trustee of the Trust;

(f) Specimens of all new certificates for Shares, accompanied by the Trustees' resolutions approving these forms; and

(g) Any other certificates, documents, or opinions as the Transfer Agent and the Trust may mutually deem necessary or appropriate for the Transfer Agent in the proper performance of its duties.

8. DUTIES OF THE TRANSFER AGENT.

(a) The Transfer Agent shall be responsible for administering and/or performing transfer agent functions, for acting as service agent in connection with dividend and distribution functions, and for performing shareholder account administrative agent functions in connection with the issuance, transfer, and redemption or repurchase (including coordination with the Custodian) of the Trust's Shares. The details of the operating standards and procedures to be followed shall be determined from time to time as the Transfer Agent and the Trust agree.

(b) The Transfer Agent will provide the services listed in Appendix B subject to the control, direction, and supervision of the Board and its designated agents and in compliance with the purchase, sale, and exchange provisions of the Trust's prospectus and statement of additional information as in effect from time to time.

(c) The Transfer Agent shall record the issuance of shares pursuant to Rule 17Ad-10(e) of the 1934 Act and maintain a record of the total number of Shares of each Sub-Trust which are authorized, based upon data the Trust provides to it, and issued and outstanding. The Transfer Agent shall provide the Trust and its agent for preparing and making "blue sky" filings with the states on a regular basis with the total number of Shares of each Sub-Trust which are authorized and issued and outstanding and shall have no obligation, when recording the issuance of Shares, to monitor the issuance of such Shares or to take cognizance of any laws relating to the issue or sale of such Shares, which functions shall be the sole responsibility of the Trust.

(d) The Transfer Agent shall create and maintain all records required by applicable laws, rules, and regulations, including but not limited to records required by Section 31(a) of the 1940 Act and the rules thereunder, as they may be amended from time to time, pertaining to the various functions the Transfer Agent performs and which are not otherwise created and maintained by another party pursuant to contract with the Trust. All such records shall be the property of the Trust at all times and shall be available for its inspection and use. When applicable, the Transfer Agent shall maintain these records for the periods and in the places required by Rule 31a-2 under the 1940 Act. The retention of such records shall be at the expense of the Trust. The Transfer Agent shall make available during regular business hours all record and other data created and maintained pursuant to this Agreement for the reasonable audit and inspection by the Trust, any person the Trust retains, or any regulatory agency having authority over the Trust.

(e) In addition to the duties listed in Appendix B, the Transfer Agent shall perform other duties and functions and shall be paid for these services as the Transfer Agent and the Trust may from time to time agree in writing.

9. RIGHT TO SEEK ASSURANCES. The Transfer Agent reserves the right to refuse to transfer or redeem Shares until it is satisfied that the requested transfer or redemption is legally authorized, and it shall incur no liability for the refusal, in good faith, to make transfers or redemptions that the Transfer Agent, in its judgment, deems improper or unauthorized, or until it is satisfied that there is no basis for any claim adverse to the transfer or redemption. The Transfer Agent may, in effecting transfers, rely upon the provisions of the Uniform Act for the Simplification of Fiduciary Security Transfers or the Uniform Commercial Code, as these may be amended from time to time, which in the opinion of legal counsel for the Trust or of its own legal counsel, protect it in not requiring certain documents in connection with the transfer or redemption of Shares of any Sub-Trust. The Trust shall indemnify the Transfer Agent for any act it does or omits to do in reliance upon these laws or opinions of counsel of the Trust or its own counsel.

10. RELIANCE BY TRANSFER AGENT; INSTRUCTIONS.

(a) The Transfer Agent shall be protected in acting upon any paper or document it believes to be genuine and to have been signed by an Authorized Person and shall not be held to have any

notice of any change of authority of any person until receipt of written certification thereof from the Trust. It shall also be protected in processing Share certificates that it reasonably believes to bear the proper manual or facsimile signatures.

(b) At any time, the Transfer Agent may apply to any Authorized Person of the Trust for Written Instructions, and at the expense of the Trust, may seek advice from legal counsel for the Trust or its own legal counsel, for any matter arising in connection with this Agreement, and it shall not be liable for any action it takes or does not take or suffers in good faith in accordance with these Written Instructions or with the opinion of counsel. In addition, the Transfer Agent, its officers, agents, or employees shall accept instructions or requests from any person representing or acting on behalf of the Trust only if the Transfer Agent, its officers, agents, or employees knows the representative to be an Authorized Person. The Transfer Agent shall have no duty or obligation to inquire into, nor shall the Transfer Agent be responsible for, the legality of any act it does upon the request or direction of Authorized Persons of the Trust.

(c) Notwithstanding any of the foregoing provisions of this Agreement, the Transfer Agent shall be under no duty or obligation to inquire into, and shall not be liable for: (i) the legality of the issue or sale of any Shares of the Trust, or the sufficiency of the amount to be received therefore; (ii) the legality of the redemption of any Shares of the Trust, or the propriety of the amount to be paid therefore; (iii) the legality of the Trust's declaration of any dividend, or the legality of the issue of any Shares of the Trust in payment of any stock dividend; or (iv) the legality of any recapitalization or readjustment of the Shares of the Trust.

11. STANDARD OF CARE AND INDEMNIFICATION.

(a) The Transfer Agent may, in connection with this Agreement, employ agents or attorneys in fact, and shall not be liable for any loss arising out of or in connection with its actions or the actions of its agents or attorneys in fact under this Agreement so long as the Transfer Agent acts in good faith and with due diligence, and is not negligent or guilty of any willful misconduct.

(b) The Trust hereby agrees to indemnify and hold harmless the Transfer Agent from and against any and all claims, demands, expenses, and liabilities (whether with or without basis in fact of law) of any and every nature which the Transfer Agent may sustain or incur or which any person may assert against the Transfer Agent by reason of, or as a result of: (i) any action the Transfer Agent takes or omits to take in good faith in reliance upon any Certificate, instrument, order, or stock certificate it believed to be genuine and to be signed, countersigned, or executed by any duly authorized person, upon the Oral Instructions or Written Instructions of an Authorized Person of the Trust, or upon the opinion of legal counsel for the Trust or its own counsel; or (ii) any good action the transfer Agent takes or is permitted to take in connection with its appointment in good faith in reliance upon any law, act, regulation, or interpretation of the same even though the same may thereafter have been altered, changed, amended, or repealed. However, indemnification hereunder shall not apply to actions or omissions of the Transfer Agent or its directors, officers, employees, or agents in cases of its or their own negligence, willful misconduct, bad faith, or reckless disregard of its or their own duties hereunder.

12. AFFILIATION BETWEEN TRUST AND TRANSFER AGENT. It is understood that the Trustees, officers, employees, agents, and Shareholders of the Trust are or may be interested in the Transfer Agent as directors, officers, employees, agents, stockholders, or otherwise, and that the directors, officers, employees, agents, or stockholders of the Transfer Agent may be interested in the Trust as Trustees, officers, employees, agents, Shareholders, or otherwise. The fact that the officers, Trustees, employees, agents, or Shareholders of the Trust are or may be affiliated persons (as defined in the 1940 Act) of the Transfer Agent shall not affect the validity of this Agreement.

13. TERM.

(a) This Agreement shall become effective on the date hereof (the "Effective Date") and shall continue so long as the continuance is specifically approved at least annually by either a majority of the Trustees or the vote of a majority of the outstanding voting securities (as defined in the 1940 Act).

Any approval of this Agreement by the holders of a majority of the outstanding shares (as defined in the 1940 Act) of any Sub-Trust shall be effective to continue this Agreement for any Sub-Trust notwithstanding: (i) that this Agreement has not been approved by the holders of a majority of the outstanding shares of any other Sub-Trust affected thereby, and (ii) that this Agreement has not been approved by the vote of a majority of the outstanding shares of the Trust, unless this approval shall be required by any other applicable law or otherwise.

(b) This Agreement may be terminated at any time without payment of any penalty by vote of the Trustees of the Trust or by the Transfer Agent on sixty (60) day written notice to the other party. In the event the Trust gives notice, notice shall be accompanied by a resolution of the Board of Trustees, certified by the Secretary, electing to terminate this Agreement and designating a successor transfer agent.

14. AMENDMENT. This Agreement may not be amended or modified in any manner except by a written agreement executed by both parties with the formality of this Agreement and authorized or approved by a resolution of the Board of Trustees.

15. SUBCONTRACTING. The Trust agrees that the Transfer Agent may, in its discretion, subcontract for certain of the services to be provided hereunder.

16. SECURITY. The Transfer Agent represents and warrants that, to the best of its knowledge, the various procedures and systems which the Transfer Agent has implemented for safeguarding from loss or damage attributable to fire, theft, or any other cause (including provision for twenty-four hours a day restricted access) the Trust's blank checks, records, and other data and the Transfer Agent's records, data, equipment, facilities, and other property used in the performance of its obligations hereunder are adequate and that it will make changes therein from time to time as in its judgment are required for the secure performance of its obligations hereunder. The parties shall periodically review these systems and procedures.

17. MISCELLANEOUS.

(a) Any notice or other instrument in writing, authorized or required by this Agreement to be given to the Trust or the Transfer Agent, shall be sufficiently given if addressed to that party

and mailed or delivered to it at its office set forth below or at another place as it may from time to time designate in writing.

TO THE TRUST:                   TO THE TRANSFER AGENT:
U.S. Global Investors Funds     United Shareholder Services, Inc.
7900 Callaghan Road             7900 Callaghan Road
San Antonio, Texas 78229        San Antonio, Texas 78229
Attention: President            Attention: President

(b) This Agreement shall extend to and shall be binding upon the parties hereto and their respective successors and assigns, provided, however, that neither the Trust nor the Transfer Agent shall assign this Agreement without the written consent of the other.

(c) This Agreement shall be construed in accordance with the laws of the State of Texas.

(d) This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original; but the counterparts shall, together, constitute only one instrument.

(e) If any term or condition of this Agreement shall be invalid or unenforceable to any extent or in any application, then the remainder of this Agreement (including the term or condition to the extent possible) shall not be affected thereby, and each and every term and condition of this Agreement shall be valid and enforceable to the fullest extent and in the broadest application permitted by law.

(f) Neither party may assign this Agreement without the written consent of the other party.

(g) The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver nor shall it deprive the party of the right thereafter to insist upon strict adherence to that term or any term of this Agreement. Any waiver must be in writing signed by the waiving party.

(h) The Transfer Agent shall not be responsible or liable for any harm, loss, or damage the Trust, its investors, or other third parties suffer or for any failure or delay in the performance of its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its control. In the event of such circumstances, the Transfer Agent shall use reasonable efforts under the circumstances to mitigate any adverse effects that such circumstances may have upon the Trust, its investors, or any third parties in connection with this Agreement. In the event of a force majeure, any resulting harm, loss, damage, failure, or delay by the Transfer Agent will not give the Trust the right to terminate this Agreement.

18. LIMITATION OF LIABILITY OF TRUSTEES. It is expressly agreed that obligations of the Trust hereunder shall not be binding upon any Trustee, Shareholder, nominees, officers, agents, or employees of the Trust, personally, but bind only the assets and property of the Trust, as provided in the Master Trust Agreement. The execution and delivery of this Agreement have been authorized by the Trustees and signed by an authorized officer of the Trust, acting as such, and neither this authorization nor this execution and delivery shall be deemed to have been made by any of them individually or to impose any liability on any of them personally, but shall bind only the assets and property of the Trust as provided in the Master Trust Agreement.

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

U.S. GLOBAL INVESTORS FUNDS

Attest:

By: /s/ Stacy G. Henk             By: /s/ Frank E. Holmes
                                      -----------------------
                                      Frank E. Holmes
                                      President

S E A L

UNITED SHAREHOLDER SERVICES, INC.

Attest:

By: /s/ Stacy G. Henk             By: /s/ Susan B. McGee
                                      -----------------------
                                      Susan B. McGee
                                      President

S E A L

FEE SCHEDULE

As compensation for all services the Transfer Agent renders and will render hereunder, each Sub-Trust shall pay to the Transfer Agent an annual fee per investor account for all Sub-Trusts, including equity, bond, and "money market" funds, an annual fee of $23 per account. In connection with obtaining/providing administrative services to the beneficial owners of Trust shares through broker-dealers, banks, trust companies, and similar institutions that provide these services and maintain an omnibus account with the Transfer Agent, each Sub-Trust shall pay to the Transfer Agent a monthly fee equal to one-twelfth (1/12) of 12.5 basis points (.00125%) of the value of the shares of the Sub-Trust held in accounts, at the institutions, which payment shall not exceed $1.92 times the average daily number of accounts holding Trust shares at the institution.

The Transfer Agent shall be entitled to bill the Trust separately for all out-of-pocket disbursements incurred at the direction of the Trust, including, without limitation:

(a) Costs of postage, envelopes, statements, confirmations, forms, labels, and any other materials required to be sent to shareholders;

(b) Costs of stationery and postage for communications with individual shareholders regarding the investment accounts;

(c) Costs of microfilm, and microfilm and electronic storage;

(d) Costs of storage of records to be maintained under applicable laws or regulations;

(e) Telephone and line charges, including "800 service" shareholders use to contact the Transfer Agent, telephone equipment and maintenance contracts;

(f) Processing forms and printing thereof;

(g) Other usual and customary miscellaneous items; and

(h) Electronic communications including firewall service for security 24 hours a day; router communications; bank transaction communications (modems), including modem telephone lines; server hardware (data warehousing, data security, data access); printers; PC hardware and software; and PC maintenance (support and training on computer hardware).

With regard to the costs of items such as telephone and electronic communications charges which are susceptible to use for multiple purposes, the Trust shall pay for that portion of the costs which represent usage of such communications systems for communications by the Transfer Agent with shareholders of the Trust for purposes of fulfilling its duties as set forth in
Section 8 of the Agreement. These costs shall be allocated pursuant to reasonable procedures or formulae mutually agreed upon from time to time, which procedures or formulae shall to the extent practicable reflect studies of relevant empirical data.

The Trust assesses Account Closing Fees, Small Account Charges, and Account Maintenance Fees to shareholders of certain Sub-Trusts in accordance with the Trust's prospectuses. These fees or

charges shall be paid directly to the Transfer Agent which will, in turn, apply these amounts first to its annual fee and then, in the event aggregate fees and charges exceed its annual fee, to out-of-pocket disbursements incurred at the direction of the Trust. The remainder, if any, shall be paid to the appropriate fund.

APPENDIX A

AUTHORIZED PERSONS

I, Frank E. Holmes, President, and I, Susan B. McGee, Secretary, of U.S. Global Investors Funds, a Massachusetts business trust (the "Trust"), do hereby certify that:

The Board of Trustees of the Trust has duly authorized the following individuals in conformity with the Trust's Declaration of Trust and By-Laws to give Oral Instructions and Written Instructions on behalf of the Trust, and the signatures set forth opposite their respective names are their true and correct signatures:

NAME               POSITION                      SIGNATURE


Frank E. Holmes    President                     /s/ Frak E. Holmes
                   Chief Executive Officer       -------------------
                   Chief Investment Officer


Susan B. McGee     Executive Vice President      /s/ Susan B. McGee
                   Secretary                     -------------------


Bobby D. Duncan    Treasurer                     /s/ Bobby D. Duncan
                                                 -------------------

APPENDIX B

DUTIES OF THE TRANSFER AGENT

The following is a general description of the transfer agency services the Transfer Agent shall provide to each Sub-Trust.

A. SHAREHOLDER RECORD KEEPING. Maintain shareholder and stock transfer records as required by the rules of the Securities and Exchange Commission, including records for each shareholder showing: (i) name, address, appropriate tax certification, and tax identifying number;
(ii) number of shares of each Fund, portfolio, or class; (iii) historical information including, but not limited to, dividends paid, date and price of all transactions including individual purchases and redemptions, based upon appropriate supporting documents; (iv) any capital gain or dividend reinvestment order, application, specific address, payment and processing instructions and correspondence relating to the current maintenance of the account; (v) any stop or restraining order placed against a Shareholder's account; (vi) certificate numbers, denominations, and the name of the holder of record for any Shareholders holding certificates; (vii) any information required in order for the Transfer Agent to perform the calculations this Agreement contemplates or requires; and (viii) any other information and data as applicable law may require.

B. SHARE ISSUANCE. Record the issuance of Shares of each Sub-Trust. Except as specifically agreed in writing between the Transfer Agent and the Trust, the Transfer Agent shall have no obligation when countersigning and issuing and/or crediting Shares to take cognizance of any other laws relating to the issue and sale of Shares except insofar as policies and procedures of the Stock Transfer Association recognize these laws.

C. PURCHASE, EXCHANGE, TRANSFER, AND REDEMPTION ORDERS. Process all orders for the purchase, exchange, transfer, and redemption of shares of the Trust in accordance with the Trust's current prospectus and customary transfer agency policies and procedures, including electronic transmissions which the Trust acknowledges it has authorized, or in accordance with any instructions of the Trust or its agents which the Transfer Agent reasonably believes to be authorized.

1. PURCHASES. Upon the sale of any Shares of a Sub-Trust, the Trust shall transmit, or cause to be transmitted, the following information to the Transfer Agent via a mutually acceptable means of communication, specifying: (i) the name of the Sub-Trust whose Shares were sold; (ii) the number of Shares sold, trade date, and price; (iii) the amount of money to be delivered to the Custodian for the sale of the Shares and specifically allocated to the Sub-Trust; and (iv) in the case of a new account, a new account application or sufficient information to establish an account.

(a) The Transfer Agent will, upon its receipt of a check or other payment it identifies as an investment in Shares of a Sub-Trust and drawn or endorsed to the Transfer Agent as agent for, or identified as being for the account of, a Sub-Trust, promptly deposit the check or other payment to the appropriate account and make such postings as are

necessary to reflect the investment. The Transfer Agent will notify the Trust, or its designee, and the Custodian of all purchases and related account adjustments.

(b) Under procedures as the Trust and Transfer Agent establish, the Transfer Agent shall issue to the purchaser or his authorized agent the Shares he is entitled to receive, based on the appropriate net asset value of the Sub-Trust's Shares, determined in accordance with the Trust's pricing procedures, as approved by the Board of Trustees. In issuing Shares to a purchaser or his authorized agent, the Transfer Agent shall be entitled to rely upon the latest directions, if any, the Transfer Agent previously received from the purchaser or his authorized agent concerning the delivery of the Shares.

(c) The Transfer Agent shall not be required to issue any Shares of the Trust when it has received a Written Instruction from the Trust or written notification from any appropriate Federal or state authority that the sale of the Shares of the Sub-Trust in question has been suspended or discontinued, and the Transfer Agent shall be entitled to rely upon the Written Instruction or written notification.

(d) Upon the issuance of any Shares of any Sub-Trust in accordance with the foregoing provision of this Section, the Transfer Agent shall not be responsible for the payment of any original issue or other taxes the Trust is required to pay in connection with the issuance.

(e) The Transfer Agent may establish additional policies and practices governing the transfer or registration of Shares as it may deem advisable and consistent with those transfer agents generally adopt.

2. EXCHANGES, TRANSFERS, AND REDEMPTIONS. The Transfer Agent is authorized to review and process transfers of Shares of each Sub-Trust, exchanges between Sub-Trusts on the records of the Sub-Trusts the Transfer Agent maintains, exchanges between the Trust and other funds as the Trust's prospectus may permit, and redemptions of Shares of a Sub-Trust. If Shares to be transferred, exchanged, or redeemed are represented by outstanding certificates, the Transfer Agent will, upon surrender to it of the certificates in proper form for transfer, and upon cancellation thereof, in the case of exchanges and transfers, countersign and issue new certificates for a like number of Shares and deliver the same or, in the case of a redemption, cause redemption proceeds to be paid to the shareholder. If the Shares to be exchanged, transferred, or redeemed are not represented by outstanding certificates, the Transfer Agent will, upon receipt of an order therefore by or on behalf of the registered holder thereof in proper form, credit the same to the transferee on its books or process the redemption request. If Shares are to be exchanged for shares of another fund, the Transfer Agent will process the exchange in the same manner as a redemption of sale of Shares, except that it may in its discretion waive requirements for information and documentation.

D. SHAREHOLDER COMMUNICATIONS. The Transfer Agent will transmit all communications by the Trust to its shareholders promptly following the Trust's delivery to the Transfer Agent of the material to be transmitted by mail, telephone, courier service, or electronically.

E. PROXY MATERIALS. In connection with special meetings of Shareholders, the Transfer Agent will prepare Shareholder lists, assist with the mailing or transmission of proxy materials, process

and tabulate returned proxy cards, report on proxies voted prior to meetings, act as teller at meetings, and certify Shares voted at meetings.

F. RETURNED CHECKS. If any check or other order for the transfer of money is returned unpaid for any reason, the Transfer Agent will take any steps as it may, in its discretion, deem appropriate to protect the Trust from financial loss or as the Trust or its designee may instruct, and notify the Fund of the steps taken. If the Transfer Agent adheres to standard procedures, as the Trust and Transfer Agent agree upon from time to time, regarding purchases and redemptions of shares, the Transfer Agent shall not be liable for any loss the Sub-Trust suffers as a result of returned or unpaid purchase or redemption transactions. Except as mutually agreed upon from time to time, legal or other expenses incurred to collect amounts owed to a Sub-Trust as a consequence of returned or unpaid purchase or redemption transaction shall be an expense of that Sub-Trust. A Sub-Trust may, at its option, purchase insurance to reduce its potential losses from collection activities.

G. SHAREHOLDER AND BROKER-DEALER CORRESPONDENCE. The Transfer Agent will investigate all Shareholder inquiries relating to Shareholder accounts and will answer all correspondence from Shareholders, securities brokers, and others relating to its duties hereunder and other correspondence as may from time to time be mutually agreed upon between the Transfer Agent and the Trust.

H. TAX REPORTING. The Transfer Agent shall file appropriate information returns concerning the payment of dividends and capital gain distributions with the proper Federal, State and local authorities as the Trust is required by law to file and shall withhold any sums required to be withheld by applicable law.

I. DIVIDEND DISBURSING. The Transfer Agent will prepare and mail checks, place wire transfers, or credit income and capital gain payments to shareholders. The Trust will advise the Transfer Agent of the declaration of any dividend or distribution and the record and payable date thereof at least five (5) days prior to the record date. The Trust shall furnish to the Transfer Agent a resolution of the Board of Trustees of the Trust certified by the Secretary: (i) authorizing the declaration of dividends on a specified period basis and authorizing the Transfer Agent to rely on Oral Instructions or a Certificate specifying the date of the declaration of the dividend or distribution, the date of payment thereof, the record date as of which Shareholders entitled to payment shall be determined and the amount payable per share to Shareholders of record as of that date and the total amount payable to the Transfer Agent of the Trust on the payment date; or (ii) setting forth the date of the declaration of any dividend or distribution by a Sub-Trust, the date of payment thereof, the record date as of which Shareholders entitled to payment shall be determined, and the amount payable per share to the Shareholders of record as of that date and the total amount payable to the Transfer Agent on the payment date.

The Transfer Agent will, on or before the payment date of any dividend or distribution, notify the Trust's Custodian of the estimated amount required to pay any portion of the dividend or distribution payable in cash, and on or before the payment date of the distribution, the Trust will instruct its Custodian to make available to the Transfer Agent sufficient funds for the cash amount to be paid out. If the Transfer Agent does not receive from the Custodian sufficient cash to pay all shareholders of the Trust as of the record date, the Transfer Agent shall, upon notifying

the Trust, withhold payment to all Shareholders of record as of the record date until it receives sufficient cash for this purpose.

If a shareholder is entitled to receive additional shares by virtue of any distribution or dividend, appropriate credits will be made to each shareholder's account. The Transfer Agent will calculate, prepare, and mail checks to, or (where appropriate) credit the dividend or distribution to the account of, Sub-Trust Shareholders, and maintain and safeguard all underlying records. The Transfer Agent will replace lost checks at its discretion and in conformity with regular business practices. The Transfer Agent will maintain all records necessary to reflect the crediting of dividends that are reinvested in Shares of the Trust, including without limitation daily dividends. The Transfer Agent shall not be liable for any improper payments made in accordance with a resolution of the Board of Trustees of the Trust.

J. ESCHEATMENT. The Transfer Agent shall provide escheatment services abandoned accounts and returned checks under applicable law and report such actions to the Trust.

K. TELEPHONE SERVICES. The Transfer Agent will provide staff coverage, training, and supervision in connection with the Trust's telephone line for shareholder inquiries, and will respond to inquiries concerning shareholder records, transactions the Transfer Agent processes, procedures to effect the shareholder records, and inquiries of a general nature relative to shareholder services.

L. 12B-1. The Transfer Agent will calculate and process, or will cause to be processed, all 12b-1 payments in accordance with each Fund's current prospectus.

M. COMMISSION PAYMENTS. The Transfer Agent will calculate and process all commission payments in accordance with each Fund's current prospectus.

N. REQUESTS FOR INFORMATION. The Transfer Agent will provide all required information in a timely fashion in support of regulatory filings.

O. SAS 70. The Transfer Agent will make available to the Trust's adviser independent auditor reports in compliance with SAS 70.

P. REGULATORY CHANGES. The Transfer Agent will assist with the analysis and implementation of any changes required by regulatory bodies.

Q. The Transfer Agent will:

1. Provide office facilities for the provision of the services contemplated herein (which may be in the offices of the Transfer Agent or its corporate affiliate);

2. Provide or otherwise obtain personnel sufficient for provision of the services contemplated herein;

3. Furnish equipment and other materials necessary or desirable for provision of the services contemplated herein; and

4. Keep records relating to the services provided hereunder in the form and manner as the Transfer Agent may deem appropriate or advisable. To the extent required by Section 31 of the 1940 Act and the rules thereunder, the Transfer Agent agrees that all records it prepares or maintains relating to the services provided hereunder are the property of the Funds and will be preserved for the periods prescribed under Rule 31a-2 under the 1940 Act, maintained at the Funds' expense, and made available in accordance with Section 31 and the rules thereunder. The Transfer Agent will make available during regular business hours all records and other data created and maintained pursuant to this Agreement for reasonable audit and inspection by the Trust, or any person the Trust retains. Upon reasonable notice by the Trust, the Transfer Agent shall make available during regular business hours its facilities and premises employed in connection with its performance of this Agreement for reasonable visitation by the Trust or any person the Trust retains. The Transfer Agent may, at its option at any time, and shall forthwith upon the Trust's demand, turn over to the Trust and cease to retain in the Transfer Agent's files, records and documents it created and maintained in performance of its services or for its protection. At the end of the six-year retention period, these records and documents either will be turned over to the Trust, or destroyed in accordance with the Trust's authorization.

R. The Transfer Agent shall furnish the Trust any state notice filing reports, any periodic and special reports as the Trust may reasonably request, and other information, including Shareholder lists and statistical information concerning accounts, as the Trust and the Transfer Agent may agree upon.

APPENDIX C

SUB-TRUSTS OF THE TRUST

All American Equity Fund
China Region Opportunity Fund
Equity Income Fund
Global Resources Fund
Gold Shares Fund
Near-Term Tax Free Fund
Tax Free Fund
U.S. Government Securities Savings Fund U.S. Treasury Securities Cash Fund
World Gold Fund

LOAN AGREEMENT

between

U.S. GLOBAL INVESTORS, INC.

and

BANK ONE, NA

February 1, 2001

LOAN AGREEMENT

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

W I T N E S S E T H:

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

ARTICLE 1

DEFINITION OF TERMS

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

1.02. OTHER DEFINITIONAL PROVISIONS.

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

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

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

ARTICLE 2

CREDIT FACILITIES

2.01 CREDIT FACILITIES

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

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

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

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

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

2.02. INTEREST RATE.

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

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

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

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

2.05. PREPAYMENTS.

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

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

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

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

ARTICLE 3

SECURITY FOR THE NOTES

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

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

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

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

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

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE 5

CONDITIONS PRECEDENT

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE 6

AFFIRMATIVE COVENANTS

6.01. FINANCIAL STATEMENTS AND REPORTS

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

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

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

6.02. FINANCIAL COVENANTS.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE 7

NEGATIVE COVENANTS

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

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

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

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

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

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

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

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

ARTICLE 8

EVENTS OF DEFAULT

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

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

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

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

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

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

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

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

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

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

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

ARTICLE 9

MISCELLANEOUS

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

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

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

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

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

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

with a copy to:     President

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

"Borrower"

U.S. GLOBAL INVESTORS, INC.

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

"Bank"

BANK ONE, NA

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

LIST OF EXHIBITS

Exhibit A Compliance Certificate Exhibit B Borrowing Base Certificate

APPENDIX A

DEFINITION OF TERMS

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

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

3. "Applicable Laws": Section 4.16.

4. "Availability Fee": Section 6.16

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

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

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

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

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

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

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

11. "Event of Default": Section 8.01.

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

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

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

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

16. "Licenses": Section 4.12

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

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

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

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

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

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

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

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

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

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

27. "Prime Rate": Section 2.02.

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

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

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

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

32. "Security Agreement": Section 3.01

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

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

EXHIBIT "A"

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

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

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

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

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

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

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

Ratio of Debt to TNW                 <  .75 : 1.00
                                     -

Debt Service Coverage Ratio          >  1.5 : 1.00
                                     -

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

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

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

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

                                       U.S. Global Investors, Inc.


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

EXHIBIT "B"

BORROWING BASE COMPLIANCE (DRAW) CERTIFICATE

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

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

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

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

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

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

2. Available borrowing advance

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

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

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

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

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

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

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

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

Borrower:

U.S. Global Investors, Inc.

AMENDMENT TO THE CUSTODIAN AGREEMENT

THIS AMENDMENT, dated as of June 30, 2001, between U.S. GLOBAL INVESTORS FUNDS, a Massachusetts Business Trust with one or more series of shares (the "Trust"), and an open-end management investment company registered with the Securities and Exchange Commission ("SEC") under the Investment Company Act of 1940, as amended (the "1940 Act"), on behalf of each of the portfolios listed on Appendix A hereto as the same may be amended from time to time (each a "Fund" and collectively the "Funds"), and BROWN BROTHERS HARRIMAN & CO., a limited partnership formed under the laws of the State of New York (BBH&CO. or the CUSTODIAN), amends the Custodian Agreement by and between the parties dated as of November 1, 1997 (the "Custodian Agreement").

W I T N E S S E T H:

WHEREAS, the Fund has employed BBH&Co. to act as custodian for the Fund and to provide related services, all as provided in the Custodian Agreement;

WHEREAS, the SEC has promulgated Rules 17f-5 and 17f-7 under the 1940 Act which establish rules regarding the Fund's Investments held outside the United States at Subcustodians or through Securities Depositories; and

WHEREAS, BBH&CO is willing to provide services in connection with such Rules in accordance with the terms of this Amendment to the Custodian Agreement;

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the Trust and BBH&Co. hereby agree, as follows:

1. That Section 7 of the Custodian Agreement shall be amended and restated in its entirety as follows:

"7. SUBCUSTODIANS AND SECURITIES DEPOSITORIES. The Trust hereby authorizes the Custodian to utilize Securities Depositories to act on behalf of a Fund and to appoint from time to time and to utilize Subcustodians. With respect to securities and funds held by a Subcustodian, either directly or indirectly (including by a Securities Depository or clearing agency), notwithstanding any provisions of this Amendment to the Custodian Agreement to the contrary, payment for securities purchased and delivery of securities sold may be made prior to receipt of securities or payment, respectively, and securities or payment may be received in a form, in accordance with (a) governmental regulations, (b) rules of Securities Depositories and clearing agencies, (c) generally accepted trade practice in the applicable local market, (d) the terms and characteristics of the particular Investment, or (e) the terms of Proper Instructions.

7.1 DOMESTIC SUBCUSTODIANS AND SECURITIES DEPOSITORIES. The Custodian may deposit and/or maintain, either directly or through one or more agents appointed by the Custodian, Investments of a Fund in any Securities Depository in the United States, including The Depository Trust Company, provided such depository meets applicable requirements of the Federal Reserve Bank or of the SEC. The Custodian may, at any time and from time to time, appoint any bank as defined in
Section 2(a)(5) of the 1940 Act meeting the requirements of a custodian under Section 17(f) of the 1940 Act and the rules and regulations thereunder, to act on behalf of a Fund as a Subcustodian for purposes of holding Investments of a Fund in the United States.

7.2 FOREIGN SUBCUSTODIANS AND SECURITIES DEPOSITORIES. Unless instructed otherwise by the Trust, the Custodian may deposit and/or maintain Foreign Assets of the Fund in any non-U.S. Securities Depository provided that the Custodian has determined that such Securities Depository meets the requirements of an "eligible securities depository" under Rule 17f-7 promulgated under the 1940 Act, or any successor rule or regulation ("Rule 17f-7") or which

by order of the SEC is exempted therefrom. Prior to the time that securities are placed with such depository, the Custodian shall have prepared an analysis of the custody risks associated with maintaining assets with the Securities Depository and shall have established a system to monitor such risks on a continuing basis in accordance with subsection 7.2.3 of this Section. Additionally, the Custodian may, in accordance with the terms of the 17f-5 Delegation Schedule to this Agreement together with any amendments thereto at any time and from time to time, appoint (a) any bank, trust company or other entity meeting the requirements of an "eligible foreign custodian" under Rule 17f-5 or which by order of the SEC is exempted therefrom, or (b) any bank as defined in Section 2(a)(5) of the 1940 Act meeting the requirements of a custodian under Section 17(f) of the 1940 Act and the rules and regulations thereunder, to act on behalf of a Fund as a Subcustodian for purposes of holding Investments of the Fund outside the United States. Such appointment of foreign Subcustodians shall be subject to approval of the Fund in accordance with Subsections 7.2.1 and 7.2.2 hereof, and use of non-U.S. Securities Depositories shall be subject to the terms of Subsections 7.2.3 hereof. A Proper Instruction to open an account in a given country shall comprise authorization of the Custodian to hold assets in such country in accordance with the terms of this Agreement. The Custodian shall not be required to make independent inquiry as to the authorization of the Fund to invest in such country.

7.2.1. BOARD APPROVAL OF FOREIGN SUBCUSTODIANS. Unless and except to the extent that the Board has delegated to, and the Custodian has accepted delegation of, review of certain matters concerning the appointment of Subcustodians pursuant to Subsection 7.2.2, the Custodian shall, prior to the appointment of any Subcustodian for purposes of holding Foreign Assets of the Fund, obtain written confirmation of the approval of the Board of Trustees of the Trust with respect to (a) the identity of a Subcustodian, and (b) the subcustodian agreement which shall govern such appointment, such approval to be signed by an authorized person.

7.2.2. DELEGATION OF BOARD REVIEW OF SUBCUSTODIANS. The Custodian's duties and obligations with respect to the review of Subcustodians and subcustodian contracts will be performed in accordance with the terms of the attached 17f-5 Delegation Schedule to this Agreement.

7.2.3. MONITORING AND RISK ASSESSMENT OF NON-U.S. SECURITIES DEPOSITORIES. Prior to the placement of any assets of a Fund with a non-U.S. Securities Depository, the Custodian: (a) shall determine that the non-U.S. Securities Depository is an Eligible Securities Depository; (b) shall provide to the Fund or its Investment Adviser an assessment of the custody risks associated with maintaining assets within such Securities Depository in accordance with Rule 17f-7(a)(1)(i)(A); and (c) shall have established a system to monitor the custody risks associated with maintaining assets with such Securities Depository on a continuing basis and to promptly notify the Fund or its Investment Adviser of any material changes in such risk in accordance with rule 17f-7(a)(1)(i)(B) or the qualification of such Securities Depository as an Eligible Securities Depository. In performing its duties under this subsection, the Custodian shall exercise reasonable care, prudence and diligence and consistent with the exercise of reasonable care, prudence and diligence may reasonably rely on such reasonable sources of information as may be available including but not limited

to: (i) published ratings; (ii) information supplied by a Subcustodian that is a participant in such Securities Depository; (iii) industry surveys or publications; (iv) information supplied by the depository itself, by its auditors (internal or external) or by the relevant Foreign Financial Regulatory Authority. It is acknowledged that information procured through some or all of these sources may not be independently verifiable by the Custodian and that direct access to Securities Depositories is limited under most circumstances. Accordingly, the Custodian shall not be responsible for errors or omissions in its duties hereunder provided that it has performed its monitoring and assessment duties with reasonable care, prudence and diligence. The risk assessment shall be provided to the Fund or its Investment Adviser by such means as the parties shall agree. Advice of material change in such assessment may be provided by the Custodian in the manner established as customary between the Trust and the Custodian for transmission of material market information.

7.3 RESPONSIBILITY FOR SUBCUSTODIANS. The Fund shall be responsible for informing the Custodian sufficiently in advance of a proposed Investment which is to be held in a country in which no Subcustodian is authorized to act in order that the Custodian shall, if it deems appropriate to do so, have sufficient time to establish a subcustodial arrangement in accordance herewith. In the event, however, the Custodian is unable to establish such arrangements prior to the time such Investment is to be acquired, the Custodian shall so notify the Trust and, upon receipt of Proper Instructions, appoint any person designated by the Trust in such instruction to hold such security or other asset. In the absence of such Proper Instructions, the security or Foreign Asset may be left at its settlement location or moved to another agent for the purpose of safekeeping, provided that the Custodian shall be responsible to the Fund for the actions of such agent if and only to the extent the Custodian shall have recovered from such agent for any damages caused the Fund by such agent.

In the event the Custodian receives a claim from a Subcustodian under the indemnification provisions of any subcustodian agreement, the Custodian shall promptly give written notice to the Trust of such claim. No more than thirty
(30) calendar days after written notice to the Trust of the Custodian's intention to make such payment, the Fund will reimburse the Custodian the amount of such payment except in respect of any negligence or misconduct of the Custodian or any Subcustodian.

The Custodian may at any time or times in its discretion appoint (and may at any time remove) any other bank or trust company as its agent (an "Agent") to carry out such of the provisions of this Agreement as the Custodian may from time to time direct, provided, however,

that the appointment of such Agent shall not relieve the Custodian of any of its responsibilities under this Agreement. The Custodian shall be responsible for the actions of any Agent other than a Subcustodian as if it performed such action itself.

Except as provided in the last sentence of this Paragraph, the Custodian shall be liable to the Fund for any loss or damage to the Fund caused by or resulting from the acts or omissions of any Subcustodian to the extent that such acts or omissions would be deemed to be negligence, gross negligence or willful misconduct in accordance with the terms of the relevant subcustodian agreement under the laws, circumstances and practices prevailing in the place where the act or omission occurred. The liability of the Custodian in respect of the countries and Subcustodians listed on the Global Custody Network listing and such countries and Subcustodians which the Custodian may from time to time designate, shall be subject to the additional condition that the Custodian actually recovers such loss or damage from the Subcustodian."

2. In addition, that the definitions under Section 2 of the Custodian Agreement shall be amended with the additional modification of the following:

"FOREIGN FINANCIAL REGULATORY AUTHORITY shall have the meaning given by
Section 2(a)(50) of the 1940 Act.

GLOBAL CUSTODY NETWORK LISTING shall mean the Countries and Subcustodians approved for Investments in non-U.S. Markets.

SECURITIES DEPOSITORY shall mean a central or book entry system or agency established under Applicable Law for purposes of recording the ownership and/or entitlement to investment securities for a given market that, if a non-U.S. Securities Depository, meets the definition of Rule 17f-7 under the 1940 Act, and (ii) if a domestic Securities Depository, meets the definition of Rules 17f-4 and 17f-7 under the 1940 Act.

ELIGIBLE FOREIGN CUSTODIAN means an entity that is incorporated or organized under the laws of a country other than the United States and that is a Qualified Foreign Bank (as defined herein) or a majority-owned direct or indirect subsidiary of a U.S. Bank (as defined herein) or bank-holding company.

FOREIGN ASSETS means any Investments (including foreign currencies) for which the primary market is outside the United States, and any cash and cash equivalents that are reasonable necessary to effect the Fund's transactions in those Investments.

FOREIGN CUSTODY MANAGER means a Fund's board of trustees or any person serving as the board's delegate under paragraphs (b) or (d) of Rule 17f-5.

QUALIFIED FOREIGN BANK means a banking institution or trust company, incorporated or organized under the laws of a country other than the United States, that is regulated as such by the country's government or an agency of the country's government.

U.S. BANK means an entity that is:

(i) A banking institution organized under the laws of the United States;

(ii) A member bank of the Federal Reserve System;

(iii) Any other banking institution or trust company organized under the laws of any state or of the United States, whether incorporated or not, doing business under the laws of any state or of the United States, a substantial portion of the business of which consists of receiving deposits or exercising fiduciary powers similar to those permitted to national banks under the authority of the Comptroller of the Currency, and which is supervised and examined by state or federal authority having supervision over banks, and which is not operated for the purpose of evading the provisions of Rule 17f-5;

(iv) A receiver, conservator, or other liquidating agent of any institution or firm included in paragraphs (i), (ii), or (iii) above; or

(v) A banking institution in accordance with Section 17(f) of the 1940 Act."

3. All defined terms used herein shall have the meaning given in the Custodian Agreement as amended by this Amendment.

4. Other than as amended and appended hereby, all terms and provisions of the Custodian Agreement are hereby ratified and affirmed as of the date hereof and are hereby extended to give effect to the terms hereof.

5. By signing below, the Trust ratifies and affirms that all of its representations and warranties set forth in the Custodian Agreement each remain true and correct as of the date hereof.

6. Upon receipt by the Custodian 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 Custodian 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.

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be duly executed as of the date first above written.

U.S. GLOBAL INVESTORS FUNDS

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

BROWN BROTHERS HARRIMAN & CO.

By:    /s/ Susan C. Livingston
       ---------------------------------
Name:  Susan C. Livingston
Title: Partner

APPENDIX A

List of Funds

17F-5 DELEGATION SCHEDULE

By its execution of this Delegation Schedule as of June 30, 2001, U.S. GLOBAL INVESTORS FUNDS (the "Trust"), a Massachusetts Business Trust with one or more series of shares, and an open-end management investment company registered with the Securities and Exchange Commission ("SEC") under the Investment Company Act of 1940 as amended (the "1940 Act"), on behalf of each of the portfolios listed on Appendix A hereto as the same may be amended from time to time (each a "Fund" and collectively the "Funds"), acting through its Board of Trustees or its duly authorized representative, hereby appoints BROWN BROTHERS HARRIMAN & CO., a New York limited partnership with an office in Boston, Massachusetts (the "Delegate") as its delegate to perform certain functions with respect to the custody of the Funds' Assets.

WHEREAS, the Trust has appointed the Delegate as Custodian of the Trust's Property in a Custodian Agreement dated as of November 1, 1997 by and between the Delegate and the Trust (as amended, the "Custodian Agreement");

WHEREAS, the Board of Trustees of the Trust (the "Board") wishes to implement arrangements under Rule 17f-5 of the 1940 Act for the safekeeping of Foreign Assets;

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the Trust and the Delegate agree as follows. Capitalized terms which are not defined in Section 12 of this Delegation Schedule shall have the meanings ascribed to them in the Custodian Agreement.

1. MAINTENANCE OF FUNDS' ASSETS ABROAD. Delegate may place and maintain the Funds' Foreign Assets in the countries listed on the Global Custody Network Listing hereto only pursuant to Proper Instructions under the terms of the Custodian Agreement and in accordance with this Delegation Schedule. The Global Custody Network Listing may be amended upon the mutual written agreement of the parties. With respect to amendments to the Global Custody Network Listing, the Trust acknowledges that, depending on the conditions in the particular country, advance notice may be required before the Delegate is able to perform its duties

hereunder in or with respect to such country (such advance notice to be reasonable in light of the specific facts and circumstances attendant to performance of duties in such country).

2. APPOINTMENT. Pursuant to the provisions of Rule 17f-5, the Trust hereby appoints the Delegate as "Foreign Custody Manager" as defined under Rule 17f-5 and the Delegate hereby accepts such appointment and agrees to perform, only those duties set forth in this Delegation Schedule concerning the safekeeping of each Fund's Foreign Assets in each of the countries set forth in the Global Custody Network Listing, as amended from time to time, in accordance with
Section 1of this Delegation Schedule. The Delegate is hereby authorized to take such actions as are reasonably required to discharge its duties under this Delegation Schedule, including, without limitation, to cause a Fund's Foreign Assets to be placed with a particular Eligible Foreign Custodian in accordance herewith.

3. SELECTION OF ELIGIBLE FOREIGN CUSTODIAN AND CONTRACT ADMINISTRATION. The Delegate shall perform the following duties with respect to the selection of Eligible Foreign Custodians and administration of certain contracts governing the Trust's foreign custodial arrangements:

(a) SELECTION OF ELIGIBLE FOREIGN CUSTODIANS. Subject to the provisions of this Delegation Schedule and the requirements of Rule 17f-5, the Delegate shall place and maintain a Fund's Foreign Assets with an Eligible Foreign Custodian in accordance with the Global Custody Network Listing PROVIDED that the Delegate shall have determined that the Fund's Assets will be subject to reasonable care based on the standards applicable to custodians in the relevant market after considering all factors relevant to the safekeeping of such assets, including, without limitation:

(i) The Eligible Foreign Custodian's practices, procedures, and internal controls, including, but not limited to, the physical protections available for certificated securities (if applicable), the controls and procedures for dealing with any Securities Depository, the method of keeping custodial records, and the security and data protection practices;

(ii) Whether the Eligible Foreign Custodian has the requisite financial strength to provide reasonable care for the Fund's Foreign Assets including, but not limited to, the adequacy of the Eligible Foreign Custodian's capital with regard to protecting a Fund's assets against the risk of loss due to such Eligible Foreign

Custodian's insolvency;

(iii) The Eligible Foreign Custodian's general reputation and standing; and

(iv) Whether the Fund will have jurisdiction over and be able to enforce judgments against the Eligible Foreign Custodian, such as by virtue of the existence of any offices of such Eligible Foreign Custodian in the United States or such Eligible Foreign Custodian's consent to services of process in the United States, appointment of an agent for service of process in the United States or consent to jurisdiction in the United States.

The Delegate shall be required to make the foregoing determinations to the best of its knowledge and belief based only on information reasonably available to it in accordance with the standard of care set forth in Section 8 of this Delegation Schedule.

(b) CONTRACT ADMINISTRATION. For each Eligible Foreign Custodian selected by the Delegate pursuant to this Section 3, the Delegate shall enter into a written contract governing each Fund's foreign custody arrangements. The Delegate shall determine that each such written contract with an Eligible Foreign Custodian provides reasonable care for the Fund's Foreign Assets based on the standard of care specified in subsection (a) of this Section 3. Each written contract with an Eligible Foreign Custodian shall, except as set forth in the last paragraph of this subsection (b), include provisions that provide:

(i) For indemnification or insurance arrangements (or any combination of the foregoing) such that the Trust will be adequately protected against the risk of loss of a Fund's Foreign Assets held in accordance with such contract;

(ii) That each Fund's Foreign Assets will not be subject to any right, charge, security interest, lien or claim of any kind in favor of the Eligible Foreign Custodian or its creditors except, a claim of payment for their safe custody or administration or, in the case of cash deposits, liens or rights in favor of creditors of such Eligible Foreign Custodian arising under bankruptcy, insolvency or similar laws;

(iii) That beneficial ownership of each Fund's Foreign Assets will be freely transferable without the payment of money or value other than for safe custody or administration;

(iv) That adequate records will be maintained by the Eligible Foreign Custodian identifying each Fund's Foreign Assets as belonging to the Fund or as being held by a third party for the benefit of the Fund;

(v) That the Trust's independent public accountants will be given access to those records described in (iv) above or confirmation of the contents of those records; and

(vi) That the Trust will receive sufficient and timely periodic reports with respect to the safekeeping of each Fund's Foreign Assets, including, but not limited to, notification of any transfer to or from the Fund's account or a third party account containing assets held for the benefit of a Fund.

Such contract may contain, in lieu of any or all of the provisions specified in this Section 3(b), such other provisions that the Delegate determines will provide, in their entirety, the same or a greater level of care and protection for each Fund's Foreign Assets as the specified provisions, in their entirety.

(c) LIMITATION TO DELEGATED SELECTION. Notwithstanding anything in this Delegation Schedule to the contrary, the duties under this Section 3 shall apply only to Eligible Foreign Custodians selected by the Delegate and shall not apply to Securities Depositories or to any Eligible Foreign Custodian that the Delegate is directed to use pursuant to Section 7 of this Delegation Schedule. Nothing in this Delegation Schedule shall require the Delegate to consider Country Risk as part of its duties under this Section 3.

4. MONITORING. In addition to determining the appropriateness of placing a Fund's Foreign Assets in accordance with Section 3(a) of this Delegation Schedule and monitoring the continuing appropriateness of the contract governing a Fund's foreign custody arrangements in accordance with Section 3(b) of this Delegation Schedule, the Delegate shall establish and maintain a system to continuously monitor: (i) the appropriateness of maintaining Foreign Assets with each Eligible Foreign Custodian selected by the Delegate pursuant to Section 3 of this Delegation Schedule; (ii) each such Eligible Foreign Custodian's continuing compliance with the standards set forth in Rule 17f-5 and this Delegation Schedule; and (iii) material changes to the Trust's foreign custody arrangements, as defined in Section 6 below (the "Monitoring System").

5. REPORTING. The Delegate shall provide to the Board and the Trust's Investment Adviser written reports specifying placement of a Fund's Foreign Assets with each Eligible Foreign Custodian selected by the Delegate pursuant to Section 3 of this Delegation Schedule; and of any material changes in a Fund's foreign custody arrangements effected by the Delegate pursuant to Section 3, including, but not limited to: (i) any withdrawal of a Fund's Foreign Assets under Section 6 of this Delegation Schedule, (ii) any event that may adversely and materially affect an Eligible Foreign Custodian's financial or operational strength, (iii) a change in control of an Eligible Foreign Custodian, (iv) the failure of an Eligible Foreign Custodian to comply with the standards in Rule 17f-5 or its contract governing the Trust's foreign custody arrangements; and (v) a material change in any information provided to the Board regarding the Delegate's expertise in foreign custody issues and risks, the Delegate's use of third-party experts to perform its foreign custody responsibilities, the Board's ability to monitor the Delegate's performance, the Delegate's financial strength or its ability to indemnify the Trust; the Delegate's inability to perform its duties in accordance with any standard of care under this Delegation Schedule or any notice with respect to information regarding prevailing Country Risk provided to the Board and/or the Investment Adviser under Section 17 of this Delegation Schedule. Such reports shall be provided to the Board at its regularly scheduled meeting next following the event being reported, or more frequently as requested by the Board, provided that, if the Delegate determines that any matter should be reported sooner, it shall promptly, following the occurrence of the event, direct such report to the Fund's President for forwarding to the Board. The Delegate will prepare such reports with respect to any Eligible Foreign Custodian that the Delegate has been instructed to use pursuant to Section 7 of this Delegation Schedule only to the extent specifically agreed to with respect to the particular situation. Nothing in this Section shall limit the Delegate's duty to report the location of a Fund's Foreign Assets as part of its normal reporting under the Custodian Agreement whether or not they have been placed by the Delegate pursuant to Section 3 of this Delegation Schedule.

At least annually, the Delegate shall provide to the Trust a written statement as may be reasonably required to document its compliance with the terms of this Delegation Schedule as well as information regarding the following factors: (i) the Delegate's expertise in foreign custody issues and risks; (ii) the Delegate's use of third-party experts to perform its foreign custody responsibilities; (iii) the Board's ability to monitor the Delegate's performance; and (iv)

the Delegate's financial strength and its ability to indemnify the Trust if necessary.

6. WITHDRAWAL OF FUND'S ASSETS. If the Delegate determines that an arrangement with a specific Eligible Foreign Custodian selected by the Delegate under
Section 3 of this Delegation Schedule no longer meets the requirements of said Section, the Delegate shall promptly notify the Trust of such fact and shall withdraw the Foreign Assets from the non-complying arrangement and make arrangements for the custody of such Foreign Assets with a successor Eligible Foreign Custodian in accordance with the terms of this Delegation Schedule as soon as reasonably practicable; PROVIDED, however, that if in the reasonable judgment of the Delegate, such withdrawal would require liquidation of any of a Fund's Foreign Assets or would materially impair the liquidity, value or other investment characteristics of a Fund's Foreign Assets, it shall be the duty of the Delegate to provide information regarding the particular circumstances and to act only in accordance with Proper Instructions with respect to such liquidation or other withdrawal.

7. DIRECTION AS TO ELIGIBLE FOREIGN CUSTODIAN. Notwithstanding this Delegation Schedule, the Trust acting through its Board, its Investment Adviser, or its authorized representative, may direct the Delegate to place and maintain the Fund's Foreign Assets with a particular Eligible Foreign Custodian, including without limitation with respect to investment in countries as to which the Delegate will not provide delegation services. In such event, the Delegate shall be entitled to rely on any such instruction as a Proper Instruction under the terms of the Custodian Agreement and shall have no duties under this Delegation Schedule with respect to such arrangement save those included under Section 16 of this Delegation Schedule and that it may undertake specifically in writing with respect to each particular instance.

8. STANDARD OF CARE. In carrying out its duties under this Delegation Schedule, the Delegate agrees to exercise reasonable care, prudence and diligence such as a person having responsibility for safekeeping of a Fund's Foreign Assets would exercise. The Delegate agrees to promptly notify the Board and the Trust's Investment Adviser if, at any time, the Delegate believes it cannot perform its duties hereunder in accordance with the foregoing standard of care.

9. REPRESENTATIONS.The Delegate hereby represents and warrants that it is a U.S.

Bank and that this Delegation Schedule has been duly authorized, executed and delivered by the Delegate and is a legal, valid and binding agreement of the Delegate and that the Delegate has established and agrees to maintain during the term of this Delegation Schedule, the Monitoring System.

The Trust hereby represents and warrants that this Delegation Schedule has been duly authorized, executed and delivered by the Trust and is a legal, valid and binding agreement of the Trust.

10. EFFECTIVENESS; TERMINATION. This Delegation Schedule shall be effective as of the date on which this Delegation Schedule shall have been accepted by the Delegate, as indicated by the date set forth below the Delegate's signature. This Delegation Schedule may be terminated at any time, without penalty, by written notice from the terminating party to the non-terminating party. Such termination shall be effective on the 90th calendar day after the date of delivery or mailing of such notice (or such other period as may be agreed between the parties). The foregoing to the contrary notwithstanding, this Delegation Schedule shall be deemed to have been terminated concurrently with the termination of the Custodian Agreement.

11. NOTICES.Notices and other communications under this Delegation Schedule are to be made in accordance with the arrangements designated for such purpose under the Custodian Agreement unless otherwise indicated in a writing referencing this Delegation Schedule and executed by both parties.

12. DEFINITIONS. Capitalized terms in this Delegation Schedule have the following meanings:

a. COUNTRY RISKS - means the systemic risks arising from holding assets in a particular country, including, those arising from a country's financial infrastructure, prevailing custody and settlement practices, expropriation, nationalization or other governmental actions, and laws applicable to the safekeeping and recovery of assets held in custody in such country.

b. ELIGIBLE FOREIGN CUSTODIAN - shall have the meaning set forth in Rule 17f-5(a)(1) of the 1940 Act and shall also include a U.S. Bank.

c. FOREIGN ASSETS - shall have the meaning set forth in Rule 17f-5(a)(2) of the 1940 Act.

d. PROPER INSTRUCTIONS - shall have the meaning set forth in the Custodian Agreement.

e. SECURITIES DEPOSITORY - shall have the meaning set forth in Rule 17f-7(b)(1) of the 1940 Act.

f. U.S. BANK - shall have the meaning set forth in Rule 17f-5(a)(7) of the 1940 Act and Section 17(f) of the 1940 Act.

13. GOVERNING LAW AND JURISDICTION. This Delegation Schedule shall be construed in accordance with the federal laws of the United States and to the extent not governed thereby, the laws of the Commonwealth of Massachusetts. The parties hereby submit to the exclusive jurisdiction of the Federal courts sitting in the State of New York or the Commonwealth of Massachusetts or the state courts of New York or Massachusetts.

14. FEES. Delegate shall perform its functions under this Delegation Schedule for the compensation determined under the Custodian Agreement.

15. INTEGRATION. This Delegation Schedule sets forth all of the Delegate's duties with respect to the selection and monitoring of Eligible Foreign Custodians, the administration of contracts with Eligible Foreign Custodians, the withdrawal of assets from Eligible Foreign Custodians and the issuance of reports in connection with such duties. This Delegation Schedule constitutes the entire agreement between the Fund and Delegate with respect to the subject matter hereof. Accordingly, this Delegation Schedule supercedes the Foreign Custody Manager Delegation Agreement heretofore in effect. The terms of the Custodian Agreement shall apply generally as to matters not expressly covered in this Delegation Schedule, including dealings with the Eligible Foreign Custodians in the course of discharge of the Delegate's obligations under the

Custodian Agreement. In the event of a conflict between the terms of this Delegation Schedule and the Custodian Agreement, the terms of this Delegation Schedule shall control with respect to the services covered herein.

16. PROVISION OF INFORMATION. The Delegate agrees to provide annually to the Trust or a Fund's Investment Adviser, such information as is specified in Appendix 1 hereto, as may be amended from time to time by the parties. With respect to each Eligible Foreign Custodian employed by the Trust pursuant to
Section 7 herein, the Delegate agrees to provide the Trust or its Investment Adviser, any information it possesses regarding Country Risk or the risks associated with placing or maintaining Foreign Assets with the Eligible Foreign Custodian. The Delegate shall be responsible to use reasonable care in the gathering of such information but shall not be deemed to warranty the completeness or specific accuracy of such information. The Delegate agrees to promptly notify the Board or the Fund's Investment Adviser at any time that the Delegate becomes aware of a material change to the information provided hereunder or if the Delegate learns that any information previously provided is incomplete or inaccurate.

17. LIMITATION OF LIABILITY; SATISFACTION OF CLAIMS. The Delegate shall be responsible under this Delegation Schedule for any direct loss, claim, damage or liability incurred or suffered by the Trust or its officers, directors, employees or agents that results from the Delegate's failure to exercise any standard of care set forth in this Delegation Schedule, or the Delegate's willful misfeasance or bad faith in the performance of its duties under this Delegation Schedule. The Delegate shall indemnify and hold the Trust harmless from and against any and all direct claims, costs, expenses (including attorney's fees), losses, damages, charges, payments and liabilities of any sort or kind (excluding consequential, special or punitive damages) which may be asserted against the Trust, or for which the Trust may be held liable in connection with the Delegate's performance hereunder (a "Claim"), unless such Claim resulted from bad faith or gross negligence by the Trust in performance of its duties and obligations hereunder. Notwithstanding the foregoing, the Delegate shall not be liable for any loss, claim, damage or liability arising as a result of any acts of God, earthquakes, fires, flood, storms or other disturbances of nature, strikes, riots, nationalization, expropriation, currency restrictions or revaluations, investment or repatriation restrictions, imposition of taxes or changes in applicable laws, acts of war, civil war or terrorism, insurrection, the interruption, loss or malfunction of utilities, transportation or

computers and computer facilities, the unavailability of energy sources and other similar happenings or events that are not within Delegate's reasonable control. Nothing in this Section 17 shall be deemed to preclude the Trust or other party from pursuing any rights it may have in law and equity.

The Delegate agrees that claims made against each Fund respectively under this Delegation Schedule shall be satisfied only from assets of such Fund, and not from the assets of any separate Fund held hereunder; that any person executing this Delegation Schedule has executed it on behalf of the Trust and not individually, and that the obligations of the Trust arising out of this Delegation Schedule are not binding upon such person or the Trust's shareholders individually, but binding upon the Property and other assets of the Trust; that no shareholders, trustees directors or officers of the Trust may be held personally liable or responsible for any obligations of the Trust arising out of this Delegation Schedule.

18. MOST FAVORED CLIENT. If at any time the Delegate shall be a party to an agreement to serve as "Foreign Custody Manager" (as defined in Rule 17f-5(a)(2) of the 1940 Act) to an investment company, that provides for either: (a) a standard of care with respect to the selection of Eligible Foreign Custodians in any jurisdiction higher than that set forth in Section 3 of this Delegation Schedule or (b) a standard of care with respect to exercise of the Delegate's duties other than that set forth in Section 8 of this Delegation Schedule, the Delegate agrees to notify the Trust of this fact and to raise the applicable standard of care hereunder to the standard specified in such other agreement.

IN WITNESS WHEREOF, each of the parties hereto has caused this Delegation Schedule to be duly executed as of the date first above written.

U.S. GLOBAL INVESTORS FUNDS

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

BROWN BROTHERS HARRIMAN & CO.

By:    /s/ Susan C. Livingston
       ---------------------------------
Name:  Sisam C. Livingston
Title: Partner

FUNDS TRANSFER SERVICES SCHEDULE TO CUSTODIAN AGREEMENT

1. EXECUTION OF PAYMENT ORDERS. Brown Brothers Harriman & Co. (the Custodian) is hereby instructed by U. S. GLOBAL INVESTORS FUNDS (the Company) to execute each payment order, whether denominated in United States dollars or other applicable currencies, received by the Custodian in the Company's name as sender and authorized and confirmed by an authorized person as described in a Custodian Agreement dated as of November 1, 1997 by and between the Custodian and the Company, as amended or restated from time thereafter (the Agreement), provided that the Company has sufficient available funds on deposit in a Principal Account as defined in the Agreement and provided that the order (i) is received by the Custodian in the manner specified in this Funds Transfer Services Schedule or any amendment hereafter; (ii) complies with any written instructions and restrictions of the Company as set forth in this Funds Transfer Services Schedule or any amendment hereafter; (iii) is authorized by the Company or is verified by the Custodian in compliance with a security procedure set forth in Paragraph 2 below for verifying the authenticity of a funds transfer communication sent to the Custodian in the name of the Company or for the detection of errors set forth in any such communication; and (iv) contains sufficient data to enable the Custodian to process such transfer.

2. SECURITY PROCEDURE. The Company hereby elects to use the procedure selected below as its security procedure (the Security Procedure). The Security Procedure will be used by the Custodian to verify the authenticity of a payment order or a communication amending or canceling a payment order. The Custodian will act on instructions received provided the instruction is authenticated by the Security Procedure. The Company agrees and acknowledges in connection with (i) the size, type and frequency of payment orders normally issued or expected to be issued by the Company to the Custodian, (ii) all of the security procedures offered to the Company by the Custodian, and (iii) the usual security procedures used by customers and receiving banks similarly situated, that authentication through the Security Procedure shall be deemed commercially reasonable for the authentication of all payment orders submitted to the Custodian. The Company hereby elects (PLEASE CHOOSE ONE) the following Security Procedure as described below:

[X] BIDS AND BIDS WORLDVIEW PAYMENT PRODUCTS. BIDS and BIDS Worldview

Payment Products, are on-line payment order authorization facilities with built-in authentication procedures. The Custodian and the Company shall each be responsible for maintaining the confidentiality of passwords or other codes to be used by them in connection with BIDS. The Custodian will act on instructions received through BIDS without duty of further confirmation unless the Company notifies the Custodian that its password is not secure.

[ ] SWIFT. The Custodian and the Company shall comply with SWIFT's authentication procedures. The Custodian will act on instructions received via SWIFT provided the instruction is authenticated by the SWIFT system.

[ ] TESTED TELEX. The Custodian will accept payment orders sent by tested telex, provided the test key matches the algorithmic key the Custodian and Company have agreed to use.

[ ] COMPUTER TRANSMISSION. The Custodian is able to accept transmissions sent from the Company's computer facilities to the Custodian's computer facilities provided such

transmissions are encrypted and digitally certified or are otherwise authenticated in a reasonable manner based on available technology. Such procedures shall be established in an operating protocol between the Custodian and the Company.

[X] TELEFAX INSTRUCTIONS. A payment order transmitted to the Custodian by telefax transmission shall transmitted by the Company to a telephone number specified from time to time by the Custodian for such purposes. If it detects no discrepancies, the Custodian will then either:

1. If the telefax requests a repetitive payment order, the Custodian may call the Company at its last known telephone number, request to speak to the Company or Authorized Person, and confirm the authorization and the details of the payment order (a "Callback"); or

2. If the telefax requests a non-repetitive order, the Custodian will perform a Callback.

All faxes must be accompanied by a fax cover sheet which indicates the sender's name, company name, telephone number, fax number, number of pages, and number of transactions or instructions attached.

[ ] TELEPHONIC. A telephonic payment order shall be called into the Custodian at the telephone number designated from time to time by the Custodian for that purpose. The caller shall identify herself/himself as an Authorized Person. The Custodian shall obtain the payment order data from the caller. The Custodian shall then:

1. If a telephonic repetitive payment order, the Custodian may perform a Callback; or

2. If a telephonic non-repetitive payment order, the Custodian will perform a Callback.

(sl)[X] BRAIDS
(sbm)

In the event the Company chooses a procedure which is not a Security Procedure as described above, the Company agrees to be bound by any payment order (whether or not authorized) issued in its name and accepted by the Custodian in compliance with the procedure selected by the Company.

3. REJECTION OF PAYMENT ORDERS. The Custodian shall give the Company timely notice of the Custodian's rejection of a payment order. Such notice may be given in writing or orally by telephone, each of which is hereby deemed commercially reasonable. In the event the Custodian fails to execute a properly executable payment order and fails to give the Company notice of the Custodian's non-execution, the Custodian shall be liable only for the Company's actual damages and only to the extent that such damages are recoverable under UCC 4A (as defined in Paragraph 7 below). Notwithstanding anything in this Funds Transfer Services Schedule and the Agreement to the contrary, the Custodian shall in no event be liable for any consequential or special damages under this Funds Transfer Services Schedule, whether or not such damages relate to services covered by UCC 4A, even if the Custodian has been advised of the possibility of such damages. Whenever compensation in the form of interest is payable by the Custodian to the Company pursuant to this Funds Transfer Services Schedule, such compensation will consist of interest payable in accordance with UCC 4A.

4. CANCELLATION OF PAYMENT ORDERS. The Company may cancel a payment order but the Custodian shall have no liability for the Custodian's failure to act on a cancellation instruction unless the Custodian has received such cancellation instruction at a time and in a manner affording the Custodian reasonable opportunity to act prior to the Custodian's execution of the order. Any cancellation shall be sent and confirmed in the manner set forth in Paragraph 2 above.

5. RESPONSIBILITY FOR THE DETECTION OF ERRORS AND UNAUTHORIZED PAYMENT ORDERS. Except as may be provided, the Custodian is not responsible for detecting any Company error contained in any payment order sent by the Company to the Custodian. In the event that the Company's payment order to the Custodian either
(i) identifies the beneficiary by both a name and an identifying or bank account number and the name and number identify different persons or entities, or (ii) identifies any bank by both a name and an identifying number and the number identifies a person or entity different from the bank identified by name, execution of the payment order, payment to the beneficiary, cancellation of the payment order or actions taken by any bank in respect of such payment order may be made solely on the basis of the number. The Custodian shall not be liable for interest on the amount of any payment order that was not authorized or was erroneously executed unless the Company so notifies the Custodian within thirty
(30) business days following the Company's receipt of notice that such payment order had been processed. If a payment order in the name of the Company and accepted by the Custodian was not authorized by the Company, the liability of the parties will be governed by the applicable provisions of UCC 4A.

6. LAWS AND REGULATIONS. The rights and obligations of the Custodian and the Company with respect to any payment order executed pursuant to this Funds Transfer Services Schedule will be governed by any applicable laws, regulations, circulars and funds transfer system rules, the laws and regulations of the United States of America and of other relevant countries including exchange control regulations and limitations on dealings or other sanctions, and including without limitation those sanctions imposed under the law of the United States of America by the Office of Foreign Assets Control. Any taxes, fines, costs, charges or fees imposed by relevant authorities on such transactions shall be for the account of the Company.

7. MISCELLANEOUS. All accounts opened by the Company or its authorized agents at the Custodian subsequent to the date hereof shall be governed by this Funds Transfer Schedule. All terms used in this Funds Transfer Services Schedule shall have the meaning set forth in Article 4A of the Uniform Commercial Code as currently in effect in the State of New York (UCC 4A) unless otherwise set forth herein. The terms and conditions of this Funds Transfer Services Schedule are in addition to, and do not modify or otherwise affect, the terms and conditions of the Agreement and any other agreement or arrangement between the parties hereto.

8. INDEMNIFICATION. The Custodian does not recommend the sending of instructions by telefax or telephonic means as provided in Paragraph 2. BY ELECTING TO SEND INSTRUCTIONS BY TELEFAX OR TELEPHONIC MEANS, THE COMPANY AGREES TO INDEMNIFY THE CUSTODIAN AND ITS PARTNERS, OFFICERS AND EMPLOYEES FOR ALL LOSSES THEREFROM.

OPTIONAL: The Custodian will perform a Callback if instructions are sent by telefax or telephonic means as provided in Paragraph 2. THE COMPANY MAY, AT ITS OWN RISK AND BY HEREBY AGREEING TO INDEMNIFY THE CUSTODIAN AND ITS PARTNERS, OFFICERS AND EMPLOYEES FOR ALL

LOSSES THEREFROM, ELECT TO WAIVE A CALLBACK BY THE CUSTODIAN BY INITIALLING HERE:____

Accepted and agreed:

BROWN BROTHERS HARRIMAN & CO. U.S. GLOBAL INVESTORS FUNDS

By:    /s/ Susan Livingston            By:    /s/ Frank E. Holmes
       --------------------------             --------------------------
Name:  Susan Livingston                Name:  Frank E. Holmes
Title: Partner                         Title: Chief Executive Officer
Date:  July 19, 2001                   Date:  July 12, 2001

APPENDIX 1
INFORMATION REGARDING COUNTRY RISK

1. To aid the Trust or its delegate in its consideration of Country Risks, the Delegate shall furnish the Trust annually and upon the initial placement of Foreign Assets into a country, the following information:

a. Opinions of local counsel concerning whether applicable foreign law would restrict the: (i) access afforded the Trust's independent public accountants to books and records kept by an Eligible Foreign Custodian located in that country; (ii) the Trust's ability to recover its Foreign Assets in the event of bankruptcy of an Eligible Foreign Custodian that country; or (iii) the Trust's ability to recover Foreign Assets that are lost while under the control of an Eligible Foreign Custodian located in that country.

b. Written information concerning (i) the likelihood of expropriation, nationalization, freezes, or confiscation of the Trust's Foreign Assets and (ii) whether difficulties in converting the Trust's cash and cash equivalents to U.S. dollars are foreseeable.

c. A MARKET PRACTICE MANUAL with respect to the following topics: (i) securities regulatory environment; (ii) foreign ownership restrictions; (iii) foreign exchange; (iv) securities settlement and registration; and (v) taxation.

2. To aid the Trust in monitoring Country Risk, the Delegate shall furnish the Trust with the following information: GLOBAL UPDATES, including with respect to changes in the information contained in the above MARKET PRACTICE MANUAL.

COUNTRY            SUBCUSTODIAN                                  DEPOSITORIES
--------------     -----------------------------------------     ---------------
AUSTRALIA          NATIONAL AUSTRALIA BANK LTD.(NAB)             Austraclear
                      National Australia Bank Agt. 5/1/85        CHESS
                      Agreement Amendment 2/13/92                RBA
                      Omnibus Amendment 11/22/93

BELGIUM            BANK BRUSSELS LAMBERT (BBL)                   CIK
                      Banque Bruxelles Lambert Agt. 11/15/90     NBB
                      Omnibus Amendment 3/1/94

CANADA             ROYAL BANK OF CANADA (RBC)                    Bank of Canada
                      The Royal Bank of Canada Agreement         CDS
                        2/23/96

CHINA              STANDARD CHARTERED BANK (SCB), SHANGHAI       SSCCRC
                      Standard Chartered Bank Agreement
                        2/18/92
                      Omnibus Amendment 6/13/94
                      Appendix 4/8/96

CHINA              STANDARD CHARTERED BANK (SCB), SHENZHEN       SSCC
                      Standard Chartered Bank Agreement
                        2/18/92
                      Omnibus Amendment 6/13/94
                      Appendix 4/8/96

FRANCE             CREDIT AGRICOLE INDOSUEZ (CAI)                BdF
                      Banque Indosuez Agreement 7/19/90          SICOVAM
                      Omnibus Amendment 3/10/94

GERMANY            DRESDNER BANK AG                              CBF
                      Dresdner Bank Agreement 10/6/95

HONG KONG          HONGKONG AND SHANGHAI BANKING CORP.           CMU
                   LTD (HSBC)                                    HKSCC
                      Hongkong & Shanghai Banking Corp.
                        Agt. 4/19/91
                      Omnibus Supplement 12/29/93
                      Schedule 5/14/96


1/10/01                             PAGE 1 OF 3                             524

COUNTRY            SUBCUSTODIAN                                  DEPOSITORIES
--------------     -----------------------------------------     ---------------
IRELAND            ALLIED IRISH BANKS PLC (AIB)                  CREST
                      Allied Irish Banks Agreement 1/10/89       CBISSO
                      Omnibus Amendment 4/8/94

ITALY              BANCA COMMERCIALE ITALIANA (BCI)              Monte Titoli
                      Banca Commerciale Italiana Agreement          S.P.A.
                        5/8/89
                      Agreement Amendment 10/8/93
                      Omnibus Amendment 12/14/93

JAPAN              BANK OF TOKYO - MITSUBISHI, LTD. (BTM)        BoJ
                      Bank of Tokyo - Mitsubishi Agreement       JASDEC
                        6/17/96

KOREA              CITIBANK NA, SEOUL                            KSD
                      Citibank, N.A., New York Agt. 7/16/81
                      New York Agreement Amendment 8/31/90
                      New York Agreement Amendment 7/26/96
                      Citibank, Seoul Agreement Supplement
                        10/28/94

MEXICO             BANCO SANTANDER MEXICANO SA (BSM) FOR         Banxico
                   BANCO DE SANTANDER                            Indeval
                     Banco de Santander Agreement 12/14/88
                     Subsidiary Amendment 10/18/96

NETHERLANDS        FORTIS BANK                                   NECIGEF
                     MeesPierson NV Agreement 6/4/99

PHILIPPINES        CITIBANK NA, MANILA                           PCD
                      Citibank, N.A., New York Agt. 7/16/81      ROSS
                      New York Agreement Amendment 8/31/90
                      New York Agreement Amendment 7/26/96

SINGAPORE          HONGKONG & SHANGHAI BANKING CORP. LTD.        CDP
                   (HSBC), SINGAPORE
                      Hongkong & Shanghai Banking Corp.
                        Agt. 4/19/91
                      Omnibus Supplement 12/29/93
                      Schedule 5/14/96

SOUTH AFRICA       STANDARD BANK OF SOUTH AFRICA (SBSA)          CDL
                      Standard Bank of South Africa              STRATE
                        Agreement 3/11/94


1/10/01                             PAGE 2 OF 3                             524

COUNTRY            SUBCUSTODIAN                                  DEPOSITORIES
--------------     -----------------------------------------     ---------------
SPAIN              BANCO SANTANDER CENTRAL HISPANO SA (BSCH)     Banco de Espana
                      Banco de Santander Agreement 12/14/88      SCL

THAILAND           HONGKONG & SHANGHAI BANKING CORP. LTD.        TSDC
                   (HSBC), BANGKOK
                      Hongkong & Shanghai Banking Corp.
                        Agt. 4/19/91
                      Omnibus Supplement 12/29/93
                      Schedule 5/14/96

TRANSNATIONAL      BROWN BROTHERS HARRIMAN & CO. (BBH&CO.)       CBL
                                                                 Euroclear

UNITED KINGDOM     HSBC BANK PLC                                 CMO
                      Midland Bank Agreement 8/8/90              CREST
                      Omnibus Amendment 12-15-93

ZIMBABWE           STANBIC BANK ZIMBABWE LTD FOR STANDARD        None
                   BANK OF SOUTH AFRICA (SBSA)
                      Standard Bank of South Africa
                        Agreement 3/11/94
                      Subsidiary Amendment 10/3/96

NOTES:

1.) The depositories in Panama and Venezuela are presently elective. It is not the current intention of Brown Brothers Harriman & Co. to use such depositories unless their use becomes compulsory. Euroclear is compulsory for fixed income obligations and elective for equities. Currently, Brown Brothers Harriman & Co. uses Euroclear for settlement of equities where we are instructed to do so. We do not use Euroclear for the ongoing safekeeping of equities.

2.) If you are authorizing investment in Bolivia, Costa Rica, Cyprus, Estonia, Ghana, Lithuania, Panama or Nigeria, these arrangements are the subject of additional information in Schedule A to the FCM report.

3.) This appendix reflects changes to the listed markets, subcustodians and/or central depositories which have been reported within the FCM report(s) through the date referenced in the lower left hand corner of this appendix.

I HEREBY CERTIFY THAT THE BOARD OR ITS DELEGATE HAS APPROVED THE COUNTRIES AND CENTRAL DEPOSITORIES LISTED ON THIS APPENDIX

/s/ Susan B. McGee
----------------------------------------
SIGNATURE
NAME:  Susan B. McGee
TITLE: Executive Vice President
DATE:  September 24, 2001

1/10/01 PAGE 3 OF 3 524

APPENDIX B

U.S. GLOBAL INVESTORS FUNDS

The following authoried sources are to be used for pricing and foreign exchange quotations, corporate actions, dividends and rights offerings:

AUTHORIZED SOURCES

Bloomberg
Extel (London)
Fund Managers
Interactive Data Corporation
Reputable Brokers
Reuters
Subcustodian Banks
Telekurs
Valorinform (Geneva)
Reputable Financial Publications
Stock Exchanges
Financial Information Inc. Card
JJ Kenny
FRI Corporation
Merrill Lynch Pricing Service
Muller
Bridge

Approved: /s/ Susan B. McGee
          ------------------
Date:     February 21, 01

AMENDMENT TO THE CUSTODIAN AGREEMENT

THIS AMENDMENT, dated as of June 30, 2001, between U.S. GLOBAL ACCOLADE FUNDS, a Massachusetts Business Trust with one or more series of shares (the "Trust"), and an open-end management investment company registered with the Securities and Exchange Commission ("SEC") under the Investment Company Act of 1940, as amended (the "1940 Act"), on behalf of each of the portfolios listed on Appendix A hereto as the same may be amended from time to time (each a "Fund" and collectively the "Funds"), and BROWN BROTHERS HARRIMAN & CO., a limited partnership formed under the laws of the State of New York (BBH&CO. or the CUSTODIAN), amends the Custodian Agreement by and between the parties dated as of November 1, 1997 (the "Custodian Agreement").

W I T N E S S E T H:

WHEREAS, the Fund has employed BBH&Co. to act as custodian for the Fund and to provide related services, all as provided in the Custodian Agreement;

WHEREAS, the SEC has promulgated Rules 17f-5 and 17f-7 under the 1940 Act which establish rules regarding the Fund's Investments held outside the United States at Subcustodians or through Securities Depositories; and

WHEREAS, BBH&CO is willing to provide services in connection with such Rules in accordance with the terms of this Amendment to the Custodian Agreement;

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the Trust and BBH&Co. hereby agree, as follows:

1. That Section 7 of the Custodian Agreement shall be amended and restated in its entirety as follows:

"7. Subcustodians and Securities Depositories. The Trust hereby authorizes the Custodian to utilize Securities Depositories to act on behalf of a Fund and to appoint from time to time and to utilize Subcustodians. With respect to securities and funds held by a Subcustodian, either directly or indirectly (including by a Securities Depository or clearing agency), notwithstanding any provisions of this Amendment to the Custodian Agreement to the contrary, payment for securities purchased and delivery of securities sold may be made prior to receipt of securities or payment, respectively, and securities or payment may be received in a form, in accordance with (a) governmental regulations, (b) rules of Securities Depositories and clearing agencies, (c) generally accepted trade practice in the applicable local market, (d) the terms and characteristics of the particular Investment, or (e) the terms of Proper Instructions.

7.1 Domestic Subcustodians and Securities Depositories. The Custodian may deposit and/or maintain, either directly or through one or more agents appointed by the Custodian, Investments of a Fund in any Securities Depository in the United States, including The Depository Trust Company, provided such depository meets applicable requirements of the Federal Reserve Bank or of the SEC. The Custodian may, at any time and from time to time, appoint any bank as defined in
Section 2(a)(5) of the 1940 Act meeting the requirements of a custodian under Section 17(f) of the 1940 Act and the rules and regulations thereunder, to act on behalf of a Fund as a Subcustodian for purposes of holding Investments of a Fund in the United States.

7.2 Foreign Subcustodians and Securities Depositories. Unless instructed otherwise by the Trust, the Custodian may deposit and/or maintain Foreign Assets of the Fund in any non-U.S. Securities Depository provided that the Custodian has determined that such Securities Depository meets the requirements of an "eligible securities depository" under Rule 17f-7 promulgated under the 1940 Act, or any successor rule or regulation ("Rule 17f-7") or which

by order of the SEC is exempted therefrom. Prior to the time that securities are placed with such depository, the Custodian shall have prepared an analysis of the custody risks associated with maintaining assets with the Securities Depository and shall have established a system to monitor such risks on a continuing basis in accordance with subsection 7.2.3 of this Section. Additionally, the Custodian may, in accordance with the terms of the 17f-5 Delegation Schedule to this Agreement together with any amendments thereto at any time and from time to time, appoint (a) any bank, trust company or other entity meeting the requirements of an "eligible foreign custodian" under Rule 17f-5 or which by order of the SEC is exempted therefrom, or (b) any bank as defined in Section 2(a)(5) of the 1940 Act meeting the requirements of a custodian under Section 17(f) of the 1940 Act and the rules and regulations thereunder, to act on behalf of a Fund as a Subcustodian for purposes of holding Investments of the Fund outside the United States. Such appointment of foreign Subcustodians shall be subject to approval of the Fund in accordance with Subsections 7.2.1 and 7.2.2 hereof, and use of non-U.S. Securities Depositories shall be subject to the terms of Subsections 7.2.3 hereof. A Proper Instruction to open an account in a given country shall comprise authorization of the Custodian to hold assets in such country in accordance with the terms of this Agreement. The Custodian shall not be required to make independent inquiry as to the authorization of the Fund to invest in such country.

7.2.1. Board Approval of Foreign Subcustodians. Unless and except to the extent that the Board has delegated to, and the Custodian has accepted delegation of, review of certain matters concerning the appointment of Subcustodians pursuant to Subsection 7.2.2, the Custodian shall, prior to the appointment of any Subcustodian for purposes of holding Foreign Assets of the Fund, obtain written confirmation of the approval of the Board of Trustees of the Trust with respect to (a) the identity of a Subcustodian, and (b) the subcustodian agreement which shall govern such appointment, such approval to be signed by an authorized person.

7.2.2. Delegation of Board Review of Subcustodians. The Custodian's duties and obligations with respect to the review of Subcustodians and subcustodian contracts will be performed in accordance with the terms of the attached 17f-5 Delegation Schedule to this Agreement.

7.2.3. Monitoring and Risk Assessment of Non-U.S. Securities Depositories. Prior to the placement of any assets of a Fund with a non-U.S. Securities Depository, the Custodian: (a) shall determine that the non-U.S. Securities Depository is an Eligible Securities Depository; (b) shall provide to the Fund or its Investment Adviser an assessment of the custody risks associated with maintaining assets within such Securities Depository in accordance with Rule 17f-7(a)(1)(i)(A); and (c) shall have established a system to monitor the custody risks associated with maintaining assets with such Securities Depository on a continuing basis and to promptly notify the Fund or its Investment Adviser of any material changes in such risk in accordance with rule 17f-7(a)(1)(i)(B) or the qualification of such Securities Depository as an Eligible Securities Depository. In performing its duties under this subsection, the Custodian shall exercise reasonable care, prudence and diligence and consistent with the exercise of reasonable care, prudence and diligence may reasonably rely on such reasonable sources of information as may be available including but not limited

to: (i) published ratings; (ii) information supplied by a Subcustodian that is a participant in such Securities Depository; (iii) industry surveys or publications; (iv) information supplied by the depository itself, by its auditors (internal or external) or by the relevant Foreign Financial Regulatory Authority. It is acknowledged that information procured through some or all of these sources may not be independently verifiable by the Custodian and that direct access to Securities Depositories is limited under most circumstances. Accordingly, the Custodian shall not be responsible for errors or omissions in its duties hereunder provided that it has performed its monitoring and assessment duties with reasonable care, prudence and diligence. The risk assessment shall be provided to the Fund or its Investment Adviser by such means as the parties shall agree. Advice of material change in such assessment may be provided by the Custodian in the manner established as customary between the Trust and the Custodian for transmission of material market information.

7.3 Responsibility for Subcustodians. The Fund shall be responsible for informing the Custodian sufficiently in advance of a proposed Investment which is to be held in a country in which no Subcustodian is authorized to act in order that the Custodian shall, if it deems appropriate to do so, have sufficient time to establish a subcustodial arrangement in accordance herewith. In the event, however, the Custodian is unable to establish such arrangements prior to the time such Investment is to be acquired, the Custodian shall so notify the Trust and, upon receipt of Proper Instructions, appoint any person designated by the Trust in such instruction to hold such security or other asset. In the absence of such Proper Instructions, the security or Foreign Asset may be left at its settlement location or moved to another agent for the purpose of safekeeping, provided that the Custodian shall be responsible to the Fund for the actions of such agent if and only to the extent the Custodian shall have recovered from such agent for any damages caused the Fund by such agent.

In the event the Custodian receives a claim from a Subcustodian under the indemnification provisions of any subcustodian agreement, the Custodian shall promptly give written notice to the Trust of such claim. No more than thirty
(30) calendar days after written notice to the Trust of the Custodian's intention to make such payment, the Fund will reimburse the Custodian the amount of such payment except in respect of any negligence or misconduct of the Custodian or any Subcustodian.

The Custodian may at any time or times in its discretion appoint (and may at any time remove) any other bank or trust company as its agent (an "Agent") to carry out such of the provisions of this Agreement as the Custodian may from time to time direct, provided, however,

that the appointment of such Agent shall not relieve the Custodian of any of its responsibilities under this Agreement. The Custodian shall be responsible for the actions of any Agent other than a Subcustodian as if it performed such action itself.

Except as provided in the last sentence of this Paragraph, the Custodian shall be liable to the Fund for any loss or damage to the Fund caused by or resulting from the acts or omissions of any Subcustodian to the extent that such acts or omissions would be deemed to be negligence, gross negligence or willful misconduct in accordance with the terms of the relevant subcustodian agreement under the laws, circumstances and practices prevailing in the place where the act or omission occurred. The liability of the Custodian in respect of the countries and Subcustodians listed on the Global Custody Network listing and such countries and Subcustodians which the Custodian may from time to time designate, shall be subject to the additional condition that the Custodian actually recovers such loss or damage from the Subcustodian."

2. In addition, that the definitions under Section 2 of the Custodian Agreement shall be amended with the additional modification of the following:

"FOREIGN FINANCIAL REGULATORY AUTHORITY shall have the meaning given by
Section 2(a)(50) of the 1940 Act.

GLOBAL CUSTODY NETWORK LISTING shall mean the Countries and Subcustodians approved for Investments in non-U.S. Markets.

SECURITIES DEPOSITORY shall mean a central or book entry system or agency established under Applicable Law for purposes of recording the ownership and/or entitlement to investment securities for a given market that, if a non-U.S. Securities Depository, meets the definition of Rule 17f-7 under the 1940 Act, and (ii) if a domestic Securities Depository, meets the definition of Rules 17f-4 and 17f-7 under the 1940 Act.

ELIGIBLE FOREIGN CUSTODIAN means an entity that is incorporated or organized under the laws of a country other than the United States and that is a Qualified Foreign Bank (as defined herein) or a majority-owned direct or indirect subsidiary of a U.S. Bank (as defined herein) or bank-holding company.

FOREIGN ASSETS means any Investments (including foreign currencies) for which the primary market is outside the United States, and any cash and cash equivalents that are reasonable necessary to effect the Fund's transactions in those Investments.

FOREIGN CUSTODY MANAGER means a Fund's board of trustees or any person serving as the board's delegate under paragraphs (b) or (d) of Rule 17f-5.

QUALIFIED FOREIGN BANK means a banking institution or trust company, incorporated or organized under the laws of a country other than the United States, that is regulated as such by the country's government or an agency of the country's government.

U.S. BANK means an entity that is:

(i) A banking institution organized under the laws of the United States;

(ii) A member bank of the Federal Reserve System;

(iii) Any other banking institution or trust company organized under the laws of any state or of the United States, whether incorporated or not, doing business under the laws of any state or of the United States, a substantial portion of the business of which consists of receiving deposits or exercising fiduciary powers similar to those permitted to national banks under the authority of the Comptroller of the Currency, and which is supervised and examined by state or federal authority having supervision over banks, and which is not operated for the purpose of evading the provisions of Rule 17f-5;

(iv) A receiver, conservator, or other liquidating agent of any institution or firm included in paragraphs (i), (ii), or (iii) above; or

(v) A banking institution in accordance with Section 17(f) of the 1940 Act."

3. All defined terms used herein shall have the meaning given in the Custodian Agreement as amended by this Amendment.

4. Other than as amended and appended hereby, all terms and provisions of the Custodian Agreement are hereby ratified and affirmed as of the date hereof and are hereby extended to give effect to the terms hereof.

5. By signing below, the Trust ratifies and affirms that all of its representations and warranties set forth in the Custodian Agreement each remain true and correct as of the date hereof.

6. Upon receipt by the Custodian 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 Custodian 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.

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be duly executed as of the date first above written.

U.S. GLOBAL ACCOLADE FUNDS

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

BROWN BROTHERS HARRIMAN & CO.

By: /s/ Susan C. Livingston
    -----------------------
Name:   Susan C. Livingston
Title:  Partner

APPENDIX A

List of Funds

17f-5 DELEGATION SCHEDULE

By its execution of this Delegation Schedule as of June 30, 2001, U.S. GLOBAL ACCOLADE FUNDS (the "Trust"), a Massachusetts Business Trust with one or more series of shares, and an open-end management investment company registered with the Securities and Exchange Commission ("SEC") under the Investment Company Act of 1940 as amended (the "1940 Act"), on behalf of each of the portfolios listed on Appendix A hereto as the same may be amended from time to time (each a "Fund" and collectively the "Funds"), acting through its Board of Trustees or its duly authorized representative, hereby appoints BROWN BROTHERS HARRIMAN & CO., a New York limited partnership with an office in Boston, Massachusetts (the "Delegate") as its delegate to perform certain functions with respect to the custody of the Funds' Assets.

WHEREAS, the Trust has appointed the Delegate as Custodian of the Trust's Property in a Custodian Agreement dated as of November 1, 1997 by and between the Delegate and the Trust (as amended, the "Custodian Agreement");

WHEREAS, the Board of Trustees of the Trust (the "Board") wishes to implement arrangements under Rule 17f-5 of the 1940 Act for the safekeeping of Foreign Assets;

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the Trust and the Delegate agree as follows. Capitalized terms which are not defined in Section 12 of this Delegation Schedule shall have the meanings ascribed to them in the Custodian Agreement.

1. Maintenance of Funds' Assets Abroad. Delegate may place and maintain the Funds' Foreign Assets in the countries listed on the Global Custody Network Listing hereto only pursuant to Proper Instructions under the terms of the Custodian Agreement and in accordance with this Delegation Schedule. The Global Custody Network Listing may be amended upon the mutual written agreement of the parties. With respect to amendments to the Global Custody Network Listing, the Trust acknowledges that, depending on the conditions in the particular country, advance notice may be required before the Delegate is able to perform its duties

hereunder in or with respect to such country (such advance notice to be reasonable in light of the specific facts and circumstances attendant to performance of duties in such country).

2. Appointment. Pursuant to the provisions of Rule 17f-5, the Trust hereby appoints the Delegate as "Foreign Custody Manager" as defined under Rule 17f-5 and the Delegate hereby accepts such appointment and agrees to perform, only those duties set forth in this Delegation Schedule concerning the safekeeping of each Fund's Foreign Assets in each of the countries set forth in the Global Custody Network Listing, as amended from time to time, in accordance with
Section 1of this Delegation Schedule. The Delegate is hereby authorized to take such actions as are reasonably required to discharge its duties under this Delegation Schedule, including, without limitation, to cause a Fund's Foreign Assets to be placed with a particular Eligible Foreign Custodian in accordance herewith.

3. Selection of Eligible Foreign Custodian and Contract Administration. The Delegate shall perform the following duties with respect to the selection of Eligible Foreign Custodians and administration of certain contracts governing the Trust's foreign custodial arrangements:

(a) Selection of Eligible Foreign Custodians. Subject to the provisions of this Delegation Schedule and the requirements of Rule 17f-5, the Delegate shall place and maintain a Fund's Foreign Assets with an Eligible Foreign Custodian in accordance with the Global Custody Network Listing PROVIDED that the Delegate shall have determined that the Fund's Assets will be subject to reasonable care based on the standards applicable to custodians in the relevant market after considering all factors relevant to the safekeeping of such assets, including, without limitation:

(i) The Eligible Foreign Custodian's practices, procedures, and internal controls, including, but not limited to, the physical protections available for certificated securities (if applicable), the controls and procedures for dealing with any Securities Depository, the method of keeping custodial records, and the security and data protection practices;

(ii) Whether the Eligible Foreign Custodian has the requisite financial strength to provide reasonable care for the Fund's Foreign Assets including, but not limited to, the adequacy of the Eligible Foreign Custodian's capital with regard to protecting a Fund's assets against the risk of loss due to such Eligible Foreign

Custodian's insolvency;

(iii) The Eligible Foreign Custodian's general reputation and standing; and

(iv) Whether the Fund will have jurisdiction over and be able to enforce judgments against the Eligible Foreign Custodian, such as by virtue of the existence of any offices of such Eligible Foreign Custodian in the United States or such Eligible Foreign Custodian's consent to services of process in the United States, appointment of an agent for service of process in the United States or consent to jurisdiction in the United States.

The Delegate shall be required to make the foregoing determinations to the best of its knowledge and belief based only on information reasonably available to it in accordance with the standard of care set forth in Section 8 of this Delegation Schedule.

(b) Contract Administration. For each Eligible Foreign Custodian selected by the Delegate pursuant to this Section 3, the Delegate shall enter into a written contract governing each Fund's foreign custody arrangements. The Delegate shall determine that each such written contract with an Eligible Foreign Custodian provides reasonable care for the Fund's Foreign Assets based on the standard of care specified in subsection (a) of this Section 3. Each written contract with an Eligible Foreign Custodian shall, except as set forth in the last paragraph of this subsection (b), include provisions that provide:

(i) For indemnification or insurance arrangements (or any combination of the foregoing) such that the Trust will be adequately protected against the risk of loss of a Fund's Foreign Assets held in accordance with such contract;

(ii) That each Fund's Foreign Assets will not be subject to any right, charge, security interest, lien or claim of any kind in favor of the Eligible Foreign Custodian or its creditors except, a claim of payment for their safe custody or administration or, in the case of cash deposits, liens or rights in favor of creditors of such Eligible Foreign Custodian arising under bankruptcy, insolvency or similar laws;

(iii) That beneficial ownership of each Fund's Foreign Assets will be freely transferable without the payment of money or value other than for safe custody or administration;

(iv) That adequate records will be maintained by the Eligible Foreign Custodian identifying each Fund's Foreign Assets as belonging to the Fund or as being held by a third party for the benefit of the Fund;

(v) That the Trust's independent public accountants will be given access to those records described in (iv) above or confirmation of the contents of those records; and

(vi) That the Trust will receive sufficient and timely periodic reports with respect to the safekeeping of each Fund's Foreign Assets, including, but not limited to, notification of any transfer to or from the Fund's account or a third party account containing assets held for the benefit of a Fund.

Such contract may contain, in lieu of any or all of the provisions specified in this Section 3(b), such other provisions that the Delegate determines will provide, in their entirety, the same or a greater level of care and protection for each Fund's Foreign Assets as the specified provisions, in their entirety.

(c) LIMITATION TO DELEGATED SELECTION. Notwithstanding anything in this Delegation Schedule to the contrary, the duties under this Section 3 shall apply only to Eligible Foreign Custodians selected by the Delegate and shall not apply to Securities Depositories or to any Eligible Foreign Custodian that the Delegate is directed to use pursuant to Section 7 of this Delegation Schedule. Nothing in this Delegation Schedule shall require the Delegate to consider Country Risk as part of its duties under this
Section 3.

4. MONITORING. In addition to determining the appropriateness of placing a Fund's Foreign Assets in accordance with Section 3(a) of this Delegation Schedule and monitoring the continuing appropriateness of the contract governing a Fund's foreign custody arrangements in accordance with Section 3(b) of this Delegation Schedule, the Delegate shall establish and maintain a system to continuously monitor: (i) the appropriateness of maintaining Foreign Assets with each Eligible Foreign Custodian selected by the Delegate pursuant to Section 3 of this Delegation Schedule; (ii) each such Eligible Foreign Custodian's continuing compliance with the standards set forth in Rule 17f-5 and this Delegation Schedule; and (iii) material changes to the Trust's foreign custody arrangements, as defined in Section 6 below (the "Monitoring System").

5. REPORTING. The Delegate shall provide to the Board and the Trust's Investment Adviser written reports specifying placement of a Fund's Foreign Assets with each Eligible Foreign Custodian selected by the Delegate pursuant to Section 3 of this Delegation Schedule; and of any material changes in a Fund's foreign custody arrangements effected by the Delegate pursuant to Section 3, including, but not limited to: (i) any withdrawal of a Fund's Foreign Assets under Section 6 of this Delegation Schedule, (ii) any event that may adversely and materially affect an Eligible Foreign Custodian's financial or operational strength, (iii) a change in control of an Eligible Foreign Custodian, (iv) the failure of an Eligible Foreign Custodian to comply with the standards in Rule 17f-5 or its contract governing the Trust's foreign custody arrangements; and (v) a material change in any information provided to the Board regarding the Delegate's expertise in foreign custody issues and risks, the Delegate's use of third-party experts to perform its foreign custody responsibilities, the Board's ability to monitor the Delegate's performance, the Delegate's financial strength or its ability to indemnify the Trust; the Delegate's inability to perform its duties in accordance with any standard of care under this Delegation Schedule or any notice with respect to information regarding prevailing Country Risk provided to the Board and/or the Investment Adviser under Section 17 of this Delegation Schedule. Such reports shall be provided to the Board at its regularly scheduled meeting next following the event being reported, or more frequently as requested by the Board, provided that, if the Delegate determines that any matter should be reported sooner, it shall promptly, following the occurrence of the event, direct such report to the Fund's President for forwarding to the Board. The Delegate will prepare such reports with respect to any Eligible Foreign Custodian that the Delegate has been instructed to use pursuant to Section 7 of this Delegation Schedule only to the extent specifically agreed to with respect to the particular situation. Nothing in this Section shall limit the Delegate's duty to report the location of a Fund's Foreign Assets as part of its normal reporting under the Custodian Agreement whether or not they have been placed by the Delegate pursuant to Section 3 of this Delegation Schedule.

At least annually, the Delegate shall provide to the Trust a written statement as may be reasonably required to document its compliance with the terms of this Delegation Schedule as well as information regarding the following factors: (i) the Delegate's expertise in foreign custody issues and risks; (ii) the Delegate's use of third-party experts to perform its foreign custody responsibilities; (iii) the Board's ability to monitor the Delegate's performance; and (iv)

the Delegate's financial strength and its ability to indemnify the Trust if necessary.

6. WITHDRAWAL OF FUND'S ASSETS. If the Delegate determines that an arrangement with a specific Eligible Foreign Custodian selected by the Delegate under
Section 3 of this Delegation Schedule no longer meets the requirements of said Section, the Delegate shall promptly notify the Trust of such fact and shall withdraw the Foreign Assets from the non-complying arrangement and make arrangements for the custody of such Foreign Assets with a successor Eligible Foreign Custodian in accordance with the terms of this Delegation Schedule as soon as reasonably practicable; PROVIDED, however, that if in the reasonable judgment of the Delegate, such withdrawal would require liquidation of any of a Fund's Foreign Assets or would materially impair the liquidity, value or other investment characteristics of a Fund's Foreign Assets, it shall be the duty of the Delegate to provide information regarding the particular circumstances and to act only in accordance with Proper Instructions with respect to such liquidation or other withdrawal.

7. DIRECTION AS TO ELIGIBLE FOREIGN CUSTODIAN. Notwithstanding this Delegation Schedule, the Trust acting through its Board, its Investment Adviser, or its authorized representative, may direct the Delegate to place and maintain the Fund's Foreign Assets with a particular Eligible Foreign Custodian, including without limitation with respect to investment in countries as to which the Delegate will not provide delegation services. In such event, the Delegate shall be entitled to rely on any such instruction as a Proper Instruction under the terms of the Custodian Agreement and shall have no duties under this Delegation Schedule with respect to such arrangement save those included under Section 16 of this Delegation Schedule and that it may undertake specifically in writing with respect to each particular instance.

8. STANDARD OF CARE. In carrying out its duties under this Delegation Schedule, the Delegate agrees to exercise reasonable care, prudence and diligence such as a person having responsibility for safekeeping of a Fund's Foreign Assets would exercise. The Delegate agrees to promptly notify the Board and the Trust's Investment Adviser if, at any time, the Delegate believes it cannot perform its duties hereunder in accordance with the foregoing standard of care.

9. REPRESENTATIONS. The Delegate hereby represents and warrants that it is a U.S.

Bank and that this Delegation Schedule has been duly authorized, executed and delivered by the Delegate and is a legal, valid and binding agreement of the Delegate and that the Delegate has established and agrees to maintain during the term of this Delegation Schedule, the Monitoring System.

The Trust hereby represents and warrants that this Delegation Schedule has been duly authorized, executed and delivered by the Trust and is a legal, valid and binding agreement of the Trust.

10. EFFECTIVENESS; TERMINATION. This Delegation Schedule shall be effective as of the date on which this Delegation Schedule shall have been accepted by the Delegate, as indicated by the date set forth below the Delegate's signature. This Delegation Schedule may be terminated at any time, without penalty, by written notice from the terminating party to the non-terminating party. Such termination shall be effective on the 90th calendar day after the date of delivery or mailing of such notice (or such other period as may be agreed between the parties). The foregoing to the contrary notwithstanding, this Delegation Schedule shall be deemed to have been terminated concurrently with the termination of the Custodian Agreement.

11. NOTICES. Notices and other communications under this Delegation Schedule are to be made in accordance with the arrangements designated for such purpose under the Custodian Agreement unless otherwise indicated in a writing referencing this Delegation Schedule and executed by both parties.

12. DEFINITIONS. Capitalized terms in this Delegation Schedule have the following meanings:

a. COUNTRY RISKS - means the systemic risks arising from holding assets in a particular country, including, those arising from a country's financial infrastructure, prevailing custody and settlement practices, expropriation, nationalization or other governmental actions, and laws applicable to the safekeeping and recovery of assets held in custody in such country.

b. ELIGIBLE FOREIGN CUSTODIAN - shall have the meaning set forth in Rule 17f-5(a)(1) of the 1940 Act and shall also include a U.S. Bank.

c. FOREIGN ASSETS - shall have the meaning set forth in Rule 17f-5(a)(2) of the 1940 Act.

d. PROPER INSTRUCTIONS - shall have the meaning set forth in the Custodian Agreement.

e. SECURITIES DEPOSITORY - shall have the meaning set forth in Rule 17f-7(b)(1) of the 1940 Act.

f. U.S. BANK - shall have the meaning set forth in Rule 17f-5(a)(7) of the 1940 Act and Section 17(f) of the 1940 Act.

13. GOVERNING LAW AND JURISDICTION. This Delegation Schedule shall be construed in accordance with the federal laws of the United States and to the extent not governed thereby, the laws of the Commonwealth of Massachusetts. The parties hereby submit to the exclusive jurisdiction of the Federal courts sitting in the State of New York or the Commonwealth of Massachusetts or the state courts of New York or Massachusetts.

14. FEES. Delegate shall perform its functions under this Delegation Schedule for the compensation determined under the Custodian Agreement.

15. INTEGRATION. This Delegation Schedule sets forth all of the Delegate's duties with respect to the selection and monitoring of Eligible Foreign Custodians, the administration of contracts with Eligible Foreign Custodians, the withdrawal of assets from Eligible Foreign Custodians and the issuance of reports in connection with such duties. This Delegation Schedule constitutes the entire agreement between the Fund and Delegate with respect to the subject matter hereof. Accordingly, this Delegation Schedule supercedes the Foreign Custody Manager Delegation Agreement heretofore in effect. The terms of the Custodian Agreement shall apply generally as to matters not expressly covered in this Delegation Schedule, including dealings with the Eligible Foreign Custodians in the course of discharge of the Delegate's obligations under the

Custodian Agreement. In the event of a conflict between the terms of this Delegation Schedule and the Custodian Agreement, the terms of this Delegation Schedule shall control with respect to the services covered herein.

16. PROVISION OF INFORMATION. The Delegate agrees to provide annually to the Trust or a Fund's Investment Adviser, such information as is specified in Appendix 1 hereto, as may be amended from time to time by the parties. With respect to each Eligible Foreign Custodian employed by the Trust pursuant to
Section 7 herein, the Delegate agrees to provide the Trust or its Investment Adviser, any information it possesses regarding Country Risk or the risks associated with placing or maintaining Foreign Assets with the Eligible Foreign Custodian. The Delegate shall be responsible to use reasonable care in the gathering of such information but shall not be deemed to warranty the completeness or specific accuracy of such information. The Delegate agrees to promptly notify the Board or the Fund's Investment Adviser at any time that the Delegate becomes aware of a material change to the information provided hereunder or if the Delegate learns that any information previously provided is incomplete or inaccurate.

17. LIMITATION OF LIABILITY; SATISFACTION OF CLAIMS. The Delegate shall be responsible under this Delegation Schedule for any direct loss, claim, damage or liability incurred or suffered by the Trust or its officers, directors, employees or agents that results from the Delegate's failure to exercise any standard of care set forth in this Delegation Schedule, or the Delegate's willful misfeasance or bad faith in the performance of its duties under this Delegation Schedule. The Delegate shall indemnify and hold the Trust harmless from and against any and all direct claims, costs, expenses (including attorney's fees), losses, damages, charges, payments and liabilities of any sort or kind (excluding consequential, special or punitive damages) which may be asserted against the Trust, or for which the Trust may be held liable in connection with the Delegate's performance hereunder (a "Claim"), unless such Claim resulted from bad faith or gross negligence by the Trust in performance of its duties and obligations hereunder. Notwithstanding the foregoing, the Delegate shall not be liable for any loss, claim, damage or liability arising as a result of any acts of God, earthquakes, fires, flood, storms or other disturbances of nature, strikes, riots, nationalization, expropriation, currency restrictions or revaluations, investment or repatriation restrictions, imposition of taxes or changes in applicable laws, acts of war, civil war or terrorism, insurrection, the interruption, loss or malfunction of utilities, transportation or

computers and computer facilities, the unavailability of energy sources and other similar happenings or events that are not within Delegate's reasonable control. Nothing in this Section 17 shall be deemed to preclude the Trust or other party from pursuing any rights it may have in law and equity.

The Delegate agrees that claims made against each Fund respectively under this Delegation Schedule shall be satisfied only from assets of such Fund, and not from the assets of any separate Fund held hereunder; that any person executing this Delegation Schedule has executed it on behalf of the Trust and not individually, and that the obligations of the Trust arising out of this Delegation Schedule are not binding upon such person or the Trust's shareholders individually, but binding upon the Property and other assets of the Trust; that no shareholders, trustees directors or officers of the Trust may be held personally liable or responsible for any obligations of the Trust arising out of this Delegation Schedule.

18. MOST FAVORED CLIENT. If at any time the Delegate shall be a party to an agreement to serve as "Foreign Custody Manager" (as defined in Rule 17f-5(a)(2) of the 1940 Act) to an investment company, that provides for either: (a) a standard of care with respect to the selection of Eligible Foreign Custodians in any jurisdiction higher than that set forth in Section 3 of this Delegation Schedule or (b) a standard of care with respect to exercise of the Delegate's duties other than that set forth in Section 8 of this Delegation Schedule, the Delegate agrees to notify the Trust of this fact and to raise the applicable standard of care hereunder to the standard specified in such other agreement.

IN WITNESS WHEREOF, each of the parties hereto has caused this Delegation Schedule to be duly executed as of the date first above written.

U.S. ACCOLADE FUNDS

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

BROWN BROTHERS HARRIMAN & CO.

By: /s/ Susan C. Livingston
   ------------------------
Name:  Susan C. Livingston
Title: Partner

FUNDS TRANSFER SERVICES SCHEDULE TO CUSTODIAN AGREEMENT

1. EXECUTION OF PAYMENT ORDERS. Brown Brothers Harriman & Co. (the Custodian) is hereby instructed by U. S. GLOBAL ACCOLADE FUNDS (the Company) to execute each payment order, whether denominated in United States dollars or other applicable currencies, received by the Custodian in the Company's name as sender and authorized and confirmed by an authorized person as described in a Custodian Agreement dated as of November 1, 1997 by and between the Custodian and the Company, as amended or restated from time thereafter (the Agreement), provided that the Company has sufficient available funds on deposit in a Principal Account as defined in the Agreement and provided that the order (i) is received by the Custodian in the manner specified in this Funds Transfer Services Schedule or any amendment hereafter; (ii) complies with any written instructions and restrictions of the Company as set forth in this Funds Transfer Services Schedule or any amendment hereafter; (iii) is authorized by the Company or is verified by the Custodian in compliance with a security procedure set forth in Paragraph 2 below for verifying the authenticity of a funds transfer communication sent to the Custodian in the name of the Company or for the detection of errors set forth in any such communication; and (iv) contains sufficient data to enable the Custodian to process such transfer.

2. SECURITY PROCEDURE. The Company hereby elects to use the procedure selected below as its security procedure (the Security Procedure). The Security Procedure will be used by the Custodian to verify the authenticity of a payment order or a communication amending or canceling a payment order. The Custodian will act on instructions received provided the instruction is authenticated by the Security Procedure. The Company agrees and acknowledges in connection with (i) the size, type and frequency of payment orders normally issued or expected to be issued by the Company to the Custodian, (ii) all of the security procedures offered to the Company by the Custodian, and (iii) the usual security procedures used by customers and receiving banks similarly situated, that authentication through the Security Procedure shall be deemed commercially reasonable for the authentication of all payment orders submitted to the Custodian. The Company hereby elects (please choose one) the following Security Procedure as described below:

[X] BIDS AND BIDS WORLDVIEW PAYMENT PRODUCTS. BIDS and BIDS Worldview

Payment Products, are on-line payment order authorization facilities with built-in authentication procedures. The Custodian and the Company shall each be responsible for maintaining the confidentiality of passwords or other codes to be used by them in connection with BIDS. The Custodian will act on instructions received through BIDS without duty of further confirmation unless the Company notifies the Custodian that its password is not secure.

[ ] SWIFT. The Custodian and the Company shall comply with SWIFT's authentication procedures. The Custodian will act on instructions received via SWIFT provided the instruction is authenticated by the SWIFT system.

[ ] TESTED TELEX. The Custodian will accept payment orders sent by tested telex, provided the test key matches the algorithmic key the Custodian and Company have agreed to use.

[ ] COMPUTER TRANSMISSION. The Custodian is able to accept transmissions sent from the Company's computer facilities to the Custodian's computer facilities provided such

transmissions are encrypted and digitally certified or are otherwise authenticated in a reasonable manner based on available technology. Such procedures shall be established in an operating protocol between the Custodian and the Company.

[X] TELEFAX INSTRUCTIONS. A payment order transmitted to the Custodian by telefax transmission shall transmitted by the Company to a telephone number specified from time to time by the Custodian for such purposes. If it detects no discrepancies, the Custodian will then either:

1. If the telefax requests a repetitive payment order, the Custodian may call the Company at its last known telephone number, request to speak to the Company or Authorized Person, and confirm the authorization and the details of the payment order (a "Callback"); or

2. If the telefax requests a non-repetitive order, the Custodian will perform a Callback.

All faxes must be accompanied by a fax cover sheet which indicates the sender's name, company name, telephone number, fax number, number of pages, and number of transactions or instructions attached.

[ ] TELEPHONIC. A telephonic payment order shall be called into the Custodian at the telephone number designated from time to time by the Custodian for that purpose. The caller shall identify herself/himself as an Authorized Person. The Custodian shall obtain the payment order data from the caller. The Custodian shall then:

1. If a telephonic repetitive payment order, the Custodian may perform a Callback; or

2. If a telephonic non-repetitive payment order, the Custodian will perform a Callback.

(sbm)[X] BRAIDS

In the event the Company chooses a procedure which is not a Security Procedure as described above, the Company agrees to be bound by any payment order (whether or not authorized) issued in its name and accepted by the Custodian in compliance with the procedure selected by the Company.

3. REJECTION OF PAYMENT ORDERS. The Custodian shall give the Company timely notice of the Custodian's rejection of a payment order. Such notice may be given in writing or orally by telephone, each of which is hereby deemed commercially reasonable. In the event the Custodian fails to execute a properly executable payment order and fails to give the Company notice of the Custodian's non-execution, the Custodian shall be liable only for the Company's actual damages and only to the extent that such damages are recoverable under UCC 4A (as defined in Paragraph 7 below). Notwithstanding anything in this Funds Transfer Services Schedule and the Agreement to the contrary, the Custodian shall in no event be liable for any consequential or special damages under this Funds Transfer Services Schedule, whether or not such damages relate to services covered by UCC 4A, even if the Custodian has been advised of the possibility of such damages. Whenever compensation in the form of interest is payable by the Custodian to the Company pursuant to this Funds Transfer Services Schedule, such compensation will consist of interest payable in accordance with UCC 4A.

4. CANCELLATION OF PAYMENT ORDERS. The Company may cancel a payment order but the Custodian shall have no liability for the Custodian's failure to act on a cancellation instruction unless the Custodian has received such cancellation instruction at a time and in a manner affording the Custodian reasonable opportunity to act prior to the Custodian's execution of the order. Any cancellation shall be sent and confirmed in the manner set forth in Paragraph 2 above.

5. RESPONSIBILITY FOR THE DETECTION OF ERRORS AND UNAUTHORIZED PAYMENT ORDERS. Except as may be provided, the Custodian is not responsible for detecting any Company error contained in any payment order sent by the Company to the Custodian. In the event that the Company's payment order to the Custodian either
(i) identifies the beneficiary by both a name and an identifying or bank account number and the name and number identify different persons or entities, or (ii) identifies any bank by both a name and an identifying number and the number identifies a person or entity different from the bank identified by name, execution of the payment order, payment to the beneficiary, cancellation of the payment order or actions taken by any bank in respect of such payment order may be made solely on the basis of the number. The Custodian shall not be liable for interest on the amount of any payment order that was not authorized or was erroneously executed unless the Company so notifies the Custodian within thirty
(30) business days following the Company's receipt of notice that such payment order had been processed. If a payment order in the name of the Company and accepted by the Custodian was not authorized by the Company, the liability of the parties will be governed by the applicable provisions of UCC 4A.

6. LAWS AND REGULATIONS. The rights and obligations of the Custodian and the Company with respect to any payment order executed pursuant to this Funds Transfer Services Schedule will be governed by any applicable laws, regulations, circulars and funds transfer system rules, the laws and regulations of the United States of America and of other relevant countries including exchange control regulations and limitations on dealings or other sanctions, and including without limitation those sanctions imposed under the law of the United States of America by the Office of Foreign Assets Control. Any taxes, fines, costs, charges or fees imposed by relevant authorities on such transactions shall be for the account of the Company.

7. MISCELLANEOUS. All accounts opened by the Company or its authorized agents at the Custodian subsequent to the date hereof shall be governed by this Funds Transfer Schedule. All terms used in this Funds Transfer Services Schedule shall have the meaning set forth in Article 4A of the Uniform Commercial Code as currently in effect in the State of New York (UCC 4A) unless otherwise set forth herein. The terms and conditions of this Funds Transfer Services Schedule are in addition to, and do not modify or otherwise affect, the terms and conditions of the Agreement and any other agreement or arrangement between the parties hereto.

8. INDEMNIFICATION. The Custodian does not recommend the sending of instructions by telefax or telephonic means as provided in Paragraph 2. BY ELECTING TO SEND INSTRUCTIONS BY TELEFAX OR TELEPHONIC MEANS, THE COMPANY AGREES TO INDEMNIFY THE CUSTODIAN AND ITS PARTNERS, OFFICERS AND EMPLOYEES FOR ALL LOSSES THEREFROM.

OPTIONAL: The Custodian will perform a Callback if instructions are sent by telefax or telephonic means as provided in Paragraph 2. THE COMPANY MAY, AT ITS OWN RISK AND BY HEREBY AGREEING TO INDEMNIFY THE CUSTODIAN AND ITS PARTNERS, OFFICERS AND EMPLOYEES FOR ALL

Accepted and agreed:

BROWN BROTHERS HARRIMAN & CO.      U.S. GLOBAL ACCOLADE FUNDS



By: /s/ Susan Livingston           By: /s/ Frank E. Hollmes
    ------------------------           ------------------------
Name:  Susan Livingston            Name:  Frank E. Holmes
Title: Partner                     Title: Chief Executive Officer
Date:  July 19, 2001               Date:  July 12, 2001

APPENDIX 1
INFORMATION REGARDING COUNTRY RISK

1. To aid the Trust or its delegate in its consideration of Country Risks, the Delegate shall furnish the Trust annually and upon the initial placement of Foreign Assets into a country, the following information:

a. Opinions of local counsel concerning whether applicable foreign law would restrict the: (i) access afforded the Trust's independent public accountants to books and records kept by an Eligible Foreign Custodian located in that country; (ii) the Trust's ability to recover its Foreign Assets in the event of bankruptcy of an Eligible Foreign Custodian that country; or (iii) the Trust's ability to recover Foreign Assets that are lost while under the control of an Eligible Foreign Custodian located in that country.

b. Written information concerning (i) the likelihood of expropriation, nationalization, freezes, or confiscation of the Trust's Foreign Assets and (ii) whether difficulties in converting the Trust's cash and cash equivalents to U.S. dollars are foreseeable.

c. A MARKET PRACTICE MANUAL with respect to the following topics: (i) securities regulatory environment; (ii) foreign ownership restrictions; (iii) foreign exchange; (iv) securities settlement and registration; and (v) taxation.

2. To aid the Trust in monitoring Country Risk, the Delegate shall furnish the Trust with the following information: GLOBAL UPDATES, including with respect to changes in the information contained in the above MARKET PRACTICE MANUAL.

COUNTRY            SUBCUSTODIAN                                  DEPOSITORIES
--------------     -----------------------------------------     ---------------
AUSTRALIA          NATIONAL AUSTRALIA BANK LTD.(NAB)             Austraclear
                      National Australia Bank Agt. 5/1/85        CHESS
                      Agreement Amendment 2/13/92                RBA
                      Omnibus Amendment 11/22/93

BRAZIL             BANKBOSTON  NA, SAO PAULO                     CBLC
                      The First  National Bank of Boston
                        Agreement 1/5/88
                      Omnibus  Amendment 2/22/94
                      Amendment 7/29/96

BULGARIA           ING BANK NV, SOFIA                            BNB
                      ING Bank N.V. Agreement 9/15/97            CDAD

CANADA             ROYAL BANK OF CANADA (RBC)                    Bank of Canada
                      The Royal Bank of Canada Agreement         CDS
                        2/23/96

CZECH              CITIBANK AS FOR CITIBANK NA                   CNB-TKD System
REPUBLIC              Citibank, N.A., New York Agt. 7/16/81      SCP
                      New York Agreement Amendment 8/31/90
                      New York Agreement Amendment 7/26/96
                      Citibank NA / Citibank AS Agreement
                        6/24/96

ESTONIA            HANSAPANK, TALLINN FOR MERITA BANK            ECDSL
                      Merita Bank Agreement 12/1/97

                      ***BBH'S RESPONSIBILITY FOR THIS
                      SUBCUSTODIAN IS CONDITIONED ON THE
                      ABILITY OF BBH TO RECOVER FROM THE
                      SUBCUSTODIAN.. IN ADDITION, BBH
                      DOES NOT ACCEPT DELEGATION IN THIS
                      MARKET.***

FINLAND            MERITA BANK PLC                               FCSD
                      Union Bank of Finland Agreement
                        2/27/89
                      Omnibus Amendment 4/6/94

FRANCE             CREDIT AGRICOLE INDOSUEZ (CAI)                BdF
                      Banque Indosuez Agreement 7/19/90          SICOVAM
                      Omnibus Amendment 3/10/94


1/10/01                             PAGE 1 OF 5                             525

COUNTRY            SUBCUSTODIAN                                  DEPOSITORIES
--------------     -----------------------------------------     ---------------
GERMANY            DRESDNER BANK AG                              CBF
                      Dresdner Bank Agreement 10/6/95

HONG KONG          HONGKONG AND SHANGHAI BANKING CORP.           CMU
                   LTD (HSBC)                                    HKSCC
                      Hongkong & Shanghai Banking Corp.
                        Agt. 4/19/91
                      Omnibus Supplement 12/29/93
                      Schedule 5/14/96

HUNGARY            CITIBANK BUDAPEST RT. FOR CITIBANK NA         KELER Ltd
                      Citibank, N.A., New York Agt. 7/16/81
                      New York Agreement Amendment 8/31/90
                      New York Agreement Amendment 7/26/96
                      Citibank, N.A. Subsidiary
                        Amendment 10/19/95
                      Citibank, N.A. / Citibank Budapest
                        Agreement 6/23/92
                      Citibank, N.A. / Citibank Budapest
                        Amendment 9/29/92

INDONESIA          CITIBANK NA, JAKARTA                          PT KSEI
                      Citibank, N.A., New York Agt. 7/16/81
                      New York Agreement Amendment 8/31/90
                      New York Agreement Amendment 7/26/96

ITALY              BANCA COMMERCIALE ITALIANA (BCI)              Monte Titoli
                      Banca Commerciale Italiana Agreement          S.P.A.
                        5/8/89
                      Agreement Amendment 10/8/93
                      Omnibus Amendment 12/14/93

JAPAN              BANK OF TOKYO - MITSUBISHI, LTD. (BTM)        BoJ
                      Bank of Tokyo - Mitsubishi Agreement       JASDEC
                        6/17/96

KOREA              CITIBANK NA, SEOUL                            KSD
                      Citibank, N.A., New York Agt. 7/16/81
                      New York Agreement Amendment 8/31/90
                      New York Agreement Amendment 7/26/96
                      Citibank, Seoul Agreement Supplement
                        10/28/94

LATVIA             MERITA BANK PLC, RIGA                         Bank of Latvia
                      Union Bank of Finland Agreement 2/27/89    LCD
                      Omnibus Amendment 4/6/94
                      Side Letter Agreement pending

LATVIA             HANSABANK, RIGA FOR MERITA BANK               Bank of Latvia
                      Merita Bank Agreement 12/1/97              LCD

                      ***REQUIRES ADDITIONAL DOCUMENTATION
                      PRIOR TO INVESTMENT.***


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COUNTRY            SUBCUSTODIAN                                  DEPOSITORIES
--------------     -----------------------------------------     ---------------
LITHUANIA          VILNIAUS BANKAS, VILNIUS FOR MERITA BANK      CSDL
                      Merita Bank Agreement 12/1/97

                      ***BBH'S RESPONSIBILITY FOR THIS
                      SUBCUSTODIAN IS CONDITIONED ON THE
                      ABILITY OF BBH TO RECOVER FROM
                      THE SUBCUSTODIAN. IN ADDITION, BBH
                      DOES NOT ACCEPT DELEGATION IN THIS
                      MARKET.***

LUXEMBOURG         KREDIETBANK LUXEMBOURG (KBL)                  CBL
                      Kredietbank Luxembourg Agt. 4/7/98

MALAYSIA           HSBC BANK MALAYSIA BERHAD (HBMB) FOR          BNM
                   HONGKONG SHANGHAI BANKING CORP. (HSBC)        MCD
                      Hongkong & Shanghai Banking Corp.
                        Agt. 4/19/91
                      Omnibus Supplement 12/29/93
                      Schedule 5/14/96
                      Malaysia Subsidiary Supplement
                        5/23/94
                      Side letter Agreement dated 7/28/97

MEXICO             BANCO SANTANDER MEXICANO SA (BSM) FOR         Banxico
                   BANCO DE SANTANDER                            Indeval
                     Banco de Santander Agreement 12/14/88
                     Subsidiary Amendment 10/18/96

NEW ZEALAND        NATIONAL AUSTRALIA BANK LTD. (NAB),           NZCSD
                   AUCKLAND
                      National Australia Bank Agt. 5/1/85
                      Agreement Amendment 2/13/92
                      Omnibus Amendment 11/22/93
                      New Zealand Addendum 3/7/89

NORWAY             DEN NORSKE BANK                               VPS
                      Den norske Bank Agreement 11/16/94

PHILIPPINES        CITIBANK NA, MANILA                           PCD
                      Citibank, N.A., New York Agt. 7/16/81      ROSS
                      New York Agreement Amendment 8/31/90
                      New York Agreement Amendment 7/26/96

POLAND             CITIBANK (POLAND) SA FOR CITIBANK NA          CRBS
                      Citibank, N.A., New York Agt. 7/16/81      NDS
                      New York Agreement Amendment 8/31/90
                      New York Agreement Amendment 7/26/96
                      Citibank Subsidiary Amendment 10/30/95
                      Citibank, N.A. / Citibank Poland S.A.
                        Agt. 11/6/92

PORTUGAL           BANCO COMERCIAL PORTUGUES SA (BCP)            CVM
                      Banco Comercial Portugues 5/18/98


1/10/01                             PAGE 3 OF 5                             525

COUNTRY            SUBCUSTODIAN                                  DEPOSITORIES
--------------     -----------------------------------------     ---------------
ROMANIA            ING BANK NV, BUCHAREST                        BSE
                      ING Bank N.V. Agreement 9/29/97            NBR
                                                                 SNCDD

RUSSIA             CITIBANK T/O FOR CITIBANK NA                  VTB
                      Citibank, N.A., New York Agt. 7/16/81      NDC
                      New York Agreement Amendment 8/31/90
                      New York Agreement Amendment 7/26/96
                      Citibank, N.A. Subsidiary Amendment
                        10/19/95
                      Citibank N.A. / Citibank T/O Agt.
                        6/16/97
                      Side Letter Agt. 8/18/97

                      ***REQUIRES SIGNED AMENDMENT TO THE
                      CUSTODIAN AGREEMENT PRIOR TO
                      INVESTMENT.***

RUSSIA             CREDIT SUISSE FIRST BOSTON AO (CSFB AO)       VTB
                   FOR CREDIT SUISSE, ZURICH
                      Credit Suisse First Boston Agreement
                        8/18/99
                      Credit Suisse, Zurich Agreement
                        4/30/96

                      ***REQUIRES SIGNED AMENDMENT TO THE
                      CUSTODIAN AGREEMENT PRIOR TO
                      INVESTMENT.***

SINGAPORE          HONGKONG & SHANGHAI BANKING CORP. LTD.        CDP
                   (HSBC), SINGAPORE
                      Hongkong & Shanghai Banking Corp.
                        Agt. 4/19/91
                      Omnibus Supplement 12/29/93
                      Schedule 5/14/96

SLOVAKIA           ING BANK NV, BRATISLAVA                       NBS
                      ING Bank N.V. Agreement 9/1/98             SCP

SOUTH AFRICA       STANDARD BANK OF SOUTH AFRICA (SBSA)          CDL
                      Standard Bank of South Africa              STRATE
                        Agreement 3/11/94

SPAIN              BANCO SANTANDER CENTRAL HISPANO SA (BSCH)     Banco de Espana
                      Banco de Santander Agreement 12/14/88      SCL

SRI LANKA          HONGKONG & SHANGHAI BANKING CORP. LTD.        CDS
                   (HSBC), COLOMBO
                      Hongkong & Shanghai Banking Corp. Agt.
                        4/19/91
                      Omnibus Supplement 12/29/93
                      Schedule 5/14/96

SWITZERLAND        UBS AG                                        SIS
                      Union Bank of Switzerland Agreement
                        12/20/88
                      Omnibus Amendment 11/29/94


1/10/01                             PAGE 4 OF 5                             525

COUNTRY            SUBCUSTODIAN                                  DEPOSITORIES
--------------     -----------------------------------------     ---------------
TAIWAN             STANDARD CHARTERED BANK (SCB), TAIPEI         TSCD
                      Standard Chartered Bank Agreement
                        2/18/92
                      Omnibus Amendment 6/13/94
                      Appendix 4/8/96

THAILAND           HONGKONG & SHANGHAI BANKING CORP. LTD.        TSDC
                   (HSBC), BANGKOK
                      Hongkong & Shanghai Banking Corp.
                        Agt. 4/19/91
                      Omnibus Supplement 12/29/93
                      Schedule 5/14/96

UNITED KINGDOM     HSBC BANK PLC                                 CMO
                      Midland Bank Agreement 8/8/90              CREST
                      Omnibus Amendment 12-15-93

NOTES:

1.) The depositories in Panama and Venezuela are presently elective. It is not the current intention of Brown Brothers Harriman & Co. to use such depositories unless their use becomes compulsory. Euroclear is compulsory for fixed income obligations and elective for equities. Currently, Brown Brothers Harriman & Co. uses Euroclear for settlement of equities where we are instructed to do so. We do not use Euroclear for the ongoing safekeeping of equities.

2.) If you are authorizing investment in Bolivia, Costa Rica, Cyprus, Estonia, Ghana, Lithuania, Panama or Nigeria, these arrangements are the subject of additional information in Schedule A to the FCM report.

3.) This appendix reflects changes to the listed markets, subcustodians and/or central depositories which have been reported within the FCM report(s) through the date referenced in the lower left hand corner of this appendix.

I HEREBY CERTIFY THAT THE BOARD OR ITS DELEGATE HAS APPROVED THE COUNTRIES AND CENTRAL DEPOSITORIES LISTED ON THIS APPENDIX

/s/ Susan B. McGee
----------------------------------------
SIGNATURE
NAME:  Susan B. McGee
TITLE: Executive Vice President
DATE:  September 24, 2001

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