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Exhibit 10.33

[HOULIHAN LOKEY HOWARD & ZUKIN LETTERHEAD]

Personal and Confidential

February 22, 2005

David L. Bradshaw
President and Chief Executive Officer
Tipperary Corporation
633 Seventeenth Street, Suite 1550
Denver, CO 80202

Dear Mr. Bradshaw:

        This letter confirms the understanding and agreement (the "Agreement")
between Tipperary Corporation (together with its subsidiaries and affiliates,
the "Company") and Houlihan Lokey Howard & Zukin Capital, Inc. ("Houlihan
Lokey") as follows:

        1.     Engagement; Services; Term. We understand that Slough Estates
USA Inc. ("Slough") owns (i) approximately 22.3 million (or approximately 52%)
of the publicly traded common stock of the Company, (ii) approximately 10% of
the common stock in Tipperary Oil & Gas (Australia) Pty Ltd, a subsidiary of the
Company, and (iii) certain indebtedness (approximately $17 million) running from
the Company to Slough (together, the "Slough Interests"). We further understand
that Slough has announced its intention to divest the Slough Interests (the
"Slough Divestiture"). It is our understanding that the members of the Company's
Board of Directors who are not affiliated with Slough are considering certain
matters relating to the Slough Divestiture, and in connection therewith the
Company hereby retains Houlihan Lokey as its exclusive financial advisor to
provide financial advisory and investment banking services.

        Houlihan Lokey will advise the Company on an exclusive basis (and act as
agent, if applicable) with respect to one or more transactions or potential
transactions relating to the Slough Divestiture, including: (i) any proposals
for a financing for the Company or any of its subsidiaries, whether in the form
of subordinated or senior debt, equity or equity equivalents, in order to
facilitate the Company purchasing the Sough Equity Interests (a "Financing
Transaction"); or (ii) any proposals to acquire all, or a substantial part, of
the business, assets or equity interests of the Company (including the Slough
Interests and/or the remaining equity interests in the Company) and/or its
subsidiaries and affiliates in one or more transactions, whether by merger,
consolidation, tender or exchange offer, purchase, acquisition, business
combination, or otherwise (a "Sale Transaction"); a Financing Transaction and a
Sale Transaction are each referred to herein as a "Transaction" and are
collectively referred to herein as the "Transactions".

        Depending upon the nature of the Transaction, Houlihan Lokey's services
will consist of, if appropriate or if requested by the Company, (a) soliciting,
coordinating and evaluating indications of interest and proposals regarding a
Transaction; (b) advising the Company as to the structure of the Transaction;
(c) negotiating the financial aspects, and facilitating the consummation, of any
Transaction; and (d) providing such other investment banking and related
financial advisory services reasonably necessary to accomplish the foregoing,
including, if requested, rendering an opinion as to the fairness of a
Transaction to the Company or its shareholders (as the case may be).

        With respect to a Financing, if requested by the Company, Houlihan Lokey
agrees to use its best efforts, consistent with its business judgment, to effect
the Financing as soon as practicable, on terms approved by the Company. The
Company acknowledges that consummation of the Financing is subject, among other
factors, to acceptable documentation, market conditions, and satisfaction of the
conditions set forth in one or more agreements to be entered into with any
financier, lender, investor or other purchaser of securities. It is expressly
understood that this engagement does not constitute any

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commitment, express or implied, on the part of Houlihan Lokey to provide, and
does not ensure the successful placement of, any portion of the Financing.

        The Company agrees to promptly inform Houlihan Lokey in the event that
the Company or its management initiate any discussions regarding a Transaction
during the term of this Agreement. In the event the Company, its controlling
equity holders (other than Slough) or affiliates, or its management receive any
inquiry regarding a Transaction, Houlihan Lokey will be promptly informed of
such inquiry so that it can evaluate such party and its interest in a
Transaction, and assist the Company in any resulting negotiations.

        This Agreement shall have an initial term of three (3) months, and
thereafter shall be automatically extended on a month-to-month basis until
either party provides thirty days prior written notice of termination to the
other party; provided, however, that no expiration or termination of this
Agreement shall affect (a) the Company's indemnification, reimbursement,
contribution and other obligations as set forth on Schedule A attached hereto,
(b) the confidentiality provisions set forth herein, (c) Sections 5-8 hereof,
and (d) Houlihan Lokey's right to receive, and the Company's obligation to pay,
any and all fees and expenses due, and whether or not any Transaction shall be
consummated prior to or subsequent to the effective date of expiration or
termination, all as more fully set forth in this Agreement.

        2.     Fees and Expenses.

        (a)   Retainer Fees. The Company shall pay Houlihan Lokey non-refundable
monthly retainer fees (the "Monthly Retainer Fees") of (i) $100,000 upon the
mutual execution of this Agreement, (ii) $100,000 on same calendar day of the
following month; and then (iii) $50,000 per month on the same calendar day of
each following month thereafter. Monthly retainer fees are payable in advance
without notice or invoice.

        (b)   Financing Transaction. In addition to the foregoing monthly
retainer fees, upon the consummation of a Financing Transaction, the Company
shall pay Houlihan Lokey a cash fee (the "Financing Fee") equal to 4.0% of the
aggregate principal amount of all senior notes, bank debt, unsecured, non-senior
and subordinated debt securities, and equity and equity equivalents (including
convertible securities and preferred stock), raised, placed or committed. For
greater certainty, the exercise of any warrants provided to any financier,
lender, investor or other purchaser of securities as part of a Financing
Transaction shall, upon the exercise thereof, be considered equity for purposes
of calculating Houlihan Lokey's Financing Fee. Any non-refundable Monthly
Retainer Fees actually received by Houlihan Lokey will be fully credited against
any Financing Fee payable to Houlihan Lokey.

        (c)   Sale Transaction. In addition to the foregoing monthly retainer
fees, upon the consummation of a Sale Transaction, the Company shall pay
Houlihan Lokey a cash fee (the "M&A Fee") equal to 4.0% of the Transaction Value
of such Sale Transaction.

        For the purpose of calculating the M&A Fee, the Transaction Value shall
be the total proceeds and other consideration paid or received, or to be paid or
received by the Company's shareholders other than Slough in connection with such
Sale Transaction (which consideration shall be deemed to include amounts in
escrow), including, without limitation, cash, notes, securities, and other
property received or to be received by the Company, deferred non-contingent
payments (such as installment payments); amounts payable under consulting
agreements, above-market employment contracts, non-compete agreements, and
employee benefit plans or similar arrangements (collectively, "Non-Slough
Consideration"). The Transaction Value shall be calculated as if 100% of the
equity interests of the Company other than the Slough Interests had been sold by
dividing the Total Consideration by the percentage of such ownership that is
sold. If any of the Company's assets are retained, sold or otherwise transferred
to another party prior to the consummation of the Sale

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Transaction, the Transaction Value will be increased to reflect the fair market
value of any such assets. Furthermore, the Transaction Value shall also be
increased to the extent that (x) the value of any current assets (including cash
and marketable securities) which are not sold in connection with or in
anticipation of a Transaction is greater than (y) the value of any non-interest
bearing current liabilities that are not assumed by such buyer.

        For the purpose of calculating the consideration received or receivable
in connection with a Sale Transaction, any securities (other than a promissory
note) will be valued at the time of the closing of the Transaction (without
regard to any restrictions on transferability) as follows: (i) if such
securities are traded on a stock exchange, the securities will be valued at the
average last sale or closing price for the ten trading days immediately prior to
the closing of the Transaction; (ii) if such securities are traded primarily in
over-the-counter transactions, the securities will be valued at the mean of the
closing bid and asked quotations similarly averaged over a ten trading day
period immediately prior to the closing of the Transaction; and (iii) if such
securities have not been traded prior to the closing of the Transaction,
Houlihan Lokey will prepare a valuation of the securities, and Houlihan Lokey
and the Company will negotiate in good faith to agree on a fair valuation
thereof for the purposes of calculating the Liquidity Fee. The value of any
purchase money or other promissory notes, installment sales contracts or other
deferred non-contingent consideration shall be deemed to be the face amount
thereof, and shall be included as part of Total Consideration for the purpose of
determining the Liquidity Fee due to Houlihan Lokey upon the consummation of the
Transaction. In the event the Transaction Value includes any Contingent
Payments, the Company and Houlihan Lokey will negotiate in good faith to agree
on that portion of the Liquidity Fee to be paid to Houlihan Lokey as of the
consummation of the Transaction in consideration thereof. If the parties cannot
reach such an agreement, an additional Liquidity Fee shall be paid to Houlihan
Lokey in the same proportions and at the same times as the Contingent Payments
are paid or received.

        Any Financing Fee and any M&A Fee are each referred to herein as a
"Transaction Fee" and are collectively referred to herein as "Transaction Fees".

        (d)   Payment of Fees. If this Agreement expires or is terminated for
any reason, and the Company consummates, or enters into an agreement in
principle to engage in (and which subsequently closes at any time), any
Transaction within twelve (12) months after such expiration or termination date,
Houlihan Lokey shall be entitled to receive its Transaction Fee upon the
consummation of such Transaction as if no such expiration or termination had
occurred.

        For the avoidance of doubt, if two or more types of Transactions occur
simultaneously or separately, or in connection with or unrelated to one another,
the Company shall pay Houlihan Lokey the Transaction Fee for each such
Transaction in addition to, and not in lieu of, each other.

        If, within 18 months after the consummation of any Financing
Transaction, the Company consummates a Sale Transaction, Houlihan Lokey's
Transaction Fee shall be calculated with respect to all such Transactions,
subject to a credit for any Transaction Fees previously paid pursuant to this
Section 2.

        Certain Transaction Fees shall be paid to Houlihan Lokey by withholding
such fee from the proceeds from the issuance of any debt or equity securities
(in the case of a Financing Transaction) or from the sale proceeds (in the case
of a Sale Transaction) by instructing the purchasers of the securities or the
payor(s) of the Transaction Value, as the case may be, to wire transfer the
Transaction Fee directly to Houlihan Lokey upon the consummation of the
Transaction.

        (e)   Expenses. Additionally, and regardless of whether any Transaction
is consummated, Houlihan Lokey shall be entitled to reimbursement of its
reasonable out-of-pocket expenses incurred from time to time during the term
hereof in connection with the services to be provided under this Agreement,
promptly after invoicing the Company therefore. Houlihan Lokey bills its clients
for its reasonable

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out-of-pocket expenses for (i) travel-related expenses, without regard to
volume-based or similar credits or rebates Houlihan Lokey may receive from
travel agents and airlines on a periodic basis, and (ii) research, database and
similar information charges paid to third party vendors, and postage,
telecommunication and duplicating expenses, to perform client-related services
that are not capable of being identified with, or charged to, a particular
client or assignment in a reasonably practicable manner, based upon a uniformly
applied monthly assessment or percentage of the fees due to Houlihan Lokey. In
the event that Houlihan Lokey anticipates that its out-of-pocket expenses will
exceed $5,000 in any given month, Houlihan Lokey agrees to promptly inform the
Company.

        In addition, Houlihan Lokey shall be reimbursed for the reasonable fees
and expenses of its outside legal counsel in connection with this Agreement and
the matters contemplated hereby.

        3.     Information. The Company will furnish Houlihan Lokey with such
information regarding the business and financial condition of the Company as is
reasonably requested, all of which will be, to the Company's best knowledge,
accurate and complete at the time furnished. The Company further represents and
warrants that any financial projections delivered to Houlihan Lokey have been or
will be prepared in good faith based upon assumptions which, in light of the
circumstances under which they are made, are reasonable and that to the extent
any projections include any estimates of value, such amounts have been estimated
as reliably as practical under the circumstances. The Company will promptly
notify Houlihan Lokey if it learns of any material misstatement in, or material
omission from, any information previously delivered to Houlihan Lokey, or any
offering memorandum, private placement memorandum or other offering materials
transmitted to any potential participant in a Transaction. Houlihan Lokey may
rely, without independent verification, on the accuracy and completeness of all
information furnished by or on behalf of the Company or any other potential
party to any Transaction. The Company understands that Houlihan Lokey will not
be responsible for independently verifying the accuracy or completeness of such
information, and shall not be liable for any inaccuracies or omissions therein.
The foregoing shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of Houlihan Lokey or any Indemnified
Party (as defined elsewhere in this Agreement) or any person controlling any of
them. Except as may be required by law or court process, any opinions or advice
(whether written or oral) rendered by Houlihan Lokey pursuant to this Agreement
are intended solely for the benefit and use of the Company, and may not be
publicly disclosed in any manner or made available to third parties (other than
the Company's management, directors, advisors, accountants and attorneys)
without the prior written consent of Houlihan Lokey, which consent shall not be
unreasonably withheld. If Houlihan Lokey resigns or terminates this Agreement
prior to the dissemination of any offering materials or any other documents or
information prepared in connection with a Transaction, no reference shall be
made therein to Houlihan Lokey.

        4.     Indemnification; Standard of Care. The Company agrees to provide
indemnification, contribution and reimbursement to Houlihan Lokey and certain
other parties in accordance with, and the Company further agrees to be bound by
the other provisions set forth in, Schedule A attached hereto.

        5.     Other Services. If the Company so requests, Houlihan Lokey (or
its affiliate, Houlihan Lokey Howard & Zukin Financial Advisors, Inc.
("HLHZFA")) will render a written opinion ("Opinion") regarding the fairness,
from a financial point of view, to the Company or to the public stockholders of
the Company, as the case may be, of the Transaction or the consideration to be
received by it in connection with the Transaction. For the avoidance of doubt,
HLHZFA shall be an Indemnified Party under Schedule A of the Agreement. Neither
Houlihan Lokey's or HLHZFA's verbal conclusions nor the Opinion will be used for
any purpose other than in connection with the Transaction. Houlihan Lokey (or
HLHZFA) shall be responsible only for the conclusions or opinions set forth in
its written Opinion, subject to the limitations set forth therein and in
Section 3 of this Agreement.

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        Any submission, distribution or filing of the Opinion, in whole or in
part, to or with any third party or governmental agency, or any reference to
Houlihan Lokey, the Company's engagement of Houlihan Lokey, the services
provided by Houlihan Lokey or the Opinion in any public filing(s), materials
distributed to the security holders of the Company, financial statements, press
releases or any other disclosure, will be subject, in each instance, to Houlihan
Lokey's prior review and written approval. Notwithstanding the preceding
sentence, the Company may (a) deliver information copies of the Opinion to its
legal counsel and other professional advisors that are participating in the
Transaction (provided that such advisors agree to keep such information
confidential), and (b) produce an information copy of the Opinion and any other
materials in its possession in response to any subpoena, court order, or similar
legal demand, provided that prompt notice thereof shall be given to Houlihan
Lokey. In addition, Houlihan Lokey acknowledges that the text of the Opinion and
a description thereof may be included in certain filing(s) required to be made
by the Company with the Securities and Exchange Commission in connection with
the Transaction, and in materials required to be delivered to the Company's
security holders that are a part of such filing(s), provided that (i) if the
Opinion is included in such filing(s) or materials, the Opinion will be
reproduced therein only in its entirety, and (ii) the content and context of any
such inclusion or description (including, without limitation, any reference to
Houlihan Lokey, the Company's engagement of Houlihan Lokey, the services
provided by Houlihan Lokey or the Opinion) shall be subject to Houlihan Lokey's
prior review and written approval (and, if applicable, formal written consent).

        The Company shall pay Houlihan Lokey, in addition to the other fees set
forth in this Agreement, an additional fee upon the delivery of the Opinion
equal to $500,000, payable upon Houlihan Lokey's issuance of the Opinion.
Moreover, in the event that any of the Company's officers or directors (other
than those affiliated with Slough) participate in the Transaction (by virtue of
direct investment of cash or through the issuance of securities of the purchaser
of the Slough Interests) the Company shall pay Houlihan Lokey an incremental
$200,000 (or a total of $700,000) upon its issuance of the Opinion.

        To the extent Houlihan Lokey is requested by the Company to perform any
other financial advisory or investment banking services which are not within the
scope of this assignment, such fees shall be mutually agreed upon by Houlihan
Lokey and the Company in writing, in advance, depending on the level and type of
services required, and shall be in addition to the fees and expenses described
hereinabove. Except as set forth in the preceding sentence, if Houlihan Lokey is
required to render services directly or indirectly relating to the subject
matter of this Agreement (including, but not limited to, producing documents,
answering interrogatories, attending depositions, testifying at trial, and
whether by subpoena, court process or order, or otherwise), the Company shall
pay Houlihan Lokey's then current hourly rates for the persons involved for the
time expended in rendering such services, including, but not limited to, time
for meetings, conferences, preparation and travel, and all related reasonable
out-of-pocket costs and expenses (including without limitation the reasonable
legal fees and expenses of Houlihan Lokey's legal counsel incurred in connection
therewith).

        6.     Attorneys' Fees. If any party to this Agreement brings an action
directly or indirectly based upon this Agreement or the matters contemplated
hereby against another party, the prevailing party shall be entitled to recover,
in addition to any other appropriate amounts, its reasonable costs and expenses
in connection with such proceeding, including, but not limited to, reasonable
attorneys' fees and court costs.

        7.     Credit. Upon the consummation of any Transaction, Houlihan Lokey
may, at its own expense, place announcements in financial and other newspapers
and periodicals (such as a customary "tombstone" advertisement) describing its
services in connection therewith. Furthermore, the Company agrees that in any
press release announcing any Transaction, the Company will include in such press
release a reference to Houlihan Lokey's role as financial advisor to the Company
with respect to such Transaction.

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        8.     Miscellaneous. This Agreement shall be binding upon the parties
hereto and their respective successors, heirs and permitted assigns. Nothing in
this Agreement, express or implied, is intended to confer or does confer on any
person or entity, other than the parties hereto and their respective successors,
heirs and permitted assigns and, to the extent expressly set forth herein, the
Indemnified Parties, any rights or remedies under or by reason of this Agreement
or as a result of the services to be rendered by Houlihan Lokey hereunder.

        The parties understand that Houlihan Lokey is being engaged hereunder to
provide the services described above solely to the Company, and that Houlihan
Lokey is not being retained to act as an agent or fiduciary of the Company, the
owners of the Company or any other persons in connection with this engagement.

        The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect pursuant to the terms
hereof.

        The Company agrees that it will be solely responsible for ensuring that
any Transaction complies with applicable law.

        This Agreement incorporates the entire understanding of the parties
regarding the subject matter hereof, and supersedes all previous agreements or
understandings regarding the same, whether written or oral.

        This Agreement may not be amended, and no portion hereof may be waived,
except in a writing duly executed by the parties.

        This Agreement has been reviewed by the signatories hereto and their
counsel. There shall be no construction of any provision against Houlihan Lokey
because this Agreement was drafted by Houlihan Lokey, and the parties waive any
statute or rule of law to such effect.

        THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO SUCH STATE'S RULES CONCERNING CONFLICTS OF LAWS. EACH OF
HOULIHAN LOKEY AND THE COMPANY (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, ON BEHALF OF ITS EQUITY HOLDERS) IRREVOCABLY WAIVES ANY RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) RELATED TO OR ARISING OUT OF THE ENGAGEMENT OF
HOULIHAN LOKEY PURSUANT TO, OR THE PERFORMANCE BY HOULIHAN LOKEY OF THE SERVICES
CONTEMPLATED BY, THIS AGREEMENT.

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        Please confirm that the foregoing terms are in accordance with your
understanding by signing and returning the enclosed copy of this Agreement,
together with payment in the amount of $100,000.

Sincerely,
 
 
HOULIHAN LOKEY HOWARD & ZUKIN CAPITAL, INC.
 
 
By:
 
/s/  WILLIAM H. HARDIE III      

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William H. Hardie III
Managing Director
 
 
Accepted and agreed to as of                        :
 
 
TIPPERARY CORPORATION
 
 
By:
 
/s/  DAVID L. BRADSHAW      

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David L. Bradshaw
President and Chief Executive Officer
 
 

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SCHEDULE A

        This Schedule is attached to, and constitutes a material part of, that
certain agreement dated February 22, 2005, between the Company and Houlihan
Lokey (the "Agreement"). Unless otherwise noted, all capitalized terms used
herein shall have the meaning set forth in the Agreement.

        As a material part of the consideration for the agreement of Houlihan
Lokey to furnish its services to the Company under the Agreement, the Company
agrees to indemnify and hold harmless Houlihan Lokey and its affiliates, and
their respective past, present and future directors, officers, shareholders,
employees, agents, representatives, advisors and controlling persons within the
meaning of either Section 15 of the Securities Act of 1933, as amended, or
Section 20 of the Securities Exchange Act of 1934, as amended (collectively, the
"Indemnified Parties"), to the fullest extent lawful, from and against any and
all losses, claims, damages or liabilities (or actions in respect thereof),
joint or several, arising out of or related to the Agreement, the Opinion, any
actions taken or omitted to be taken by an Indemnified Party (including acts or
omissions constituting ordinary negligence) in connection with the Agreement, or
any Transaction or proposed Transaction contemplated thereby. In addition, the
Company agrees to reimburse the Indemnified Parties for any legal or other
expenses reasonably incurred by them in respect thereof at the time such
expenses are incurred; provided, however, the Company shall not be liable under
the foregoing indemnity and reimbursement agreement for any loss, claim, damage
or liability which is finally judicially determined by a court of competent
jurisdiction to have resulted primarily from the willful misconduct or gross
negligence of such Indemnified Party.

        If for any reason the foregoing indemnification is unavailable to any
Indemnified Party or insufficient fully to indemnify any such party or to hold
it harmless, the Company shall contribute to the amount paid or payable by the
Indemnified Party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative benefits
received (or anticipated to be received) by the Company, on the one hand, and
Houlihan Lokey, on the other hand, in connection with the actual or potential
Transaction. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or otherwise, then the Company shall
contribute to such amount paid or payable by any Indemnified Party in such
proportion as is appropriate to reflect not only such relative benefits, but
also the relative fault of the Company, on the one hand, and Houlihan Lokey, on
the other hand, in connection therewith, as well as any other relevant equitable
considerations. Notwithstanding the foregoing, the aggregate contribution of all
Indemnified Parties to any such losses, claims, damages, liabilities and
expenses shall not exceed the amount of fees actually received by Houlihan Lokey
pursuant to the Agreement.

        The Company agrees that it shall not effect any settlement or release
from liability in connection with any matter for which an Indemnified Party
would be entitled to indemnification from the Company, unless such settlement or
release contains a release of the Indemnified Parties reasonably satisfactory in
form and substance to Houlihan Lokey. The Company shall not be required to
indemnify any Indemnified Party for any amount paid or payable by such party in
the settlement or compromise of any claim or action without the Company's prior
written consent, which consent shall not be unreasonably withheld.

        The Company further agrees that neither Houlihan Lokey nor any other
Indemnified Party shall have any liability, regardless of the legal theory
advanced, to the Company or any other person or entity (including, without
limitation, the Company's equity holders and creditors) related to or arising
out of the Agreement, except for any liability for losses, claims, damages,
liabilities or expenses incurred which are finally judicially determined by a
court of competent jurisdiction to have resulted primarily from the willful
misconduct or gross negligence of such Indemnified Party. The indemnity,
reimbursement, contribution and other obligations and agreements of the Company
set forth herein shall apply to any modifications of the Agreement, shall be in
addition to any liability which the Company may otherwise have, and shall be
binding upon, inure to the benefit of and be enforceable by any successors,
assigns, heirs and personal representatives of the Company and each Indemnified
Party. The foregoing provisions shall survive the consummation of any
Transaction and any termination of the relationship established by the
Agreement.

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Exhibit 10.33