Exhibit 4.9


 


This Promissory Note has not been registered under
the Securities Act of 1933, as amended (the “Act”), or applicable state
securities laws (the “State Acts”), and shall not be sold, pledged,
hypothecated, donated or otherwise transferred (whether or not for
consideration) by the holder except upon the issuance to Tipperary Corporation
of a favorable opinion of the holder’s counsel or submission to Tipperary
Corporation of such other evidence as may be satisfactory to counsel to
Tipperary Corporation, to the effect that any such transfer shall not be in
violation of the Act and/or the State Acts.


 


PROMISSORY
NOTE


 


	
  $11,400,000

  	
  Denver, Colorado

  
	
   

  	
  August 1, 2005

  



 


Tipperary Corporation, a Texas corporation (“Maker”),
hereby promises to pay to the order of Santos International Holdings Pty Ltd.,
a corporation organized under the laws of the Australian Capital Territory
A.B.N. 57 057 585 869 (“Lender”), the owner and holder of that certain
Promissory Note dated July 12, 2005 made by Maker and payable to the order
of Slough Estates USA Inc., a Delaware corporation, in the original principal
amount of Ten Million, Nine Hundred Thousand and No/100 Dollars ($10,900,000),
at 10111 Richmond Avenue, Suite 500, Houston, Texas 77042 or at any other
place the holder hereafter designates, the principal amount of Eleven Million,
Four Hundred Thousand and No/100 Dollars ($11,400,000), together with interest
thereon in lawful money of the United States (“Note”) as herein provided.


 


1.             Interest.  The unpaid principal balance of this Note
shall bear interest on the following sums received or to be received,
commencing on the following dates:


 


	
  (i)

  	
   

  	
  One Million and
  No/100 Dollars ($1,000,000), received on July 29, 2002;

  
	
  (ii)

  	
   

  	
  Two Million and
  No/100 Dollars ($2,000,000), received on October 30, 2002;

  
	
  (iii)

  	
   

  	
  One Million and
  No/100 Dollars ($1,000,000), received on November 18, 2002;

  
	
  (iv)

  	
   

  	
  Five Hundred
  Thousand and No/100 Dollars ($500,000), received on March 19, 2005;

  
	
  (v)

  	
   

  	
  Five Hundred
  Thousand and No/100 Dollars ($500,000), received on March 28, 2005;

  
	
  (vi)

  	
   

  	
  Three Hundred
  Thousand and No/100 Dollars ($300,000), received on April 4, 2005;

  
	
  (vii)

  	
   

  	
  Three Hundred
  Thousand and No/100 Dollars ($300,000), received on April 19, 2005;

  
	
  (viii)

  	
   

  	
  One Million and
  No/100 Dollars ($1,000,000), received on May 3, 2005;

  
	
  (ix)

  	
   

  	
  Two Hundred
  Thousand and No/100 Dollars ($200,000), received on May 11, 2005;

  
	
  (x)

  	
   

  	
  Three Hundred
  Thousand and No/100 Dollars ($300,000) received on May 12, 2005;

  
	
  (xi)

  	
   

  	
  Four Hundred
  Thousand and No/100 Dollars ($400,000 received on May 19,2005

  
	
  (xii)

  	
   

  	
  Four Hundred
  Thousand and No/100 Dollars ($400,000) received on May 26,2005;

  
	
  (xiii)

  	
   

  	
  Five Hundred
  Thousand and No/100 Dollars ($500,000) received on June 2, 2005;

  
	
  (xiv)

  	
   

  	
  Five Hundred
  Thousand and No/100 Dollars ($500,000) received on June 9, 2005;

  
	
  (xv)

  	
   

  	
  Five Hundred
  Thousand and No/100 Dollars ($500,000) received on June 16, 2005;

  
	
  (xvi)

  	
   

  	
  Five Hundred
  Thousand and No/100 Dollars ($500,000) received on July 1, 2005;

  
	
  (xvii)

  	
   

  	
  Five Hundred
  Thousand and No/100 Dollars ($500,000) received on July 12, 2005;

  
	
  (xviii)

  	
   

  	
  Five Hundred
  Thousand and No/100 Dollars ($500,000) received on July 21, 2005; and

  
	
  (xix)

  	
   

  	
  Five Hundred
  Thousand and No/100 Dollars ($500,000) received on August 1, 2005.

  



 





















 


The applicable annual interest rate hereunder, adjusted monthly, shall
be the sum of (i) the one month London Interbank Offered Rate on the first
day of each calendar month (“LIBOR”) plus (ii) 3.5% per year until such
date as the unpaid principal balance of this Note becomes due and payable and (ii) 6.0%
per year after such date as the unpaid principal balance of this Note becomes
due and payable, whether at maturity or pursuant to other default as provided
hereunder.  Each monthly interest payment
shall be payable in arrears in calendar monthly installments, due and payable
by the second business day of the following calendar month.  Interest shall be calculated based on the
actual number of days the principal balance remains outstanding in a year of 365
days.


 


2.             Maturity.  The unpaid principal balance of this Note,
together with accrued and unpaid interest, shall be due and payable on April 30,
2006.


 


3.             Prepayment.  The unpaid principal balance of the Note,
together with accrued and unpaid interest, may be paid in whole or in part at
any time in the sole discretion of Maker without penalty.  Any prepayment in part by Maker shall be
first allocated to any accrued and unpaid interest, with any remaining amount
being allocated to the unpaid principal.


 


4.             Default.  If any of the following events occur, all
indebtedness owing by Maker hereunder shall become forthwith due and payable to
holder, upon delivery by holder to Maker of a written notice of default and
demand for payment, and the expiration of the following periods from the
delivery of such notice, during which periods Maker shall have the ability to
cure such default: (i) in the case of (a) below, ten days, (ii) in
the case of (b), (c) or (d) below, 30 days and, (iii) in the
case of (e) below, 15 days, or, if it is not practicable for Maker to cure
such default within said 15-day period and Maker is diligently proceeding
to cure such default, such time longer than 15 days as is reasonable for Maker
to cure such default.


 


(a)           Any
default by Maker in the payment, when due, of any part of the principal of or
interest on this Note and the payment of any other sums payable by Maker
pursuant to the terms of this Note.


 


(b)           The
insolvency or bankruptcy of Maker or any of its direct or indirect
subsidiaries, the execution by Maker or any of its direct or indirect
subsidiaries of an assignment for the benefit of creditors of substantially all
of the assets of Maker or any such direct or indirect subsidiary, or Maker’s or
any of its direct or indirect subsidiary’s consent to the appointment of a trustee
or a receiver or other officer of a court or other tribunal.


 


(c)           The
appointment of a trustee or receiver or other officer of a court for Maker or
any of its direct or indirect subsidiaries, or for a substantial part of their
properties, without the consent of Maker or of such direct or indirect
subsidiary, where no discharge is effected within 30 days.


 


2





















 


(d)           The
institution of bankruptcy, reorganization, insolvency or liquidation
proceedings by or against Maker or any of its direct or indirect subsidiaries,
and if against Maker or such a direct or indirect subsidiary, where such
proceeding is consented to by Maker or such subsidiary or remains undismissed
for 30 days.


 


(e)           Any
other breach or failure of Maker to perform any term or condition of this Note.


 


5.             Collection.  Maker and all guarantors and endorsers of
this Note shall pay all costs and expenses of collection and enforcement of
this Note, including reasonable attorneys’ fees.


 


6.             Waiver.  Demand, presentment for payment, notice of
dishonor, protest and notice of protest are hereby waived.


 


7.             Proceeds.  The proceeds from this Note have previously
been advanced to Maker by Lender.


 


8.             Assignment.  This Note may not be assigned by Lender or
Maker without the express written consent of the other party; provided,
however, that Lender may assign this Note to any of its affiliates without such
consent.  Such an affiliate, for purposes
of this Section 9, is any person of which Lender owns directly or
indirectly more than 50% of the voting equity interests, or such person as owns
directly or indirectly more than 50% of the voting equity interests of Lender.


 


9.             Governing
Law.  This Note is made and is being
executed in the State of Colorado, and the provisions hereof will be construed
in accordance with the laws of the State of Colorado, without regard to
principles of conflicts of laws. 
Furthermore, Lender and Maker (and their lawful assignees, successors
and endorsers) further agree that in the event of default this Note may be
enforced in any court of competent jurisdiction in the States of Colorado or
Illinois, and they do hereby submit to such jurisdiction in the States of
Colorado or Illinois.


 


10.           Severability.  Invalidation of any of the provisions of this
Note shall not affect the remainder of this Note.


 


11.           Amendment.  This Note may not be amended or modified
except by an instrument in writing signed by both parties.


 


3





















 


12.           Modification.  This Note is given in modification and
increase, but not in extinguishment or discharge of the sum of Ten Million,
Nine Hundred Thousand and No/100 Dollars ($10,900,000) left owing and unpaid
upon that certain promissory note dated July 21, 2005, executed by Maker
and payable to the order of Slough Estates USA Inc. in the original principal
amount of Eleven Million, Four Hundred Thousand and No/100 Dollars
($11,400,000).  The principal amount of
this Note represents an additional Five Hundred Thousand and No/100 Dollars
($500,000) monies advanced by Lender and paid to Maker at its special instance
and request.


 


	
   

  	
  TIPPERARY CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David L. Bradshaw

  	
   

  
	
   

  	
   

  	
  David L. Bradshaw, President and

  
	
   

  	
   

  	
  Chief Executive Officer

  



 


4