Exhibit 4.79(h)


 


GUARANTY


 


THIS GUARANTY is made as of 9 June, 2004, by Tipperary
Corporation, a Texas corporation (“TC”), Tipperary Oil & Gas Corporation, a
Texas corporation (“TOGC”), Tipperary CSG Inc., a Colorado corporation
(“TCSG”), and Slough Estates USA Inc., a Delaware corporation (“Slough”; TC,
TOGC, TCSG, and Slough are sometimes collectively referred to herein as
“Guarantors” and each individually as “Guarantor”), in favor of ANZ Fiduciary
Services Pty Ltd, as Security Trustee of the trust established under the
Security Trust Deed (described in the Facilities Agreement) (in such capacity
“Guaranty Trustee”) and each Security Beneficiary.


 


RECITALS:


 


WHEREAS, Tipperary Oil & Gas (Australia) Pty Limited (“Borrower”),
Guarantors, Slough Estates plc, Australia and New Zealand Banking Group
Limited, as Agent, and as Working Capital Facility Provider, BOS International
(Australia) Limited, as Technical Bank, Guaranty Trustee, Tipperary Pastoral
Company Pty Ltd, each of the parties listed as Hedge Providers, and each of the
financial institutions listed as financiers (collectively, the “Financiers”),
are parties to the Comet Ridge Project Facilities Agreement of even date
herewith (as from time to time amended, supplemented, or restated, the “Facilities
Agreement”); and


 


WHEREAS, pursuant to the Finance Documents further described in the
Facilities Agreement, the Security Beneficiaries have agreed to extend credit
to Borrower; and


 


WHEREAS, in order to induce Security Beneficiaries to extend such
credit pursuant to the Finance Documents and as a condition precedent to each
Security Beneficiary’s obligations to advance such funds, Guarantors must
execute and deliver to Guaranty Trustee a satisfactory guaranty of Borrower’s
obligations under the Finance Documents; and


 


WHEREAS, combined, Slough and TOGC own one hundred percent (100%) of
the issued and outstanding shares of common stock of Borrower, Slough owns
sixty-two percent (62%) of the issued and outstanding shares of common stock of
TC, TC owns one hundred percent (100%) of the issued and outstanding shares of
common stock of TOGC, and TOGC owns one hundred percent (100%) of the issued
and outstanding shares of common stock of TCSG; and


 


WHEREAS, the Board of Directors of each of TC, TOGC, TCSG and Slough
has determined that the execution, delivery and performance of this Guaranty
may reasonably be expected to benefit such Guarantor, directly or indirectly,
and are in the best interests of such Guarantor;


 


NOW, THEREFORE, in consideration of the premises, of the benefits which
will inure to Guarantors from Security Beneficiary’s advances of funds to
Borrower under the Finance Documents, and of Ten Dollars and other good and
valuable consideration, the receipt and sufficiency of all of which are hereby
acknowledged, and in order to induce each Security


 

















 


Beneficiary to advance funds under the
Finance Documents, Guarantors hereby agree with Guaranty Trustee, for the
benefit of Guaranty Trustee and each Security Beneficiary as follows:


 


AGREEMENTS:


 


Section 1.                                            Definitions.  Reference is hereby made to the Facilities
Agreement for all purposes. All terms used in this Guaranty which are defined
in the Facilities Agreement and not otherwise defined herein shall have the
same meanings when used herein and for those not defined therein which are
defined in the Security Trust Deed (as described in the Facilities Agreement),
shall have the meanings when used therein. All references herein to any Finance
Document, Transaction Document, or other document or instrument refer to the
same as from time to time amended, supplemented or restated. As used herein,
the terms “Guarantor”, “Guarantors”, “Guaranty Trustee”, “TC”, “TCSG”,
“Slough”, “TOGC”, “Borrower”, and “Facilities Agreement” shall have the
meanings indicated above, and the following terms shall have the following
meanings:


 


“Financiers” means the Persons who are from time to time
“Financiers” as defined in the Facilities Agreement.


 


“Hedge Providers” means the Persons who are from time to time
“Hedge Providers” as defined in the Facilities Agreement.


 


“Obligations” means collectively all of the indebtedness,
obligations, and undertakings which are guaranteed by Guarantor and described
in subsections (a) and (b) of Section 2.


 


“Obligors” means Borrower, Guarantors and any other endorsers,
guarantors or obligors, primary or secondary, of any or all of the Obligations.


 


“Person” means an individual, corporation, general partnership,
limited partnership, limited liability company, association, joint stock
company, trust or trustee thereof, estate or executor thereof, court,
administrative agency, or any other legally recognizable entity.


 


“Security” means any rights, properties, or interests of
Guaranty Trustee or any Security Beneficiary, under the Finance Documents or otherwise,
which provide recourse or other benefits to Guaranty Trustee or any Security
Beneficiary in connection with the Obligations or the non-payment or
non-performance thereof, including collateral (whether real or personal,
tangible or intangible) in which Guaranty Trustee or any Security Beneficiary
have rights under or pursuant to any Finance Documents, guaranties of the
payment or performance of any Obligation, bonds, surety agreements, keep-well
agreements, letters of credit, rights of subrogation, rights of offset, and
rights pursuant to which other claims are subordinated to the Obligations.


 


“Security Beneficiary” means the Agent (for its own account or
for the account of another Security Beneficiary), the Guaranty Trustee (for its
own account or for the account of another Security Beneficiary), each
Financier, each Hedge Provider, the Technical Bank, the Working Capital
Facility Provider, and each other person the Guaranty Trustee and the Borrower
agree in writing from time to time is a Security Beneficiary (for its own
account or for the account of another Security Beneficiary).


 


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Section 2.                                            Guaranty.


 


(a)                                  Guarantors
hereby, jointly and severally, irrevocably, absolutely, and unconditionally guarantee
to Guaranty Trustee and each Security Beneficiary the prompt, complete, and
full payment when due, and no matter how the same shall become due, of all sums
payable under the Finance Documents, whether for principal, interest, fees or
otherwise. Without limiting the generality of the foregoing, Guarantors’
liability hereunder shall extend to and include all post-petition interest,
expenses, and other duties and liabilities of Borrower described above in this
subsection (a), which would be owed by Borrower but for the fact that they
are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization, or similar proceeding involving Borrower.


 


(b)                                 If
Borrower shall for any reason fail to pay any Obligation, as and when such
Obligation shall become due and payable, whether at its stated maturity, as a
result of the exercise of any power to accelerate, or otherwise, Guarantors
will, upon written demand by Guaranty Trustee, pay such Obligation in full to
Guaranty Trustee for the benefit of Guaranty Trustee or the Security
Beneficiary to whom such Obligation is owed. If Borrower shall for any reason
fail to perform promptly any Obligation, Guarantors will, upon written demand
by Guaranty Trustee, cause such Obligation to be performed or, if specified by
Guaranty Trustee, provide sufficient funds, in such amount and manner as
Guaranty Trustee shall in good faith determine, for the prompt, full and
faithful performance of such Obligation by Guaranty Trustee or such other
Person as Guaranty Trustee shall designate.


 


(c)                                  If
either Borrower or a Guarantor fails to pay any Obligation as described in the
immediately preceding subsections (a) or (b) Guarantors will incur the
additional obligation to pay to Guaranty Trustee, and Guarantors will forthwith
upon written demand by Guaranty Trustee, specifying the nature and amount of
each expense, pay to Guaranty Trustee, the amount of any and all expenses,
including fees and disbursements of Guaranty Trustee’s counsel and of
any experts or agents retained by Guaranty Trustee, which Guaranty Trustee may
incur as a result of such failure.


 


(d)                                 As
between Guarantors and Guaranty Trustee or any Security Beneficiary, this
Guaranty shall be considered a primary and liquidated liability of Guarantors.


 


(e)                                  It
is the intention of each Guarantor, Guaranty Trustee and Security Beneficiary
that the liability of each Guarantor hereunder not constitute a fraudulent
transfer or fraudulent conveyance under any state or federal law that may be
applied hereto. Each Guarantor and, by their acceptance hereof, Guaranty
Trustee and Security Beneficiary hereby acknowledges and agrees that,
notwithstanding any other provision of this Guaranty, the indebtedness
guaranteed hereby by such Guarantor shall be limited to the maximum amount of
indebtedness that can be incurred or secured by such Guarantor without
rendering this Guaranty subject to avoidance with respect to such Guarantor
under Section 548 of the United States Bankruptcy Code or any comparable
provisions of any applicable state or federal law.


 


(f)                                    The
liability of each of Slough, TC and TOGC to pay any amount under this Guaranty
may be discharged from, and the recourse of the Guaranty Trustee or any
Security


 


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Beneficiary
with respect to such Guarantor (in respect of such liability) is limited to,
only the assets of such Guarantor described as “Collateral” under any of the
Finance Documents, despite anything else to the contrary herein or in any of
the Finance Documents and only subject to the terms of this Section (g).
The Guaranty Trustee or any Security Beneficiary may (a) do anything necessary
to enforce its rights in connection with the Collateral, and (b) take
proceedings to obtain (i) an injunction or other order to restrain any breach
of the Finance Documents by a Guarantor, or (ii) declaratory relief or some
other similar judgment or order as to the obligations of a Guarantor under the
Finance Documents.  The Guaranty Trustee
or any Security Beneficiary may not seek to recover any shortfall in the
amounts owing to it under this Guaranty by applying to have a Guarantor wound
up. Notwithstanding the foregoing, the Guaranty Trustee or any Security
Beneficiary may take action against Slough or TOGC individually, beyond the
Collateral, through any proceeding for all loss, damage, and expense suffered
or incurred by the Guaranty Trustee or any Security Beneficiary as a result of
any of the following:


 


(i)                                     such
Guarantor’s fraud, gross negligence or wilful misconduct in connection with any
Finance Document; or


 


(ii)                                  a
representation or warranty by or on behalf of such Guarantor under any Finance
Document being found to have been incorrect or misleading when made or taken to
be made; or


 


(iii)                               such Guarantor’s failure
to comply with its obligations (other than an obligation to pay money) under
any Finance Document.


 


Notwithstanding
the foregoing, the Guaranty Trustee or any Security Beneficiary may take action
against TC individually, beyond the Collateral, through any proceeding for all
amounts payable by TC in the event of:


 


(i)                                     TC’s
fraud, gross negligence or wilful misconduct in connection with any Finance
Document; or


 


(ii)


 


(1)                                  a representation or
warranty by or on behalf of TC under any Finance Document being found to have
been incorrect or misleading when made or taken to be made; or


 


(2)                                  TC’s failure to
comply with its obligations (other than an obligation to pay money) under any
Finance Document;


 


where the Guaranty Trustee or any Security Beneficiary determines (which
it may do at its discretion) that the circumstance was a material factor in the
determination by it or another Security Beneficiary to give an instruction to
the Agent to act under clause 21-2 of the Facilities Agreement


 


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Section 3.                                            Unconditional
Guaranty.


 


(a)                                  No
action which Guaranty Trustee or any Security Beneficiary may take or omit to
take in connection with any of the Finance Documents, any of the Obligations
(or any other indebtedness owing by Borrower to Guaranty Trustee or any
Security Beneficiary), or any Security, and no course of dealing of Guaranty
Trustee or any Security Beneficiary with any Obligor or any other Person, shall
release or diminish any of Guarantor’s obligations, liabilities, agreements or
duties hereunder, affect this Guaranty in any way, or afford Guarantors any
recourse against Guaranty Trustee or any Security Beneficiary, regardless of
whether any such action or inaction may increase any risks to or liabilities of
Guaranty Trustee or any Security Beneficiary or any Obligor or increase any
risk to or diminish any safeguard of any Security. Without limiting the
foregoing, Guarantors hereby expressly agree that Guaranty Trustee and Security
Beneficiaries may, from time to time, without notice to or the consent of
Guarantors, do any or all of the following:


 


(i)                                     Amend,
change or modify, in whole or in part, any one or more of the Finance Documents
and give or refuse to give any waivers or other indulgences with respect
thereto.


 


(ii)                                  Neglect,
delay, fail, or refuse to take or prosecute any action for the collection or
enforcement of any of the Obligations, to foreclose or take or prosecute any
action in connection with any Security or Finance Document, to bring suit
against any Obligor or any other Person, or to take any other action concerning
the Obligations or the Finance Documents.


 


(iii)                               Accelerate,
change, rearrange, extend, or renew the time, rate, terms, or manner for
payment or performance of any one or more of the Obligations (whether for
principal, interest, fees, expenses, indemnifications, affirmative or negative
covenants, or otherwise).


 


(iv)                              Compromise
or settle any unpaid or unperformed Obligation or any other obligation or
amount due or owing, or claimed to be due or owing, under any one or more of
the Finance Documents.


 


(v)                                 Take,
exchange, amend, eliminate, surrender, release, or subordinate any or all
Security for any or all of the
Obligations, accept additional or substituted Security therefor, and
perfect or fail to perfect Guaranty Trustee’s or Security Beneficiary’s’ rights
in any or all Security.


 


(vi)                              Discharge,
release, substitute or add Obligors.


 


(vii)                           Subject
to the terms of the Finance Documents apply all monies received from Obligors
or others, or from any Security for any of the Obligations, as Guaranty Trustee
or Security Beneficiary may determine to be in their best interest, without in
any way being required to marshall Security or assets or to apply all or any
part of such monies upon any particular Obligations.


 


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(b)                                 No
action or inaction of any Obligor or any other Person, and no change of law or
circumstances, shall release or diminish Guarantors’ obligations, liabilities,
agreements, or duties hereunder, affect this Guaranty in any way, or afford
Guarantors any recourse against Guaranty Trustee or any Security Beneficiary.
Without limiting the foregoing, the obligations, liabilities, agreements, and
duties of Guarantors under this Guaranty shall not be released, diminished,
impaired, reduced, or affected by the occurrence of any or all of the following
from time to time, even if occurring without notice to or without the consent
of Guarantors:


 


(i)                                     Any voluntary or
involuntary liquidation, dissolution, sale of all or substantially all assets,
marshalling of assets or liabilities, receivership, conservatorship, assignment
for the benefit of creditors, insolvency, bankruptcy, reorganization,
arrangement, or composition of any Obligor or any other proceedings involving
any Obligor or any of the assets of any Obligor under laws for the protection
of debtors, or any discharge, impairment, modification, release, or limitation
of the liability of, or stay of actions or lien enforcement proceedings against,
any Obligor, any properties of any Obligor, or the estate in bankruptcy of any
Obligor in the course of or resulting from any such proceedings.


 


(ii)                                  The
failure by Guaranty Trustee or any Security Beneficiary to file or enforce a
claim in any proceeding described in the immediately preceding
subsection (i) or to take any other action in any proceeding to which any
Obligor is a party.


 


(iii)                               The
release by operation of law of any Obligor from any of the Obligations or any
other obligations to Guaranty Trustee or any Security Beneficiary.


 


(iv)                              The
invalidity, deficiency, illegality, or unenforceability of any of the
Obligations or the Finance Documents, in whole or in part, any bar by any
statute of limitations or other law of recovery on any of the Obligations, or
any defense or excuse for failure to perform on account of force majeure, act
of God, casualty, impossibility, impracticability, or other defense or excuse
whatsoever.


 


(v)                                 The
failure of any Obligor or any other Person to sign any guaranty or other
instrument or agreement within the contemplation of any Obligor, Guaranty
Trustee or any Security Beneficiary.


 


(vi)                              The
fact that any Guarantor may
have incurred directly part of the Obligations or is otherwise primarily liable
therefor.


 


(vii)                           Without
limiting any of the foregoing, any fact or event (whether or not similar to any
of the foregoing) which in the absence of this provision would or might
constitute or afford a legal or equitable discharge or release of or defense to
a guarantor or surety other than the actual payment and performance by
Guarantors under this Guaranty.


 


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(c)                                  Guaranty
Trustee and Security Beneficiary may invoke the benefits of this Guaranty
before pursuing any remedies against any Obligor or any other Person and before
proceeding against any Security now or hereafter existing for the payment or
performance of any of the Obligations, provided that the foregoing is subject
to the limitations set forth in Section 2(g) of this Guaranty. Guaranty
Trustee and Security Beneficiary may maintain an action against Guarantors on
this Guaranty without joining any other Obligor therein and without bringing a
separate action against any other Obligor.


 


(d)                                 If
any payment to Guaranty Trustee or any Security Beneficiary by any Obligor is
held to constitute a preference or a voidable transfer under applicable state
or federal laws, or if for any other reason Guaranty Trustee or any Security
Beneficiary is required to refund such payment to the payor thereof or to pay
the amount thereof to any other Person, such payment to Guaranty Trustee or
such Security Beneficiary shall not constitute a release of Guarantors from any
liability hereunder, and Guarantors agree to pay such amount to Guaranty Trustee
or such Security Beneficiary on demand and agree and acknowledge that this
Guaranty shall continue to be effective or shall be reinstated, as the case may
be, to the extent of any such payment or payments. Any transfer by subrogation
which is made as contemplated in Section 6 prior to any such payment or
payments shall (regardless of the terms of such transfer) be automatically
voided upon the making of any such payment or payments, and all rights so
transferred shall thereupon revert to and be vested in Guaranty Trustee and
Security Beneficiaries.


 


(e)                                  This
is a continuing guaranty and shall apply to and cover all Obligations and
renewals and extensions thereof and substitutions therefor from time to time.


 


Section 4.                                            Waiver.
Guarantors hereby waive, with respect to the Obligations, this Guaranty, and
the other Finance Documents:


 


(a)                                  notice
of the incurrence of any Obligation by Borrower, and notice of any kind
concerning the assets, liabilities, financial condition, creditworthiness,
businesses, prospects, or other affairs of Borrower (it being understood and
agreed that: (i) each Guarantor shall take full responsibility for informing
itself of such matters, (ii) neither Guaranty Trustee nor any Security
Beneficiary shall have any responsibility of any kind to inform Guarantors of
such matters, and (iii) Guaranty Trustee and Security Beneficiaries are hereby
authorized to assume that each Guarantor, by virtue of its relationships with
Borrower which are independent of this Guaranty, has full and complete knowledge
of such matters whenever Security Beneficiaries extend credit to Borrower or
take any other action which may change or increase such Guarantor’s liabilities
or losses hereunder).


 


(b)                                 notice
that Guaranty Trustee, any Security Beneficiary, any Obligor, or any other
Person has taken or omitted to take any action under any Finance Document or
any other agreement or instrument relating thereto or relating to any
Obligation.


 


(c)                                  notice
of acceptance of this Guaranty and all rights of each Guarantor under §34.02 of the
Texas Business and Commerce Code, as amended.


 


(d)                                 default,
demand, presentment for payment, and notice of default, demand, dishonor,
nonpayment, or nonperformance.


 


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(e)                                  notice
of intention to accelerate, notice of acceleration, protest, notice of protest,
notice of any exercise of remedies (as described in the following
Section 5 or otherwise), and all other notices of any kind whatsoever.


 


Section 5.                                            Exercise
of Remedies. Guaranty Trustee and each Security Beneficiary shall have the
right to enforce, from time to time, in any order and at Guaranty Trustee’s or
such Security Beneficiary’s sole discretion, any rights, powers and remedies
which Guaranty Trustee or such Security Beneficiary may have under the Finance
Documents or otherwise, including judicial foreclosure, the exercise of rights
of power of sale, the taking of a deed or assignment in lieu of foreclosure,
the appointment of a receiver to collect rents, issues and profits, the exercise
of remedies against personal property, or the enforcement of any assignment of
leases, rentals, oil or gas production, or other properties or rights, whether
real or personal, tangible or intangible; and Guarantors shall be liable to
Guaranty Trustee and each Security Beneficiary hereunder for any deficiency
resulting from the exercise by Guaranty Trustee or any Security Beneficiary of
any such right or remedy even though any rights which Guarantors may have
against Borrower or others may be destroyed or diminished by exercise of any
such right or remedy. No failure on the part of Guaranty Trustee or any
Security Beneficiary to exercise, and no delay in exercising, any right
hereunder or under any other Finance Document shall operate as a waiver thereof;
nor shall any single or partial exercise of any right preclude any other or
further exercise thereof or the exercise of any other right. The rights, powers
and remedies of Guaranty Trustee and each Security Beneficiary provided herein
and in the other Finance Documents are cumulative and are in addition to, and
not exclusive of, any other rights, powers or remedies provided by law or in
equity. The rights of Guaranty Trustee and each Security Beneficiary hereunder
are not conditional or contingent on any attempt by Guaranty Trustee or any
Security Beneficiary to exercise any of its rights under any other Finance
Document against any Obligor or any other Person.


 


Section 6.                                            Limited
Subrogation.


 


(a)                                  Until
all of the Obligations have been paid and performed in full Guarantors shall
have no right to exercise any right of subrogation, reimbursement, indemnity,
exoneration, contribution or any other claim which it may now or hereafter have
against or to any Obligor or any Security in connection with this Guaranty
(including any right of subrogation under ‘34.04 of the Texas Business and
Commerce Code, as amended), and Guarantors hereby waive any rights to enforce
any remedy which Guarantors may have against Borrower and any right to
participate in any Security until such time. 
If any amount shall be paid to any Guarantor on account of any such
subrogation or other rights, any such other remedy, or any Security at any time
when all of the Obligations and all other expenses guaranteed pursuant hereto
shall not have been paid in full, such amount shall be held in trust for the
benefit of Guaranty Trustee, shall be segregated from the other funds of such
Guarantor and shall forthwith be paid over to Guaranty Trustee to be held by
Guaranty Trustee as collateral for, or then or at any time thereafter applied
in whole or in part by Guaranty Trustee against, all or any portion of the
Obligations, whether matured or unmatured, in such order as Guaranty Trustee
shall elect.


 


(b)                                 If
Guarantors shall make payment to Guaranty Trustee of all or any portion of the
Obligations and if all of the Obligations shall be finally paid in full,
Guaranty Trustee will, at


 


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Guarantors’
request and expense, execute and deliver to Guarantors (without recourse,
representation or warranty) appropriate documents necessary to evidence the
transfer by subrogation to Guarantors of an interest in the Obligations
resulting from such payment by Guarantors; provided that such transfer shall be
subject to Section 3(d) above and that without the consent of Guaranty
Trustee (which Guaranty Trustee may withhold in its discretion) Guarantors
shall not have the right to be subrogated to any claim or right against any
Obligor which has become owned by Guaranty Trustee or any Security Beneficiary,
whose ownership has otherwise changed in the course of enforcement of the
Finance Documents, or which Guaranty Trustee otherwise has released or wishes
to release from its Obligations.


 


Section 7.                                            Successors
and Assigns. Guarantors’ rights or obligations hereunder may not be
assigned or delegated, but this Guaranty and such obligations shall pass to and
be fully binding upon the successors of Guarantors, as well as Guarantors. This
Guaranty shall apply to and inure to the benefit of Guaranty Trustee and
Security Beneficiaries and their successors or assigns. Without limiting the
generality of the immediately preceding sentence, Guaranty Trustee and each
Security Beneficiary may assign, grant a participation in, or otherwise
transfer any Obligation held by it or any portion thereof, and Guaranty Trustee
and each Security Beneficiary may assign or otherwise transfer its rights or
any portion thereof under any Finance Document, to any other Person, and such
other Person shall thereupon become entitled to all of the benefits in respect
thereof granted to Guaranty Trustee or such Security Beneficiary hereunder
unless otherwise expressly provided by Guaranty Trustee or such Security
Beneficiary in connection with such assignment or transfer.


 


Section 8.                                            Representations
and Warranties. Guarantors, as to their respective entities, hereby
represent and warrant as of the date hereof and on the dates set forth in
Section 17.8 of the Facilities Agreement, to Guaranty Trustee and each
Security Beneficiary as follows:


 


(a)                                  The
Recitals at the beginning of this Guaranty are true and correct in all material
respects.


 


(b)                                 Guarantors
are corporations duly organized, validly existing and in good standing under
the laws of the state of their incorporation as set forth in the Recitals to
this Guaranty; and each Guarantor has all requisite power and authority to
execute, deliver and perform this Guaranty.


 


(c)                                  The
execution, delivery and performance by each Guarantor of this Guaranty have
been duly authorized by all necessary corporate action and do not and will not
contravene its certificate or articles of incorporation or bylaws.


 


(d)                                 The
execution, delivery and performance by each Guarantor of this Guaranty do not
and will not contravene any law or governmental regulation or any contractual
restriction binding on or affecting Guarantor or any of its properties, and do
not and will not result in or require the creation of any lien, security
interest or other charge or encumbrance upon or with respect to any of its
properties.


 


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(e)                                  No
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or other regulatory body or third party is required
for the due execution, delivery and performance by each Guarantor of this
Guaranty.


 


(f)                                    This
Guaranty is a legal, valid and binding obligation of Guarantors, enforceable
against Guarantors in accordance with its terms except as limited by
bankruptcy, insolvency or similar laws of general application relating to the
enforcement of creditors’ rights.


 


(g)                                 There
is no action, suit or proceeding pending or, to the knowledge of each
Guarantor, threatened against or otherwise affecting any Guarantor before any
court, arbitrator or governmental department, commission, board, bureau, agency
or instrumentality which may materially and adversely affect Guarantor’s
financial condition or its ability to perform its obligations hereunder, except
for that certain litigation captioned Tipperary
Corporation & Tipperary Australia Pty. Ltd. v. TriStar Petroleum,
Case No. CV-42,265, before the District Court of Midland County, Texas, 238th
Judicial District.


 


Section 9.                                            No Oral
Change. No amendment of any provision of this Guaranty shall be effective
unless it is in writing and signed by Guarantors, Guaranty Trustee and Security
Beneficiaries, and no waiver of any provision of this Guaranty, and no consent
to any departure by any Guarantor therefrom, shall be effective unless it is in
writing and signed by Guaranty Trustee and Security Beneficiaries, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.


 


Section 10.                                      Invalidity of
Particular Provisions. If any term or provision of this Guaranty shall be
determined to be illegal or unenforceable all other terms and provisions hereof
shall nevertheless remain effective and shall be enforced to the fullest extent
permitted by applicable law.


 


Section 11.                                      Headings and
References. The headings used herein are for purposes of convenience only
and shall not be used in construing the provisions hereof. The words “this
Guaranty,” “this instrument,” “herein,” “hereof,” “hereby” and words of similar
import refer to this Guaranty as a whole and not to any particular subdivision
unless expressly so limited. The phrases “this section” and “this subsection”
and similar phrases refer only to the subdivisions hereof in which such phrases
occur. The word “or” is not exclusive, and the word “including” (in its various
forms) means “including without limitation”. Pronouns in masculine, feminine
and neuter genders shall be construed to include any other gender, and words in
the singular form shall be construed to include the plural and vice versa,
unless the context otherwise requires.


 


Section 12.                                      Term. This
Guaranty shall be irrevocable until all of the Obligations have been completely
and finally paid and performed, no Security Beneficiary has any obligation to
make any loans or other advances to Borrower pursuant to the Finance Documents,
and all obligations and undertakings of Borrower under, by reason of, or
pursuant to the Finance Documents have been completely performed, and this
Guaranty is thereafter subject to reinstatement as provided in
Section 3(d). All extensions of credit and financial accommodations
heretofore or hereafter made by Guaranty Trustee or Security Beneficiaries to
Borrower shall be conclusively presumed to have been made in acceptance hereof
and in reliance hereon.


 


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Section 13.                                      Notices.
Any notice or communication required or permitted hereunder shall be given as
provided in the Facilities Agreement.


 


Section 14.                                      Limitation on
Interest. Guaranty Trustee, Security Beneficiaries, and Guarantors intend
to contract in strict compliance with applicable usury law from time to time in
effect.  Notwithstanding anything to the
contrary herein or in any of the Finance Documents, this Guaranty shall never
be construed as a contract obligating any Guarantor to pay interest in excess
of the maximum amount of interest permitted by applicable law from time to time
in effect, and each Guarantor shall have no liability hereunder to pay interest
in excess of such maximum amount.  Guaranty
Trustee and each Security Beneficiary expressly disavows any intention to
charge or collect excessive unearned interest or finance charges in the event
the maturity of any Obligation is accelerated. 
If Guaranty Trustee or Security Beneficiaries shall collect monies which
are deemed to constitute interest which would otherwise increase the amount of
interest paid by any Guarantor to an amount in excess of that permitted by
applicable law in effect at the relevant times, all such sums deemed to constitute
interest in excess of such legal limit shall be immediately returned to such
Guarantor upon such determination.  In
determining whether or not the interest paid or payable by such Guarantor,
under any specific circumstance exceeds the maximum interest permitted under
applicable law, Guaranty Trustee, Security Beneficiaries and Guarantors shall,
to the greatest extent permitted by applicable law: (a) characterize any
non-principal payment as an expense, fee or premium rather than as interest,
(b) exclude voluntary payments and the effects thereof, and (c) amortize,
prorate, allocate, and spread the total amount of interest throughout the
entire contemplated term of the Finance Documents evidencing the Obligations in
accordance with the maximum amounts outstanding from time to time thereunder
and the maximum legal rates of interest from time to time in effect under
applicable law in order to lawfully charge the maximum amount of interest
permitted under applicable law.


 


Section 15.                                      Finance
Document. This Guaranty is a Finance Document, as defined in the Facilities
Agreement, and is subject to the provisions of the Facilities Agreement
governing Finance Documents.


 


Section 16.                                      Counterparts;
Fax. This Guaranty may be executed in any number of counterparts, each of
which when so executed shall be deemed to constitute one and the same Guaranty.
This Agreement may be validly executed and delivered by facsimile or other
electronic transmission.


 


SECTION 17.                     GOVERNING
LAW. THIS GUARANTY IS TO BE PERFORMED IN THE STATE OF TEXAS AND SHALL BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF SUCH
STATE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. GUARANTORS HEREBY
IRREVOCABLY SUBMIT THEMSELF TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL
COURTS OF SUCH STATE OF AND AGREE AND CONSENT THAT SERVICE OF PROCESS MAY BE
MADE UPON IT IN ANY LEGAL PROCEEDING RELATING HERETO BY SERVING SUCH GUARANTOR,
OR IF NOT A TEXAS CORPORATION BY SERVING THE SECRETARY OF STATE OF THE STATE OF
TEXAS (OR BY OTHER SERVICE) IN ACCORDANCE WITH ANY APPLICABLE PROVISIONS OF THE
TEXAS REVISED


 


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CIVIL STATUTES, AS AMENDED, GOVERNING SERVICE
OF PROCESS UPON FOREIGN CORPORATIONS.


 


SECTION 18.                     FINAL
AGREEMENT.  THIS WRITTEN AGREEMENT
AND THE OTHER FINANCE DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES HERETO.


 


Section 19.                                      Capacity of Guaranty Trustee.


 


(a)                                  The Guaranty Trustee holds the benefit of
this Guaranty solely in its capacity as security trustee under the Security
Trust Deed.


 


(b)                                 The Guaranty Trustee holds the benefit of
this Guaranty for the Security Beneficiaries on the terms of the Security Trust
Deed and the Facilities Agreement.


 


(c)                                  The Guaranty Trustee is bound to act on the
instructions given to it pursuant to the terms of the Facilities Agreement.


 


(d)                                 Any rights which a person may have against
the Guaranty Trustee under or in respect of this Guaranty are not against the
Guaranty Trustee personally but against the Guaranty Trustee solely in its
capacity as trustee of the trust established under the Security Trust Deed.


 


(e)                                  The Guaranty Trustee may not be called on and
is not liable to satisfy any obligation or liability under or in connection
with this Guaranty except to the extent to which the Guaranty Trustee is
entitled to be indemnified out of the assets of the trust established under the
Security Trust Deed provided that this paragraph (e) does not apply to any
obligation or liability of the Guaranty Trustee to the extent that it is not
satisfied under the Facilities Agreement or by operation of law there is a
reduction in the extent of the Guaranty Trustee’s indemnification or
exoneration out of the assets of the trust established under the Security Trust
Deed as a result of the Guaranty Trustee’s fraud, gross negligence or willful
default.


 


[THE REMAINDER
OF THIS PAGE IS INTENTIONALLY LEFT BLANK]


 


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IN WITNESS
WHEREOF, Guarantor has executed and delivered this Guaranty as of the date
first written above.


 


	
  WITNESS:

  	
   

  	
  TIPPERARY
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ D. Padmore

  	
   

  	
   

  
	
  Name:  Deanne Elizabeth
  Padmore

  	
   

  	
  By: 

  	
  /s/ David L. Bradshaw

  	
   

  
	
   

  	
   

  	
  Name: David Bradshaw

  
	
   

  	
   

  	
  Title:  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
  TIPPERARY
  OIL & GAS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ D. Padmore

  	
   

  	
   

  
	
  Name:  Deanne Elizabeth
  Padmore

  	
   

  	
  By: 

  	
  /s/ David L. Bradshaw

  	
   

  
	
   

  	
   

  	
  Name: David Bradshaw

  
	
   

  	
   

  	
  Title:  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
  TIPPERARY
  CSG INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ D. Padmore

  	
   

  	
   

  
	
  Name:  Deanne Elizabeth
  Padmore

  	
   

  	
  By: 

  	
  /s/ David L. Bradshaw

  	
   

  
	
   

  	
   

  	
  Name: David Bradshaw

  
	
   

  	
   

  	
  Title:Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
  SLOUGH
  ESTATES USA INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ June Safran

  	
   

  	
   

  
	
  Name:  June Safran

  	
   

  	
  By: 

  	
  /s/ R. W. Rohner

  	
   

  
	
   

  	
   

  	
  Name:  Randall W. Rohner

  
	
   

  	
   

  	
  Title:  Senior v.P./CFO

  
								



 


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