Document:

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                                                                    EXHIBIT 4.71

                  FIRST AMENDED AND RESTATED CREDIT AGREEMENT

                                     Among

                            TIPPERARY CORPORATION,
                                 as Borrower,

          TIPPERARY OIL & GAS (AUSTRALIA) PTY LTD, (ACN 077 536 871)
                                 as Guarantor,

                       TIPPERARY OIL & GAS CORPORATION,

                       TCW DEBT & ROYALTY FUND VI, L.P.

                                      and

                                   the other
                                    LENDERS
                                 party hereto,

                                      and

                         TCW ASSET MANAGEMENT COMPANY,
                       in the capacities described herein

                                  $17,000,000

                                  Dated as of
                                February 2, 2001

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                               TABLE OF CONTENTS

                                                                            Page
                                                                            ----

Article 1 DEFINITIONS AND ACCOUNTING MATTERS...............................   1
     Section 1.1   Defined Terms...........................................   1
     Section 1.2   Accounting Terms and Determinations.....................  22
     Section 1.3   Interpretation..........................................  22

Article 2 LOANS............................................................  23
     Section 2.1   Loan Advances...........................................  23
     Section 2.2   The Notes...............................................  23
     Section 2.3   Request for Advances....................................  23
     Section 2.4   Use of Proceeds.........................................  23
     Section 2.5   Coupon Interest.........................................  24
     Section 2.6   Accrual and Payment of Coupon Interest..................  24
     Section 2.7   Computation of Interest.................................  24
     Section 2.8   Payment of Principal; Quarterly Payments................  25
     Section 2.9   Prepayment..............................................  26
     Section 2.10  General Payment Provision...............................  27
     Section 2.11  Yield Adjustment Payment................................  28
     Section 2.12  Collateral Accounts.....................................  28

Article 3 CONDITIONS PRECEDENT TO LENDING..................................  30
     Section 3.1   Conditions Precedent to Initial Loan Advance............  30
     Section 3.2   Conditions Precedent to Any Advance.....................  33
     Section 3.3   Special Conditions Precedent for an Additional Loan
                   Advance.................................................  34
     Section 3.4   Special Condition to Any Advance........................  35

Article 4 REPRESENTATIONS AND WARRANTIES...................................  35
     Section 4.1   Representations and Warranties of Borrower, TOGC
                   and TOGA................................................  35
     Section 4.2   Representations of the Lenders, the Collateral
                   Agent and the Agent.....................................  41

Article 5 COVENANTS OF BORROWER, TOGC and TOGA.............................  43
     Section 5.1   Affirmative Covenants...................................  43
     Section 5.2   Negative Covenants......................................  54
     Section 5.3   Coverage Ratio..........................................  57

Article 6 SECURITY.........................................................  57
     Section 6.1   The Security............................................  57
     Section 6.2   Agreement to Deliver Security Documents.................  58
     Section 6.3   Perfection and Protection of Security Interests and
                   Liens...................................................  58
     Section 6.4   Appointment of Agent and Collateral Agent...............  58

Article 7 EVENTS OF DEFAULT AND REMEDIES...................................  61

                                       i
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     Section 7.1   Events of Default...................................  61
     Section 7.2   Remedies............................................  65
     Section 7.3   Indemnity...........................................  65

Article 8 MISCELLANEOUS....  66
     Section 8.1   Waivers and Amendments; Acknowledgment..............  66
     Section 8.2   Survival of Agreements; Cumulative Nature...........  67
     Section 8.3   Notices.............................................  68
     Section 8.4   Parties in Interest.................................  70
     Section 8.5   Governing Law; Submission to Process................  70
     Section 8.6   Limitation on Interest..............................  70
     Section 8.7   Survival............................................  71
     Section 8.8   Severability........................................  71
     Section 8.9   Counterparts........................................  71
     Section 8.10  Waiver of Jury Trial, Punitive Damages, Etc.........  72
     Section 8.11  Exhibits and Schedules; Additional Definitions......  72
     Section 8.12  Confidentiality of Holders..........................  72
     Section 8.13  Transfer of Notes...................................  73
     Section 8.14  Reproduction of Documents...........................  73
     Section 8.15  Currency in Which Payments Shall Be Made............  74
     Section 8.16  Judgments in Other Than Dollars.....................  74
     Section 8.17  Ratification of Credit Agreement and Loan Documents.  74

                                       ii
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     Exhibits:
     ---------

     Exhibit A      -  Form of Australian Charge
     Exhibit B-1    -  Form of Restricted Account Agreement
     Exhibit B-2    -  Form of Bankers Deed of Covenant
     Exhibit C-1    -  Form of Guarantee Agreement
     Exhibit C-2    -  Form of Guarantee and Indemnity
     Exhibit D      -  Form of TC Pledge and Security Agreement
     Exhibit D-1    -  Form of First Amendment to TC Pledge and
                       Security Agreement
     Exhibit E      -  Form of Royalty Agreement
     Exhibit F      -  Form of TOGA Security Agreement
     Exhibit G-1    -  Form of Equity Letter of Credit
     Exhibit G-2    -  Form of Tri-Star Litigation Indemnity Letter of
                       Credit
     Exhibit H      -  Form of Subordination Agreement
     Exhibit I      -  Form of TOGA-Borrower Management Agreement
     Exhibit J-1    -  Form of First Amended and Restated TOGC Pledge
                       and Security Agreement
     Exhibit K      -  Form of Senior Secured Promissory Note
     Exhibit L      -  Form of Request for Initial Loan Advance
     Exhibit M      -  Form of Request for Additional Loan Advance
     Exhibit N      -  [Deleted]
     Exhibit O      -  Form of Letter Directing Payment to Collateral
                       Account
     Exhibit P      -  Form of Omnibus Certificate of Secretary
     Exhibit Q      -  Form of Compliance Certificate
     Exhibit R-1    -  Form of Opinion of Australian counsel
     Exhibit R-2    -  Form of Opinion of New York counsel
     Exhibit R-3    -  Form of Opinion of Texas counsel
     Exhibit S      -  Form of Collateral Properties
     Exhibit T      -  Form of Supplement to Royalty Agreement

     Schedules:
     ----------

     Schedule 1     -  Disclosure Schedule
     Schedule 2     -  List of Lenders
     Schedule 3     -  Holders' Individual Note Amounts/Pro Rata Shares
     Schedule 4     -  Security Schedule
     Schedule 5     -  Payment Accounts
     Schedule 6     -  Insurance

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                  FIRST AMENDED AND RESTATED CREDIT AGREEMENT

     THIS FIRST AMENDED AND RESTATED CREDIT AGREEMENT ("Agreement") is entered
into as of February 2, 2001 and amends and restates in its entirety that certain
Credit Agreement dated as of April 28, 2000, by and between:

     TIPPERARY CORPORATION, a Texas corporation ("Borrower");

     TIPPERARY OIL & GAS (AUSTRALIA) PTY. LTD (ACN 077 536 871), a Queensland,
Australia corporation ("TOGA");

     TIPPERARY OIL & GAS CORPORATION, a Texas corporation ("TOGC");

     LENDERS (as defined below) that are party hereto;

     TCW ASSET MANAGEMENT COMPANY, a California corporation ("TAMCO"), as Agent
(as defined below); and

     TAMCO, as Collateral Agent (as defined below).

                                   RECITALS:

     A.  Borrower owns all of the outstanding stock of TOGC, which in turn owns
ninety percent (90%) of the outstanding stock of TOGA. The remaining ten percent
(10%) of the outstanding stock of TOGA is owned by Slough Estates USA Inc.

     B.  Borrower seeks to provide funds to TOGA to assist TOGA in (i)
refinancing certain existing debt, (ii) continuing the development of Comet
Ridge Project (as defined below) and (iii) obtaining additional working capital.

     C.  Borrower desires to obtain loans from Lenders in the aggregate
principal amount of up to Seventeen Million and 00/100 Dollars ($17,000,000) for
the purpose of financing the activities described in Recital B above and herein
and other related activities.

     D.  Lenders are willing to make such loans to Borrower on the terms herein.

     NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

                                   ARTICLE 1

                      DEFINITIONS AND ACCOUNTING MATTERS

    Section 1.1  Defined Terms. As used with capital letters in this Agreement,
each of the following terms has the meaning given in this Section 1.1 or in the
Sections referred to below:

                                       1
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     "Additional Advance Funding Date" means the date on which the Lenders fund
any Additional Loan Advance pursuant to the provisions in Section 2.1(b).

     "Additional Loan Advance" has the meaning given in Section 2.1.

     "Adjusted Investment" means the sum, at the time in question, of:

               (i)   the outstanding principal Obligations under the Notes; plus

               (ii)  any past due payments owing for fifteen (15) days or more
     under this Agreement (including interest and un-reimbursed professional
     fees and other advances, expenses and costs payable by a Related Person
     hereunder) and under any Royalty Agreements; plus

               (iii) all lessor royalties or similar burdens on the Collateral
     which remain unpaid for thirty (30) days beyond the terms contained in the
     applicable leases (other than disputed royalties for which designated cash
     reserves have been set aside); plus

               (iv)  the absolute value of TOGA's Working Capital, but only in
     the event the Working Capital is negative.

     "Advance" means an Initial Loan Advance or an Additional Loan Advance.

     "Affiliate" of a specified Person means:

               (i)   any other Person directly or indirectly owning, controlling
     or holding with power to vote 10% or more of the outstanding voting
     securities of the specified Person;

               (ii)  any other Person 10% or more of whose outstanding voting
     securities are directly or indirectly owned, controlled or held with power
     to vote by the specified Person;

               (iii) any other Person directly or indirectly controlling,
     controlled by or under common control with the specified Person; or

               (iv)  any officer, director, partner or sanguineous or affined
     kin of the specified Person or of any other Person described in clause
     (iii) above.

     As used herein the term `control' means possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person whether through the direct or indirect ownership of partnership
interests, voting securities or other equity interests, or otherwise.

     The preceding sentence notwithstanding, for purposes of the Loan Documents,
Trustco, TAMCO and the Lenders shall be deemed not to be "Affiliates" of
Borrower.

                                       2
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     "Affiliate Payments" means any payments or transfers of any kind directly
or indirectly made to any of Borrower's Affiliates, whether as (i)
distributions, (ii) purchases or redemptions of equity interests in Borrower,
(iii) repayments of any loans from Affiliates, (iv) loans, investments or
advances made from or to Affiliates, or (v) purchases of properties, goods or
services from Affiliates, including without limitation, the payment of
Management Fees by TOGA to either TOGC or Borrower.

     "Agent" has the meaning given in Section 6.4(a).

     "Agreement" has the meaning given in the preamble hereto.

     "ANCF" (or "Adjusted Net Cash Flow") means, with respect to a period, the
sum of:

     (1) the positive difference of:

               (i)   Project Gross Cash Revenues during any Calculation Period
          (or other period of calculation, if applicable),

          less

               (ii)  Actual payments by either Borrower or TOGA during such
          Calculation Period (or other period of calculation, if applicable), of

          (A)  Lessor royalties and other burdens on production existing as of
               the Closing Date with respect to the Project Properties and
               Royalties;

          (B)  Direct Taxes with respect to the Project Properties;

          (C)  Coupon Interest on the Notes and payment of other Obligations
               under the Loan Documents (other than Principal Payments or
               payments of Late Payment Interest); and

          (D)  Approved LOE, Approved G&A Costs, Approved Capital Expenditures
               and Approved Third Party Costs incurred in connection with the
               Project to the extent and only to the extent such amounts exceed
               (and are not funded directly or indirectly by) the proceeds of
               Advances and/or the proceeds of any draw upon a Letter of Credit.

     plus

     (2) Net TOGA Non-Project Cash Flow.

     "ANZ Bank" means Australia and New Zealand Banking Group Limited (ACN 005
357 522) of 324 Queen Street, Brisbane, Queensland Australia.

     "AP Replacement Date" has the meaning set forth in Section 5.1(q).

     "Approved" means approved in writing by the Agent.

                                       3
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     "Approved Capital Expenditures" means, for any period, Capital Expenditures
made or to be made by or on behalf of TOGA which (i) are included in the
Approved Plan of Development or (ii) otherwise Approved specifically as
"Approved Capital Expenditures" by Agent in its sole and absolute discretion.

     "Approved G&A Costs" means G&A Costs Approved specifically as Approved
G&A Costs (rather than Permitted G&A Costs) by Agent in its sole and absolute
discretion. The Approved G&A Costs will be $0 per annum until otherwise approved
by the Agent.

     "Approved Plan of Development" means TOGA's plan of development for the
Subject Properties that describes, among other things: (i) the expenditures and
improvements necessary to develop the Project Properties, (ii) the timetable for
such development, and (iii) the sources of capital (including but not limited to
the Advances) to be used for such development, all as revised and Approved
annually by December 1 of each year.

     "Australian Charge Document" means that Fixed and Floating Charge to be
entered into between TOGA and Collateral Agent in substantially the form
attached hereto as Exhibit A.

     "Australian Withholding Taxes" means Australian withholding tax on amounts
paid pursuant to this Agreement, the other Loan Documents or the Project
Documents under applicable Australian Governmental Rules.

     "Bank Debt" means the Debt owed by Borrower to U.S. Bank N.A. under the
Revolving Credit Agreement between Central Bank National Association, TOGA,
Borrower and Tipperary Petroleum Company dated March 30, 1992, as amended as of
the date thereof.

     "Borrower" has the meaning given in the preamble hereto.

     "Borrower/TOGC Collateral Account" means that certain lockbox account
established with a bank Approved by Agent in its sole discretion pursuant to the
Borrower/TOGC Collateral Account Agreement, or any other lockbox account
established pursuant to a replacement Collateral Account Agreement.

     "Borrower/TOGC Collateral Account Agreement" means that certain Restricted
Collateral Account Agreement substantially in the form of Exhibit B-1 among
Borrower, TOGA, the Lenders and a bank Approved by Agent in its sole discretion,
as amended from time to time or as replaced by any other Collateral Account
Agreement from time to time.

     "Business Day" means a day, other than a Saturday, Sunday or legal holiday
on which commercial banks are authorized or obligated by law or executive order
to close in either the City of New York, State of New York, U.S.A. or the City
of Brisbane, Queensland, Australia.

     "Calculation Period" means a three month period consisting of any December
through February, any March through May, any June through August, and any
September through November.

                                       4
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     "Calendar Month" means any of January, February, March, April, May, June,
July, August, September, October, November or December.

     "Calendar Quarter" means a three Calendar Month period ending on March 31,
June 30, September 30 or December 31 of any year.

     "Calendar Year" means a twelve Calendar Month period ending on December 31
of any year.

     "Capital Expenditures" shall mean, for any period, expenditures made or to
be made for the drilling and completion of any wells on the properties in the
Collateral, including new drilling, completion, production facilities, lifting
equipment, gathering systems, workovers, redrilling recompletions and
stimulation or other similar types of oil and gas field operations.

     "Cash Collateral Account" means the TOGA Dollar Collateral Account and the
TOGA Australian Collateral Account.

     "Change in Control" means with respect to TOGA, Borrower no longer owns,
directly or indirectly, at least seventy percent (70%) of the issued and
outstanding voting equity interests, on a fully diluted basis of TOGA and at
least (70%) of the issued and outstanding non-voting equity interests, on a
fully diluted basis of TOGA.

     "Closing" or "Closing Date" means April 28, 2000.

     "Collateral" means all Property of any kind which is subject to a Lien in
favor of Holders or Collateral Agent or which, under the terms of any Security
Document, is purported or intended to be subject to such a Lien.

     "Collateral Accounts" means the Borrower/TOGC Collateral Account, the TOGA
Dollar Collateral Account and the TOGA Australian Collateral Account.

     "Collateral Account Agreements" means the Borrower/TOGC Collateral Account
Agreement, the TOGA Dollar Collateral Account Agreement and the TOGA Australian
Collateral Account Agreement each as may be modified in the sole and absolute
discretion of the Agent.

     "Collateral Agent" has the meaning given in Section 6.4(b).

     "Collateral Properties" has the meaning given in Section 4.1(t).

     "Comet Ridge Project" means the exploration and development for the
recovery of, and production of Hydrocarbons from lands originally covered by
Authority To Prospect Number 526P, including but not limited to all Property,
leases and other interests in connection with such land whether acquired by
assignment or by operation of the Project JOA due to non-participation of
certain parties thereto.

     "Commission" means the United States Securities and Exchange Commission.

                                       5
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     "Commitment Period" means the period from and including the date hereof
until the Funding Expiry Date.

     "Coupon Interest" has the meaning given in Section 2.5.

     "Coverage Default" means that the Coverage Ratio is less than 125%.

     "Coverage Deficiency" means that the Coverage Ratio is less than 150%.

     "Coverage Ratio" has the meaning given in Section 5.3.

     "Debt" means, as to any Person at any date, all or any, indebtedness,
liabilities and obligations of such Person, whether matured or unmatured,
liquidated or unliquidated, primary or secondary, direct or indirect, absolute,
fixed or contingent, and whether or not required to be considered pursuant to
GAAP and includes indebtedness, liabilities or obligations guaranteed by such
Person.

     "Dedication Rate" means 80%, provided that the Dedication Rate will
automatically increase to 100% whenever (a) an Event of Default exists, or (b) a
Coverage Deficiency occurs and Borrower does not cure such Coverage Deficiency
within one month thereafter.

     "Default" means any Coverage Default, any Event of Default, and any
default, event or condition which would, with the giving of any requisite
notices and the passage of any requisite periods of time, constitute an Event of
Default without regard to whether such required notices have been given or such
required grace periods have expired.

     "Direct Taxes" means production, severance, ad valorem, excise or other
taxes or governmental charges or assessments on (i) the Eligible Proved
Properties, (ii) the production therefrom or (iii) the proceeds of such
production, but excluding any income or franchise taxes.

     "Disclosure Schedule" means (i) Schedule 1 and (ii) any documents listed on
such schedule and expressly incorporated therein by reference, so long as
Borrower or TOGA has heretofore delivered true and correct copies of such
documents to the Lenders. Insofar as any representations and warranties made
herein are incorporated by reference or otherwise remade in Loan Documents
delivered as of a date after the date hereof, the term "Disclosure Schedule"
shall in such representations and warranties be deemed to refer as well to all
other documents which Borrower or TOGA has at the time in question delivered to
the Lenders in the manner prescribed for the delivery of notices in Section 8.3
if and only if Borrower or TOGA shall have delivered to the Lenders a written
notice expressly stating that the same shall be added to and become a part of
the "Disclosure Schedule."

     "Dollars" or "$" means the lawful and official currency of the United
States of America.

     "Eligible Proved Property" means an oil and gas property which at the
particular time in question (i) is either owned by TOGA or a Comet Ridge
Participant and subject to the enforceable contract or other rights of TOGA or a
Comet Ridge Participant under the Project

                                       6
<PAGE>

JOA which entitle it to its proportional share of Hydrocarbon production
therefrom; (ii) is subject to registered Australian Charge Documents and filed
Security Documents in each case which create perfected first security interests
in such property or rights in favor of Collateral Agent; (iii) is not subject to
forfeiture under the Project JOA or any other Project Documents; (iv) is not
subject to any Prohibited Liens; and (v) is the subject of favorable title
opinions or other assurance to Lenders from legal counsel acceptable to Agent,
(A) based upon abstract or record examinations to dates acceptable to Agent, (B)
stating or advising that TOGA or a Comet Ridge Participant, as the case may be,
or the source of title of TOGA or a Comet Ridge Participant, has good and
marketable title to such property and that it is subject to no Prohibited Liens,
and (C) covering such other matters as Agent may reasonably request.

     "Engineering Report" means (i) the Initial Engineering Report and (ii) any
engineering report to be delivered to the Lenders pursuant to Section
5.1(b)(vii).

     "Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or other
Governmental Rules relating to the environment or to emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes into the environment
including ambient air, surface water, ground water, or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes.

     "Environmental Report" means an environmental report that satisfies the
same terms and conditions as the Initial Environmental Report.

     "Equity Letter of Credit" means the letter of credit delivered pursuant to
Section 3.1(a)(xvi), together with any renewal or replacement thereof.

     "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations promulgated
with respect thereto.

     "ERISA Plan" means any pension benefit plan subject to Title IV of ERISA
maintained by any Related Person or any Affiliate thereof with respect to which
Borrower has any fixed or contingent liability.

     "Event of Default" has the meaning given in Section 7.1.

     "Excess ANCF" means, with respect to a period, the positive difference
of (i) ANCF for that period, less (ii) the Principal Payment for such period.

     "Funded Amount" means, as of any date of calculation thereof the
aggregate original principal amount of all Advances made as of such date.

     "Funding Expiry Date" means the earliest to occur of:

             (i)   the date on which an Event of Default occurs;

                                       7
<PAGE>

               (ii)    December 31, 2001; or

               (iii)   the date on which a Coverage Deficiency occurs.

     "GAAP" means, with respect to Borrower and TOGA and any Related Person
domiciled in the United States, those generally accepted accounting principles
and practices which are recognized as such by the Financial Accounting Standards
Board (or any generally recognized successor) in the United States.

     "G&A Costs" means all overhead and administrative costs paid by or on
behalf of TOGA.

     "Governmental Approval" means any authorization, consent, decree, permit,
privilege, approval, certificate, license, lease, ruling, permit, waiver,
exemption, filing, registration or notice by or with any Governmental Person
necessary for the maintenance and operation of the Project, the ongoing
operation of the Borrower or TOGA and the execution of and performance of the
Borrower's and TOGA's obligations under the Loan Documents.

     "Governmental Person" means for any country, such country and its
government and any international, national (Federal or foreign), state or local
government, any political subdivision or any governmental, quasi-governmental,
judicial, public or statutory instrumentality, authority, corporation or
commission, court, agency, body or entity under the direct or indirect control
of such country.

     "Governmental Rule" means:

               (i)   any statute, constitutional provision, law, rule,
     regulation, ordinance, order, code, judgment, decree, directive, guideline,
     permit or policy by a Governmental Person; or

               (ii)  any similar form of decision, interpretation or
     administration by a Governmental Person having the force of law of the
     foregoing in clause (i) above, whether in effect as the date of this
     Agreement or thereafter and in each case as amended (including without
     limitation, all Environmental Laws and any of the foregoing pertaining to
     land use or zoning restrictions).

     "Gross Proceeds" shall have the meaning ascribed thereto in the Royalty
Agreement.

     "Guarantee Agreement" means collectively or individually as the context may
so require (i) that certain Guarantee Agreement in substantially the same form
as Exhibit C-1 among TOGA, Agent and Collateral Agent and (ii) that certain
Guarantee and Indemnity in substantially the same form as Exhibit C-2 among
TOGA, Agent and Collateral Agent.

     "Hazardous Materials" means any substances which are regulated or could
lead to liability under any Environmental Law, whether as pollutants,
contaminants, or chemicals, or as industrial, toxic or hazardous substances or
wastes, or otherwise.

                                       8
<PAGE>

     "Highest Lawful Rate" means the maximum non-usurious rate of interest that
the Lenders or Holders are permitted under applicable law to contract for, take,
charge, or receive with respect to the Obligation in question.

     "Holders" means the holders of the Notes from time to time.

     "Hydrocarbons" shall have the meaning ascribed thereto in the Royalty
Agreement.

     "Indemnitors" means, collectively, Borrower, TOGC, TOGA and all
subsidiaries of TOGA, if any.

     "Indemnitees" has the meaning given in Section 7.3.

     "Independent Engineering Report" means any Engineering Report prepared by
an Independent Engineer.

     "Independent Engineers" means S. A. Holditch & Associates or other
independent petroleum reserve engineers acceptable to both Borrower and Agent.

     "Initial Amortization Date" means the first Quarterly Payment Date to occur
after Closing.

     "Initial Engineering Report" means the engineering report dated October 29,
1999 prepared by S.A. Holditch & Associates evaluating the Subject Properties.

     "Initial Environmental Report" has the meaning given thereto in Section
3.1(xi).

     "Initial Financial Statements" means the unaudited financial statements of
Borrower and TOGA dated as of March 31, 2000, including the notes thereto.

     "Initial Funding Date" means the date on which the Lenders fund the Initial
Loan Advance pursuant to the provisions of Section 2.1.

     "Initial Loan Advance" has the meaning given in Section 2.1.

     "Inter-company Debt" means any Debt i) owed by TOGA to Borrower, ii) owed
by TOGA to TOGC or iii) owed by TOGC to Borrower in each case whether or not
such Debt is evidenced by a promissory note.

     "JOA Property" means the Authority to Prospect 526P issued under the
Petroleum Act 1923 (Qld) and any tenement or other land to which the Project JOA
applies.

     "Lands" has the meaning given in Section 5.1(m).

     "Late Payment Rate" means, at the time in question, the lesser of (i)
fourteen percent (14%) per annum or (ii) the Highest Lawful Rate.

                                       9
<PAGE>

     "Late Payment Rate Interest" means any interest accrued at the Late Payment
Rate.

     "Lenders" means the entities set forth on Schedule 2 attached hereto which
have executed a counterpart hereof.

     "Letters of Credit" means collectively the Tri-Star Indemnity Letter of
Credit and the Equity Letter of Credit.

     "Lien" means, with respect to any Property, any right or interest therein
of a creditor to secure Debt owed to him or any other arrangement with such
creditor which provides for the payment of such Debt out of such Property or
which allows him to have such Debt satisfied out of such Property prior to the
general creditors of any owner thereof, including any lien, mortgage, security
interest, pledge, deposit, production payment, rights of a vendor under any
title retention or conditional sale agreement or lease substantially equivalent
thereto, right of recoupment under a gas balancing agreement, tax lien,
mechanic's or materialman's lien, or any other charge or encumbrance for
security purposes, whether arising by law or agreement or otherwise, but
excluding any right of offset which arises without agreement in the ordinary
course of business. "Lien" also means any filed financing statement, any
registration of a pledge (such as with an issuer of unregistered securities), or
any other arrangement or action which would serve to perfect a Lien described in
the preceding sentence, regardless of whether such financing statement is filed,
such registration is made, or such arrangement or action is undertaken before or
after such Lien exists.

     "Loans" means the loans contemplated hereby.

     "Loan Documents" means this Agreement, the Notes, the Security Documents,
the Royalty Agreement, the Guarantee Agreement and all other agreements,
certificates, documents, instruments and writings at any time delivered in
connection with the Loans (exclusive of the term sheets, commitment letters,
correspondence and similar documents used in the negotiation hereof, except to
the extent the same contain information about Borrower or its Affiliates or
their properties, business or prospects and such information is the subject of a
written representation or certificate upon which the Lenders shall rely).

     "LOE" means leasehold operating expenses and other field level or lease
level charges for operations on the properties of TOGA included within the
Collateral including overhead charges of a third party operator under the
Project JOA.

     "Management Fees" shall mean management fees payable pursuant to the
TOGA-Borrower Management Agreement.

     "Material Adverse Effect" shall mean a material adverse effect on any of
the following (determined, with respect to any event, occurrence, circumstance
or condition by reference to the situation which would have been in effect
without the occurrence of such event, occurrence, circumstance or condition):

               (a) the Property, the Project, the business, operations,
     condition (financial or otherwise), liabilities or capitalization of
     Borrower or any Related Persons

                                       10
<PAGE>

     taken as a whole, which adversely affects the ability of Borrower or the
     Related Persons to perform in a timely manner its and their material
     obligations under any Loan Document and any Project Document;

               (b)   the validity or enforceability of any of the Loan Documents
     and Project Documents;

               (c)   the availability of any material Governmental Approval (in
     whole or in material part) as shall then or thereafter be necessary to be
     obtained under applicable Governmental Rules in connection with the
     development, financing, construction, operation, expansion and ownership of
     the Project which adversely affects the ability of Borrower and the Related
     Persons to perform its and their material obligations under any Loan
     Document or any Project Document;

               (d)   the validity or enforceability of any of the material
     rights, remedies, powers and privileges of any Lender, Holder, Agent or
     Collateral Agent under the Loan Documents; or

               (e)   the validity or enforceability of the Liens on any material
     item of Collateral under any of the Security Documents.

     "Maturity Date" means March 30, 2006.

     "Modified NPV10" means the sum of:

               (i)   with respect to any Proved Developed Producing Reserves
     attributable to the Eligible Proved Properties, NPV10 of a percentage
     between 90% and 100% of such Reserves, as such percentage is chosen by
     Agent in its sole and absolute discretion;  plus

               (ii)  with respect to any Proved Developed Non-Producing Reserves
     attributable to the Eligible Proved Properties, NPV10 of a percentage
     between 70% and 90% of such Reserves, as such percentage is chosen by Agent
     in its sole and absolute discretion; plus

               (iii) with respect to any Proved Undeveloped Reserves
     attributable to the Eligible Proved Properties, NPV10 of a percentage
     between 70% and 90% of such Reserves, as such percentage is chosen by Agent
     in its sole and absolute discretion;

     provided, however, that the Modified NPV10 for any particular Proved
     Developed Non-Producing Reserves or Proved Undeveloped Reserves shall be
     zero (0) unless capital expenditures for the development of such Reserves,
     in at least the amounts required pursuant to the most recent Engineering
     Report, have been scheduled and such capital is reasonably expected to be
     available from Advances or as a deduction from ANCF as Approved Capital
     Expenditures.

     "Net TOGA Non-Project Cash Flow" means the positive difference of:

                                       11
<PAGE>

               (i)   Non-Project TOGA Gross Cash Revenues during any Calculation
     Period (or other period of calculation, if applicable),

     less

               (ii)  Actual payments by TOGA during such Calculation Period (or
     other period of calculation, if applicable), of

         (A)  Lessor royalties and other burdens on production payable to
              parties other than Affiliates of Borrower with respect to the Non-
              Project Properties and Royalties;

         (B)  Direct Taxes with respect to the Non-Project Properties;

         (C)  Permitted LOE, Permitted G&A Costs (excluding any Management
              Fees), Permitted Capital Expenditures and Permitted Third Party
              Costs, in each case, incurred in connection with the Non-Project
              Properties to the extent, and only to the extent, not funded by
              either capital contributions or advances of Inter-company Debt to
              TOGA.

     "Non-Project Properties" means all Properties of TOGA that are not Project
Properties.

     "Non-Project TOGA Gross Cash Revenues" means all cash and non-monetary
revenues and receipts (excluding accounts receivable and other accruals)
received by or on behalf of TOGA (without duplication) from or in any way
relating to the Non-Project Properties or by or on behalf of TOGA from any other
source, including without limitation interest or other earnings received in
respect of all invested funds and insurance proceeds but excluding cash receipts
from (a) sales of any portion of the Collateral approved by Agent which are used
to make a mandatory prepayment of principal pursuant to Section 2.9, (b) an
Approved refinancing of the Loans which are used to make a mandatory prepayment
of principal pursuant to Section 2.9(b)(ii), and (c) insurance proceeds
necessary and used to replace or repair Non-Project assets.

     "Notes" has the meaning given in Section 2.2.

     "NPV10" means with respect to any Proved Reserves expected to be produced
from the Eligible Proved Properties, the net present value of the future net
revenues expected to accrue to TOGA's interests in such Reserves during the
remaining expected economic lives of such Reserves, discounted at 10% per annum.
Each calculation of such expected future net revenues shall be made as of the
date when requested in accordance with the then existing standards of the
Society of Petroleum Engineers, provided that in any event:

               (i)   appropriate deductions shall be made for (A) Direct Taxes
     and existing burdens that are Permitted Liens (excluding, however, the
     Royalty), (B) LOE, (C) Third Party Costs, and (D) Capital Expenditures
     (including plugging and abandonment costs), all consistent with the most
     recent Engineering Report; and

                                       12
<PAGE>

               (ii)  the pricing assumptions used in determining NPV10 for any
     particular Proved Reserves shall be:

                     (A) the contract price, if any, during the term of any
          written oil and gas sales contract with respect to such Proved
          Reserves between Borrower or TOGA and unrelated Persons; or

                     (B) if no sales contract exists:

                         (I)  for volumes of oil and gas swapped or hedged with
                              investment grade counter parties, the hedged price
                              net of any costs, expenses or deductions relating
                              thereto; and

                         (II) for "naked" or long unhedged volumes, the lower of
                              the last twelve (12)-month average of prices
                              actually received or the last six (6)-month
                              average of prices actually received.

     "Obligations" means the sum of all Debt from time to time owing by Related
Persons to the Holders, the Lenders, Collateral Agent or Agent under or pursuant
to any of the Loan Documents. "Obligation" means any part of the Obligations.

     "Owned Properties" means TOGA's interest in Authorities to Prospect 655P
and 675P issued under the Petroleum Act 1923 (Qld) and any other interest which
TOGA has in and which is intended to be used for the purpose of exploration or
extraction of Hydrocarbons.

     "Permitted Borrower Payments" means any payment made by TOGA to Borrower or
TOGC whether as a distribution, as a payment of Approved Management Fees or
otherwise, which shall be used by Borrower for the payment of the Obligations,
provided, however, that no payment shall be a Permitted Borrower Payment if it
shall have the effect of reducing the outstanding Inter-company Debt of TOGA to
an amount less than an amount Approved by the Agent.

     "Permitted Capital Expenditures" means, for any period, Approved Capital
Expenditures and Capital Expenditures made or to be made by or on behalf of TOGA
which are funded by either capital contributions or advances of Inter-company
Debt to TOGA from Borrower or TOGC including such contributions or advances by
Borrower using proceeds of any Advance.

     "Permitted Debt" means, without duplication:

               (i)   Obligations owing to the Lenders, Holders, Agent or
     Collateral Agent created pursuant to the Loan Documents;

               (ii)  liabilities for taxes, assessments, governmental charges or
     levies which are being contested in good faith with cash reserves
     established pursuant to GAAP;

                                       13
<PAGE>

               (iii) tax liabilities of TOGA, if any, arising as a result of
     the filing of TOGA's tax return;

               (iv)  Inter-company Debt which is (a) pledged to the Collateral
     Agent pursuant to the Pledge and Security Agreement and (b) subordinated to
     the Obligations in a manner acceptable to Agent; and

               (v)   Currency hedging contracts relating to the net cash flows
     from TOGA's oil and gas operations at any time not to exceed the projected
     production revenues over the immediately following twelve (12) month
     period; and

               (vi)  obligations of TOGA under the Contract of Sale dated as of
     November 15, 2000, with Soilmec (H.K.) Limited and Soilmec, S.p.A (the
     "Soilmec Sale Contract") and the agreement dated January 18, 2001 between
     TOGA and Slough with respect to the Soilmec Sale Contract.

     "Permitted G&A Costs" means G&A Costs which (i) are Approved Management
Fees, or (ii) shall not exceed such amounts set forth in an Approved operating
budget of TOGA or (iii) shall be Approved by Agent in its sole and absolute
discretion.

     "Permitted Investments" means investments:

               (i)   in open market commercial paper, maturing within 270 days
     after acquisition thereof, which at the time of investment has the highest
     or second highest credit rating given by either Standard & Poor's
     Corporation or Moody's Investors Service, Inc.;

               (ii)  in marketable obligations, maturing within twelve (12)
     months after acquisition thereof, issued or unconditionally guaranteed by
     the United States of America or an instrumentality or agency thereof and
     entitled to the full faith and credit of the United States of America;

               (iii) in demand deposits, time deposits or other "money market
     instruments" (including certificates of deposit) maturing within twelve
     (12) months from the date of deposit thereof, with any office of a domestic
     office of any national or state bank or trust company which is organized
     under the laws of the United States of America or any state therein, which
     has capital, surplus and undivided profits of at least $500,000,000, and
     whose certificates of deposit have at least the third highest credit rating
     given by either Standard & Poor's Corporation or Moody's Investors Service,
     Inc.; or

               (iv)  in repurchase agreements entered into with any bank or
     trust company organized under the laws of the United States of America or
     any State thereof and having capital and surplus in an aggregate amount not
     less than $500,000,000 relating to United States of America government
     obligations.

                                       14
<PAGE>

     "Permitted Liens" means:

               (i)    deposits or pledges (but not other Liens) to secure the
     payment of worker's compensation, unemployment insurance or other social
     security benefits or obligations, or public or statutory obligations of a
     like general nature incurred in the ordinary course of business;

               (ii)   Liens securing surety or appeal bonds, bid or performance
     bonds or other obligations of a like general nature incurred in the
     ordinary course of business if such Liens (A) are either approved by Agent
     or reasonably necessary to obtain the bonds, (B) secure obligations in an
     aggregate amount not to exceed $500,000 at any time, and (C) do not
     constitute Liens on any of Borrower's interests in the Project;

               (iii)  zoning restrictions, easements, licenses, or restrictions
     on the use of real property which do not materially impair the use of such
     property in the operation of the business of Borrower, or the value of such
     property;

               (iv)   inchoate liens arising under applicable Governmental Rules
     to secure current service pension liabilities as they are incurred under
     the provisions of employee benefits plans from time to time in effect;

               (v)    state and municipal liens for personal property taxes
     where no enforcement or execution proceedings have been taken in respect
     thereof, and provided same do not exceed $100,000 in the aggregate at any
     time;

               (vi)   the rights of any lessors under any leases capitalized in
     accordance with GAAP which constitute Permitted Debt;

               (vii)  Liens arising by operation of any Governmental Rule in
     connection with trade debt constituting Permitted Debt so long as the same
     are junior and subordinate to the Lien of the Security Documents; or

               (viii) Liens arising under the Project JOA.

     "Permitted LOE" means LOE relating to Non-Project Properties to the extent,
and only to the extent, funded from Non-Project TOGA Gross Cash Revenues or
capital contributions or advances of Inter-company Debt.

     "Permitted Management Fees" means the Management Fees paid by TOGA to
Borrower pursuant to the TOGA-Borrower Management Agreement all as Approved by
Agent.

     "Permitted Third Party Costs" means Third Party Costs to the extent, and
only to the extent, funded from Non-Project TOGA Gross Cash Revenues or capital
contributions or advances of Inter-company Debt.

     "Person" means an individual, corporation, partnership, association, joint
stock company, trust or trustee thereof, estate or executor thereof,
unincorporated organization or joint

                                       15
<PAGE>

venture, court or governmental unit or any agency or subdivision thereof, or any
other legally recognizable entity.

     "Pledge and Security Agreement" means that certain Pledge and Security
Agreement substantially in the form of Exhibit D between Borrower and Collateral
Agent as amended by that certain First Amendment to TC Pledge and Security
Agreement substantially in the form of Exhibit D-1, as may be further amended
from time to time.

     "Principal Payment" shall have the meaning given thereto in Section 2.8.

     "Prohibited Lien" means any Lien not expressly allowed under Section
5.2(b).

     "Project" means the Comet Ridge Project and all related assets and
facilities whether now in existence or hereinafter acquired, including any other
properties funded directly or indirectly with the proceeds of any Advances.

     "Project Documents" shall mean each agreement or document necessary for the
development, financing, construction operation and ownership of the Project and
shall in any event include without limitation the Project JOA, Government
Approvals, the leases, contracts, or other documents establishing or evidencing
the Collateral or Subject Properties and the insurance policies required under
Section 3.2(h) of the Loan Agreement.

     "Project Gross Cash Revenues" means all cash and non-monetary revenues and
receipts (excluding accounts receivable and other accruals) received by or on
behalf of TOGA, TOGC or Borrower (without duplication) from or in any way
relating to the Project, including without limitation interest or other earnings
received in respect of all invested funds and insurance proceeds but excluding
cash receipts from (a) sales of any portion of the Collateral approved by Agent
which are used to make a mandatory prepayment of principal pursuant to Section
2.9, (b) an Approved refinancing of the Loans which are used to make a mandatory
prepayment of principal pursuant to Section 2.9(b)(ii), (c) insurance proceeds
necessary and used to replace or repair Project assets, (d) Advances, and (e)
Inter-company Debt payments.

     "Project Properties" means the Eligible Proved Properties within the
Project.

     "Project JOA" means that certain Operating Agreement between Tri-Star,
TOGA, and the other parties thereto dated May 15, 1992, as amended from time to
time.

     "Property" means any interest in any kind of property or asset, whether
real, personal or mixed.

     "Pro Rata Share" means, with respect to each Holder, the percentage set
forth opposite such Holder's name on Schedule 3; provided, however, that upon
any transfer, change or re-issuance of Notes, the Pro Rata Share for each Holder
will be recalculated at the time of such transfer, change or re-issuance based
upon the outstanding principal amounts of the Notes held by such Holder.

     "Proved Developed Non-Producing Reserves" are Proved Reserves that are
Shut-in and Behind-pipe Reserves. "Shut-in Reserves" are those expected to be
recovered from

                                       16
<PAGE>

completion intervals open at the time of the estimate, but which had not started
producing, or were shut in for market conditions or pipeline connections, or
were not capable of production for mechanical reasons (including the requirement
for installation or restaging of compression), and the time when sales will
start is uncertain. "Behind-pipe Reserves" are those expected to be recovered
from zones behind casing in existing wells, which will require additional
completion work or a future completion prior to the start of production.

     "Proved Developed Producing Reserves" means Proved Reserves that are
expected to be recovered from completion intervals open and producing at the
time of the estimate.

     "Proved Developed Reserves" means Proved Developed Producing Reserves and
Proved Developed Non-Producing Reserves.

     "Proved Reserves" means those Reserves which are "proved oil and gas
reserves" within the meaning of Rule 4-10 of Regulation S-X, 17 C.F.R. (S)
210.4-10 of the Commission.

     "Proved Undeveloped Reserves" means Proved Reserves that are assigned to
undrilled locations which satisfy the following conditions: (i) the locations
are direct offsets to wells which have indicated commercial production in the
objective formation, (ii) it is reasonably certain that the locations are within
the known proved productive limits of the objective formation, (iii) the
locations conform to existing well spacing regulations, if any, and (iv) it is
reasonably certain that the locations will be developed. Reserves for other
undrilled locations are classified as Proved Undeveloped Reserves only in those
cases where interpretations of data from wells indicate that the objective
formation is laterally continuous and contains commercially recoverable
hydrocarbons at locations beyond direct offsets.

     "Quarterly Payment Date" means the penultimate Business Day of each
Calendar Quarter.

     "Related Person" means Borrower, TOGA, TOGC, any Indemnitor, and any
Subsidiary of Borrower or TOGA.

     "Repayment Date" means the date the Obligations, other than Royalties, are
repaid in full.

     "Request for Advance" means a written or telephonic request, or a written
confirmation, made by Borrower which meets the requirements of Section 2.3.

     "Reserves" means estimated volumes of crude oil, condensate, natural gas,
natural gas liquids, and associated substances anticipated to be commercially
recoverable from known accumulations from a given date forward, under then
existing economic conditions, by established operating practices, and under
current government regulations. Reserve estimates are based on interpretation of
geologic or engineering data available at the time of the estimate. Reserves do
not include volumes of crude oil, condensate, natural gas (including storage
gas), or natural gas liquids being held in inventory. If required for financial
reporting, reserve estimates or other purposes, Reserves may be reduced for on-
site or processing losses.

                                       17
<PAGE>

     "Restricted Debt" of any Person means Debt in any of the following
categories:

               (i)    Debt for borrowed money;

               (ii)   Debt constituting an obligation to pay the deferred
     purchase price of property or services;

               (iii)  Debt evidenced by a bond, debenture, note or similar
     instrument;

               (iv)   Debt which would under GAAP or, with respect to TOGA, GAAP
     or Australian generally accepted accounting principles be shown on such
     Person's balance sheet as a liability;

               (vi)   Debt constituting principal under leases capitalized in
     accordance with GAAP;

               (vii)  Debt arising under conditional sales or other title
     retention agreements;

               (viii) Debt owing under direct or indirect guaranties of Debt of
     any other Person or constituting obligations to purchase or acquire or to
     otherwise protect or insure a creditor against loss in respect of Debt of
     any other Person (such as obligations under working capital maintenance
     agreements, agreements to keep-well, or agreements to purchase Debt,
     assets, goods, securities or services), but excluding endorsements in the
     ordinary course of business of negotiable instruments in the course of
     collection;

               (ix)  Debt with respect to letters of credit or applications or
     reimbursement agreements therefor; or

               (x)   Debt with respect to other obligations to deliver goods or
     services in consideration of advance payments therefor;

provided, however, that the term "Restricted Debt" of any Person shall not
include Debt that was incurred on ordinary trade terms and is owed by the Person
incurring the same to vendors, suppliers, or other Persons providing goods and
services for use by such Person in the ordinary course of its business which
relate to items included in or constituting Permitted Capital Expenditures,
Permitted LOE, Permitted Third Party Cost or Permitted G&A Costs unless such is
more than ninety (90) days past due.

     "Royalty" means any overriding royalty granted or agreed to be paid
pursuant to any Royalty Agreement.

     "Royalty Agreement" shall mean that certain Overriding Royalty Agreement
dated as of even date herewith in substantially the same form attached hereto as
Exhibit E, as the same may be amended or supplemented from time to time.

                                       18
<PAGE>

     "Royalty Agreements" means the Royalty Agreement and any Supplement to
Royalty Agreement and any Royalty Conveyance (as defined in the Royalty
Agreement), collectively, or individually as the context may so require.

     "Royalty Determination Date" means (i) if Agent or Lenders shall
exercise the right under Section 3.4 hereof to refuse to fund any Advance or to
terminate or cancel the obligation to make future Advances, the later of (a) the
date of disbursement of the last Advance to be funded or (b) the date of
completion of the last work comprising Approved Capital Expenditures deducted in
the calculation of ANCF, or (ii) in all other events, the Repayment Date.

     "Royalty Payee" means the Payee as defined in the Royalty Agreements.

     "Security Agreement" means the Security Agreement substantially in the
form of Exhibit F between TOGA and Collateral Agent, as may be amended or

replaced from time to time.

     "Security Documents" means the Guarantee Agreement, the Security
Agreement, the Australian Charge Document, the Pledge and Security Agreement,
the TOGC Security Agreement, the Subordination Agreement, the financing
statements, any other instruments listed in the Security Schedule, and all other
security agreements, deeds of trust, mortgages, chattel mortgages, pledges,
guaranties, financing statements, continuation statements, extension agreements
and other agreements or instruments now, heretofore, or hereafter delivered by
any Related Person to Lenders, Holders or Collateral Agent in connection with
this Agreement or any transaction contemplated hereby to secure or guarantee the
payment of any part of the obligations or the performance of any Related
Person's other duties and obligations under the Loan Documents.

     "Security Schedule" means Schedule 4.

     "Scheduled Minimum Principal Payment" shall have the meaning given
hereto in Section 2.8(c)(ii).

     "Slough" means Slough Estates USA Inc.

     "Spot Rate" means in relation to the conversion of any amount in a
currency other than Dollars to the noon date spot rate of exchange announced by
the Federal Reserve Bank of New York on the Business Day immediately prior to
the date that the calculation or currency is to be made for the conversion of
the currency in question. Each determination of the Spot Rate shall be made by
the Agent and shall be conclusive absent manifest error.

     "Subject Hydrocarbons" has the meaning given in the Royalty Agreement.

     "Subject Properties" means, collectively, the oil and gas leases, oil,
gas and mineral leases, mineral leases, licenses, concessions, authorities to
prospect and other mineral interests and properties and the lands covered
thereby described in Exhibit A to the Royalty Agreement and by reference to any
Royalty Conveyance (as defined in the Royalty Agreement).

                                       19
<PAGE>

     "Subordination Agreement" means the Subordination Agreement among Borrower,
TOGC and TAMCO substantially in the form attached hereto as Exhibit H.

     "Subsidiary" of a specified Person means any corporation, association,
partnership, joint venture, or other business or corporate entity, enterprise or
organization which is directly or indirectly (through one or more
intermediaries) controlled by or owned fifty percent or more by the specified
Person, provided that associations, joint ventures or other relationships (i)
which are established pursuant to a standard form operating agreement or similar
agreement or which are partnerships for purposes of federal income taxation
only, (ii) which are not corporations or partnerships (or subject to the Uniform
Partnership Act) under applicable state law, and (iii) whose businesses are
limited to the exploration, development and operation of oil, gas or mineral
properties and interests owned directly by the parties in such associations,
joint ventures or relationships, shall not be deemed to be "Subsidiaries" of the
specified Person.

     "Supplement to Royalty Agreement" has the meaning given in Section 5.1(m).

     "Taxes" shall have the meaning given thereto in Section 5.1(h).

     "TCW Governing Documents" shall have the meaning given thereto in Section
6.4(d).

     "Termination Event" means:

               (i)   the occurrence with respect to any ERISA Plan of (A) a
     reportable event described in Sections 4043(b)(5) or (6) of ERISA or (B)
     any other reportable event described in Section 4043(b) of ERISA other than
     a reportable event not subject to the provision for 30-day notice to the
     Pension Benefit Guarantee Corporation pursuant to a waiver by such
     corporation under Section 4043(a) of ERISA;

               (ii)  the withdrawal of any Related Person or of any Affiliate of
     any Related Person from an ERISA Plan during a plan year in which it was a
     "substantial employer" as defined in Section 4001(a)(2) of ERISA;

               (iii) the filing of a notice of intent to terminate any ERISA
     Plan or the treatment of any ERISA Plan amendment as a termination under
     Section 4041 of ERISA;

               (iv)  the institution of proceedings to terminate any ERISA Plan
     by the Pension Benefit Guarantee Corporation under Section 4042 of ERISA;
     or

               (v)   any other event or condition which might constitute grounds
     under Section 4042 of ERISA for the termination of, or the appointment of a
     trustee to administer, any ERISA Plan.

     "Third Party Costs" means any costs paid to persons other than Affiliates
of Borrower for the transportation, processing, treating and marketing of
Subject Hydrocarbons.

     "TOGA Australian Collateral Account" means that certain lockbox account
established with the Brisbane office of ANZ Bank pursuant to the TOGA Australian
Collateral

                                       20
<PAGE>

Account Agreement, or any other lockbox account established pursuant to a
replacement Collateral Account Agreement.

     "TOGA Australian Collateral Account Agreement" means that certain Bankers
Deed of Covenant substantially in the form of Exhibit B-2 between Borrower,
TOGA, the Lenders and ANZ Bank, as amended from time to time or as replaced by
any other Bankers Deed of Covenant from time to time.

     "TOGA-Borrower Management Agreement" means that certain Services Agreement
to be entered into between TOGA and Borrower in substantially the form attached
hereto as Exhibit I.

     "TOGA Dollar Collateral Account" means that certain lockbox account
established with the Brisbane office of ANZ Bank pursuant to the TOGA Dollar
Collateral Account Agreement, or any other lockbox account established pursuant
to a replacement Collateral Account Agreement.

     "TOGA Dollar Collateral Account Agreement" means that certain Bankers Deed
of Covenant substantially in the form of Exhibit B-2 between Borrower, TOGA, the
Lenders and ANZ Bank, as amended from time to time or as replaced by any Bankers
Deed of Covenant from time to time.

     "TOGC Security Agreement" means that certain First Amended and Restated
Pledge and Security Agreement between TOGC and Collateral Agent in substantially
the form attached hereto as Exhibit J, as may be further amended or replaced
from time to time.

     "Total Modified NPV10" means the sum of the Modified NPV10's for all Proved
Developed Producing Reserves, Proved Developed Non-Producing Reserves and Proved
Un-Developed Reserves.

     "Tri-Star" has the meaning given in Section 4.1(t).

     "Tri-Star Litigation" means that certain litigation captioned Tipperary v.
Tri-Star, Case No. CV-42, 256 before the District Court of Midland County,
Texas, 238th Judicial District.

     "Tri-Star Litigation Indemnity" has the meaning given in Section 7.3.

     "Tri-Star Litigation Indemnity Letter of Credit" means the letter of
credit delivered pursuant to Section 3.1(a)(xvii), together with any renewal or
replacement thereof.

     "Trustco" means Trust Company of the West, a California trust company.

     "Working Capital" has the meaning given in Section 5.2(k).

     "Yield Adjustment Payment" has the meaning given in Section 2.11.

                                       21
<PAGE>

     Section 1.2 Accounting Terms and Determinations.

     (a)  Except as otherwise expressly provided in this Agreement, all
accounting terms used in this Agreement (including the term "Working Capital")
shall be interpreted, and all financial statements and certificates and reports
as to financial matters required to be delivered to the Lenders, Holders, Agent
or Collateral Agent under this Agreement shall (unless otherwise disclosed to
the Lenders, Holders, Agent or Collateral Agent in writing at the time of
delivery in the manner described in subsection (b) below) be prepared in
accordance with GAAP applied on a basis consistent with those used in the
preparation of the latest financial statements furnished to the Lenders,
Holders, Agent or Collateral Agent under this Agreement (which, prior to the
delivery of the first audited financial statements under Section 5.1(b)(i),
shall mean the Initial Financial Statements). Except as otherwise expressly
provided in this Agreement, all calculations made for the purposes of
determining compliance with this Agreement shall (except as otherwise expressly
provided in this Agreement) be made by application of GAAP applied on a basis
consistent with those used in the preparation of the latest annual or quarterly
financial statements furnished to the Lenders, Holders, Agent or Collateral
Agent pursuant to Section 5.1(b)(i) or (ii).

     (b)  To enable the ready and consistent determination of compliance with
the covenants set forth in this Section 1.2 and Section 5.1, Borrower will not
change the last day of its fiscal year from September 30 of each year, or the
last days of the first three fiscal quarters in each of its fiscal years from
December 31, March 31 and June 30 of each year, respectively, except with
Agent's reasonable consent.

     Section 1.3  Interpretation.  In this Agreement, unless otherwise
indicated, the singular includes the plural and conversely; words importing one
gender include the others and neuter includes all genders; references to
statutes or regulations are to be construed as including all statutory or
regulatory provisions consolidating, amending or replacing the statute or
regulation referred to; references to "writing" include printing, typing,
lithography and other means of reproducing words in a tangible visible form; the
word "or" shall not be exclusive (i.e., shall be deemed to include "and/or");
the words "hereof," "herein" and "hereunder" and words of similar import refer
to this Agreement as a whole and not to any particular provision of this
Agreement; the Table of Contents and article and section headings and other
captions are for the purpose of reference only and do not limit or effect the
meaning of the terms and provisions hereof; the words "including," "includes"
and "include" shall be deemed a reference to such agreement and/or instrument
and shall be followed by the words "without limitation"; references to articles,
sections (or subdivisions of sections), exhibits, annexes or schedules are to
such parts of this Agreement; references to agreements and other contractual
instruments shall be deemed a reference to such agreement and/or instrument and
shall include all subsequent amendments, extensions and other modifications to
such instruments (without, however, limiting any prohibition on any such
amendments, extensions and other modifications by the terms of this Agreement);
and references to Persons include their respective permitted successors and
assigns and, in the case of Governmental Persons, Persons succeeding to their
respective functions and capacities.

                                       22
<PAGE>

                                   ARTICLE 2
                                     LOANS

     Section 2.1  Loan Advances.

     (a)  Subject to the terms and conditions hereof, the Lenders agree on
behalf of the Holders to make an initial advance to Borrower (the "Initial Loan
Advance") on the Initial Funding Date in the aggregate amount of Seven Million
Five Hundred and 00/100 Dollars ($7,500,000).

     (b)  Subject to the terms and conditions precedent hereof, including
Section 3.3, the Lenders agree on behalf of the Holders to make additional
advances to Borrower (the "Additional Loan Advances") from time to time during
the Commitment Period so long as the aggregate amount of the Additional Loan
Advances does not exceed Nine Million Five Hundred and 00/100 Dollars
($9,500,000) and the aggregate amount of all Advances does not exceed Seventeen
Million and 00/100 Dollars ($17,000,000).

     Section 2.2  The Notes. Borrower's obligation to repay to the Lenders the
aggregate amount of the Advances, together with interest accruing in connection
therewith, shall be evidenced by senior secured promissory notes (the "Notes")
made by Borrower in the form of Exhibit K with appropriate insertions, each
payable to the order of the Holders in the stated principal amounts set forth on
Schedule 3 (as the same may be revised, from time to time). All Advances will be
made under the Notes in proportion to their relative stated principal amounts.
The amount of principal owing on each Note at any given time shall be such
proportionate share of the aggregate amount of the Advances theretofore made
minus such proportionate share of all payments of principal theretofore received
by the Holders on such Notes. Interest on the Notes shall accrue and be due and
payable as provided herein and therein. Amounts borrowed and repaid on the Notes
may not be re-borrowed hereunder.

     Section 2.3  Request for Advances.

     (a)  Borrower must give the Lenders at least fifteen (15) days prior
written notice (or telephonic notice promptly confirmed in writing by the
Lenders) of any requested Additional Loan Advance. Each such written notice (or
confirmation) must be made (i) if the Initial Loan Advance, in the form and
substance of the "Request for Initial Advance" in Exhibit L duly completed; and
(ii) if an Additional Loan Advance, in the form and substance of the "Request
for Additional Advance" in Exhibit M. Each such telephonic request shall be
deemed a representation, warranty, acknowledgment and agreement by Borrower as
to the matters which are to be set out in the written confirmation.

     (b)  If all conditions precedent to such Advance have been met, the Lenders
will, on the funding date specified in the Borrower's Request for Advance or on
the date such conditions precedent have been met, make such Advance available to
Borrower in immediately available funds.

     Section 2.4  Use of Proceeds.

                                       23
<PAGE>

     (a)  Borrower shall use the proceeds from the Initial Loan Advance for the
sole purpose of capitalizing TOGA by means of either Approved capital
contributions or Approved advances of Inter-company Debt in order for TOGA to:

          (i)   Refinance approximately $4,800,000 of existing Debt owed by TOGA
     to Slough; and

          (ii)  Use up to $1,200,000 for Approved Working Capital purposes; and

          (iii) Use up to $1,500,000 for Approved Capital Expenditures.

     (b)  Borrower shall use approximately $9,500,000 of the proceeds from the
Additional Loan Advances, which funds may be drawn upon as set forth in this
Section 2.4 and in Article 3, for the sole purpose of capitalizing TOGA for the
continued development of TOGA's interests in the Project in accordance with the
Approved Plan of Development.

     (c)  [Deleted]

     (d)  In no event shall the funds from any Advance be used directly or
indirectly by any Person for personal, family, household or agricultural
purposes or for the purpose, whether immediate, incidental or ultimate, of
purchasing, acquiring or carrying any "margin stock" or any "margin securities"
(as such terms are defined respectively in Regulations U, G and X promulgated by
the Board of Governors of the Federal Reserve System) or to extend credit to
others directly or indirectly for the purpose of purchasing or carrying any such
margin stock or margin securities. Borrower represents and warrants to the
Lenders, Holders, Agent and Collateral Agent that Borrower is not engaged
principally, or as one of Borrower's important activities, in the business of
extending credit to others for the purpose of purchasing or carrying such margin
stock or margin securities.

     Section 2.5  Coupon Interest. Subject to modification pursuant to Section
2.7, the Notes shall bear interest ("Coupon Interest") from and including the
dates of the Advances on the unpaid principal amount from time to time
outstanding at the rate of ten percent (10%) per annum.

     Section 2.6  Accrual and Payment of Coupon Interest. Coupon Interest shall
accrue on the Notes from and including the Initial Funding Date until their
repayment in full. For each Calendar Quarter (or part thereof) commencing on or
after the Initial Funding Date and ending on or before the Maturity Date, Coupon
Interest on the Notes shall be calculated for the entire such Calendar Quarter
in the manner provided in Section 2.7, but shall be due and payable on the
Quarterly Payment Date of such Calendar Quarter.

     Section 2.7  Computation of Interest.

     (a)  Coupon Interest shall be computed on the Notes on the basis of a 360-
day year and on the actual number of days elapsed in any period including the
date of Advance but excluding the date by which the Holders are deemed, pursuant
to Section 2.10(a), to have

                                       24
<PAGE>

received payment. Coupon Interest on the Notes for each Calendar Quarter (or
part thereof) ending on or before the Maturity Date shall be computed as the sum
of the daily interest for the Calendar Quarter (or part thereof), taking into
account the outstanding principal balance of the Notes on each day of the period
(where such balance on any given day shall reflect any payment of principal
credited on such date pursuant to Section 2.10 hereof). For purposes of clarity,
for purposes of computing the Coupon Interest due and payable on the Quarterly
Payment Date of such Calendar Quarter, the daily interest for the period from
and including the Quarterly Payment Date through the end of the Calendar Quarter
shall be based on the outstanding principal balance after crediting all payments
of principal through the Quarterly Payment Date.

     (b)  Any principal or Coupon Interest payment due on the Notes or any other
monetary Obligation which is not paid when due, whether at stated maturity, by
notice of acceleration or otherwise, shall bear interest (calculated in the
manner set forth above) at the Late Payment Rate.

Section 2.8  Payment of Principal; Quarterly Payments.

     (a)  Borrower shall not be required to make payments of principal on the
Notes during the period commencing on the Initial Funding Date and ending on the
day before the Initial Amortization Date.

     (b)  The outstanding principal balance of the Notes shall be due and
payable in full on the Maturity Date.

     (c)  Commencing upon the first Quarterly Payment Date after the Initial
Amortization Date, and on every Quarterly Payment Date thereafter until the
Maturity Date, Borrower shall make a principal payment to Lenders on account of
the outstanding principal balance of the Notes (each, a "Principal Payment") in
an amount equal to the greater of:

          (i)   The sum of the Dedication Rate multiplied by the ANCF for the
     preceding Calculation Period; or

          (ii)  The "Scheduled Minimum Principal Payment" applicable on such
     Quarterly Payment Date, defined as the product of (A) the unpaid principal
     balance on the Notes as of December 31, 2002 and (B) the percentage set
     forth below for the month and year in which such Quarterly Payment Date
     occurs, rounded to the next higher $1,000:

                        Percentages for Computation of
                     Scheduled Minimum Principal Payments

<TABLE>
<CAPTION>
     Year            March            June           September         December          Total
-------------------------------------------------------------------------------------------------
<S>             <C>              <C>              <C>               <C>              <C>
     2000                    0%               0%                0%               0%
     2001                    0%               0%                0%               0%
     2002                    0%               0%                0%               0%
</TABLE>

                                       25
<PAGE>

<TABLE>
<CAPTION>

     Year            March            June           September         December          Total
-------------------------------------------------------------------------------------------------
<S>             <C>              <C>              <C>               <C>              <C>
     2003            5%               5%                5%               5%              20%
     2004            9%               9%                9%               9%              36%
     2005           10%              10%               10%              10%              40%
     2006         Remainder                                                               4%
-------------------------------------------------------------------------------------------------
    Total                                                                               100%
-------------------------------------------------------------------------------------------------
</TABLE>

     (d)  All payments of principal made by Borrower hereunder shall be applied
to the Notes to which such payments relate ratably among the Holders of such
Notes proportionately to their respective Pro Rata Shares. All prepayments of
principal made pursuant to Section 2.9 shall apply to principal payments
thereafter required in inverse order of their maturity.

     Section 2.9  Prepayment.

     (a)  Optional Prepayments. In addition to the payments required under
Sections 2.6 and 2.8, Borrower may, from time to time, on or after October 1,
2000 through March 1, 2002, and upon ten (10) Business Days' prior written
notice to Lenders, prepay the Notes, in whole but not in part, so long as such
prepayment is accompanied by the payment of, and there shall be due and payable
upon any prepayment in full of principal during such period whether by optional
prepayment or mandatory prepayment pursuant to Section 2.9(b), a prepayment
premium (the "Prepayment Premium") equal to the product of the applicable
"Prepayment Premium Percentage" set forth below opposite the time period in
which the date of prepayment occurs multiplied by the principal amount prepaid:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
Date of Prepayment                                                Prepayment Premium Percentage
-----------------------------------------------------------------------------------------------------------
<S>                                                   <C>
Prior to March 31, 2001                               12.5%
-----------------------------------------------------------------------------------------------------------
April 1, 2001 to June 30, 2001                        10%
-----------------------------------------------------------------------------------------------------------
July 1, 2001 to September 30, 2001                    7.5%
-----------------------------------------------------------------------------------------------------------
October 1, 2001 to December 31, 2001                  5%
-----------------------------------------------------------------------------------------------------------
January 1, 2002 to February 28, 2002                  2.5%
-----------------------------------------------------------------------------------------------------------
</TABLE>

     In addition to the payments required under Sections 2.6 and 2.8, Borrower
may, on or after March 1, 2002, from time to time and upon ten (10) Business
Days' prior written notice to Lenders, prepay the Notes, in whole or in part, so
long as each partial prepayment of principal on the Notes is greater than or
equal to $250,000.  Each partial prepayment of principal shall be applied to the
Minimum Principal Payments due under the Notes in the inverse order of their
maturities.

     Each prepayment of principal under this Section 2.9 shall be accompanied by
all interest then accrued and unpaid on the principal so prepaid. Any principal
prepaid pursuant to this

                                       26
<PAGE>

Section 2.9 shall be in addition to, and not in lieu of, all payments otherwise
required to be paid under the Loan Documents at the time of such prepayment.

     (b)  Mandatory Prepayments.

          (i)   If the Agent Approves any request by TOGA to sell all or any
     portion of the Eligible Proved Properties (which approval shall be in
     Agent's sole and absolute discretion as to any Collateral comprising a
     portion of the Project but which approval shall not be withheld
     unreasonably as to any Collateral not comprising a portion of the Project),
     notwithstanding any other provision hereof, all sales proceeds must be
     applied to the prepayment of the Notes unless otherwise approved in writing
     by the Agent, which approval the Agent may withhold in its sole and
     absolute discretion.

          (ii)  If Borrower refinances all or any portion of the Loans, which
     prior to October 1, 2000 shall be subject to receipt of Approval of the
     Agent which may be withheld in Lenders' sole and absolute discretion,
     notwithstanding any other provision hereof, all refinancing proceeds shall
     be applied to prepayment of the Scheduled Principal Payments in inverse
     order of their maturities.

          (iii) Borrower shall apply any Excess ANCF not used for additional
     development expenditures pursuant to the Approved Plan of Development
     within nine months after receipt to the prepayment of the Scheduled
     Principal Payment in inverse order of their maturities.

     Any mandatory prepayments made pursuant to this Section 2.9(b) shall be
     free from prepayment penalties.

     (c)  Effect on Royalty. Under no circumstances shall the Royalty be
released in connection with any prepayment pursuant to subsection (a) or (b)
above.

     Section 2.10  General Payment Provision.

     (a)  Borrower shall make each payment which Borrower owes under any of the
Loan Documents not later than 11:00 a.m., Los Angeles, California time, on the
date such payment becomes due and payable, in lawful money of the United States
of America, without set-off, deduction or counterclaim, and in immediately
available funds sent by wire transfer to the payment accounts set forth on
Schedule 5 (or to such other bank and accounts and pursuant to such other
directions as Holders may from time to time specify). Any payment received by
Holders after such time shall be deemed to have been made on the next following
Business Day. Should any such payment become due and payable on a day other than
a Business Day, the maturity of such payment shall be the preceding Business
Day. Each payment under a Loan Document shall be due and payable at the place
provided therein and, if no specific place of payment is provided, shall be due
and payable at the place of payment of the Notes. When the Holders collect or
receive money on account of the Obligations which is insufficient to pay all

                                       27
<PAGE>

Obligations then due and payable, the Holders may apply such money as they elect
to the various Obligations which are then due and payable.

     (b)  Any amount received by the Agent or Collateral Agent, or any Holder,
whether as a Coupon Interest payment or principal payment from or on behalf of
Borrower, shall be applied as follows in descending order of priority (provided
that after the occurrence of the Event of Default such amounts may be applied as
determined by Agent, Holders, or Collateral Agent in their sole discretion):

          (i)    to all costs and expenses (including reasonable attorneys' fees
     and costs; costs of maintaining, preserving or disposing of any Collateral;
     and costs of settlement) incurred by the Lenders, Holders, Agent or
     Collateral Agent either pursuant to Section 5.1(j) or in enforcing any
     Obligations of, or in collecting any payments from, any obligor hereunder
     or under the other Loan Documents;

          (ii)   to Obligations (other than principal or interest) then due and
     owing the Lenders, Holders, Agent or Collateral Agent under any of the Loan
     Documents;

          (iii)  to Late Payment Rate Interest which has accrued on past due
     payments hereunder pursuant to Section 2.7(b);

          (iv)   to Coupon Interest that is currently due and payable on the
     Notes pursuant to Sections 2.6 and 2.7(a);

          (v)    to the payment of past due principal on the Notes;

          (vi)   to payment of principal on the Notes currently due and payable
     pursuant to Section 2.8; and

          (vii)  to the prepayment of principal under the Notes, which
     prepayment shall be applied to future Scheduled Minimum Principal Payments
     in inverse order of their maturities.

     Section 2.11  Yield Adjustment Payment.  Concurrently with the funding of
the Initial Loan Advance, Borrower shall pay in immediately available funds to
Lenders a yield adjustment payment (the "Yield Adjustment Payment") in an amount
equal to One Hundred Twenty Thousand Dollars ($120,000).

     Section 2.12  Collateral Accounts.

     (a)  Establishment of Collateral Accounts; Rules.

          (i)   Borrower shall establish and maintain at its expense the
     Borrower/TOGC Collateral Account pursuant to the Borrower/TOGC Collateral
     Account Agreement and TOGA shall establish and maintain at its expense the
     TOGA Dollar Collateral Account pursuant to the TOGA Dollar Collateral

                                       28
<PAGE>

     Account Agreement and the TOGA Australian Collateral Account pursuant to
     the TOGA Australian Collateral Account Agreement.

          (ii)  TOGA, and to the extent applicable Borrower, shall deposit into
     the TOGA Dollar Collateral Account or the TOGA Australian Collateral
     Account all Project Gross Cash Revenues and Net TOGA Non-Project Cash Flow
     from and after the Initial Funding Date through the Repayment Date.

          (iii) TOGA may make monthly withdrawals from the TOGA Dollar
     Collateral Account or the TOGA Australian Collateral Account on the last
     day of each Calendar Month to pay Approved LOE, Approved Third Party Costs,
     Approved Capital Expenditures and Direct Taxes provided that all
     Obligations then due and payable have been paid in full and no Default
     shall then exist or be outstanding.

          (iv)  From and after the Initial Funding Date through the Repayment
     Date, Borrower, TOGA and TOGC shall deposit into the Borrower/TOGC
     Collateral Account all Permitted Borrower Payments, and all payments of
     Inter-company Debt of TOGC with respect to or in any way relating to the
     Advances or TOGA.

          (v)   Collateral Agent may instruct the administrator of the
     Collateral Accounts to transfer or disburse amounts from it to Agent only
     to the extent such amounts are due and payable under the Notes, this
     Agreement or any other Loan Document.

          (vi)  After the occurrence of an Event of Default under any Loan
     Document or Borrower's or TOGA's failure to comply with the terms of this
     Section 2.12, Collateral Agent may, at its option, apply all sums in the
     Collateral Accounts to the reduction of outstanding principal of, and
     interest and other sums owed by Borrower on, the Notes.

          (vii) Upon the satisfaction in full of all amounts owed by Borrower
     under the Loan Documents, Collateral Agent shall have all amounts remaining
     in the Borrower/TOGC Collateral Account disbursed to Borrower and all
     amounts remaining in the TOGA Dollar Collateral Account and the TOGA
     Australian Collateral Account disbursed to TOGA.

     (b)  Notice. Not later than one (1) Business Day preceding the Initial
Funding Date or 15 Business Days after the execution of any new or future gas
sales contract, TOGA shall send a notice, substantially in the form of Exhibit
O, to all existing and/or new Hydrocarbon purchasers, including without
limitation, Energex Retail Pty Ltd, directing them to forward all amounts
payable to TOGA directly to the TOGA Dollar Collateral Account at the mailing
address of the depositary bank for deposit into the TOGA Dollar Collateral
Account. The failure of such Hydrocarbon purchasers to comply with any such
notice shall not constitute a Default hereunder by any Related Person, provided
that (i) such Hydrocarbon purchasers' failure to comply with such notice is not
done at the request of Borrower or TOGA and (ii) Borrower

                                       29
<PAGE>

and TOGA shall forward all amounts received from such Hydrocarbon purchasers to
the TOGA Dollar Collateral Account within one (1) Business Day of Borrower's or
TOGA's receipt thereof.

     (c)  Acknowledgments. Each of Borrower, TOGC and TOGA hereby acknowledge
that:

          (i)   It has granted and assigned to Collateral Agent a first
     priority, perfected security interest in the Collateral Accounts, all funds
     therein and all proceeds thereof pursuant to the Security Agreement, the
     Pledge and Security Agreement, the TOGC Pledge and Security Agreement and
     the Collateral account Agreements; and

          (ii)  None of Borrower, TOGC or TOGA shall be permitted to withdraw,
     transfer or disburse any funds from the Collateral Accounts except in
     accordance with the terms hereof and each other Loan Document.

     (d)  Attorney-in-fact. Each of Borrower, TOGC and TOGA hereby appoint
Collateral Agent its attorney-in-fact, with full power of substitution, to
execute and file on behalf of Borrower, TOGC or TOGA, respectively, any
financing statement, continuation statement or instrument of further assurance
to more effectively perfect, continue or confirm (i) the provisions of this
Section 2.12 and of any agreement entered into by Borrower, TOGC ,TOGA,
Collateral Agent and the depositary bank administering the Collateral Accounts
and (ii) the security interest granted in the Collateral Accounts. This power,
being coupled with an interest, shall be irrevocable until all amounts due in
connection with the Notes have been paid in full.

                                   ARTICLE 3
                        CONDITIONS PRECEDENT TO LENDING

     Section 3.1  Conditions Precedent to Initial Loan Advance. The Lenders have
no obligation to make the Initial Loan Advance unless all of the following
conditions precedent have been satisfied in which event the Initial Loan Advance
shall be made:

     (a)  The Lenders shall have received all of the following at Agent's office
in Los Angeles, California, duly executed and delivered and in form,
     substance and date satisfactory to the Lenders:

          (i)   The Notes;

          (ii)  Each Security Document listed in the Security Schedule;

          (iii) An "Omnibus Certificate" substantially in the form of Exhibit P
     of the Secretary or the Board of Directors of each of Borrower, TOGC and
     TOGA which shall contain the names and signatures of its officers
     authorized to execute the Loan Documents to which it is a party and which
     shall certify to the truth, correctness and completeness of the following
     exhibits attached to the certificate: (i) a copy of resolutions of
     Borrower's, TOGC's and TOGA's, respectively, board of directors in full
     force and effect at the time this Agreement

                                       30
<PAGE>

     is entered into, authorizing the execution of the Loan Documents delivered
     or to be delivered by Borrower, TOGC or TOGA in connection herewith and the
     consummation of the transactions contemplated in the Loan Documents; (ii) a
     copy of Borrower's and TOGC's Articles of Incorporation and all amendments
     thereto, certified by the Secretary of the State of Texas; or (iii) a copy
     of the necessary authorization authorizing observers to the board of
     directors of Borrower and TOGA as provided under Section 5.1(c)(v); and
     (iv) a copy of the appointment of all legal representatives and attorneys
     in fact of Borrower, TOGC and TOGA duly registered;

          (iv)   A "Compliance Certificate," substantially in the form of
     Exhibit Q, of the President of Borrower, TOGC and TOGA of even date with
     such Advance, in which such persons certify to the satisfaction of the
     conditions set out in clauses (i) through (ii) above;

          (v)    Opinions of Allen, Allen & Hemsley, Australian counsel for the
     Related Persons, covering the items set forth in Exhibit R-1, and such
     other matters requested by Agent and otherwise in form acceptable to Agent
     and its counsel;

          (vi)   An opinion of Jackson & Nash, or other New York counsel
     acceptable to Agent for the Related Persons, substantially in the form of
     Exhibit R-2, and such other matters requested by Agent and otherwise in
     form acceptable to Agent and its counsel;

          (vii)  An opinion of Glast, Phillips & Murray, P.C., or other Texas
     counsel acceptable to Agent for the Related Persons, substantially in the
     form of Exhibit R-3, and such other matters requested by Agent and
     otherwise in form acceptable to Agent and its counsel;

          (viii) An opinion of counsel to the Lenders, or other assurance
     satisfactory to the Lenders in their sole discretion, that the Loans are
     permitted investments by the Lenders under the terms of all governing
     documents relating to the Lenders and as to such other matters as the
     Lenders may reasonably request;

          (ix)   The Initial Financial Statements;

          (x)    The Initial Engineering Report;

          (xi)   An environmental report (the "Initial Environmental Report")
     relating to all Properties of TOGA included in the Project prepared by an
     environmental engineering consultant reasonably approved by Agent which is
     satisfactory to Agent and its counsel in form and substance, including the
     satisfactory compliance with all applicable environmental laws and
     regulations;

          (xii)  Certificates from the Comptroller of the State of Texas as to
     the existence, good standing and due qualification to do business of
     Borrower;

                                       31
<PAGE>

          (xiii)  A certified copy of the Certificates of Incorporation of TOGA
     issued by the Australia Securities & Investment Commission;

          (xiv)   Title opinions and other title information concerning the
     Project in form, substance and authorship satisfactory to Agent;

          (xv)    Evidence that the board of directors and any required equity
     owners of the Borrower, TOGC and of TOGA have approved the transactions
     contemplated hereby and any other required governmental or regulatory
     approval or consent;

          (xvi)   An irrevocable standby letter of credit in the form of Exhibit
     G-1 in favor of Collateral Agent issued by a bank Approved by Agent in its
     sole and absolute discretion pursuant to which Collateral Agent shall be
     authorized to draw Three Million Five Hundred Thousand Dollars
     ($3,500,000);

          (xvii)  An irrevocable standby letter of credit in the form of Exhibit
     G-2 in favor of Collateral Agent issued by a bank Approved by Agent in its
     sole and absolute discretion pursuant to which Collateral Agent shall be
     authorized to draw Five Hundred Thousand Dollars ($500,000) with respect to
     unpaid amounts payable under the Tri-Star Litigation Indemnity.

          (xviii) An agreement executed by Slough as the account party with
     respect to the Letters of Credit and the Borrower with respect to the
     consequences of a draw upon the Letters of Credit, in form and substance
     acceptable to Agent in its sole and absolute discretion together with a
     subordination agreement in form and substance acceptable to Agent in its
     sole and absolute discretion in favor of Lenders with respect to any
     obligation of Borrower, TOGC or TOGA to Slough arising from such a draw
     upon a Letter of Credit.

          (xix)   A shareholder approval executed by Slough, as shareholder in
     TOGA, in form Approved by Agent in its sole discretion, approving (a) the
     terms of the issuance of shares of TOGA to TOGC or Borrower in
     consideration of the contribution to TOGA of the proceeds of any Advance
     or, in the alternative, the terms of the Inter-company Debt reflecting the
     advance to TOGA of the proceeds of any Advance, (b) the termination by
     Slough of any future obligation of TOGA to pay to Slough any overriding
     royalty or other contractual payment in consideration of the transfer to
     TOGA of interests under the Project JOA heretofore acquired by Borrower or
     TOGC, (c) the Management Fees and TOGA -Borrower Management Agreement, and
     (d) the execution and delivery by TOGA of the Guarantee Agreement and other
     Loan Documents executed by TOGA.

          (xx)    The Borrower should have prepared a drilling program proposal
     consisting of at least twenty (20) wells pursuant to the terms of the
     Project JOA covering the Project, the time periods for consent and non-
     consent by all parties thereto shall have expired and Agent shall have
     received copies of all

                                       32
<PAGE>

     communications relating to such proposals and evidence satisfactory to the
     Agent in its sole and absolute discretion that such drilling programs will
     be undertaken on a schedule acceptable to Agent (including copies of the
     drilling contract executed with respect thereto) and that adequate funding
     will be available to finance the same;

          (xxi)   Evidence that the Bank Debt has been paid in full and all
     liens, claims and other security interests have been released;

          (xxii)  Evidence that the debt described in subsection 2.4(a)(i) shall
     be paid in full and all liens, claims and other security interests securing
     the same have been released and all obligations of TOGA to pay any
     overriding royalty, Contractual Payments (as defined in Section 3 of the
     Promissory Note dated December 22, 1998 in the original principal amount of
     $6,000,000 executed by TOGA to Slough) or other amounts thereunder shall be
     terminated and released concurrent with the Initial Loan Advance; and

          (xxiii) Such other information as the Lenders may reasonably require,
     including evidence satisfactory to the Lenders that all conditions
     precedent to Initial Funding Date set forth in this Article and to any
     disbursement to be made at Initial Funding Date have been satisfied.

     (b)  Borrower, TOGC and TOGA shall have established the Collateral
Accounts.

     (c)  The notices required pursuant to Section 2.12(b) shall have been
delivered.

     (d)  Borrower shall have transferred to TOGA, either directly or indirectly
through TOGC, all rights and interests in the Project heretofore acquired by
Borrower or TOGC from parties to the Project JOA pursuant to documentation in
form and substance satisfactory to Agent.

     Section 3.2  Conditions Precedent to Any Advance. The Lenders have no
obligation to make any Advance (including the Initial Loan Advance) unless all
of the following conditions precedent have been satisfied, to the Agent's
satisfaction and in its sole discretion (in which event the Advance shall be
made):

     (a)  All representations and warranties made by Borrower and by TOGA and
any other Related Person in any Loan Document shall be true in all material
respects on and as of the date of such Advance (except to the extent that the
facts upon which such representations are based (i) have been changed by the
extension of credit hereunder and (ii) are true and correct in all material
respects only when taken together with all other representations and warranties
thereof in any Loan Document previously delivered) as if such representations
and warranties had been made as of the date of such Advance.

     (b)  No Default shall exist at the date of such Advance.

                                       33
<PAGE>

     (c)  No Material Adverse Effect shall have occurred to Borrower's, TOGC's
or to TOGA's financial condition or businesses since the date of this Agreement.

     (d)  Each of Borrower, TOGC and TOGA shall have performed and complied in
all material respects with all agreements and conditions required in the Loan
Documents to be performed or complied with by it on or prior to the date of such
Advance.

     (e)  The making of such Advance shall not be prohibited by any law or any
regulation or order of any court or governmental agency or authority and shall
not subject the Lenders, Holders, Collateral Agent or Agent to any penalty or
other onerous condition which would impose on any Lender a material additional
cost in making a funding under or pursuant to any such law, regulation or order.

     (f)  Lenders shall have received or shall have been authorized and
instructed to withhold from the Initial Loan Advance the Yield Adjustment
Payment.

     (g)  Lenders shall have (i) reviewed Borrower's, TOGC's and TOGA's
financial condition, and (ii) found the same to be satisfactory.

     (h)  Each of Borrower, TOGC and TOGA shall have procured and maintained the
insurance required under Schedule 6 hereto.

     Section 3.3  Special Conditions Precedent for an Additional Loan Advance.
After the Initial Loan Advance, the Lenders shall be obligated to make an
Additional Loan Advance only:

          (i)   before the Funding Expiry Date;

          (ii)  in the amount requested by Borrower in Borrower's Request for
     Advance, not to exceed $9,500,000 in the aggregate for all Additional Loan
     Advances;

          (iii) upon Lenders' receipt of a timely Request for Advance and all
     documents and instruments which the Lenders have then requested, in
     addition to those described in Sections 3.1 and 3.2 (including opinions of
     legal counsel, corporate documents and records, documents evidencing
     Governmental Approvals and exemptions, and certificates of Governmental
     Persons and of officers and representatives of Borrower, TOGA and other
     Persons), as to (i) the accuracy and validity of or compliance with, in all
     material respects, all representations, warranties and covenants made in
     the Loan Documents, (ii) the satisfaction of all conditions contained
     therein, and (iii) all other matters pertaining thereto. All such
     additional documents and instruments shall be satisfactory to the Lenders
     in form, substance and date;

          (iv)  upon Lender's satisfactory review of the Engineering Report for
     the Comet Ridge Project as set forth in the Approved Plan of Development;

                                       34
<PAGE>

          (v)   if the Additional Advance is being used to develop properties
     not covered by the Initial Environmental Report ("Additional Properties"),
     upon receipt of an Environmental Report covering the Additional Properties;
     and

          (vi)  upon receipt by Agent of (i) evidence that all stamp and other
     taxes due with respect to all prior Advances and the requested Additional
     Advance in connection with the Australian Charge Document have been duly
     and properly paid and filed and (ii) evidence that no lien, charge,
     security interest or other interest has been granted to or has arisen in
     favor of any party other than Collateral Agent in any Collateral other than
     Permitted Liens.

     Section 3.4 Special Condition to Any Advance. Notwithstanding anything in
this Agreement or any other Loan Document to the contrary, the parties expressly
acknowledge and agree that uncertainties exist with respect to the Tri-Star
Litigation and Agent and Lenders reserve the right, in their sole and absolute
discretion, to refuse to fund any Advance and/or terminate or cancel any
obligation to make future Advances if Agent or Lenders determine, in their sole
and absolute discretion, that the operating relationship between TOGA and the
operator of the Project is unacceptable to Agent or Lenders. It is further
acknowledged and agreed that the Lenders and Agent shall have the right to
consider, and approve or disapprove the status of such operating relations prior
to each Advance and the making of any Advance shall not estop, limit or restrict
Agent's or Lenders' rights under the preceding sentence with respect to
subsequent Advances. Borrower, TOGC and TOGA hereby waive and release any and
all claims or causes of action against Agent, Lenders and any Indemnitees (as
defined in Section 7.3 below) arising from the exercise by Agent or Lenders of
the rights set forth in this Section 3.4.

                                   ARTICLE 4
                        REPRESENTATIONS AND WARRANTIES

     Section 4.1  Representations and Warranties of Borrower, TOGC and TOGA. To
confirm the Lenders' understanding concerning Borrower, TOGC and TOGA and
Borrower's, TOGC's and TOGA's business, Properties and obligations and to induce
the Lenders, the Holders, Collateral Agent and Agent to enter into this
Agreement and to make the Loans, each of Borrower, TOGC and TOGA represents and
warrants to the Holders, Agents and Collateral Agent as of the date hereof and
as of the Initial Funding Date that:

     (a)  No Default. None of Borrower, TOGC or TOGA is in default in the
performance of any of the material covenants and agreements contained herein. No
event has occurred and is continuing which, with the passage of time or giving
of notice, would constitute a Default.

     (b)  Organization and Good Standing. Each of Borrower, TOGC and TOGA is
duly organized and validly existing and in good standing under the laws of its
jurisdiction of organization, having all powers required to carry on its
business and enter into and carry out the transactions contemplated hereby and
by the Loan Documents to which it is a party. Each of Borrower, TOGC and TOGA is
duly qualified, in good standing and authorized to do

                                       35
<PAGE>

business in all other jurisdictions wherein the character of the properties
owned or held by it or the nature of the business transacted by it makes such
qualification necessary.

     (c)  Authorization and Validity. Each of Borrower, TOGC and TOGA has duly
taken all requisite corporate action necessary to authorize the execution and
delivery by it of the Loan Documents to which it is a party and to authorize the
consummation of the transactions contemplated thereby and the performance of its
obligations thereunder. Borrower is duly authorized to borrow funds hereunder.

     (d)  Compliance with Laws and Contracts. The execution and delivery by each
of Borrower, TOGC and TOGA of the Loan Documents to which it is a party, the
performance by it of its obligations under such Loan Documents, and the
consummation by it of the transactions contemplated by the various Loan
Documents to which it is a party, do not and will not (i) breach, violate or
conflict with any provision of (A) any Governmental Rule, (B) the articles or
certificate of incorporation, bylaws, charter, or partnership agreement or
certificate of Borrower, TOGC or TOGA, as applicable, or (C) any agreement,
judgment, license, order or permit applicable to or binding upon Borrower, TOGC
or TOGA; (ii) result in the acceleration of any Debt owed by Borrower, TOGC or
TOGA; (iii) require any Governmental Approval other than those already obtained
by Borrower, TOGC or TOGA or not yet required to be obtained by Borrower, TOGC
or TOGA; or (iv) result in or require the creation of any Lien upon any assets
or properties of Borrower, TOGC or TOGA except as expressly contemplated in the
Loan Documents. Except as expressly contemplated in the Loan Documents, no
consent, approval, authorization or order of, and no notice to or filing with,
any court or governmental authority or third party is required in connection
with the execution, delivery or performance by Borrower, TOGC or TOGA of any
Loan Documents to which it is a party or to consummate any transactions
contemplated by the Loan Documents to which it is a party. Each of Borrower,
TOGC and TOGA is fully aware of and has complied with all regulations
promulgated in connection with the U.S. Foreign Corrupt Practices Act of 1974,
as amended and chapter 4 of Division 70 of the Criminal Code Act of 1995 (Cth)
of Australia.

     (e)  Enforceable Obligations. This Agreement is, and the other Loan
Documents to which Borrower, TOGC or TOGA is a party will be, when duly executed
and delivered, legal, valid and binding obligations of Borrower, TOGC or TOGA,
as applicable, enforceable against Borrower, TOGC and TOGA in accordance with
their respective terms except as such enforcement may be limited by bankruptcy,
insolvency or similar laws of general application relating to the enforcement of
creditors' rights and general principles of equity.

     (f)  Initial Financial Statements. The Initial Financial Statements were
prepared in accordance with GAAP and fairly presented Borrower's consolidated,
TOGC's and TOGA's financial position at the statements' date and the results of
Borrower's consolidated, TOGC's and TOGA's operations and Borrower's
consolidated, TOGC's and TOGA's cash flows for the statements' periods. Since
the statements' date, no Material Adverse Effect has occurred with respect to
Borrower's, TOGC's or TOGA's financial condition or businesses.

     (g)  Other Obligations and Restrictions. Neither Borrower, TOGC nor TOGA
has any outstanding Debt of any kind (including contingent obligations, tax
assessments, and unusual forward or long-term commitments) which is, in the
aggregate, (i) material to

                                       36
<PAGE>

Borrower, TOGC or TOGA or material with respect to Borrower's, TOGC's or TOGA's
financial condition and (ii) not (A) shown in the Initial Financial Statements
or (B) disclosed in the Disclosure Schedule. Except as shown in the Initial
Financial Statements or disclosed in the Disclosure Schedule, no Related Person
is subject to or restricted by any franchise, contract, deed, charter
restriction, or other instrument or restriction which is materially likely in
the foreseeable future to materially and adversely affect the businesses,
properties, prospects, operations, or financial condition of Borrower, TOGC or
TOGA.

     (h)  Full Disclosure. No certificate, written statement or other written
information delivered herewith or heretofore by any Related Person to the
Lenders in connection with the negotiation of this Agreement or the other Loan
Documents or in connection with any transaction contemplated hereby contains any
untrue statement of a material fact or omits to state any material fact known to
Borrower, TOGC or TOGA (other than industry-wide risks normally associated with
the types of businesses conducted by Borrower, TOGC or TOGA, respectively)
necessary to make the statements contained herein or therein not misleading as
of the date made or deemed made. There is no fact known to Borrower, TOGC or
TOGA (other than industry-wide risks normally associated with the types of
businesses conducted by Borrower, TOGC or TOGA, respectively) that has not been
disclosed to the Lenders in writing that might reasonably be expected to cause a
Material Adverse Effect upon Borrower's, TOGC's, TOGA's or any of TOGA's
Subsidiaries' properties, businesses, prospects or condition (financial or
otherwise). Borrower has heretofore delivered to the Lenders true, correct and
complete copies of the Initial Financial Statements and the Initial Engineering
Report.

     (i)  Litigation. Except as disclosed in the Initial Financial Statements or
in the Disclosure Schedule: (i) there are no actions, suits or legal, equitable,
arbitrative or administrative proceedings pending, or to the knowledge of
Borrower, TOGC or TOGA threatened, against any Related Person before any
Governmental Person which could reasonably be expected to have a Material
Adverse Effect on Borrower, TOGC or TOGA, or the right or ability of Borrower,
TOGC or TOGA to enter into the Loan Documents to which it is a party or to
consummate the transactions contemplated thereby or to perform its obligations
thereunder and (ii) there are no outstanding judgments, injunctions, writs,
rulings or orders by any such Governmental Person against any Related Person
which have a material probability of causing a Material Adverse Effect on such
Related Person.

     (j)  ERISA Liabilities. There are no currently existing ERISA Plans or
similar plans in Australia. No Related Person is required to contribute to, or
has any other absolute or contingent liability in respect of, any "multiemployer
plan" as defined in Section 4001 of ERISA or any other Australian law which has
a comparable effect to ERISA.

     (k)  Environmental and Other Laws. Except as disclosed in the Disclosure
Schedule:

          (i)  each of Borrower, TOGC and TOGA is conducting its businesses in
     material compliance with all applicable Governmental Rules, including
     applicable Environmental Laws, and has been and is in compliance in all
     material respects with all Governmental Approvals required under such
     Governmental Rules, including applicable Environmental Laws;

                                       37
<PAGE>

          (ii)  to the best of Borrower's, TOGC's and TOGA's knowledge, none of
     the operations or properties of any Related Person is the subject of any
     applicable Governmental Person's investigation evaluating any release of
     any Hazardous Materials into the environment or the improper storage or
     disposal (including storage or disposal at offsite locations) of any
     Hazardous Materials;

          (iii) no Related Person (and to the best knowledge of Borrower, TOGC
     and TOGA, no other Person) has filed any notice under any Governmental Rule
     indicating that any Related Person is responsible for the release into the
     environment, or the improper storage or disposal, of any material amount of
     any Hazardous Materials or that any Hazardous Materials have been released,
     or are improperly stored or disposed of, upon any Property of any Related
     Person;

          (iv)  no Related Person has transported or arranged for the
     transportation of any Hazardous Material to any location (A) in
     contravention of any Environmental Law or (B) is the subject of any
     applicable Governmental Person's enforcement actions or, to the best of
     Borrower's, TOGC's and TOGA's knowledge, other Governmental Person's
     investigations which may lead to claims against any Related Person for
     clean-up costs, remedial work, damages to natural resources or for personal
     injury claims (whether under Environmental Laws or otherwise), in each
     case, where such action could reasonably be expected to have a Material
     Adverse Effect; and

          (v)   no Related Person otherwise has any known material contingent
     liability under any Environmental Laws or in connection with the release
     into the environment, or the storage or disposal, of any Hazardous
     Materials.

     (l)  Names and Places of Business. Except as disclosed in the Disclosure
Schedule, neither Borrower, TOGC nor TOGA has, had, been known by, or used any
other partnership, trade, or fictitious name, except as disclosed in the
Disclosure Schedule. The chief executive office and principal place of business
of Borrower, TOGC and TOGA are located at the address for Borrower, TOGC and
TOGA, respectively, set out in Section 8.3. Neither the Borrower, TOGC, nor any
Subsidiary of either has done business in, has investments or operations in,
oil, gas or energy related activities in Australia other than through TOGA or in
connection with interests which have been transferred to TOGA.

     (m)  No Subsidiaries. Except as disclosed in the Disclosure Schedule,
Borrower, TOGC and TOGA have no Subsidiaries, own no stock in any other Person,
and is not a member of any general or limited partnership, joint venture or
association of any kind.

     (n)  Regulations G, U and X. None of Borrower, TOGC or TOGA is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying "margin stock" (as defined in
Regulations G, U and X of the Board of Governors of the Federal Reserve System)
or any Australian law of comparable effect.

                                       38
<PAGE>

     (o)  Commissions. Except as set forth in the Disclosure Schedule, none of
Borrower, TOGC or TOGA, nor any other Related Person, has entered into any
agreement or incurred any obligation which might result in the obligation to pay
a brokerage commission or finder's fee (other than fees to one or more Lenders)
with respect to the Loans.

     (p)  Certain Regulations. None of Borrower, TOGC or TOGA (i) is an
"investment company," or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940 or any other Australian
law which has a comparable effect; (ii) is a "holding company," an "affiliate"
of a "holding company" or a "subsidiary company" of a "holding company," within
the meaning of the Public Utility Holding Company Act of 1935 or any other
Australian law which has a comparable effect; or (iii) is subject to any other
Governmental Rule restricting its ability to incur debt or to grant Liens.

     (q)  Ownership of TOGC and TOGA. Borrower owns one hundred percent (100%)
of the outstanding stock of TOGC. TOGC owns ninety percent (90%) of the
outstanding stock of TOGA which is evidenced by the certificates described in
Exhibit A to the TOGC Security Agreement. Except for the rights created under
the Loan Documents, no other Person has a Lien on or any right to acquire any
stock, equity interest or other interest whatsoever in TOGC or TOGA.

     (r)  Governmental Approvals; Governmental Rules. To the best of TOGA's,
TOGC's and Borrower's knowledge and belief, Tri-Star as record holder of the
Project Properties and as operator under the Project JOA holds all Governmental
Approvals necessary under Governmental Rules for the ownership and operation of
the Project in the ordinary course as well as the consummation of the
transactions contemplated in the Loan Documents, except for those Governmental
Approvals which are not currently required. TOGA has no reasonable basis to
believe that any Governmental Approvals which have not been obtained by Tri-Star
as of the date of this Agreement, but which will be required in the future, will
not be obtained in due course on or prior to the commencement of the appropriate
stage of the expansion of the Project or that they will not be free from any
condition or requirements, compliance with which could reasonably be expected to
have a Material Adverse Effect on TOGA. The Project, if constructed in
accordance with the Approved Plan of Development and otherwise developed,
constructed, operated and maintained as contemplated by the Loan Documents, is
expected to conform to and comply with all covenants, conditions, restrictions
and reservations in the Governmental Approvals applicable thereto and all
Governmental Rules, except to the extent any such noncompliance could not
reasonably be expected to have a Material Adverse Effect on TOGA.

     (s)  Nature of Business. TOGA has not engaged in any business other than:
(i) its participation in the Project and (ii) other energy related activities in
Australia including ownership and development of authorities to prospect.
Neither the business nor any Property of TOGA are or have been affected by any
fire, explosion, accident, strike, lockout or other labor dispute, drought,
storm, hail, earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance), that individually or in the
aggregate has had or could reasonably be expected to result in a Material
Adverse Effect on Borrower, TOGC, TOGA or any Related Person.

                                       39
<PAGE>

     (t)  Title; Security Documents; Interests Company Collateral. Subject to
this paragraph, each of Borrower, TOGC and TOGA own and have good, legal and
marketable title (with respect to personalty) and good, legal and indefeasible
title (with respect to real property) to the Collateral purported to be so owned
and covered by the Security Documents to which it is a party free and clear of
all Liens other than Permitted Liens. Lender and Agent specifically acknowledge
that as of the date of this Agreement, TOGA's interest in the Project is a valid
and enforceable contractual or equitable interest only under the Project JOA.
TOGA has brought proceedings in the Courts of the State of Texas against Tri-
Star Petroleum Company ("Tri-Star") to remove Tri-Star as the operator of the
Project and to require Tri-Star to transfer to TOGA and the other working group
interest owners who are parties to the Project JOA their proportionate interests
in the Authority to Prospect 526P and other property held in connection with the
Project Properties. TOGA's proportionate interest in the Project Properties is
not encumbered by any Liens other than Permitted Liens. TOGA's ownership of the
interest in Eligible Proved Properties has not been forfeited and there is no
basis for a claim of forfeiture under the Project JOA and other Project
Documents and it is entitled to receive (net of all Permitted Liens) the share
of the oil, gas and other minerals produced from or allocated to the wells,
leases and lands listed or described in Exhibit S hereto or in any Security
Document (the "Collateral Properties") specified as fractional, percentage or
decimal interests in such Exhibit S hereto or Security Document under the
heading "NRI". Such shares of production which TOGA is entitled to receive (and
TOGA's share of expenses relating to the Collateral Properties with respect to
each lease and lands affected thereby and also specified in Exhibit S or
Security Document under the heading "WI") are not subject to change except, and
only to the extent that, such changes are reflected in Exhibit S; and such
shares of production and the oil and gas interests to which some of them relate
are (and, unless and until released by Collateral Agent, shall remain)
encumbered by the Security Documents. There is no financing statement, mortgage
or similar document covering any Collateral Property on file in any public
office naming any party other than Collateral Agent as mortgagee or secured
party other than financing statements, mortgage or similar documents which have
heretofore expired or been terminated.

     (u)  Status of Leases, etc. With respect to the Owned Properties and the
JOA Properties, the leases and other contracts and agreements, permits and
approvals forming a part of the Eligible Proved Properties, which are material
to the operation or value of any Properties, when taken as a whole, are in full
force and effect. All rents, royalties and other payments due and payable under
such leases and other contracts and agreements, forming a part of the Eligible
Proved Properties, or under the Permitted Liens, have been properly and timely
paid in accordance with prudent industry practices, but in no event later than
ninety (90) days past due. TOGA in respect of the Owned Properties and, to the
best of TOGA's knowledge and belief, the operator under the Project JOA in
respect of JOA Properties, is not in default with respect to its obligations
other than to Comet Ridge Participants (and is not aware of any default by any
third party with respect to such third party's obligations where such default
could adversely affect the ownership or operation of the Eligible Proved
Properties) under such leases and other contracts or agreements, or under
Permitted Liens, or otherwise attendant to the ownership or operation of the
Eligible Proved Properties, where such default could have a Material Adverse
Effect.

     (v)  Production Sales, etc. Except as set forth in the Disclosure Schedule,
with respect to the Owned Properties and the JOA Properties (to the best of
TOGA's, TOGC's and the Borrower's knowledge and belief), neither TOGA, TOGC or
Borrower nor to the best of

                                       40
<PAGE>

TOGA's, TOGC's and the Borrower's knowledge and belief, Tri-Star as operator
under the Project JOA (in respect of the JOA Properties) or TOGA's predecessors-
in-title (in respect of the Owned Properties) have received prepayments
(including, but not limited to, payments for gas not taken pursuant to "take or
pay" arrangements) for any oil or gas to be produced from the Eligible Proved
Properties after the Closing, no Eligible Proved Property is subject to any
contractual or other arrangement whereby payment for production from such
Eligible Proved Property is to be deferred for a substantial period after the
end of the calendar month in which such production is delivered in the case of
oil, not in excess of thirty (30) days, and in the case of gas, not in excess of
sixty (60) days. Except as heretofore disclosed, in writing by Borrower, TOGC or
TOGA to Agent, no Eligible Proved Property is subject to any contractual or
other arrangement for the sale of hydrocarbons which cannot be canceled on
ninety (90) days' or less notice. No Eligible Proved Property is subject at the
present time to any regulation refund obligation, and to the best of TOGA's,
TOGC's and Borrower's knowledge and belief, no situation exists where the same
might be imposed. Except as heretofore disclosed in writing by Borrower to
Agent, no Eligible Proved Property is subject to a gas balancing arrangement
under which an imbalance exists, with respect to which imbalance TOGA is in an
overproducing status and is required to (i) permit one or more third parties to
take a portion of the production attributable to such Collateral Property
without payment (or without full payment) therefor and/or (ii) make payment in
cash, in order to correct such imbalance.

     (w)  Operation of Collateral Properties. Borrower has disclosed to Agent
and Lenders that Borrower and TOGA have asserted certain claims in the Tri-Star
Litigation that, among other things, the Project Properties are not being
operated in a good and workmanlike manner in compliance with the Project JOA and
applicable laws, rules and regulations. Notwithstanding such alleged breaches of
the Project JOA and applicable laws, rules and regulations by Tri-Star, none of
Borrower, TOGC or TOGA is aware of any fact or condition that would cause a
material risk that (1) the Project Properties will not continue to produce
Hydrocarbons as projected in the Initial Engineering Report, (2) either the
Hydrocarbons produced from the Project Properties will not be sold or TOGA's
share of sales proceeds will not be remitted at its direction, in each case as
consistent with prior practice, and (3) once proposed pursuant to the Project
JOA and funded as contemplated hereby, the Approved Plan of Development will not
be conducted as contemplated therein.

     (x)  Tax Filings. Except as set forth in the Disclosure Schedule, each of
Borrower, TOGC and TOGA has filed all required tax returns and paid all taxes
and governmental charges or levies (which taxes, charges or levies are material
in the aggregate to Borrower, TOGC or TOGA) imposed upon its income, properties
or profits, before the same became in default, including, but not limited, to
all ad valorem taxes assessed under the Collateral Properties or any part
thereof and all occupational taxes and all production, severance, windfall
profit, excise and other taxes assessed against, or measured by, the production
of (or the value of, proceeds or the production of) oil, gas, or other minerals
accruing to the Collateral Properties.

     (y)  Use of Proceeds. The proceeds of each Advance will be used solely in
accordance with, and solely for the purposes contemplated by, Section 2.4
hereof. No part of the proceeds of any extension of credit hereunder will be
used for the purpose, whether immediate,

                                       41
<PAGE>

incidental or ultimate, of buying or carrying any margin stock within the
meaning of Regulations U and X or to extend credit to others for such purpose.

     Section 4.2  Representations of the Lenders, the Collateral Agent and the
Agent. To confirm the Borrower's and TOGA's understanding concerning the
Lenders, the Collateral Agent and the Agent and to induce the Borrower and TOGA
to enter into this Agreement, each of the Lenders, the Collateral Agent and the
Agent severally and not jointly represents and warrants to TOGA and Borrower as
of the date hereof and as of the Initial Funding Date and any Additional Advance
Funding Date that:

     (a)  Organization and Good Standing. Each of the Lenders, the Collateral
Agent and the Agent is duly organized and validly existing and in good standing
under the laws of its jurisdiction of organization, having all powers required
to carry on its business and enter into and carry out the transactions
contemplated hereby and by the Loan Documents to which it is a party. Each of
the Lenders, the Collateral Agent and the Agent is duly qualified, in good
standing and authorized to do business in all other jurisdictions wherein the
character of the properties owned or held by it or the nature of the business
transacted by it makes such qualification necessary.

     (b)  Authorization and Validity. Each of the Lenders, the Collateral Agent
and the Agent has duly taken all requisite corporate action necessary to
authorize the execution and delivery by it of the Loan Documents to which it is
a party and to authorize the consummation of the transactions contemplated
thereby and the performance of its obligations thereunder.

     (c)  Enforceable Obligations. This Agreement is, and the other Loan
Documents to which the each Lender, the Collateral Agent and the Agent is a
party will be, when duly executed and delivered, legal, valid and binding
obligations of the Lenders, the Collateral Agent and the Agent, as applicable,
enforceable against the Lenders, the Collateral Agent and the Agent in
accordance with their respective terms except as such enforcement may be limited
by bankruptcy, insolvency or similar laws of general application relating to the
enforcement of creditors' rights and general principles of equity.

     (d)  Investment.  Each Lender represents to Borrower and TOGA, as of the
dates set forth above:

          (i)   it is an "accredited investor" as such term is defined in
     Regulation D adopted under the Securities Act; and

          (ii)  it is making the Initial Advance as well as any subsequent
     Advances and purchasing the Notes for investment purposes and not with a
     view towards sale or distribution in violation of applicable laws.

                                       42
<PAGE>

          (iii) it understands that the Notes have not been registered under the
     Securities Act and may be resold only if registered pursuant to the
     provisions of the Securities Act or if an exemption from registration is
     available, except under circumstances where neither such registration nor
     such an exemption is required by law, and that the Borrower is not required
     to register the Notes.

                                   ARTICLE 5
                     COVENANTS OF BORROWER, TOGC and toga

     Section 5.1  Affirmative Covenants. To conform with the terms and
conditions under which the Lenders and the Holders are willing to have credit
outstanding to Borrower, and to induce the Lenders and the Holders to enter into
this Agreement and make the Loans, each of Borrower, TOGC and TOGA warrants,
covenants and agrees that until the full and final payment of the Obligations
and the termination of this Agreement, unless the Agent previously agrees
otherwise:

     (a)  Payment and Performance. Borrower will pay all amounts due under the
Loan Documents in accordance with the terms thereof and each of Borrower, TOGC
and TOGA will observe, perform and comply in all material respects with every
covenant, term and condition expressed in the Loan Documents to which it is a
party.

     (b)  Books, Financial Statements and Reports. Each of Borrower and TOGA
will at all times maintain full and accurate books of account and records and a
standard system of accounting and will furnish the following statements and
reports to the Agent at Borrower's expense:

          (i)   (A) By the date hereof in the case of the 1999 fiscal year ended
     September 30, 1999 and (B) promptly after becoming available, and in any
     event not later than ninety (90) days after the close of each fiscal year
     beginning with the 2000 fiscal year, the audited Consolidated and
     consolidating balance sheets of Borrower and of TOGA as of the end of the
     Borrower's fiscal year and the audited Consolidated and consolidating
     statements of profit and loss of Borrower and of TOGA for such fiscal year,
     all such financial statements prepared without regard to whether Borrower's
     or TOGA's financial results would otherwise be shown on consolidated
     financial statements of another Person and setting forth in each case in
     comparative form the corresponding figures for the preceding fiscal year,
     all in reasonable detail and all prepared in conformity with GAAP or
     Australian GAAP, as applicable, certified in a manner by such independent
     certified public accountants.

          (ii)  Promptly after becoming available, and in any event not later
     than forty-five (45) days after the end of each fiscal quarter beginning
     with the 2000 fiscal year, the unaudited Consolidated balance sheets of
     Borrower and of TOGA as of the end of said fiscal quarter, and the
     Consolidated statements of profits and loss of Borrower and of TOGA for
     such quarter and for the period from the beginning of the fiscal year to
     the end of such quarter, setting forth in each case in comparative form the
     corresponding figures for the corresponding

                                       43
<PAGE>

     period of the preceding fiscal year, all prepared in reasonable detail and
     in accordance with GAAP or Australian GAAP, as applicable.

          (iii) A certificate signed by Borrower's or TOGA's chief financial
     officer, to be furnished with each set of financial statements under
     paragraph (i) and (ii) above. The certificate shall state that, to the
     officer's knowledge based upon his or her due diligence review, under his
     or her supervision, of Borrower's or TOGA's affairs, respectively, (A) all
     of the representations and warranties made herein continue to be true and
     correct as of the date of the certificate (or, if any representation or
     warranty is not true or correct as of such date, the certificate shall
     state the nature of the representation or warranty no longer valid and the
     actions which Borrower or TOGA is taking or proposes to take with respect
     thereto) and (B) such financial statements are accurate and complete in all
     material respects. In the case of a certificate accompanying the financial
     statements in paragraph (ii), the certificate shall also state that the
     officer reviewed the Loan Documents containing calculations showing
     compliance (or non-compliance) at the end of the applicable fiscal quarter
     with the requirements of Sections 5.2(a), (e), (f), (g), (j) and (k), and
     determined that no Default or Coverage Deficiency existed at the end of
     such Fiscal Quarter or at the time of such certificate (or, if the officer
     determines otherwise, the certificate shall specify the nature and period
     of existence of the Default or Coverage Deficiency).

          (iv)  Promptly after becoming available, copies of all financial
     statements, reports, notices and proxy statements sent by Borrower or TOGA
     to its stockholders and all registration statements, periodic reports on
     Forms 8-K, 10-K or 10-Q and other statements and schedules filed by
     Borrower or TOGA with any securities exchange, the Commission or any
     similar Governmental Person.

          (v)   Promptly upon receipt thereof, each other report submitted to
     Borrower or TOGA by an independent certified public accountant in
     connection with any annual, quarterly, interim or special audit made by
     such accountant of the books or records of Borrower or TOGA.

          (vi)  On each Quarterly Payment Date, to the extent such information
     is made available to TOGA from the operator of the Project (and Borrower
     and TOGA shall exercise all rights and remedies as requested by Agent to
     obtain such information), a consolidated report in detail acceptable to
     Agent with respect to the Eligible Proved Properties during the Calendar
     Quarter immediately prior thereto containing the following information:

                (A)  a description of cash flows for such period with a detailed
          breakdown of all relevant sources and uses of cash for the applicable
          quarter;
                (B)  a description by well and field of the gross quantities of
          Hydrocarbons and water produced from or injected into the Eligible
          Proved Properties during such period;

                                       44
<PAGE>

                (C)  a description by well and field of the net quantities of
          Hydrocarbons sold during such period out of production from the
          Eligible Proved Properties and calculating the average sales prices of
          such oil, gas, and natural gas liquids;

                (D)  a detailed calculation of ANCF and Excess ANCF for such
          period including a detailed aging of TOGA's accounts receivable and
          payable;

                (E)  regardless of whether the same are included in such
          calculation of ANCF, a detailed calculation of any LOE, G&A Costs,
          Third Party Costs, Capital Expenditures, and other direct charges or
          overhead costs with respect to the Eligible Proved Properties
          specifying any material differences from those Approved and those
          actually incurred;

                (F)  a summary of wells drilled, completed or worked over during
          the reporting period showing the total depth drilled or tested, the
          depth at which production casing was set, and the existing or
          anticipated perforated interval and upon request copies of any well
          logs across the pay sectors;

                (G)  a discussion of any current operating problems with any
          wells and any proposed solutions;

                (H)  any technical studies conducted during the reporting period
          of performance; and

                (I)  a projection of Capital Expenditures for the next Calendar
          Quarter and if any of such Capital Expenditures are not Approved
          Capital Expenditures the sources of capital for the payment thereof,
          together with accompanying authority for expenditures if requested by
          Agent or Lenders.

          (vii) An annual Engineering Report, to be effective as of October 1 of
     each year and to be delivered to Agent prior to December 1 of that year
     (or, in the case of 1999, by the date hereof). Each Engineering Report
     shall:

                (A)  be prepared by S.A. Holditch & Associates or such other
          nationally or regionally recognized independent petroleum engineers,
          which may be chosen by TOGA if acceptable to Agent in its sole and
          absolute discretion, concerning all of the oil and gas properties of
          TOGA including without limitation the Eligible Proved Properties,
          prepared at Borrower's expense;

                (B)  separately report on Proved Developed Producing Reserves,
          Proved Developed Non-Producing Reserves and Proved Undeveloped
          Reserves of the Eligible Proved Properties and Subject

                                       45
<PAGE>

          Properties, and separately calculate the NPV10 and Modified NPV10 of
          each such category of Reserves;

                (C)  use pricing specified in the definition of NPV10;

                (D)  address the various factors to be taken into account in
          calculating ANCF so that projected ANCF can be readily calculated from
          the report;

                (E)  take into account TOGA's actual experiences with LOE and
          other costs in determining projected LOE and other costs;

                (F)  take into account any "over-produced" status under gas
          balancing arrangements;

                (G)  contain information and analysis comparable in scope to
          that contained in the Initial Engineering Report;

                (H)  set forth all monetary sums in Dollars using the Spot Rate
          as of the effective date of such report for the purposes of converting
          any amounts payable in any currency other than Dollars to Dollars; and

                (I)  otherwise be in form and substance satisfactory to Agent.

In the event that Borrower or TOGA  and Agent disagree over whether or not any
workovers or other remedial Capital Expenditures should be included in the LOE
of an Engineering Report for the purposes of calculating NPV10, the engineers
preparing the report shall resolve such disagreement by determining whether such
expenditures are likely to be required in accordance with prudent industry
practice and shall include or exclude such expenditures based upon such
determination.

          (viii) Interim engineering reports shall be prepared with an effective
     date of April 1 and delivered no later than May 1 of each year if requested
     by Agent. Such interim engineering reports shall include, but not be
     limited to, calculations of NPV10 on the Eligible Proved Properties, and
     shall use prices supplied by Lenders except as modified by prices actually
     received as of April 1 by TOGA pursuant to oil and gas sales contracts
     between TOGA (as seller) and third parties (as buyers).

          (ix)  Within ten (10) days after submission to any Governmental
     Person, a copy of any and all reports required to be furnished pursuant to
     any Governmental Rule pertaining to the Eligible Proved Properties.

          (x)   An Independent Engineering Report shall be prepared as of and
     delivered within thirty (30) days after the Repayment Date covering all
     properties held by TOGA and all subsidiaries of TOGA, if any.

     (c)  Other Information and Inspections.

                                       46
<PAGE>

          (i)   Borrower and TOGA will furnish to the Lenders at Borrower's or
     TOGA's, respectively, reasonable expense any information which the Agent
     may from time to time reasonably request concerning any covenant, provision
     or condition of the Loan Documents or any matter in connection with
     Borrower's or TOGA's businesses and operations. Borrower and TOGA will
     permit representatives appointed by Lenders (including independent
     accountants, engineers, agents, attorneys, appraisers and any other
     Persons) upon reasonable notice to visit and inspect any of Borrower's or
     TOGA's property, including books of account, other books and records, and
     any facilities or other business assets, and to make extra copies therefrom
     and photocopies and photographs thereof, and to record any information such
     representatives obtain, and shall further permit Lenders or its
     representatives to investigate and verify the accuracy of the information
     furnished to Lenders in connection with the Loan Documents and to discuss
     all such matters with its officers, employees and representatives.

          (ii)  On a Monthly basis or in any event no less than once each
     Quarter, TOGA will review with Agent (an "Operations Review") all
     operational activities on the Subject Properties in sufficient detail so as
     to give a full account and reconciliation of operational and financial
     progress from the Closing and from any preceding Operations Review, to the
     extent that such information has been provided by the operator to the
     Project, and Such Operations Reviews will include, but not be limited to,
     progress as of such date on the Approved Plan of Development, any
     substitutions or changes to the Approved Plan of Development requested by
     Lenders, and changes to the Approved Plan of Development due to cost or
     expense overruns, under-runs, unanticipated mechanical problems or
     differences in reserve or production estimates. Such Operations Reviews
     shall include, to the extent permitted by the operator of the particular
     Property, on-site inspections at the Project either by two of Lenders'
     representatives once per Calendar Year or by one of Lenders'
     representatives twice per Calendar Year, which inspections shall be at
     Borrower's expense.

          (iii) Each of the Lenders, Holders, Agents and Collateral Agent agrees
     that it will take all reasonable steps to keep confidential any proprietary
     information given to it by Borrower or TOGA; provided, however, that this
     restriction shall not apply to information which has at the time in
     question entered the public domain; provided further that any such party
     may disclose any such information to the limited extent that such
     information (i) is required to be disclosed by law or by any order, rule or
     regulation (whether valid or invalid) of any court or governmental agency,
     or any regulatory authority (whether or not governmental); (ii) is
     disclosed to the Affiliates, auditors, attorneys, or agents of the Lenders,
     provided that such Persons agree to keep any such information confidential
     to the same extent as any such party is required to; (iii) is furnished to
     any purchaser or prospective purchaser of participations or other interests
     in the Loans or the Notes, provided that such Persons agree to keep any
     such information confidential to the same extent as such party is required
     to; or (iv) is disclosed by such party in the course of collecting the
     obligations or enforcing its

                                       47
<PAGE>

     rights under the Loan Documents following the occurrence of an Event of
     Default without violating such party's confidentiality obligations to
     Borrower or TOGA.

          (iv)  Borrower, TOGC and TOGA will furnish to the Lenders at
     Borrower's, TOGC's or TOGA's, respectively, expense, copies of all
     pleadings, motions and other filings made in the Tri-Star Litigation within
     ten (10) days of any such filing or its service upon Borrower, TOGC or
     TOGA.

          (v)   The Lenders shall be entitled to have observers to the
     Borrower's and TOGA's Board of Directors ("Board") who shall have the right
     to attend and receive all materials distributed for or at all meetings
     (telephonic and otherwise) of directors and shall be entitled to the same
     rights expense reimbursement rights as directors of the Borrower and TOGA,
     except that such observers shall not be entitled to vote on matters
     presented to or discussed by the Board nor participate in attorney-client
     privileged discussions or receive or review any documents subject to an
     attorney-client or attorney work product privilege. Lenders will be
     notified of all meetings of and all proposed actions by the Board as if a
     representative of each Lender were a member of the Board. Such observers
     will receive no compensation for their services as observers, but shall be
     entitled to be reimbursed by the Borrower or TOGA, respectively, for all
     reasonable costs and expenses incurred in connection with their
     participation in meetings or other activities of the Board.

     (d)  Notice of Material Events and Change of Address. Each of Borrower and
TOGA will notify the Lenders of any of the following events promptly, and in any
event within ten (10) Business Days, after learning of the event's occurrence:

          (i)   a Material Adverse Effect;

          (ii)  a Default;

          (iii) (A) the acceleration of the maturity of any Debt owed by any
     Related Person or (B) a default by any Related Person under any indenture,
     mortgage, agreement, contract or other instrument to which such Related
     Person is a party or by which it or any of its properties is bound, if such
     acceleration or default would reasonably be expected to have a Material
     Adverse Effect upon Borrower's or TOGA's financial condition or a Material
     Adverse Effect on the value of the Collateral;

          (iv)  a claim of $250,000 or more, any claim or notice of potential
     liability under any Environmental Laws, or any other material adverse claim
     asserted against Borrower or TOGA or with respect to its properties;

          (v)   the filing of any suit or proceeding against any Related Person
     in which an adverse decision would have a material probability of causing a
     Material Adverse Effect;

                                       48
<PAGE>

          (vi)  a written notice, claim, allegation or assertion that Borrower,
     TOGA or the Project is in violation or noncompliance of any Governmental
     Rule of any Governmental Person having jurisdiction over Borrower, TOGA or
     the Project, which violation or noncompliance would reasonably be expected
     to have a Material Adverse Effect on Borrower, TOGA or any other Related
     Person; and

          (vii) if a Change in Control has occurred with respect to Borrower or
     TOGA.

Upon the occurrence of any of the foregoing, Borrower and TOGA will take all
necessary or appropriate steps to remedy promptly any such Default under (ii)
above, Material Adverse Effect or acceleration; to protect against any such
adverse claim; to defend any such suit or proceeding; and to resolve all
controversies on account of any of the foregoing. Borrower or TOGA will also
notify Agent in writing at least twenty (20) Business Days prior to the date
that Borrower, TOGA or any of  TOGA's Subsidiaries changes its name or the
location of its chief executive office or principal place of business or the
place where it keeps its books and records concerning the Collateral, furnishing
with such notice any necessary financing statement amendments or requesting
Agent and its counsel to prepare the same.

     (e)  Maintenance and Development of Properties; Maintenance of Agreements.
Each of Borrower and TOGA will or will cause the operator of the Project to the
extent of Borrower's and TOGA's abilities under the Project JOA, as applicable
to:

          (i)   maintain, preserve, protect and keep all Eligible Proved
     Properties and all other Collateral used or useful in the conduct of its
     business in good condition (normal wear and tear excepted) and in
     compliance in all material respects with all applicable laws, rules and
     regulations, except where (A) the necessity of compliance therewith is
     contested in good faith by appropriate proceedings or (B) non-compliance
     therewith would not have a Material Adverse Effect;

          (ii)  develop the Project in accordance with the Approved Plan of
     Development;

          (iii) from time to time make all repairs, renewals and replacements
     needed to enable the Project and operations carried on in connection
     therewith to be conducted at all times consistent with prudent industry
     practices;

          (iv)  maintain bonding and insurance coverages, as set forth in
     Schedule 6 hereto or as Approved by the Agent; and

          (v)   keep and perform all of the terms, covenants, and conditions of
     the Loan Documents to which it is a party.

     (f)  Maintenance of Existence And Qualifications. Each of Borrower and TOGA
will:

                                       49
<PAGE>

          (i)   maintain and preserve its existence as a corporation under Texas
     or Australian law, respectively, and its rights in full force and effect;
     and

          (ii)  qualify to do business as a foreign corporation in every state
     or jurisdiction where required to do so by applicable law, except in any
     jurisdiction where no Collateral is located and the failure to qualify will
     have no Material Adverse Effect.

     (g)  Payment of Trade Debt, etc.  Each of Borrower and TOGA will:

          (i)   pay, within ninety (90) days after the date of invoice, any Debt
     owed by it on ordinary trade terms to vendors, suppliers or other Persons
     providing goods and services used by it in the ordinary course of its
     business;

          (ii)  pay and discharge when due all other Debt, royalties and
     encumbrances now or hereafter owed by it unless the same is being contested
     in good faith by appropriate means and for which adequate cash reserves
     have been established; and

          (iii) maintain appropriate accruals and reserves for all of the
     foregoing Debt in accordance with GAAP and Australian GAAP, as applicable.

     Borrower or TOGA may, however, delay paying or discharging any such Debt so
long as it is in good faith contesting the validity thereof by appropriate
proceedings and has set aside on its books adequate reserves therefor.

     (h)  Payment of Taxes, etc.  Each of Borrower and TOGA will:

          (i)   timely file all required tax returns;

          (ii)  timely pay all Taxes, assessments, and other governmental
     charges or levies properly imposed upon it or upon its income, profits or
     property; and

          (iii) maintain appropriate accruals and reserves for all of the
     foregoing Taxes in accordance with GAAP.

     Borrower or TOGA may, however, delay paying or discharging any such Taxes
described in clauses (i) through (iii) above so long as it is in good faith
contesting the validity thereof by appropriate proceedings and has set aside
adequate cash reserves therefor.

          (iv)  Each of Borrower and TOGA agrees to pay or to cause to be paid
     all governmental assessments, charges, taxes, levies, imposts or other
     liabilities imposed by any Australian Governmental Person (including
     Australian Withholding Taxes) including any interest or penalties thereon
     and any stamp or documentary or other excise or property taxes, at any time
     payable by it or ruled to be payable by it, by reason of any Australian
     Governmental Person or

                                       50
<PAGE>

     Australian Governmental Rule (collectively, "Taxes"), and to indemnify and
     hold the Holders and Collateral Agent harmless against liability fees or
     additional expense with respect to or in connection with any such Taxes.
     Each of Borrower and TOGA hereby further agrees as follows:

                (A)  Any and all payments made by Borrower and TOGA hereunder
          and under any of the other Loan Documents, whether of principal,
          Coupon Interest, Royalty, expenses or otherwise shall be free and
          clear of and without deduction or withholding for any and all Taxes
          and all liabilities with respect thereto including Australian
          Withholding Taxes. If TOGA shall be required by law to deduct or
          withhold any Taxes (including Australian Withholding Taxes) from or in
          respect of any sum payable to the Collateral Agent or any Holder
          hereunder or under any of the other Loan Documents, the sums payable
          under the Notes or the Loan Documents shall be increased as may be
          necessary so that after making all required deductions and
          withholdings (including deductions or withholdings applicable to
          additional sums payable under this paragraph) the Holders or
          Collateral Agent receives an amount equal to the sum it would have
          received had no such deductions or withholdings been made. TOGA shall
          make such deductions or withholdings and Borrower and TOGA shall pay
          the full amount deducted or withheld to the relevant Australian or
          other foreign taxation authority or other Australian or other foreign
          authority in accordance with applicable law.

                (B)  Indemnitors shall indemnify the Holders and Collateral
          Agent for the full amount of Taxes paid by the Holders and Collateral
          Agent and any liability (including penalties, interest and expenses)
          arising therefrom or with respect thereto, whether or not such Taxes
          were correctly or legally asserted, provided, that any refunds for any
          Taxes incorrectly paid shall be remitted to Borrower promptly upon
          receipt by Collateral Agent or any Holder, to the extent such refunds
          are received by Collateral Agent, or any Holder and are not otherwise
          necessary to pay any Obligations then due and payable. Payments under
          this indemnification shall be made within thirty (30) days from the
          date the Holders, or Collateral Agent makes written demand therefor
          after payment of such Taxes. A certificate as to the amount of such
          Taxes and the calculation thereof (if determinable), submitted to
          Borrower by the Holders or Collateral Agent shall be conclusive and
          binding for all purposes, absent manifest error. With respect to any
          payment request made by any Person pursuant to the tax indemnity set
          forth in this clause (B), if the Borrower shall request, such Person
          shall in good faith at Borrower's expense contest the imposition of or
          the amount of any such request amount, keep the Borrower reasonably
          informed in respect thereof, consult in good faith with the counsel to
          Borrower regarding such contest, and shall not compromise or otherwise
          settle such contest without the consent of Borrower.

                                       51
<PAGE>

          (v)   Upon the reasonable request of Holder, TOGA and Borrower shall
     furnish to the Holder copies of the presented forms filed in connection
     therewith and the original or a certified copy of a receipt or certificate
     evidencing payment thereof. Without prejudice to the survival of any other
     agreement of Borrower or TOGA hereunder, the agreements and obligations of
     Borrower and TOGA contained in this Section 5.1 shall survive for a period
     of ten (10) years after the date of termination hereof.

     (i)  Payment of Expenses. Whether or not the transactions contemplated by
this Agreement are consummated, Borrower will promptly (and in any event, within
fifteen (15) days after any invoice or other statement or notice) pay all
reasonable costs and expenses incurred by or on behalf of the Lenders, Holders,
Agent or Collateral Agent (including reasonable attorneys' fees) in connection
with (A) the negotiation, preparation, execution and delivery of the Loan
Documents, and any and all amendments, consents, waivers or other documents or
instruments relating thereto, (B) the filing, recording, refiling and re-
recording of any Loan Documents and any other documents or instruments or
further assurances required to be filed or recorded or refiled or re-recorded by
the terms of any Loan Document, (C) the borrowings hereunder and other action
reasonably required in the course of administration of the various Loan
Documents (except for allocations of indirect overhead costs of the Lenders or
its affiliates), (D) the defense or enforcement of the Loan Documents or the
Lenders', Holders' Agent's or Collateral Agent's exercise of their rights
thereunder, and (E) Borrower's or TOGA's performance of its obligations and the
Lenders', Holders', Agent's or Collateral Agent's exercise of their or its
rights under Sections 5.1(c)(i) and (ii).

     Notwithstanding anything to the contrary herein, on the Initial Funding
Date and the date of each Advance thereafter, and in any event no later than
fifteen (15) days after receipt of invoices for the following, Borrower shall
pay to the Lenders the reasonable fees, office charges and expenses of Milbank,
Tweed, Hadley & McCloy LLP and MinterEllison, counsel to Agent, Collateral Agent
and the Lenders. Notwithstanding anything to the contrary herein, on or before
the Initial Funding Date, Borrower shall pay to the Lenders:

                (A)  the Yield Adjustment Payment;

                (B)  $30,000 for payment of out-of-pocket costs and expenses
          incurred by or on behalf of the Lenders, Holders, Agent, Collateral
          Agent as of the Initial Funding Date which has been paid prior to the
          execution of this Agreement; and

                (C)  the reasonable fees, office charges and expenses of
          Milbank, Tweed, Hadley & McCloy LLP and MinterEllison, counsel to
          Agent, Collateral Agent and the Lenders.

Borrower's obligations under this subsection shall survive the payment of the
Notes.

     (j)  Performance on Borrower's Behalf. If Borrower or TOGA fails to pay any
taxes, insurance premiums, expenses, attorneys' fees or other amounts it is
required to pay under any Loan Document, Holders, Agent or Collateral Agent may
pay the same after giving

                                       52
<PAGE>

ten (10) Business Days' prior notice to Borrower or TOGA, respectively, of the
intended payment (except in cases of exigent circumstances, such as the imminent
termination of insurance coverage, where such notice shall not be required).
Borrower or TOGA, respectively, shall immediately reimburse Holders, Agent or
Collateral Agent for any such payments and each amount paid by Holders, Agent or
Collateral Agent shall constitute an Obligation owed under this Agreement which
is due and payable on the date such amount is paid by Holders, Agent or
Collateral Agent and shall accrue interest from such date at the Late Payment
Rate.

     (k)  Compliance with Agreements and Law. Each of Borrower and TOGA will
perform all material obligations it is required to perform under the terms of
each indenture, mortgage, deed of trust, security agreement, lease, franchise,
agreement, contract or other instrument or obligation to which it is a party or
by which it or any of its properties is bound. Each of Borrower and TOGA will
conduct its business and affairs in compliance in all material respects with all
laws, regulations, and orders applicable thereto, including applicable
Environmental Laws, and, within two (2) years of the Initial Funding Date,
except where (i) the necessity of compliance therewith is contested in good
faith by appropriate proceedings (with bonds, cash reserves or other assurance
of compliance reasonably satisfactory to the Lenders) or (ii) non-compliance
therewith would not have a Material Adverse Effect.

     (l)  Evidence of Compliance. Each of Borrower and TOGA will furnish to
Holders, Agent or Collateral Agent at Borrower's expense all evidence which
Holders, Agent or Collateral Agent from time to time reasonably request as to
the accuracy and validity of, or compliance in all material respects with, all
representations, warranties and covenants made by Borrower or TOGA in the Loan
Documents, the satisfaction of all conditions contained therein, and all other
matters pertaining thereto.

     (m)  Execution of Supplements to Royalty Agreement; Assignment of Royalties
from Comet Ridge Participants. Borrower shall execute and deliver to Royalty
Payee from time to time, upon request of Royalty Payee, Supplements to the
Royalty Agreement agreeing to pay, and Borrower hereby agrees to pay, overriding
royalties in the form of Exhibit T (collectively, the "Supplement to Royalty
Agreement") with respect to all properties, authorities to prospect, licenses,
leases, wells and other interests (determined in as broad a manner as
practicable with reference to lands covered by any of the foregoing and not just
with respect to wells, spacing units or well bores) (collectively, "Lands")
beneficially owned or in which interests are owned or held by TOGA or any
Subsidiary of TOGA, whether now or hereafter acquired, at any time after the
Closing Date through and including the Royalty Determination Date which Lands
are (1) categorized or include or have attributed to them reserves which are
categorized as Proved Reserves in any Engineering Report, including without
limitation the Engineering Report to be delivered pursuant to Section 5.1(b)(x),
upon either (i) the request of the Royalty Payee or (ii) the Royalty
Determination Date and (2) either comprise a portion of the Project or
constitute Non-Project Properties which have been developed by Capital
Expenditures which were either (i) funded directly or indirectly with the
proceeds of any Advance or (ii) Approved Capital Expenditures deducted in the
calculation of ANCF.

     (n)  Withdrawal as Operator. If at any time TOGA or any Affiliate thereof
assumes operations of the Project and an Event of Default occurs which is not
cured within one hundred twenty (120) days, TOGA will, or will cause its
Affiliate to, withdraw as operator of all

                                       53
<PAGE>

or a portion of the Project at the request of Lenders. TOGA will support
Lenders' designee as replacement operator.

     (o)  Execution of Other Instruments; Additional Acts. Each of Borrower and
TOGA shall do, execute, acknowledge and deliver, or cause to be done, executed,
acknowledged and delivered, such further instruments and documents in form and
substance reasonably satisfactory to Holders, Agent or Collateral Agent as such
Person may reasonably request from time to time in order to carry out the intent
and purpose of this Agreement and the other Loan Documents.

     (p)  Waiver of Litigation Payments. In the event that any action or lawsuit
is initiated by or on behalf of any of the Lenders, Holders, Agent, Collateral
Agent or their successors, transferees or assignees (such entity being referred
to in this Section 5.1 as "Plaintiff") in Australia or elsewhere against
Borrower or TOGA, each of Borrower and TOGA irrevocably waives its right to
have, and agrees not to request, plead or claim that, Plaintiff post, pay or
offer any "cautio judicatum solve" bond or "excepcion de arraigo" due to its
status as a foreign entity, and each of Borrower and TOGA further waives any
objection that it may now or hereafter have to a Plaintiff's claim that such
Plaintiff should be exempt or immune from posting, paying, making or offering
any such "cautio judicatum solvi" bond or "excepcion de arraigo" due to its
status as a foreign entity.

     (q)  Letters of Credit. The Borrower shall cause each of the Letters of
Credit to expire no earlier than one year after its issuance and to be reissued
or extended for subsequent periods of at least a one-year duration by a bank
Approved by Agent in its sole and absolute discretion. The final maturity of the
Letters of Credit shall fall on the ninetieth (90) day following the Maturity
Date. Borrower's failure to obtain the renewal of the Letters of Credit as
provided in the preceding sentence at least sixty (60) days prior to the
maturity date thereof shall entitle the Collateral Agent to fully draw the
entire face amount of such Letters of Credit. The Collateral Agent shall be
entitled to draw upon the Equity Letter of Credit at any time either (a)
Collateral Agent decides the funds are needed by Borrower, TOGC or TOGA to pay
any amounts due hereunder or under any other Loan Document or any Permitted
Capital Expenditure or LOE, (b) there shall exist an Event of Default or (c)
after the Loan Advances exceed $12,000,000 in the aggregate. The Collateral
Agent shall be entitled to draw upon the Tri-Star Litigation Indemnity Letter of
Credit at any time Borrower, TOGC or TOGA shall fail to pay any amount due under
the Tri-Star Litigation Indemnity for any reason whatsoever. In the event Slough
ceases to be the sole account party with respect to either Letter of Credit then
(1) Borrower shall give notice thereof to Agent within ten (10) Business Days
after the date (the "AP Replacement Date") any other party becomes an account
party with respect to a Letter of Credit and (2) no later than thirty (30) days
after the AP Replacement Date Borrower shall cause any other account party with
respect to a Letter of Credit to execute and deliver an agreement and
subordination agreement in substance equivalent to the agreement and
subordination agreement executed and delivered by Slough and described in
Section 3.1(a)(xviii).

     Section 5.2  Negative Covenants. To conform with the terms and conditions
under which the Lenders are willing to have credit outstanding to Borrower, and
to induce the Lenders to enter into this Agreement and make the Loans, each of
Borrower and TOGA

                                       54
<PAGE>

warrants, covenants and agrees that until the full and final payment of the
Obligations and the termination of this Agreement, unless the Lenders have
previously agreed otherwise:

     (a)  Restricted Debt.  TOGA will not in any manner owe or be liable for
Restricted Debt, except for Permitted Debt.

     (b)  Limitation on Liens. TOGA will not create, assume or permit to exist
any Lien upon any of the properties or assets relating to the Project which TOGA
now owns or hereafter acquires, except Permitted Liens. Borrower will not
create, assume or permit to exist any Lien upon (i) any of the capital stock of
TOGC or (ii) any of the Collateral which Borrower or any subsidiary of Borrower
now owns or hereafter acquires.

     (c)  No Mergers. Without Agent's prior written consent, neither Borrower
nor TOGA will merge or consolidate with or into any other business entity,
create any additional Subsidiaries of TOGA other than those in existence on the
date hereof or enter into any contracts (including contracts to borrow money)
with any Subsidiaries of TOGA.

     (d)  Limitation on Sales of Property. TOGA will not sell, transfer, lease,
exchange, discount, assign, abandon, surrender, alienate or dispose of any
interest in the Project or any material interest therein, including without
limitation the Collateral, without the express written consent of Agent except
for any equipment or other tangible personal property which is replaced by
comparable equipment or other tangible personal property of equal or greater
mutability or value. Borrower will not sell, transfer, lease, exchange,
discount, assign, abandon, surrender, alienate or dispose of (i) any capital
stock or other equity of TOGC or any debt Obligation owed by TOGC to Borrower or
(ii) any part of the Collateral or any material interest therein without the
express written consent of Agent.

     (e)  Limitation on Affiliate Payments. TOGA shall not make any
distributions or Affiliate Payments except for Permitted Borrower Payments.

     (f)  Limitation on Investments and New Business.  TOGA will not:

          (i)   make any expenditure or commitment or incur any obligation or
     enter into or engage in any transaction except in the ordinary course of
     business;

          (ii)  engage directly or indirectly in any business or conduct any
     operations except in connection with or incidental to its present business;
     or

          (iii) without prior approval of the Agent, form or acquire any or make
     any other acquisitions of or capital contributions to or investments in any
     Person, other than Permitted Investments and as contemplated in Section
     2.4(c).

     (g)  Limitation on Credit Extensions. Except for Permitted Investments or
the extension of trade credit in the ordinary course of business as operator of
oil and gas properties, TOGA will not extend credit, make advances or make
loans.

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<PAGE>

     (h)  Transactions with Affiliates. Except for investments otherwise
expressly permitted under this Agreement, TOGA will not engage, without Agent's
prior written approval, in any material transaction with any other Related
Person or any Affiliate thereof.

     (i)  Certain Contracts: Amendments; Multiemployer ERISA Plans. TOGA will
not:

          (i)   enter into any "take-or-pay" contract or other contract or
     arrangement for the purchase of goods or services which obligates TOGA to
     pay for such goods or service regardless of whether they are delivered or
     furnished to it;

          (ii)  incur any obligation to contribute to any "multiemployer plan"
     as defined in Section 4001 of ERISA;

          (iii) amend or permit any change to any material terms of any Project
     Document (except, in each case, with the approval of Agent, which approval
     shall not be unreasonably withheld or delayed);

          (iv)  waive any default under, or breach of, any Project Document or
     waive, fail to enforce, forgive, compromise, settle, adjust or release any
     right, interest or entitlement, howsoever arising, under, or in respect of
     any Project Document;

          (v)   exercise any right to initiate an arbitration proceeding under
     any Project Documents (except, in each case, with the approval of Agent
     which approval shall not be unreasonably withheld or delayed);

          (vi)  petition, request or take any other legal or administrative
     action that seeks, or may reasonably be expected, to cancel, suspend, void,
     or terminate any Project Document; or

          (vii) amend or permit any change to any contract or lease which
     releases, qualifies, limits, makes contingent or otherwise detrimentally
     affects the rights and benefits of Holders, Agent or Collateral Agent under
     or acquired pursuant to any Security Documents.

Furthermore, TOGA will insure that no other Related Person makes or permits any
amendment described in clause (vii) above.

     (j)  Limitation on TOGA's G&A Costs. TOGA shall not incur or expend any G&A
Costs other than Permitted G&A Costs.

     (k)  Minimum Working Capital. TOGA and its Subsidiaries, if any, will
maintain consolidated working capital ("Working Capital") of at least $1,000,000
(excluding, so long as no default exists, the maturities on the Notes) at all
times. For the purpose of calculating working capital, the following accounts
receivable shall be excluded: (i) those owing by shareholders, Affiliates,
directors or employees, (ii) those payable greater than sixty (60) days

                                       56
<PAGE>

after the end of the related production month and (iii) those outstanding
greater than one hundred twenty (120) days after the end of the related
production month.

     (l)  Press Releases; Public Announcements. Neither Borrower nor TOGA will
make or permit any public announcement or press release respecting the
transactions contemplated herein or any agreements related hereto without the
Agent's prior Approval unless required by law to comply with disclosure
requirements.

     (m)  Discretionary Spending. To the extent not advanced or reimbursed by a
Related Party as Inter-company Debt or a Capital Contribution to TOGA, TOGA will
not, in the aggregate, expend amounts exceeding $100,000 per year other than
those amounts specifically contemplated in the Approved Plan of Development,
excluding any amounts funded by Borrower as a capital contribution to TOGA.

     (n)  Limitation on Issuance of Capital Stock. TOGA will not issue any
voting or non-voting capital stock to any Person unless such Person concurrently
with the issuance thereof pledges such stock to Collateral Agent to secure the
Obligations by a perfected first priority Lien pursuant to a pledge agreement in
form substantially equivalent to the TOGC Pledge and Security Agreement.
Borrower will not permit any issuance of capital stock by TOGC to any party
other than Borrower.

     Section 5.3  Coverage Ratio.

     From and after the Closing Date, Borrower and TOGA in the aggregate shall
maintain a Coverage Ratio (as defined below) of at least 150% at all times while
any of the Obligations under the Loan Documents remain outstanding. If any
Coverage Deficiency exists, Borrower and TOGA shall as soon as reasonably
commercially practicable after obtaining knowledge thereof cure such Coverage
Deficiency, either by furnishing and mortgaging additional engineered producing
oil and gas wells satisfactory to Lenders in order to increase Modified NPV10 or
by making payments (or identifying and segregating cash in the TOGA Dollar
Collateral Account) in order to reduce the Adjusted Investment. If any Coverage
Default exists, Borrower and TOGA shall within thirty (30) days after obtaining
knowledge thereof cure such Coverage Default, either by furnishing and
mortgaging additional engineered producing oil and gas wells satisfactory to
Lenders in order to increase Modified NPV10 or by making payments (or
identifying and segregating cash in the TOGA Dollar Collateral Account) in order
to reduce the Adjusted Investment. As used in this Section 5.3, "Coverage Ratio"
means at any time in question the quotient obtained by dividing:

          (i)   The sum of (A) the Total Modified NPV10 as determined from the
     Engineering Report most recently prepared as of such time (which report
     shall adjust the projected cash flow and volumes of oil and gas reserves
     produced since the last report and engineering of new wells all in a manner
     satisfactory to Lenders) and (B) the Working Capital (if positive);

     by

          (ii)  the Adjusted Investment at such time.

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<PAGE>

                                   ARTICLE 6
                                   SECURITY

     Section 6.1  The Security. The Obligations will be secured by perfected
first-priority liens (subject only to Liens permitted under Section 5.2(b) if
expressly permitted to be senior to the Liens securing the Obligations) in the
Collateral and all other assets under the Security Documents listed in the
Security Schedule, and by the liens and security interests (including security
interests in the shares of TOGA) granted in any additional Security Documents
hereafter delivered by any Related Person and accepted by Agent or Collateral
Agent.

     Section 6.2  Agreement to Deliver Security Documents. Borrower agrees to
deliver or cause to be delivered, to further secure the Obligations whenever
requested by Agent or Collateral Agent in its sole and absolute discretion,
deeds of trust, mortgages, chattel mortgages, security agreements, financing
statements and other Security Documents in form and substance satisfactory to
Collateral Agent for the purpose of granting, confirming, and perfecting first
and prior liens or security interests in any real or personal property of
Borrower or TOGA. Without limitation of the foregoing, Borrower hereby agrees
(i) to give Collateral Agent notice of any change in the nature of the interest
of TOGA in the Petroleum Leases and Authorities to Prospect in the Project
Properties and Non-Project Properties from such interests as of April 28, 2000
(including without limitation TOGA acquiring a registered interest in any such
lease or ATP or an interest in any of the lands covered thereby) not later than
ten (10) Business Days after the date upon which such change occurs and (ii) to
deliver or cause to be delivered such charge documents or amendments to charge
documents and Governmental Approvals (including any required under the Petroleum
Act of Queensland) as requested by Agent or Collateral Agent in its sole and
absolute discretion to grant, confirm and/or perfect a first and prior lien,
security interest or charge on, in or over such interests.

     Section 6.3  Perfection and Protection of Security Interests and Liens.
Each of Borrower, TOGC and TOGA will from time to time deliver to Collateral
Agent any financing statements, continuation statements, extension agreements
and other documents properly completed and executed (and acknowledged when
required) by the Related Persons in form and substance satisfactory to
Collateral Agent, which Agent or Collateral Agent requests for the purpose of
perfecting, confirming, or protecting any Liens or other rights in Collateral
securing any Obligations.

     Section 6.4  Appointment of Agent and Collateral Agent.

     (a)  Agent. Each Lender, for itself in the capacity in which it is acting
herein, and each other Holder hereby appoints TAMCO as agent (together with its
successors in such capacity herein called "Agent") to act for and on behalf of
the Lenders and each other Holder under or pursuant to this Agreement and the
other Loan Documents, and TAMCO hereby accepts such appointment. Agent is
authorized to act on behalf of the Lenders and each other Holder in (i)
exercising rights and remedies with respect to Collateral (which may be
delegated to Collateral Agent) or with respect to any other matter under any of
the Loan Documents, (ii) giving notices or instructions to Borrower and TOGA,
(iii) receiving information from or notices by Borrower and TOGA, and (iv)
communicating to Borrower and TOGA determinations

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<PAGE>

required or permitted to be made under this Agreement or any other Loan
Document. Agent may, on behalf of any Lender and any other Holder, take any
other action which such Lender or such Holder is entitled to take hereunder or
under any of the Loan Documents. Such appointment of TAMCO as Agent shall not,
however, impair or modify any rights, obligations or duties which TAMCO or any
Affiliate of TAMCO otherwise has with respect to any Lender or any other Holder.
In its administration of this Agreement and the other Loan Documents, except to
the extent to which another standard applies to TAMCO by reason of any other
document between TAMCO and the Lenders or other Holder, Agent will exercise the
same care that it exercises in the administration or handling of transactions
for its own account, subject, however, to subsection (h) below.

     (b)  Collateral Agent. Each Lender, for itself in each capacity in which it
is acting herein, and each other Holder hereby appoints TAMCO as Collateral
Agent (herein, together with its successors and assigns in such capacity,
"Collateral Agent") under the Loan Documents, to exercise such powers under the
Loan Documents as are delegated to Collateral Agent by the terms thereof,
together with all such powers as are reasonably incidental thereto, including
taking, holding and disposing of the Collateral. TAMCO hereby accepts such
appointment. Collateral Agent shall act for and on behalf of the Lenders and the
Holders in connection with all Collateral and Security Documents. In its
administration of this Agreement and the other Loan Documents, except to the
extent to which another standard applies to TAMCO by reason of any other
document between TAMCO and the Lenders and any other Holder, Collateral Agent
will exercise the same care that it exercises in the administration or handling
of transactions for its own account, subject, however, to subsection (h) below.

     (c)  Requisite Holders. Except with respect to any matters expressly
provided for by this Agreement, the Notes, the Security Documents, any other
Loan Documents or the TCW Governing Documents (as defined in subsection (d)(iii)
below), each Holder agrees that neither Agent nor Collateral Agent shall be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and each Holder agrees that Agent and Collateral
Agent shall be fully protected in so acting or refraining from acting) upon the
written instructions of the Requisite Holders. For the purpose hereof, the
"Requisite Holders" shall mean, at any time, the Holders holding at least sixty-
six and two-thirds percent (66 2/3%) of the outstanding principal amount of all
Notes. The Requisite Holders may, in their reasonable discretion, remove TAMCO
from its respective appointments as Agent and Collateral Agent and then select a
new party to fulfill, in accordance with the terms hereof, such positions. All
powers of Agent and Collateral Agent shall be exercised for the benefit of all
Holders and in accordance with the directions of the Requisite Holders. Agent
and Collateral Agent shall take every reasonable action to implement the
Requisite Holders' directions. If any Note is ever held by any Person other than
the original Holders in accordance herewith, Agent and Collateral Agent may
insist on the execution of any agency agreement among all holders of Notes, in
form satisfactory to Agent and Collateral Agent and providing for satisfactory
indemnification, before carrying out any further actions under the Loan
Documents. Until any such agency agreement is executed: (i) Agent and Collateral
Agent shall be fully protected in acting on the instructions of Persons holding
Notes representing sixty-six and two-thirds percent (66 2/3%) or more of the
aggregate principal indebtedness owing under all Notes in the manner described
herein; (ii) TAMCO shall have the right to withdraw as Agent and Collateral
Agent, respectively, subject, however, to its rights an duties under any other
agreements with the Lenders or any other Holder;

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<PAGE>

and (iii) any action of Collateral Agent under any Security Document shall be
binding on the Lenders and Holders.

     (d)  Limitation of Duties and Fiduciary Relationship. Neither Agent nor
Collateral Agent shall have any duties or responsibilities, except those
expressly set forth in:

          (i)   this Agreement;

          (ii)  the Security Documents; and

          (iii) the other documents entered into between Trustco and TAMCO
     described in the definitions of "Lenders" and "Holders" (such other
     documents, collectively the "TCW Governing Documents"),

nor shall Agent or Collateral Agent have any additional fiduciary relationship
with any Holder arising under this Section 6.4 and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or the other Loan Documents against Agent or Collateral
Agent.

    (e)  Distribution of Proceeds. The Holders shall share in the proceeds
obtained by Agent and in any other benefit either arising under the Loan
Agreement, the Notes and the Security Documents or obtained by Agent or
Collateral Agent in connection therewith, in the relative proportions which the
amounts then owed by Borrower to each of the Holders bear to the total amount
then owed by Borrower to all of the Holders; provided that Agent and Collateral
Agent shall be the first to be reimbursed for all costs and expenses incurred on
behalf of all parties in their respective capacities as Agent and Collateral
Agent to the extent permitted by the TCW Governing Documents. The duties
undertaken by Agent and Collateral Agent have been undertaken as an
accommodation to the Holders and, accordingly, Agent and Collateral Agent shall
not be compensated for their services hereunder except as provided in the TCW
Governing Documents.

     (f)  Written Directions. Agent or Collateral Agent may at any time request
written directions from all the Holders with respect to (i) any interpretation
of this Agreement, the Notes and the Security Documents, or (ii) any action to
be taken or not to be taken hereunder or thereunder and may withhold any action
until such directions have been received from the Requisite Holders. Agent and
Collateral Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a direction of
the Requisite Holders under the terms of this Agreement and such request and any
action taken or withheld pursuant to such direction shall be binding upon all
the Holders.

     (g)  Agents and Attorneys. Agent or Collateral Agent may execute any of its
respective duties under this Agreement, the Notes and the Security Documents by
or through agents or attorneys selected by Agent or Collateral Agent,
respectively, using reasonable care. Neither Agent nor Collateral Agent shall be
responsible for the negligence or misconduct of any agents or attorneys so
selected. Agent and Collateral Agent shall be entitled to the advice of counsel
concerning all matters pertaining to their respective duties hereunder.

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<PAGE>

     (h)  Limitation of Liability. Agent, Collateral Agent, and their respective
officers, directors, employees, agents, attorneys-in-fact and affiliates shall
not:

          (i)   be liable for any action taken or omitted to be taken by any of
     such Persons or for any error in judgment under or in connection with this
     Agreement, the Notes and the Security Documents, except for any such
     Person's gross negligence or willful misconduct; or

          (ii)  be responsible in any manner to any Holder or any other Person
     for any failure of any other party to perform its obligations under this
     Agreement, the Notes and the Security Documents.

Nothing in this subsection, however, shall be deemed to limit or restrict any
liability, fiduciary duty or responsibility of TAMCO in any capacity other than
as Agent or Collateral Agent, including any liability, fiduciary duty or
responsibility under the TCW Governing Documents.

     (i)  Reliance upon Documentation. Agent or Collateral Agent shall be
entitled to rely, and shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or any telephone conversation believed, respectively, by Agent or
Collateral Agent to be genuine and correct and to have been signed, sent, made
or spoken by the proper person or persons, and upon the advice and statements of
legal counsel, independent accountants and other experts selected, respectively,
by Agent or Collateral Agent.

     (j)  Reliance by Borrower and TOGA. Each Lender and each Holder agree that,
prior to the delivery to Borrower, TOGC or TOGA of a notice of the removal or
termination of TAMCO as Agent as set forth below, Borrower, TOGC and TOGA shall
be entitled to rely on TAMCO's or any subsequent Agent's authority to act on
behalf of each Lender and each Holder in all dealings with TAMCO (or any such
subsequent Agent) with respect to the Loans and the Loan Documents; Borrower,
TOGC and TOGA shall be protected in relying on actions, communications, notices
and terminations relating thereto or required or permitted thereunder by Agent;
and Borrower, TOGC and TOGA shall discharge their obligations under this
Agreement and the Loan Documents by delivering payments, notices and other
information to Agent. In the event of the removal of Agent and the appointment
of a successor Agent by Holders, Borrower, TOGC and TOGA shall not be required
to recognize any such removal or appointment unless and until Borrower, TOGC or
TOGA shall have received a writing setting forth such removal and appointment
executed by the Requisite Holders, and Borrower, TOGC and TOGA shall be entitled
to rely on such writing as being genuine and what it purports to be without any
necessity of any investigation whatsoever. Borrower, TOGC and TOGA shall be
entitled to rely upon the actions, communications and notices of TAMCO with
respect to the Collateral until Borrower, TOGC or TOGA receives notice in
writing from Agent that TAMCO has resigned or been replaced as Collateral Agent.

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<PAGE>

                                   ARTICLE 7

                        EVENTS OF DEFAULT AND REMEDIES

     Section 7.1  Events of Default.

        (a)  If any of the following events shall occur and be continuing, it
shall constitute an "Event of Default" under this Agreement:

             (i)     Borrower or any Related Person fails to pay any Obligation
        when due and payable, whether at a date for the payment of a fixed
        installment or as a contingent or other payment becomes due and payable
        or as a result of acceleration or otherwise and such failure continues
        for ten (10) Business days thereafter.

             (ii)    Any "default" or "event of default" occurs under any Loan
        Document which defines either such term and such occurrence is not
        remedied within the applicable period of grace (if any) provided in such
        Loan Document.

             (iii)   Borrower, TOGA or any Related Person fails (other than as
        referred to in paragraphs (i) and (ii) above) to duly observe, perform
        or comply with any covenant, agreement, condition or provision of any
        Loan Document, and such failure is not remedied within thirty (30) days
        after Borrower, TOGA or any Related Person first learns of such failure
        (whether by notice from the Lenders or otherwise);

             (iv)    Any representation or warranty previously, presently or
        hereafter made in writing by or on behalf of Borrower, TOGA or any
        Related Person in connection with any Loan Document shall prove to have
        been false or incorrect in any material respect on any date on or as of
        which made, or any Loan Document at any time ceases to be valid, binding
        and enforceable in any material respect as warranted in Section 4.1(e)
        for any reason other than its release or subordination by the Lenders or
        Collateral Agent;

             (v)     Borrower, TOGA or any Related Person fails to duly observe,
        perform or comply with any agreement with any Person or with any
        material term or condition of any instrument, if such agreement or
        instrument is material to the business or financial condition of
        Borrower or TOGA, if the effect of such event is to cause or (with the
        giving of notice or lapse of time or both) to permit such agreement or
        instrument to be modified or terminated;

             (vi)    (A) Borrower or TOGA fails to pay when due any portion in
        excess of $100,000 of any of its Debt and such failure continues for
        sixty (60) days unless the same is being contested in good faith and for
        which adequate cash reserves have been established, or (B) Borrower or
        TOGA breaches or defaults in the performance of any material term or
        condition of any agreement or instrument by which any such Debt is
        issued, evidenced, governed, or secured, and any such

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<PAGE>

        failure, breach or default continues beyond any applicable period of
        grace provided therefor unless the same is being contested in good
        faith;

             (vii)   Either (A) any "accumulated funding deficiency" (as defined
        in Section 412(a) of the Internal Revenue Code of 1986, as amended) in
        excess of $100,000 exists with respect to any ERISA Plan, whether or not
        waived by the Secretary of the Treasury or his delegate, or (B) any
        Termination Event occurs with respect to any ERISA Plan and the then
        current value of such ERISA Plan's benefit liabilities exceeds the then
        current value of its assets available for the payment of such benefit
        liabilities by more than $100,000 (or in the case of a Termination Event
        involving the withdrawal of a substantial employer, the withdrawing
        employer's proportionate share of such excess exceeds such amount);

             (viii)  Any Governmental Approval necessary for the execution,
        delivery or performance of this Agreement, the Notes (i) any of the
        other Loan Documents, or (ii) the validity or enforceability of
        Borrower's, TOGA's or any Related Person's obligations under this
        Agreement, the Notes or the other Loan Documents, is not effected or
        given or is withdrawn or ceases to remain in full force and effect for a
        period in excess of thirty (30) days;

             (ix)   The occurrence of any of the following with respect to
        Borrower or TOGA:

                    (A)  Borrower or TOGA suffers the entry against it of a
             judgment, decree or order for relief by a court of competent
             jurisdiction in an involuntary proceeding commenced under any
             applicable bankruptcy, insolvency or other similar law of any
             jurisdiction now or hereafter in effect, including the federal
             Bankruptcy Code, as from time to time amended, or has any such
             proceeding commenced against it which remains undismissed for a
             period of sixty (60) days; or

                    (B)  Borrower or TOGA commences a voluntary case under any
             applicable bankruptcy, insolvency or similar law now or hereafter
             in effect, including the federal Bankruptcy Code, as from time to
             time amended; or applies for or consents to the entry of an order
             for relief in an involuntary case under any such law; or makes a
             general assignment for the benefit of creditors; or fails generally
             to pay (or admits in writing Borrower's or TOGA's inability to pay)
             its debts as such debts become due; or takes corporate or other
             action to authorize any of the foregoing; or

                    (C)  Borrower or TOGA suffers the appointment of or taking
             possession by a receiver, liquidator, assignee, custodian, trustee,
             sequestrator or similar official of all or a substantial part of
             Borrower's or TOGA's assets or of any part of the Collateral in a
             proceeding brought against or initiated by Borrower or TOGA, and
             such appointment or taking possession is neither made ineffective
             nor discharged within sixty (60)

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<PAGE>

             days after the making thereof, or such appointment or taking
             possession is at any time consented to, requested by, or acquiesced
             to by Borrower or TOGA; or

                     (D)  Borrower or TOGA suffers the entry against it of a
             final judgment for the payment of money in excess of $100,000 with
             respect to Borrower and TOGA unless the same is discharged within
             thirty (30) days after the date of entry thereof or an appeal or
             appropriate proceeding for review thereof is taken within such
             period and a stay of execution pending such appeal is obtained
             prior to the first date on which such execution is allowed; or

                     (E)  Borrower or TOGA suffers a writ or warrant of
             attachment or any similar process to be issued by any court against
             all or any substantial part of Borrower's or TOGA's assets or any
             part of the Collateral, and such writ or warrant of attachment or
             any similar process is not stayed or released within thirty (30)
             days after the entry or levy thereof or after any stay is vacated
             or set aside; or

                     (F)  a Change in Control has occurred without the Approval
             of the Agent.

             (x)     A Material Adverse Effect occurs and is not remedied within
        thirty (30) days after a Related Person first learns of such occurrence
        (whether by notice from the Lenders or otherwise);

             (xi)    TOGA shall be dissolved and shall not be reincorporated
        within fifteen (15) days after the date of such dissolution;

             (xii)   Borrower shall be dissolved;

             (xiii)  This Agreement, the Notes or any Loan Document at any time
        for any reason ceases to be in full force and effect, or is declared to
        be void or is repudiated, or the validity or enforceability hereof or
        thereof is at any time contested by Borrower, TOGA or any Related Person
        or such documents ceases to give or provide the respective Liens,
        rights, titles, remedies, powers or privileges intended to be created
        thereby; and

             (xiv)   Any Governmental Person confiscates, takes, restricts,
        appropriates, condemns, seizes or otherwise expropriates all or a
        substantial portion of the Project or the properties, assets or the
        capital stock of Borrower, TOGA or a Related Person, or assumes custody
        or control or interferes with the administration or management of a
        material part of such property or other assets or business operations of
        Borrower or TOGA.

        (b)  Upon the occurrence of an Event of Default described in paragraph
(ix)(A), (ix)(B) or (ix)(C) of subsection (a) above, all of the Obligations
shall thereupon be immediately due and payable, without demand, presentment,
notice of demand or of dishonor

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<PAGE>

and nonpayment, protest, notice of protest, notice of intention to accelerate,
declaration or notice of acceleration, or any other notice or declaration of any
kind, all of which are hereby expressly waived by Borrower, TOGA and each
Related Person who at any time ratifies or approves this Agreement. During the
continuance of any other Event of Default, the Agent or Requisite Holders at any
time and from time to time may without notice to Borrower, TOGA or any other
Related Person declare any or all of the Obligations immediately due and
payable, and all such obligations shall thereupon be immediately due and
payable, without demand, presentment, notice of demand or of dishonor and
nonpayment, protest, notice of protest, notice of intention to accelerate,
declaration or notice of acceleration, or any other notice or declaration of any
kind, all of which, to the extent provided by applicable law, are hereby
expressly waived by Borrower, TOGA and each Related Person who at any time
ratifies or approves this Agreement. After any such acceleration (whether
automatic or due to declaration by the Agent or Requisite Holders), any
obligation of the Lenders or Holders to make any further Advances or loans of
any kind under any agreement with Borrower shall be permanently terminated.

     Section 7.2  Remedies.  If any Event of Default shall occur and be
continuing, the Lenders may protect and enforce their rights under the Loan
Documents by any appropriate proceedings, including proceedings for specific
performance of any covenant or agreement contained in any Loan Document, and the
Lenders may enforce the payment of any obligations due or enforce any other
legal or equitable right. All rights, remedies and waivers conferred upon the
Lenders or Collateral Agent under the Loan Documents shall be deemed cumulative
and not exclusive of any other rights, remedies or powers available under the
Loan Documents or at law or in equity.

        In addition to any and all other rights and remedies that the Holders
shall have, the Holders shall have the option to either:

             (i)     Maintain this Agreement in full force and effect and sue
        for the Principal Payments and Coupon Interest as they become due and
        payable;

             (ii)    Accelerate all amounts due under the Notes and sue for the
        Principal Payment and Coupon Interest as they become due and payable; or

             (iii)   Accelerate all amounts due under the Notes, and to collect
        in addition to the amount of outstanding principal, accrued Coupon
        Interest and other amounts owing with respect to the Obligations, all
        costs and expenses of the Holders in enforcing these provisions,
        including without limitation attorneys' fees and costs; and the Early
        Payment Premium.

     Section 7.3  Indemnity.  Indemnitors jointly and severally agree to
indemnify the Lenders, the Holders, Agent and Collateral Agent and their
directors, officers, shareholders, partners, members, employees, affiliates and
professional advisers and consultants (collectively, "Indemnitees"), upon
demand, from and against any and all liabilities, obligations, claims, losses,
damages, penalties, fines, actions, judgments, suits, settlements, costs,
expenses or disbursements (including reasonable fees of attorneys, accountants,
experts and advisors) of any kind or nature whatsoever (in this Section 7.3
collectively called "liabilities and costs") which to any extent (in whole or in
part) may be imposed on, incurred by, or asserted against such

                                      65
<PAGE>

Indemnitees growing out of, resulting from or in any other way associated with
any of the Collateral, the Loan Documents, or the transactions and events
(including the enforcement or defense thereof) at any time associated therewith
or contemplated therein (including any violation or noncompliance with any
Environmental Laws by the Borrower, TOGA or any Related Person or any
liabilities or duties of the Borrower, TOGA or any Related Person or of such
Indemnities with respect to Hazardous Materials found in or released into the
environment); provided, however, that Borrower shall not be obligated to
indemnify Indemnitees for liabilities and costs attributable to taxes imposed on
Indemnitees or their income other than Australian Withholding Taxes. Without
limitation of the foregoing, the Indemnitors jointly and severally agree to
indemnify any Indemnitee for any liability or cost such Indemnitee may incur in
connection with the Tri-Star Litigation, whether such Indemnitee is named or
joined in such action, served with a subpoena, required to attend or produce any
discovery in connection with such action or otherwise incurs any liabilities or
costs in connection therewith (the "Tri-Star Litigation Indemnity"). THE
FOREGOING INDEMNIFICATION AGREEMENTS SHALL APPLY WHETHER OR NOT SUCH LIABILITIES
AND COSTS ARE IN ANY WAY OR TO ANY EFFECT CAUSED, IN PART BUT NOT IN WHOLE, BY
ANY NEGLIGENT ACT OR OMISSION OF ANY KIND BY THE INDEMNITEES, provided only that
any Indemnitee shall not be entitled under this Section 7.3 to receive
indemnification for that portion, if any, of any liabilities and costs which is
proximately caused by its own individual fraud, gross negligence or willful
misconduct, as determined in a final judgment, or by its own individual actions
with respect to Collateral in its possession. As used in this Section 7.3, the
term "Lenders" shall refer not only to the Persons designated as such in the
preamble hereto, but also to Trustco, TAMCO, and each director, officer, agent,
trustee, manager, attorney, employee, representative and Affiliate of any such
Person.

                                   ARTICLE 8

                                 MISCELLANEOUS

     Section 8.1   Waivers and Amendments; Acknowledgment.

        (a)  Waivers and Amendments.  No failure or delay (whether by course of
conduct or otherwise) by Lenders, Holders, Agent or Collateral Agent in
exercising any right, power or remedy which any of them may have under any of
the Loan Documents shall operate as a waiver thereof or of any other right,
power or remedy, nor shall any single or partial exercise by Lenders, Holders,
Agent or Collateral Agent of any such right, power or remedy preclude any other
or further exercise thereof or of any other right, power or remedy. No waiver of
any provision of any Loan Document and no consent to any departure therefrom
shall ever be effective unless it is in writing and signed by Agent or by
Collateral Agent, and then such waiver or consent shall be effective only in the
specific instances and for the purposes for which given and to the extent
specified in such writing. No notice to or demand on any Related Person shall in
any case of itself entitle any Related Person to any other or further notice or
demand in similar or other circumstances. This Agreement and the other Loan
Documents set forth the entire understanding and agreement of the parties hereto
and thereto with respect to the transactions contemplated herein and therein and
supersede all prior discussions and understandings with respect to the subject
matter hereof and thereof, and no modification or amendment of or supplement to
this Agreement or the other Loan Documents shall be valid or effective unless
the same is in writing and signed by the party against whom it is sought to be
enforced. THIS

                                      66
<PAGE>

WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

        (b)  Acknowledgments and Admissions.  Each of Borrower and TOGA hereby
represents, warrants, acknowledges and admits that:

             (i)     it has been advised by counsel in the negotiation,
        execution and delivery of the Loan Documents to which it is a party;

             (ii)    it has made an independent decision to enter into this
        Agreement and the other Loan Documents to which it is a party, without
        reliance on any representation, warranty, covenant or undertaking by the
        Lenders, Holders, Agent or Collateral Agent, whether written, oral or
        implicit, other than as expressly set out in this Agreement or in
        another Loan Document delivered on or after the date hereof;

             (iii)   there are no representations, warranties, covenants,
        undertakings or agreements by the Lenders, Holders, Agent or Collateral
        Agent as to the Loan Documents except as expressly set out in this
        Agreement or in another Loan Document delivered on or after the date
        hereof;

             (iv)    neither the Lenders, Holders, Agent nor Collateral Agent
        owes any fiduciary duty to Borrower or TOGA with respect to any Loan
        Document or the transactions contemplated thereby;

             (v)     the relationship pursuant to the Loan Documents between
        Borrower or TOGA, on one hand, and the Lenders, Holders, Agent or
        Collateral Agent, on the other hand, is and shall be solely that of
        debtor and creditor, respectively;

             (vi)    no partnership or joint venture exists with respect to the
        Loan Documents between Borrower or TOGA and the Lenders, the Holders,
        Agent or Collateral Agent;

             (vii)   should an Event of Default or Default occur or exist, each
        of the Lenders, Holders, Agent and Collateral Agent will determine in
        its sole discretion and for its own reasons what remedies and actions it
        will or will not exercise or take at that time;

             (viii)  without limiting any of the foregoing, each of Borrower and
        TOGA is not relying upon any representation or covenant by the Lenders,
        Holders, Agent or Collateral Agent, or any representative thereof, and
        no such representation or covenant has been made, that the Lenders,
        Holders, Agent or Collateral Agent will, at the time of an Event of
        Default or Default, or at any other time, waive, negotiate, discuss, or
        take or refrain from taking any action permitted

                                      67
<PAGE>

        under the Loan Documents with respect to any such Event of Default or
        Default or any other provision of the Loan Documents; and

             (ix)    The Lenders have relied upon the truthfulness of the
        acknowledgments in this Section 8.1 in deciding to execute and deliver
        this Agreement and to make the Loans.

     Section 8.2  Survival of Agreements; Cumulative Nature.  All of the Related
Persons' various representations, warranties, covenants and agreements in the
Loan Documents shall survive the execution and delivery of this Agreement and
the other Loan Documents and the performance hereof and thereof, including the
making or granting of the Loans and the delivery of the Notes and the other Loan
Documents, and shall further survive until all of the Obligations are paid in
full to the Lender, Holders, Agent and Collateral Agent and all of the Lenders'
obligations to Borrower hereunder are terminated. The representations,
warranties, and covenants made by the Related Persons in the Loan Documents, and
the rights, powers and privileges granted to the Lenders, Holders, Agent and
Collateral Agent in the Loan Documents, are cumulative, and, except for
expressly specified waivers and consents, no Loan Document shall be construed in
the context of another to diminish, nullify, or otherwise reduce the benefit to
the Lender, Holders, Agent or Collateral Agent of any such representation,
warranty, covenant, right, power or privilege. In particular and without
limitation, no exception set out in this Agreement to any representation,
warranty or covenant herein contained shall apply to any similar representation,
warranty or covenant contained in any other Loan Document, and each such similar
representation, warranty or covenant shall be subject only to those exceptions
which are expressly made applicable to it by the terms of the various Loan
Documents. Notwithstanding the foregoing, in the event of any inconsistency
between the terms of this Agreement and any other Loan Document, the terms of
this Agreement shall prevail.

     Section 8.3   Notices.  All notices, requests, consents, demands and other
communications required or permitted under any Loan Document shall be in
writing, unless otherwise specifically provided in such Loan Document, and shall
be deemed sufficiently given or furnished if delivered by personal delivery, by
telecopy, by delivery service with proof of delivery, or by registered or
certified United States mail, postage prepaid, to Borrower, TOGA and the Related
Persons and to the Lenders, Holders, Agent and Collateral Agent at the addresses
specified below (unless changed by similar notice in writing given by the
particular Person whose address is to be changed)

        Borrower:               Tipperary Corporation
                                633 Seventeenth Street
                                Suite 1550
                                Denver, Colorado  80202
                                Attention:  David L. Bradshaw, President
                                Telephone:  (303) 293-9379
                                Telecopy:   (303) 292-3428

                                      68
<PAGE>

        With a copy to:         Jones & Keller, P.C.
                                Sixteenth Floor
                                1625 Broadway
                                Denver, Colorado 80202
                                Attention:  Reid Godbolt, Esq.
                                Telephone:  (303) 573-1600
                                Telecopy:   (303) 573-0769

        TOGA:                   Tipperary Oil & Gas (Australia) Pty. Ltd (ACN
                                077 536 871)
                                Level 18, 307 Queen Street
                                Brisbane, Queensland 4000
                                Australia
                                Attention:  Richard A. Barber
                                Telephone:  61-7-3229-5774
                                Telecopy:   61-7-3221-7666

        TOGC:                   Tipperary Corporation
                                633 Seventeenth Street
                                Suite 1550
                                Denver, Colorado  80202
                                Attention:  David L. Bradshaw, President
                                Telephone:  (303) 293-9379
                                Telecopy:   (303) 292-3428

        With a copy to:         Jones & Keller, P.C.
                                Sixteenth Floor
                                1625 Broadway
                                Denver, Colorado 80202
                                Attention:  Reid Godbolt, Esq.
                                Telephone:  (303) 573-1600
                                Telecopy:   (303) 573-0769

        Lenders and Holders:    Trust Company of the West
                                865 South Figueroa Street
                                Los Angeles, California 90017
                                Attention:  Arthur R. Carlson
                                Telephone:  (213) 244-0053
                                Telecopy:   (213) 244-0604

        With a copy to:         TCW Asset Management Company
                                865 South Figueroa Street, Suite 1800
                                Los Angeles, California  90017
                                Attention:  Thomas F. Mehlberg
                                Telephone:  (213) 244-0702
                                Telecopy:   (213) 244-0604

                                      69
<PAGE>

        With a copy to:                 Milbank, Tweed, Hadley & McCloy LLP
                                        601 South Figueroa Street
                                        30th Floor
                                        Los Angeles, California 90017
                                        Attention:  David A. Lamb, Esq.
                                        Telephone:  (213) 892-4434
                                        Telecopy:   (213) 629-5063

        Agent and Collateral Agent:     Trust Company of the West
                                        865 South Figueroa Street
                                        Los Angeles, California 90017
                                        Attention:  Arthur R. Carlson
                                        Telephone:  (213) 244-0053
                                        Telecopy:   (213) 244-0604

        With a copy to:                 TCW Asset Management Company
                                        865 South Figueroa Street, Suite 1800
                                        Los Angeles, California  90017
                                        Attention:  Thomas F. Mehlberg
                                        Telephone:  (213) 244-0702
                                        Telecopy:   (213) 244-0604

        With a copy to:                 Milbank, Tweed, Hadley & McCloy LLP
                                        601 South Figueroa Street
                                        30th Floor
                                        Los Angeles, California 90017
                                        Attention:  David A. Lamb, Esq.
                                        Telephone:  (213) 892-4434
                                        Telecopy:   (213) 629-5063

     Section 8.4  Parties in Interest.  All grants, covenants and agreements
contained in the Loan Documents shall bind and inure to the benefit of the
parties thereto and their respective successors and assigns; provided, however,
that no Related Person may assign or transfer any of its rights or delegate any
of its duties or obligations under any Loan Document without the prior consent
of the Lenders.

     Section 8.5  Governing Law; Submission to Process.  EXCEPT TO THE EXTENT
THAT THE LAW OF ANOTHER JURISDICTION IS EXPRESSLY ELECTED IN A LOAN DOCUMENT,
THE LOAN DOCUMENTS, INCLUDING THIS AGREEMENT, SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. THE BORROWER HEREBY IRREVOCABLY SUBMITS ITSELF
TO THE NON-EXCLUSIVE PERSONAL JURISDICTION OF THE STATE AND FEDERAL COURTS
SITTING IN THE STATE OF NEW YORK AND THE COUNTY OF NEW YORK AND AGREES AND
CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT OR ANY OF ITS SUBSIDIARIES
IN ANY LEGAL PROCEEDING RELATING TO THE LOAN DOCUMENTS OR THE OBLIGATIONS BY

                                      70
<PAGE>

ANY MEANS ALLOWED UNDER NEW YORK OR FEDERAL LAW. BORROWER IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH
A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. BORROWER HAS APPOINTED CT CORPORATION AS ITS
AGENT FOR SERVICE OF PROCESS IN THE STATE OF NEW YORK AND SHALL NOTIFY THE
LENDERS IN WRITING OF ANY CHANGE IN SUCH APPOINTMENT (WHICH MAY BE CHANGED ONLY
TO ANOTHER CORPORATE AGENT HAVING AN ADDRESS IN NEW YORK, NEW YORK).

     Section 8.6   Limitation on Interest.

        (a)  The Lenders, Holders, the Related Persons and any other parties to
the Loan Documents intend to contract in strict compliance with applicable usury
law from time to time in effect. In furtherance thereof, such Persons stipulate
and agree that none of the terms and provisions contained in the Loan Documents
shall ever be construed to create a contract to pay, for the use, forbearance or
detention of money, interest in excess of the maximum amount of interest
permitted to be charged by applicable law from time to time in effect. Neither
any Related Person nor any present or future guarantors, endorsers, or other
Persons hereafter becoming liable for payment of any Obligation shall ever be
liable for unearned interest thereon or shall ever be required to pay interest
thereon in excess of the maximum amount that may be lawfully charged under
applicable law from time to time in effect, and the provisions of this Section
8.6 shall control over all other provisions of the Loan Documents which may be
in conflict or apparent conflict herewith.

        (b)  The Lenders and Holders expressly disavow any intention to contract
for, charge or collect unearned interest or finance charges in the event the
maturity of any Obligation is accelerated. If (i) the maturity of any Obligation
is accelerated for any reason, (ii) any Obligation is prepaid and as a result
any amounts held to constitute interest are determined to be in excess of the
legal maximum, or (iii) the Lenders or any other Holder of any or all of the
Obligations shall otherwise collect moneys which are determined to constitute
interest which would otherwise increase the interest on any or all of the
Obligations to an amount in excess of that permitted to be charged by applicable
law then in effect, then all such sums determined to constitute interest in
excess of such legal limit shall, without penalty, be promptly applied to reduce
the then outstanding principal of the related Obligations or, at the Lenders' or
such Holder's option, promptly returned to Borrower or the other payor thereof
upon such determination.

        (c)  In determining whether or not the interest paid or payable under
any specific circumstances exceeds the maximum amount permitted under applicable
law, the Lenders, Holders and the Related Persons (and any other payors thereof)
shall, to the greatest extent permitted under applicable law, (i) characterize
any non-principal 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 the total amount of interest throughout the entire
contemplated term of the instruments evidencing the Obligations in accordance
with the amounts outstanding from time to time thereunder and the Highest Lawful
Rate from time to time in

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<PAGE>

effect under applicable law in order to lawfully charge the maximum amount of
interest permitted under applicable law.

     Section 8.7   Survival.  Any waivers or admissions made by any Related
Person in any Loan Document and any obligations which any Person may have to
indemnify or compensate the Lenders, Holders, Agent or Collateral Agent shall
survive any termination of this Agreement or any other Loan Document.

     Section 8.8   Severability.  If any term or provision of any Loan Document
shall be determined to be illegal or unenforceable, all other terms and
provisions of the Loan Documents shall nevertheless remain effective and shall
be enforced to the fullest extent permitted by applicable law.

     Section 8.9   Counterparts.  This Agreement may be separately executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to constitute one
and the same Agreement.

     Section 8.10  Waiver of Jury Trial, Punitive Damages, Etc.  EACH OF THE
BORROWER, TOGA, AGENT, COLLATERAL AGENT, LENDERS AND HOLDERS HEREBY:

        (a)  KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY WAIVES, TO
THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR DIRECTLY OR INDIRECTLY AT ANY
TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS OR ANY LOAN
CONTEMPLATED THEREBY OR ASSOCIATED THEREWITH, BEFORE OR AFTER MATURITY;

        (b)  IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW,
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES;

        (c)  CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR
COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED
THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVERS; AND

        (d)  ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT,
THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS
SECTION 8.10.

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<PAGE>

     Section 8.11  Exhibits and Schedules; Additional Definitions.  All Exhibits
and Schedules to this Agreement are a part hereof for all purposes. Certain
additional terms may be defined in the Security Schedule and used but not
defined in the body of this Agreement; reference is hereby made to the Security
Schedule for the meaning of any such terms.

     Section 8.12  Confidentiality of Holders.

        (a)  Notwithstanding the termination of this Agreement and except as
otherwise provided in subsection (b), (c) or (d) below, Borrower shall maintain
the confidentiality of the identities of (i) any Holder or any holder of any
Obligation other than the Notes; (ii) any participant in any of the TCW Funds;
and (iii) any owner of a beneficial interest in the Notes (collectively,
"Confidential Information") and shall not, without Lenders' or the Holder's
prior written consent, disclose any such information to another Person or use
such information for purposes other than those contemplated herein.

        (b)  Borrower and TOGA may disclose at any time and to any Person the
fact that Trustco or TAMCO is a party hereto in various agency, custodial, or
fiduciary capacities, without disclosing the identities of the principals or
beneficiaries represented directly or indirectly by Trustco or TAMCO.

        (c)  Borrower and TOGA may disclose Confidential Information to its
directors, officers, employees, and agents (including attorneys, accountants,
and consultants) to whom such disclosure is reasonably necessary for the
execution or effectuation hereof, provided Borrower or TOGA, respectively,
notifies all such Persons that the Confidential Information disclosed to them is
subject to this Section 8.12 and requires them not to disclose or use such
information in breach of this Section 8.12.

        (d)  If Borrower or TOGA is requested or required by legal process
(including law or regulation, oral questions, interrogatories, request for
information or documents, subpoena, and civil investigative demand) to disclose
any Confidential Information, Borrower or TOGA, respectively, shall promptly
notify the Lenders or the particular Holder of such request prior to complying
with such process so that the Lenders or the particular Holder may seek an
appropriate protective order or waive the respondent's compliance with this
Section 8.12. If, after such notice and after providing the Lenders and such
Holder a reasonable opportunity to obtain a protective order or to grant such
waiver, Borrower or TOGA is nonetheless legally compelled to disclose such
information, Borrower or TOGA, respectively, may do so without liability under
this Section 8.12.

     Section 8.13  Transfer of Notes.  The Lenders and any Holder shall be
entitled to transfer all or a portion of its interests in the Notes to any
Holder or any Affiliate thereof, or to any other Person, provided that any such
transferee as a condition to such transfer shall execute and deliver a
counterpart to this Agreement as then in effect in the capacity as an assignee
Holder and shall thereby be deemed to have ratified and approved each of the
other Loan Documents then in effect. Upon surrender of any of the Notes by any
transferor Holder or any such transferee Borrower shall execute and deliver one
or more substitute notes in such denominations and of a like aggregate unpaid
principal amount issued to the Lenders or Holder

                                      73
<PAGE>

or to the designated transferee or transferees for the Lenders or Holder or to
the order of such transferees. The terms and provisions of this Agreement shall
inure to the benefit of any such assignee or transferee of the Notes or such
substitute note(s), and in the event of such transfer or assignment, the rights
and privileges herein conferred shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms hereof. Until notified in
writing of the transfer of any Note(s) or substitute note(s), Borrower shall be
entitled to deem the Lenders or such Person who has been identified to Borrower
as the Holder of the Note(s) or substitute note(s), as the owner and Holder of
the Note(s) or substitute note(s).

     Section 8.14  Reproduction of Documents.  This Agreement and all documents
relating hereto may be reproduced by any party and by any photographic,
photostatic, microfilm, microcard, miniature photographic or other similar
process and any party may destroy any original documents so produced. Each of
the parties hereto agrees and stipulates that, to the extent permitted by
applicable law, any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made by you in
the regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.

     Section 8.15  Currency in Which Payments Shall Be Made.  All payments made
by Borrower to any Lender, Holder, Agent or Collateral Agent hereunder or under
any Loan Document shall be made in Dollars.

     Section 8.16  Judgments in Other Than Dollars.  This is a loan transaction
that involves certain international components and in which the specification of
Dollars and payment in Los Angeles is of the essence, and the obligations of the
Borrower or TOGA under this Agreement or any of the other Loan Documents to make
payment to any Lender, Holder, Agent or Collateral Agent in Dollars shall not be
discharged or satisfied by any tender or recovery pursuant to any judgment
expressed in or converted into any other currency or in another place except to
the extent that such tender or recovery results in the effective receipt by such
Lender, Holder, Agent or Collateral Agent in Los Angeles of the full amount of
Dollars payable to such Lender, Holder, Agent or Collateral Agent under this
Agreement. If any judgment in favor of the Lenders, the Holders, the Agent or
the Collateral Agent, or with respect to the Obligations or any other
obligations of Borrower or TOGA under this Agreement cannot, for any reason, be
entered in terms of Dollars, the parties hereto expressly agree that the amount
of such judgment as denominated in a currency other than Dollars shall be
determined using the rate of exchange for such other currency viz Dollars on the
date of entry of judgment. Any payment made to or for the account of any Lender,
any Holder, the Agent or the Collateral Agent in respect of any amount payable
by Borrower or TOGA in Dollars which payment is made in currency of any other
country, whether pursuant to any judgment or order of a court or tribunal or
otherwise, shall constitute a discharge of Borrower or TOGA only to the extent
of the United States currency equivalent thereof using the Spot Rate on the date
payment is actually received by any Lender, any Holder, the Agent or the
Collateral Agent. Each of Borrower and TOGA shall, as a separate and independent
obligation which shall not be merged in any such judgment or order, pay or cause
to be paid the amount not so discharged in accordance with the foregoing and
indemnify and hold harmless any Lender, any Holder, the Agent or the Collateral
Agent

                                      74
<PAGE>

against any loss or damage as a result of any such amount being paid in currency
of any other country.

     Section 8.17  Ratification of Credit Agreement and Loan Documents. The
Credit Agreement and other Loan Documents are hereby ratified and confirmed in
all respects, and Borrower, TOGA and TOGC acknowledge and agree that they have
no counterclaims against, Agent, Collateral Agent or Lenders or defenses to
enforcement thereof.

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<PAGE>

          IN WITNESS WHEREOF, this Agreement is executed as of the date first
written above.

BORROWER:                     TIPPERARY CORPORATION, a Texas corporation

                              By: /s/ David L. Bradshaw
                                 -----------------------------------------------
                              Name: David L. Bradshaw
                              Title: President

TOGA:                         TIPPERARY OIL & GAS (AUSTRALIA) PTY LTD (ACN 077
                              536 871), a Queensland, Australia corporation

                              By: /s/ David L. Bradshaw
                                 -----------------------------------------------
                              Name: David L. Bradshaw
                              Title: President

TOGC:                         TIPPERARY OIL & GAS CORPORATION, a Texas
                              corporation

                              By: /s/ David L. Bradshaw
                                 -----------------------------------------------
                              Name: David L. Bradshaw
                              Title: President

LENDERS:                      TCW DEBT AND ROYALTY FUND VI, L.P., a California
                              limited partnership

                              By:  TCW Asset Management Company, a
                                   California corporation, as General Partner

                                   By: /s/ Arthur R. Carlson
                                      ------------------------------------------
                                   Name:  Arthur R. Carlson
                                   Title: Managing Director

                                   By: /s/ Thomas F. Mehlberg
                                      ------------------------------------------
                                   Name:  Thomas F. Mehlberg
                                   Title: Managing Director

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<PAGE>

                              TCW ASSET MANAGEMENT COMPANY, a California
                              corporation, as Investment Manager pursuant to the
                              Investment Management Agreement dated as of
                              October 27, 1997 between Delta Air Lines, Inc.,
                              TCW Asset Management Company and Trust Company of
                              the West

                              By: /s/ Arthur R. Carlson
                                 -----------------------------------------------
                              Name:  Arthur R. Carlson
                              Title:  Managing Director

                              By: /s/ Thomas F. Mehlberg
                                 -----------------------------------------------
                              Name:  Thomas F. Mehlberg
                              Title:  Managing Director

                              TCW ASSET MANAGEMENT COMPANY, a California
                              corporation, as Investment Manager pursuant to the
                              Investment Management and Custody Agreement dated
                              as of October 27, 1997 between University of
                              Chicago, TCW Asset Management Company and Trust
                              Company of the West

                              By: /s/ Arthur R. Carlson
                                 -----------------------------------------------
                              Name:  Arthur R. Carlson
                              Title:  Managing Director

                              By: /s/ Thomas F. Mehlberg
                                 -----------------------------------------------
                              Name:  Thomas F. Mehlberg
                              Title:  Managing Director

                                       77
<PAGE>

                              TCW ASSET MANAGEMENT COMPANY, a California
                              corporation, as Investment Manager pursuant to the
                              Investment Management and Custody Agreement dated
                              as of October 27, 1997 between University of Notre
                              Dame du Lac, TCW Asset Management Company and
                              Trust Company of the West

                              By: /s/ Arthur R. Carlson
                                 -----------------------------------------------
                              Name:   Arthur R. Carlson
                              Title:  Managing Director

                              By: /s/ Thomas F. Mehlberg
                                 -----------------------------------------------
                              Name:   Thomas F. Mehlberg
                              Title:  Managing Director

                              TCW ASSET MANAGEMENT COMPANY, a California
                              corporation, as Investment Manager pursuant to the
                              Investment Management and Custody Agreement dated
                              as of October 24, 1997 between William N.
                              Pennington Separate Property Trust dated January
                              1, 1991, TCW Asset Management Company and Trust
                              Company of the West

                              By: /s/ Arthur R. Carlson
                                 -----------------------------------------------
                              Name:   Arthur R. Carlson
                              Title:  Managing Director

                              By: /s/ Thomas F. Mehlberg
                                 -----------------------------------------------
                              Name:   Thomas F. Mehlberg
                              Title:  Managing Director

                                       78
<PAGE>

                              LION II CUSTOM INVESTMENTS LLC
                              LIFE INSURANCE COMPANY OF GEORGIA
                              SECURITY LIFE OF DENVER INSURANCE
                                COMPANY
                              SOUTHLAND LIFE INSURANCE COMPANY

                                 By: TCW Asset Management Company, a
                                 California corporation, as Investment Manager

                                 By: /s/ Arthur R. Carlson
                                    --------------------------------------------
                                 Name:  Arthur R. Carlson
                                 Title: Managing Director

                                 By: /s/ Thomas F. Mehlberg
                                    --------------------------------------------
                                 Name:  Thomas F. Mehlberg
                                 Title: Managing Director

AGENT:                        TCW ASSET MANAGEMENT COMPANY,
                              a California corporation

                              By: /s/ Arthur R. Carlson
                                 -----------------------------------------------
                              Name:  Arthur R. Carlson
                              Title: Managing Director

                              By: /s/ Thomas F. Mehlberg
                                 -----------------------------------------------
                              Name:  Thomas F. Mehlberg
                              Title: Managing Director

                                       79
<PAGE>

COLLATERAL AGENT:             TCW ASSET MANAGEMENT COMPANY, a California
                              corporation

                              By: /s/ Arthur R. Carlson
                                 _________________________________________
                              Name:  Arthur R. Carlson
                              Title: Managing Director

                              By: /s/ Thomas F. Mehlberg
                                 _________________________________________
                              Name:  Thomas F. Mehlberg
                              Title: Managing Director

                                       80
<PAGE>

                                   SCHEDULE 1

                              DISCLOSURE SCHEDULE

1.   Re: Article 4 of the Credit Agreement.  The Form 10-Q of Tipperary
     Corporation for the Quarter Ended December 31, 1999, as well as its Annual
     Report on Form 10-KSB for the Fiscal Year Ended September 30, 2000, a copy
     of which has been delivered to the Agent, is incorporated.

2.   Re: Section 4.1 (m) of the Credit Agreement. Subsidiaries of Tipperary
     Corporation:

     Tipperary Oil & Gas Corporation, a Texas corporation - wholly owned;
     Burro Pipeline Corporation, a New Mexico corporation - wholly owned.

3.   Re: Section 4.1 (o) of the Credit Agreement.  In connection with the
     execution of the Loan Documents, the Borrower is obligated to pay a fee to
     Weisser, Johnson & Co. under an agreement with said company dated October
     15, 1998.  A copy of this agreement has been delivered to the Agent.

4.   Re: Section 4.1 (v) of the Credit Agreement.  Copies of all existing gas
     sales contracts of TOGA have been previously delivered to the Agent.  A
     copy of a gas sales contract with Energex entered into in June 2000 has
     been delivered to the Agent.

5.   Re: Section 4.1 (v) of the Credit Agreement.  A Gas Imbalance Schedule as
     of December, 2000 relating to the Comet Ridge Project has been delivered to
     the Agent.

6.   Re: Section 4.1 (x) of the Credit Agreement.  Tipperary Corporation has not
     filed tax returns in Australia for the fiscal years ended September 30,
     1996 and 1997. TOGA has not filed tax returns in Australia for the fiscal
     years ended September 30, 1998 and 1999.

<PAGE>

                                   SCHEDULE 2

                                    LENDERS

TCW DEBT AND ROYALTY FUND VI, L.P., a California limited partnership.

TCW ASSET MANAGEMENT COMPANY, a California corporation, as Investment Manager
pursuant to the Investment Management Agreement dated as of October 27, 1997
between Delta Air Lines, Inc., TCW Asset Management Company and Trust Company of
the West.

LION II CUSTOM INVESTMENTS LLC.

LIFE INSURANCE COMPANY OF GEORGIA.

SECURITY LIFE OF DENVER INSURANCE COMPANY.

SOUTHLAND LIFE INSURANCE COMPANY.

TCW ASSET MANAGEMENT COMPANY, a California corporation, as Investment Manager
pursuant to the Investment Management and Custody Agreement dated as of October
27, 1997 between University of Chicago, TCW Asset Management Company and Trust
Company of the West.

TCW ASSET MANAGEMENT COMPANY, a California corporation, as Investment Manager
pursuant to the Investment Management and Custody Agreement dated as of October
27, 1997 between University of Notre Dame du Lac, TCW Asset Management Company
and Trust Company of the West.

TCW ASSET MANAGEMENT COMPANY, a California corporation, as Investment Manager
pursuant to the Investment Management and Custody Agreement dated as of October
24, 1997 between William N. Pennington Separate Property Trust dated January 1,
1991, TCW Asset Management Company and Trust Company of the West.

<PAGE>

                                   SCHEDULE 3

                HOLDERS' INDIVIDUAL NOTE AMOUNTS/PRO RATA SHARES

<TABLE>
<CAPTION>
                                                          Initial
                                                           Note                  Pro Rata
                     Holder                               Amount                  Share
===============================================================================================
<S>                                                <C>                    <C>
 TCW Debt and Royalty Fund VI, L.P., a California         $ 8,319,177.00              48.936335%
 limited partnership
-----------------------------------------------------------------------------------------------
 TRUST COMPANY OF THE WEST, a California trust            $ 2,849,033.00              16.759019%
 company, as Sub-Custodian for the Delta Master
 Trust dated May 27, 1982, as amended, under the
 Sub-Custody Agreement and Power of Attorney
 dated October 30, 1997
-----------------------------------------------------------------------------------------------
 LION II CUSTOM INVESTMENTS LLC                           $   267,447.00               1.573216%
-----------------------------------------------------------------------------------------------
 LIFE INSURANCE COMPANY OF GEORGIA                        $   133,724.00               0.786608%
-----------------------------------------------------------------------------------------------
 SECURITY LIFE OF DENVER INSURANCE COMPANY                $   668,617.00               3.933041%
-----------------------------------------------------------------------------------------------
 SOUTHLAND LIFE INSURANCE COMPANY                         $   267,447.00               1.573217%
-----------------------------------------------------------------------------------------------
 TRUST COMPANY OF THE WEST, a California trust            $ 1,139,613.00               6.703607%
 company, as Custodian for the University of
 Chicago
-----------------------------------------------------------------------------------------------
 TRUST COMPANY OF THE WEST, a California trust            $   505,909.00               2.975937%
 company, as Custodian for the University of
 Notre Dame du Lac
-----------------------------------------------------------------------------------------------
 TRUST COMPANY OF THE WEST, a California trust            $ 2,849,033.00              16.759020%
 company, as Custodian for William N. Pennington
 Separate Property Trust dated January 1, 1991
===============================================================================================
 TOTAL                                                    $17,000,000.00             100.000000%
-----------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                                   SCHEDULE 4

                               SECURITY SCHEDULE

<TABLE>
<CAPTION>

   Party                Collateral                    Instrument(s)             Where Filed        Timing
                                                                                                Requirement
--------------------------------------------------------------------------------------------------------------
<S>           <C>                              <C>                               <C>            <C>
Borrower      .  All interests in TOGA         .  Borrower Pledge and
              .  All interests in TOGC to         Security Agreement
                 the extent related to TOGA    .  UCC-1 Financing
              .  Any Inter-company Debt owed      Statement                      Texas,
                 by TOGC or TOGA to Borrower                                     Colorado,
              .  All rights, claims and                                          New York
                 interests in the Tri-Star
                 Litigation
--------------------------------------------------------------------------------------------------------------
              .  All funds received from       .  Borrower-TOGA
                 TOGA or TOGC in Borrower-TOGC    Collateral Account
                 Collateral Account               Agreement
--------------------------------------------------------------------------------------------------------------
TOGC          .  Capital Stock of TOGA         .  TOGC Pledge and
              .  Inter-company Debt owed          Security Agreement
                 from TOGA                     .  UCC-1 Financing                Texas,
              .  All other interests in TOGA      Statement                      Colorado,
              .  All rights, claims and                                          New York
                 interests in the Tri-Star
                 Litigation
--------------------------------------------------------------------------------------------------------------
              .  All funds received from       .  Borrower-TOGC
                 TOGA in Borrower-TOGC            Collateral Account
                 Collateral Account               Agreement
--------------------------------------------------------------------------------------------------------------
Guarantor                                      .  Guarantee Agreement            Queensland
--------------------------------------------------------------------------------------------------------------
              .  All rights, claims and        .  TOGA Security Agreement
                 interest under Project JOA    .  UCC-1 Financing                Texas,
                 and in the Tri-Star Litigation   Statement                      Colorado,
              .  All assets of TOGA                                              New York,
                 including all interests in                                      Queensland
                 ATPs and Leases
--------------------------------------------------------------------------------------------------------------
              .  All assets of TOGA            .  Australian Fixed and           Queensland
                 including all interests in       Floating Charge Document
                 ATPs and Leases
--------------------------------------------------------------------------------------------------------------
              .  All funds  in the TOGA        .  TOGA Dollar Collateral
                 Dollar Collateral Account        Account Agreement
--------------------------------------------------------------------------------------------------------------
              .  All funds in the TOGA         .  TOGA Australian
                 Australian Collateral Account    Collateral Account Agreement
--------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                                   SCHEDULE 5

                                PAYMENT ACCOUNTS

I.   Principal and Coupon Interest Payments

     All payments on account of the Notes shall be made by wire transfer of
     immediately available funds for credit to:

          Investors Bank & Trust Company
          ABA #:  011001438
          F/C Client Funds No. 569530395
          Attention:  Peter Maescher
          Account #:  76T02327-4
          TCW Debt & Royalty Funds VI

II.  Yield Adjustment Payment/Prepayment Premium

          Investors Bank & Trust Company
          ABA #:  011001438
          F/C Client Funds No. 569530395
          Attention:  Peter Maescher
          Account #:  76T02327-4
          TCW Debt & Royalty Funds VI

III. Expense Reimbursement/Payment and Other Expenses

          Bank of America
          Los Angeles, CA
          AC #:  49575-02303
          Benefit:  TAMCO-D&R Funds VI
          ABA #:  121000358

<PAGE>

                                   SCHEDULE 6

                                   INSURANCE

(1)  Borrower, TOGC and TOGA shall procure at their own expense and maintain in
     full force and effect at all times on and after the Initial Funding Date,
     (except for insurance required by 1(h), which shall be in effect as set
     forth in the Credit Agreement) and continuing throughout the term of the
     Credit Agreement, insurance policies with responsible insurance companies
     authorized to do business in Queensland, Australia (if required by law or
     regulation) with a Best Insurance Reports rating of "A-" or better and a
     financial size category of "IX" or higher, or if not rated by Best, a
     Standard & Poors claims paying ability rating of BBB+ or higher (and other
     companies acceptable to Agent), with limits and coverage provisions
     sufficient to satisfy the requirements set forth in each of the Project
     Documents, but in no event less than the limits and coverage provisions set
     forth below:

     (a)   Employer's Liability Insurance: Employer's liability insurance with a
           $500,000 minimum limit per accident. A maximum deductible or self-
           insured retention of $25,000 per occurrence shall be allowed.

     (b)   General Liability Insurance: Liability insurance on an occurrence
           basis against claims for personal injury (including bodily injury and
           death) and property damage. Such insurance shall provide coverage for
           products-completed operations, blanket contractual, broad form
           property damage, personal injury insurance, and sudden and accidental
           pollution liability with a $1,000,000 minimum limit per occurrence
           for combined bodily injury and property damage provided that policy
           aggregates, if any, shall apply separately to claims occurring with
           respect to the Project. A maximum deductible or self-insured
           retention of $25,000 per occurrence shall be allowed.\

     (c)   Automobile Liability Insurance. Automobile liability insurance
           against claims for personal injury (including bodily injury and
           death) and property damage covering all owned, leased non-owned and
           hired motor vehicles, including loading and unloading, with a
           $1,000,000 minimum limit per occurrence for combined bodily injury
           and property damage and containing appropriate no-fault insurance
           provisions wherever applicable. A maximum deductible or self-insured
           retention of $25,000 per occurrence shall be allowed.

     (d)   Excess Insurance: Excess liability insurance on an occurrence basis
           (with coverage at least as broad as the coverage under all primary
           policies) covering claims in excess of the underlying insurance
           described in the foregoing subsections (b), (c) and (d), with a
           $10,000,000 minimum limit per occurrence, provided that aggregate
           limits of liability, if any, shall apply separately to claims
           occurring with respect to the Project.

<PAGE>

           The amounts of insurance required in the foregoing subsections (a),
           (b), (c) and this subsection (d) may be satisfied by Borrower
           purchasing coverage in the amounts specified or by any combination of
           primary and excess insurance, so long as the total amount of
           insurance meets the requirements specified above.

     (e)   Aircraft Insurance: If the performance of any of the Project
           Documents requires the use of any aircraft that is owned, leased or
           chartered by Borrower, aircraft liability insurance with a
           $25,000,000 minimum limit per occurrence for combined property damage
           and bodily injury, including passengers and crew.

     (f)   Physical Damage Insurance: Property damage insurance on an "all risk"
           basis, boiler and machinery insurance on a comprehensive basis
           (covering all production machinery, including but not limited to
           pressure vessels, reciprocating engines, generators, transformers and
           other related equipment, motors, air tanks, machinery, pressure
           piping or any other similar objects) including coverage against
           damage or loss caused by earth movement (including but not limited to
           earthquake, landslide, subsidence and volcanic eruption), sabotage,
           terrorism and flood and providing coverage for (1) the Project
           (excluding power transmission lines and towers) in a minimum
           aggregate amount equal to the "required insured value" of the
           Project, (2) transit including ocean marine transit, if applicable,
           with sub-limits sufficient to insure the full replacement value of
           the property or equipment prior to its being removed from the Project
           and while located away from the Project, (3) foundations and other
           property below the surface of the ground, and (4) attorneys fees,
           engineering and other consulting costs, and permit fees directly
           incurred in order to repair or replace damaged insured property in a
           minimum amount of $1,000,000. For purposes of this Section (f),
           "required insured value" shall mean not less than 75% of the full
           replacement value of the Project, including any improvements,
           equipment, spare parts, fuel and supplies, without deduction for
           physical depreciation and/or obsolescence; all such insurance may
           have deductibles of not greater than $100,000 per occurrence. Such
           insurance shall (5) not include any coinsurance provision, (6)
           provide for increased cost of construction and loss to undamaged
           property as the result of enforcement of building laws or ordinances
           with sub-limits not less than 10% of the "full insurable value" of
           the Project, and (7) include debris removal with sub-limits not less
           than $500,000 or 25% of the loss, whichever is greater. The earth
           movement and flood coverage may be insured with a sublimit not less
           than 100% of the "full insurable value" of the Project plus 100% of
           the business income amount required by Section (g) below. The
           sabotage and terrorism coverage may be insured with a sub-limit not
           less than 50% of the "full insurable value" of the Project plus 50%
           of the business income amount required by Section (g) below. The
           property damage coverage shall not contain an exclusion for freezing,
           mechanical breakdown, loss or damage covered under any guarantee or
           warranty, or resultant damage caused by faulty workmanship, design or
           materials.

           If the insurance company providing the physical damage insurance is
           different from the company providing the boiler & machinery insurance
           required in this

                                       2
<PAGE>

           Section, then a joint loss agreement between them will be required
           and included as part of the respective policies.

     (g)   Business Interruption Insurance: Business Interruption insurance
           covering 100% of continuing normal operating expenses including
           payroll and debt service of the Project for a period of twelve (12)
           months, arising from loss required to be insured by Section (B)(2)(a)
           above. The maximum deductible shall be no greater than thirty (30)
           days per occurrence. Such insurance shall also include, (1) an
           indemnity period of not less than fifteen (15) months and (2) extra
           expenses (defined as extraordinary expenses incurred after an insured
           loss to make temporary repairs and expedite the permanent repair of
           the damaged property in excess of the business interruption even if
           such expense does not reduce the business interruption loss) in an
           amount not less than $1,000,000. Such insurance shall not contain any
           coinsurance clause or include a waiver of such clause.

           Notwithstanding Subsections (f) and (g) above, if under the
           applicable Governmental Approvals or Project Documents, Borrower is
           not obligated to restore the Project in the event of a casualty such
           that Borrower can apply the Casualty Proceeds against the
           Obligations, Borrower shall not be required to maintain the insurance
           described in Subsection (f) above in an amount greater than the sum
           of (i) the then-outstanding principal balance of the Notes, plus (ii)
           all accrued and unpaid interest thereon, plus (iii) an amount equal
           to the total interest payable on the Notes during the succeeding six
           (6) months.

(2)  Endorsements: All policies of insurance to be maintained by Borrower shall
     provide for waivers of subrogation in favor of the Holders, Agent, and
     Collateral Agent, their Affiliates, and all of their respective directors,
     officers and employees (and such other Persons as may be required by the
     Project Documents). All policies of liability insurance required to be
     maintained by Borrower under Section (1) above, other than employer's
     liability, shall be endorsed as follows:

     (a)   To provide a severability of interest or cross liability clause.

     (b)   That the insurance shall be primary and not excess to or contributing
           with any insurance or self-insurance maintained by the Holders,
           Agent, or Collateral Agent, and their Affiliates.

     (c)   To name the Holders, Agent, and Collateral Agent, their Affiliates,
           and all of their respective officers and employees (and such other
           persons as may be required by the Project Documents) as additional
           insureds.

     (d)   To name Borrower and its officers and employees as a named insured.

(3)  Waiver of Subrogation:  Borrower hereby waives any and every claim for
     recovery from Holders, Agent, or Collateral Agent, and their Affiliates,
     and all of their officers, directors, employees, contractors, and agents,
     for any and all loss or damage covered by any of the insurance policies to
     be maintained under the Credit Agreement to the extent that such loss or
     damage is recovered under any such policy.  Inasmuch as the foregoing

                                       3
<PAGE>

     waiver will preclude the assignment of any such claim to the extent of such
     recovery, by subrogation (or otherwise), to an insurance company (or other
     person), Borrower shall give written notice of the terms of such waiver to
     each insurance company which has issued, or which may issue in the future,
     any such policy of insurance (if such notice is required by the insurance
     policy) and shall cause each such insurance policy to be properly endorsed
     by the issuer thereof to, or to otherwise contain one or more provisions
     that, prevent the invalidation of the insurance coverage provided thereby
     by reason of such waiver.

(4)  Amendment of Requirements:  Agent or Collateral Agent may at any time amend
     the requirements and approved insurance companies of this Schedule 7 due to
     (i) new information not known by Agent or Collateral Agent on the date
     hereof or (ii) changed circumstances after the date hereof which in the
     reasonable judgment of Agent or Collateral Agent either renders such
     coverage materially inadequate or materially reduces the financial ability
     of the approved insurance companies to pay claims.

     In the event any insurance (including the limits or deductibles thereof)
     hereby required to be maintained shall not be reasonably available and
     commercially feasible in the commercial insurance market, Agent shall not
     unreasonably withhold its agreement to waive such requirement to the extent
     the maintenance thereof is not so available; provided, however, that (i)
     Borrower shall first request any such waiver in writing, which request
     shall be accompanied by written reports prepared by two independent
     insurance advisors of recognized national standing (one of which may be the
     Borrower's insurance advisor and one of which may be Agent's insurance
     advisor), certifying that such insurance is not reasonably available and
     commercially feasible in the commercial insurance market for oil, gas and
     hydrocarbon producing facilities of similar type, location and capacity
     (and, in any case where the required amount is not so available, certifying
     as to the maximum amount which is so available) and explaining in detail
     the basis for such conclusions; (ii) at any time after the granting of any
     such waiver, but not more often than once a year, Agent may request, and
     Borrower shall furnish to Agent within fifteen (15) days after such
     request, supplemental reports reasonably acceptable to Agent from such
     independent insurance broker or an insurance consultant updating their
     prior reports and reaffirming such conclusion; and (iii) any such waiver
     shall be effective only so long as such insurance shall not be reasonably
     available and commercially feasible in the commercial insurance market, it
     being understood that the failure of Borrower to timely furnish any such
     supplement report shall be conclusive evidence that such waiver is no
     longer effective because such condition no longer exists, but that such
     failure is not the only way to establish such non-existence. The failure at
     any time to satisfy the condition to any waiver of an insurance requirement
     set forth in the proviso to the preceding sentence shall not impair or be
     construed as a relinquishment of Borrower's ability to obtain a waiver of
     an insurance requirement pursuant to the preceding sentence at any other
     time upon satisfaction of such conditions.

(5)  Application of Proceeds:

     (a)   The insurance required by Sections (1)(f) and (g) of this Schedule 7
           (the "Casualty Insurance"), shall (except as provided below) be
           payable to Agent and

                                       4
<PAGE>

           Collateral Agent, and Borrower hereby authorizes and directs any
           affected insurance company to make payment of such proceeds directly
           to Agent and/or Collateral Agent. If Borrower receives any proceeds
           of such Casualty Insurance, Borrower (i) shall promptly deposit such
           proceeds into a segregated account (the "Restoration Account") in
           which Collateral Agent shall have a perfected security interest; (ii)
           to the extent relating to damage or destruction of the Project, such
           proceeds shall be available for repair or reconstruction as provided
           in Section (c) below; and (iii) such proceeds so deposited or
           received directly by Collateral Agent shall be the "Casualty
           Proceeds."

     (b)   Borrower is hereby authorized and empowered by Agent to settle,
           adjust or compromise any and all Casualty Insurance claims in the
           aggregate amount of $500,000 or less; provided, however, that no
           Event of Default has occurred and is outstanding. The mutual written
           agreement of Borrower and Agent shall be required to settle, adjust
           or compromise any and all Casualty Insurance claims in the aggregate
           amount of greater than $500,000; provided, however, that no Event of
           Default has occurred and is outstanding. Collateral Agent is hereby
           authorized and empowered by Borrower to settle, adjust or compromise
           any and all claims for loss, damage and destruction under any policy
           or policies of insurance at any time an Event of Default has occurred
           and is outstanding.

     (c)   In the event of any damage or destruction of the Project that is
           insured by the Casualty Insurance (other than business interruption
           or delayed startup insurance), then, except as provided in Section
           (4) below, Collateral Agent shall disburse to Borrower from such
           separate account loss proceeds remaining after deduction of all
           expenses of collection and settlement thereof, including, without
           limitation, attorneys' and adjustors' fees and expenses, to pay or
           reimburse the payment of costs of the restoration of the Project but
           only as repairs or replacements are effected in a diligent manner
           with contractors and pursuant to lump-sum contracts reasonably
           acceptable to Collateral Agent (which contracts shall provide for not
           less than 5% retainage). If the cost of the restoration, as
           reasonably determined by Collateral Agent, is less than $500,000,
           then Collateral Agent shall, except as provided in Section (4)(a)
           below, pay upon receipt thereof the Casualty Insurance proceeds to
           Borrower in one lump sum to apply to the restoration of the Project
           to its condition existing prior to the casualty ("Restoration").

     (d)
           (i)   If (i) an Event of Default occurs, (ii) Borrower notifies Agent
                 or Collateral Agent to apply the Casualty Insurance proceeds
                 against the Obligations, or (iii) Agent or Collateral Agent
                 reasonably determines that (A) the proceeds of the insurance
                 are not adequate in amount to complete the Restoration and
                 Borrower has not provided adequate security or other
                 commitments acceptable to Agent in its sole discretion to cover
                 any such deficiency in Casualty Insurance proceeds or (B) the
                 Restoration cannot be achieved due to the unavailability of
                 Governmental Approvals, then Agent and Collateral Agent shall
                 not be obligated to make any further

                                       5
<PAGE>

                 disbursements pursuant to the Loan Documents and Collateral
                 Agent shall apply all Casualty Insurance loss proceeds, after
                 deductions as herein provided, to the repayment of the
                 outstanding balance of the Notes, together with all accrued
                 interest thereon, notwithstanding that the outstanding balance
                 may not be due and payable.

           (ii)  Without limiting the provisions of Section (c) above,
                 Collateral Agent shall disburse Casualty Proceeds subject to
                 the following conditions:

                 (A)    the contracts, contractors, plans and specifications for
                        the Restoration shall have been approved in advance by
                        Collateral Agent, which approval shall not be
                        unreasonably withheld or delayed, and Agent shall be
                        provided with satisfactory proof that any subordinate
                        lienholder has consented to the Restoration and has
                        agreed to make any Casualty Proceeds it is entitled to
                        available for such Restoration;

                 (B)    such Restoration is then allowed by applicable
                        Governmental Rules, and all necessary Governmental
                        Approvals for the commencement of construction shall
                        have been obtained or shall be obtained as required to
                        complete the Restoration in a timely manner;

                 (C)    the net Casualty Proceeds received by Borrower from time
                        to time plus any deficiency funded by Borrower shall be
                        deposited with Agent in the Restoration Account;

                 (D)    at the time of any disbursement from the Restoration
                        Account, no Event of Default shall have occurred since
                        the date of the casualty;

                 (E)    disbursement from the Restoration Account shall be made
                        by Agent to Borrower in an amount not exceeding the cost
                        of the work completed since the date of the last
                        disbursement, net of retainage provided under the
                        applicable contracts, within 10 Business Days after
                        receipt by Agent of reasonably satisfactory evidence of
                        the stage of completion and of performance of the work
                        in a good and workmanlike manner in accordance with the
                        contracts, plans and specifications; provided that
                        Borrower may not make requisitions more often than
                        monthly; and

                 (F)    Notwithstanding anything in this Section (5)(d) to the
                        contrary, if at any time during the course of
                        Restoration a deficiency has been identified in the
                        amount available for Restoration, no further
                        disbursements shall be made from the Restoration Account
                        until Collateral Agent receives either payment of such
                        deficiency or commitment to fund such deficiency
                        acceptable to Collateral Agent in its sole discretion.
                        All Casualty Proceeds, if any,

                                       6
<PAGE>

                        remaining in the Restoration Account after completion of
                        Restoration shall be applied by Agent to the reduction
                        of the Obligations.

     (e)   Borrower shall promptly notify Agent of any loss in excess of
           $100,000 covered by any Casualty Insurance.

(6)  Conditions:

     (1)   All policies of insurance required to be maintained pursuant to this
           Schedule 6 shall be endorsed such that if at any time such policies
           are canceled, or coverage be reduced which affects the interests of
           the Holders, Agent, and/or Collateral Agent, such cancellation or
           reduction shall not be effective as to the Holders, Agent, or
           Collateral Agent for forty-five (45) days, except for non-payment of
           premium which shall be for ten (10) days, after receipt by Agent of
           written notice from such insurer of such cancellation or reduction.

     (2)   All policies of insurance required to be maintained pursuant to
           Sections (1)(f) and (g) shall not include any annual or term
           aggregate limits of liability or clause requiring the payment of
           additional premium to reinstate the limits after loss except as
           regards the insurance applicable to the perils of flood, earth
           movement, sabotage and terrorism.

(7)  Evidence of Insurance:  On the Initial Funding Date and on an annual basis
     at least ten (10) days prior to each policy anniversary, Borrower shall
     furnish Agent with (1) approved certification of all required insurance and
     (2) a schedule of the insurance policies held by or for the benefit of
     Borrower and required to be in force by the provisions of this Schedule 6.
     Such certification shall be executed by each insurer or by an authorized
     representative of each insurer where it is not practical for such insurer
     to execute the certificate itself.  Such certification shall identify
     underwriters, the type of insurance, the insurance limits and the policy
     term and shall specifically list the special provisions enumerated for such
     insurance required by this Schedule 6.  Upon request, Borrower will
     promptly furnish Agent with copies of all insurance policies, binders and
     cover notes or other evidence of such insurance relating to the insurance
     required to be maintained by Borrower.  The schedule of insurance shall
     include the name of the insurance company, policy number, type of
     insurance, major limits of liability and expiration date of the insurance
     policies.

(8)  Reports:  Concurrently with the furnishing of the certification referred to
     in this Section (8), Borrower shall furnish Agent with a report of an
     independent broker, signed by an officer of the broker, stating that in the
     opinion of such broker, the insurance then carried or to be renewed is in
     accordance with the terms of this Schedule 6, and attaching an updated copy
     of the schedule of insurance required by this Section (8) above.  In
     addition, Borrower will advise Agent in writing promptly of any default in
     the payment of any premium and of any other act or omission on the part of
     Borrower which may invalidate or render unenforceable, in whole or in part,
     any insurance being maintained by Borrower pursuant to this Schedule 6.

                                       7
<PAGE>

(9)  Failure to Maintain Insurance:  In the event Borrower fails, or fails to
     cause the contractors or the Operator, to take out or maintain the full
     insurance coverage required by this Schedule 6, Agent, upon thirty (30)
     days' prior notice (unless the aforementioned insurance would lapse within
     such period, in which event notice should be given as soon as reasonably
     possible) to Borrower of any such failure, may (but shall not be obligated
     to) take out the required policies of insurance and pay the premiums on the
     same.  All amounts so advanced thereof by Agent shall become an additional
     obligation of Borrower to Agent, and Borrower shall forthwith pay such
     amounts to Collateral Agent, together with interest thereon at the Late
     Payment Rate from the date so advanced.

(10) No Duty to Verify or Review:  No provision of this Schedule 6 or any
     provision of the Credit Agreement or any Project Document shall impose on
     the Holders, Agent, or Collateral Agent any duty or obligation to verify
     the existence or adequacy of the insurance coverage maintained by Borrower,
     nor shall any of the Holders, Agent, or Collateral Agent be responsible for
     any representations or warranties made by or on behalf of Borrower to any
     insurance company or underwriter.  Any failure on the part of the Holders,
     Agent, or Collateral Agent to pursue or obtain the evidence of insurance
     required by the Credit Agreement from Borrower and/or failure of the
     Holders, Agent, or Collateral Agent to point out any non-compliance of such
     evidence of insurance shall not constitute a waiver of any of the insurance
     requirements in the Credit Agreement.

(11) Maintenance of Insurance:  Borrower shall at all times maintain the
     insurance coverage required of it under the terms of the Project Documents.

                                       8
<PAGE>

                                   EXHIBIT A

                           AUSTRALIAN CHARGE DOCUMENT

<PAGE>

                                  EXHIBIT B-1

                          RESTRICTED ACCOUNT AGREEMENT

<PAGE>

                                  EXHIBIT B-2

                            BANKERS DEED OF COVENANT

<PAGE>

                                  EXHIBIT C-1

                              GUARANTEE AGREEMENT

                                  EXHIBIT C-2

                            GUARANTEE AND INDEMNITY

<PAGE>

                                   EXHIBIT D

                        TC PLEDGE AND SECURITY AGREEMENT

<PAGE>

                                  EXHIBIT D-1

              FIRST AMENDMENT TO TC PLEDGE AND SECURITY AGREEMENT

<PAGE>

                                   EXHIBIT E

                               ROYALTY AGREEMENT

<PAGE>

                                   EXHIBIT F

                           TOGA SECURITY AGREEMENT
<PAGE>

                                  EXHIBIT G-1

                            EQUITY LETTER OF CREDIT

<PAGE>

                                  EXHIBIT G-2

                 TRI-STAR LITIGATION INDEMNITY LETTER OF CREDIT
<PAGE>

                                   EXHIBIT H

                            SUBORDINATION AGREEMENT
<PAGE>

                                   EXHIBIT I

                                 TOGA-BORROWER
                              MANAGEMENT AGREEMENT
<PAGE>

                                   EXHIBIT J

         FIRST AMENDED AND RESTATED TOGC PLEDGE AND SECURITY AGREEMENT

<PAGE>

                                   EXHIBIT K

                         SENIOR SECURED PROMISSORY NOTE

$________________                                             New York, New York

Note No. _______                                        Date:  April _____, 2000

          FOR VALUE RECEIVED, the undersigned, TIPPERARY CORPORATION, a Texas
corporation ("Promisor"), hereby unconditionally promises to pay to the order of
-------------------------------------------------------------------------------
-----------------------------------------------------, or assigns ("Holder"),
the principal sum of __________________ AND 00/100 DOLLARS ($__________)
(or so much thereof as shall not have been repaid) on or before March 30, 2006.
The undersigned also promises to pay to the Holder hereof interest on the unpaid
principal hereof, at the rate set forth in and in accordance with that certain
Credit Agreement, dated as of even date herewith, among Promisor, TCW Asset
Management Company in the capacities described therein and the other parties
thereto (as amended, modified or restated from time to time, the "Credit
Agreement"). All undefined capitalized terms used herein shall have the meaning
given in the Credit Agreement. Payments of principal and interest shall be
computed on the bases set forth in the Credit Agreement and shall be payable as
follows: (i) from and after the Initial Funding Date and until this Note is
repaid in full, Coupon Interest for each Calendar Quarter (or part thereof)
shall be payable quarterly on the Quarterly Payment Date, (ii) from and after
the Initial Amortization Date, principal shall be payable quarterly on the
Quarterly Payment Date in the amount equal to the Principal Payment for such
quarter set forth in the Credit Agreement, (iii) Late Payment Rate Interest
shall be payable immediately upon accrual, and (iv) the outstanding principal
balance shall be payable on the Maturity Date. Payments of principal and
interest are to be made in lawful money of the United States of America in
immediately available funds.

          This Note is issued pursuant to the Credit Agreement and is secured by
and entitled to the benefits thereof.  This Note is also secured by certain of,
and entitled to the benefits provided in, the other Loan Documents (by the terms
of which agreements the Holder hereof, by its acceptance hereof, agrees to be
bound), in each case to the extent provided in said agreements.

          All principal under and interest on this Note shall be payable without
deduction or withholding for or on account of any present or future taxes,
duties, fees or other charges levied or imposed on this Note or the Holder by
the Commonwealth of Australia or any political subdivision or taxing authority
thereof or therein.  If the Promisor is required by law to make any such
deduction or withholding, it will pay the Holder such additional amounts as may
be necessary so that every net payment of principal of and interest on the Note
received by the

<PAGE>

Holder will not be less than the amount provided in the Credit Agreement to be
then due and payable.

          THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS, AND
TRANSFER OF THIS NOTE IS SUBJECT TO RESTRICTIONS SET FORTH IN THE CREDIT
AGREEMENT.

          Subject to the terms and conditions set forth in the Credit Agreement,
upon surrender of this Note, duly endorsed, or accompanied by a written
instrument of transfer or assignment or request for reissuance, duly executed by
the registered Holder hereof or such Holder's attorney duly authorized in
writing, one or more new Notes for a like principal amount will be issued to,
and, at the option of the Holder, registered in the name of, such Holder or the
designated transferee(s) or assignee(s).  Promisor may deem and treat the person
in whose name this Note is registered as the Holder and owner hereof for the
purpose of receiving payments and for all other purposes whatsoever.

          If an Event of Default shall occur and be continuing, the principal of
this Note may, under certain circumstances, become or be declared due and
payable in the manner and with the effect provided in the Credit Agreement.

          This Note shall be binding upon the successors and assigns of the
Promisor and shall inure to the benefit of the successors and assigns of the
Holder.

          This Note shall be governed by and construed in accordance with the
laws of the State of New York, United States of America.  Promisor hereby
submits to the nonexclusive jurisdiction of the state and federal courts sitting
in the State of New York and County of New York for the purposes of all legal
proceedings arising out of or relating to this Note or the transactions
contemplated hereby.  Promisor irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such proceeding brought in such court and any claim that any
such proceeding brought in such a court has been brought in an inconvenient
forum.

                              TIPPERARY CORPORATION, a Texas corporation

                              By:______________________________________________
                              Name:   David L. Bradshaw
                              Title:  President

                                       2
<PAGE>

                                   EXHIBIT L

                        REQUEST FOR INITIAL LOAN ADVANCE

<PAGE>

                                   EXHIBIT M

                      REQUEST FOR ADDITIONAL LOAN ADVANCE

          Reference is made to that certain First Amended and Restated Credit
Agreement dated as of February 2, 2001, amending and restating that certain
Credit Agreement dated as of April 28, 2000 (as from time to time amended), by
and among TIPPERARY CORPORATION, a Colorado corporation ("Borrower"), TIPPERARY
OIL & GAS (AUSTRALIA) PTY. LTD, a Queensland corporation ("TOGA"), and LENDERS
that are party thereto, TCW ASSET MANAGEMENT COMPANY, a California corporation
("TAMCO"), as Agent, and TAMCO, as Collateral Agent.  Terms which are defined in
the Credit Agreement are used herein with the meanings given them in the Credit
Agreement.

          Pursuant to the terms of the Credit Agreement, Borrower hereby
requests the Lenders to make an Additional Loan Advance to Borrower in the
principal amount of $________ and specifies [__________], as the date Borrower
desires for the Lenders to make such Additional Loan Advance and to deliver to
Borrower the proceeds thereof, by wire transfer to the following:

       Tipperary Corporation

       Acct # ______________________

       [Bank]_______________________

       [City, State] _______________

       ABA # _______________________

          To induce the Lenders to make such Additional Loan Advance, Borrower
hereby represents, warrants, acknowledges, and agrees that:

          The officer of Borrower signing this instrument is the duly elected,
     qualified and acting officer of Borrower as indicated below such officer's
     signature hereby, having all necessary authority to act for Borrower in
     making the request herein contained.

          All representations and warranties made by Borrower, TOGA, or each
     Related Person in any Loan Document are true and correct on and as of the
     date hereof as if such representations and warranties had been made as of
     the date hereof.

<PAGE>

          There does not exist on the date hereof any condition or event which
     constitutes a Default which has not been waived in writing by Collateral
     Agent, Agent and the Lenders; nor will any such Default exist upon
     Borrower's receipt and application of the AdditionalLoan Advance requested
     hereby.  Borrower will use the Additional Loan Advance hereby requested in
     compliance with Section 2.4 of the Credit Agreement.

          Except to the extent waived in writing by Collateral Agent, Agent and
     the Lenders, Borrower, TOGA and each Related Person have performed and
     complied with all agreements and conditions required in the Loan Documents
     to be performed or complied with by it on or prior to the date hereof, and
     each of the conditions precedent to Additional Loan Advance contained in
     the Credit Agreement shall be satisfied as of the date thereof.

          The Loan Documents have not been modified, amended or supplemented by
     any unwritten representations or promises, by any course of dealing, or by
     any other means not provided for in the Credit Agreement.

          The person signing this instrument hereby certifies, that, to the best
of [his] knowledge after due inquiry, the above representations, warranties,
acknowledgements, and agreements of Borrower are true, correct and complete.

          IN WITNESS WHEREOF, this instrument is executed as of _________, 2001.

                              TIPPERARY CORPORATION, a Texas corporation

                              By:______________________________________________
                                 Name:_________________________________________
                                 Title:________________________________________

ACKNOWLEDGED:

TCW ASSET MANAGEMENT COMPANY, a
California corporation as Agent for the Lenders
party to the Credit Agreement

By:______________________________________________
   Name:_________________________________________
   Title:________________________________________

                                       2
<PAGE>

                                   EXHIBIT N

                                   [Deleted]
<PAGE>

                                   EXHIBIT O

             FORM OF LETTER DIRECTING PAYMENT TO COLLATERAL ACCOUNT

              [TIPPERARY OIL & GAS (AUSTRALIA) PTY LTD LETTERHEAD]

[Purchaser Address]

Ladies and Gentlemen:

     We hereby irrevocably authorize and direct you to make all payments owed by
you to us in connection with that certain Operating Agreement dated May 15,
1992, as amended, among Tri-Star Petroleum Company, as operator, and other
parties thereto, or otherwise owned by you, payable to Tipperary Oil & Gas
(Australia) Pty Ltd and forward said payments directly by (i) mail to
[_____________________________________________________] or (ii) wire transfer to
[_____________________________________________].  The instructions set forth
herein are irrevocable and are not subject to modification in any manner unless
you are so notified in writing and said writing is executed by both TCW Asset
Management Company and the undersigned.

                              Very truly yours,

                              TIPPERARY OIL & GAS (AUSTRALIA) PTY
                              LTD (ACN 077 536 871), a Queensland corporation

                              By:_____________________________________________
                                 Name:________________________________________
                                 Title:_______________________________________
<PAGE>

                                   EXHIBIT P

                        OMNIBUS CERTIFICATE OF SECRETARY

          I, __________________________, do hereby certify that I am the duly
elected, qualified and acting Secretary of Tipperary Corporation, a Texas
corporation (the "Borrower"), and that, in such capacity, I am authorized to
certify on behalf of the Borrower to TCW Asset Management Company, a California
corporation ("Tamco"), acting in the capacity of "Collateral Agent" and "Agent,"
pursuant to that certain First Amended and Restated Credit Agreement dated as of
February 2, 2001, amending and restating that certain Credit Agreement dated as
of April 28, 2000 (the "Credit Agreement"), by and among the Borrower, Tamco, in
the capacities set forth therein, and the other parties thereto that:

          1.  Attached hereto as Exhibit A are true, correct and complete copies
              of the Articles of Incorporation of the Borrower, and all
              amendments thereto, certified by the _______________, and as in
              effect on the date hereof.

          2.  Attached hereto as Exhibit B are true, correct and complete copies
              of the Bylaws of the Borrower, and all amendments thereto,
              certified by the _______________, and as in effect on the date
              hereof.

          3.  Attached hereto as Exhibit C are true, correct and complete copy
              of the unanimous written consent of the Board of Directors of the
              Borrower, approving the Loan Documents (as defined in the Credit
              Agreement) and the transactions contemplated in the Loan
              Documents, authorizing the execution, delivery and performance by
              the Borrower of the Loan Documents to which it is a party and the
              consummation of the transactions contemplated therein, which
              resolutions have not been revoked, modified, amended or rescinded
              and are still in full force and effect on the date hereof.

          4.  The below-named persons have been duly elected and qualified and
              on ____________, _____, were and at all time subsequent thereto,
              including the date hereof, have been officers of the Borrower,
              holding the offices indicated opposite their respective names, and
              the signatures set forth opposite their respective names are their
              genuine signatures.

              Name                 Office                 Signature
              ----                 ------                 ---------

              __________________   ____________________   ____________________
              __________________   ____________________   ____________________

<PAGE>

          DATED AND EFFECTIVE as of this _____ day of February, 2001.

                              TIPPERARY CORPORATION, a Texas corporation

                              By:______________________________________________
                                 Name:_________________________________________
                                 Title:________________________________________

          The undersigned hereby certifies that _____________ who executed the
foregoing certificate is the duly elected ______________ of the Borrower, and
the signature set forth above his name is his genuine signature.

                                 ______________________________________________
                                 Name:_________________________________________
                                 Title: [President]

                                       2
<PAGE>

                                   EXHIBIT Q

                             COMPLIANCE CERTIFICATE

          The undersigned, _____________________, the duly elected, qualified
and acting President of TIPPERARY CORPORATION, a Texas corporation, hereby
certifies to TRUST COMPANY OF THE WEST, a California trust company, TCW ASSET
MANAGEMENT COMPANY, a California corporation, and TCW DEBT AND ROYALTY FUND VI,
L.P., a California limited partnership, in connection with that certain First
Amended and Restated Credit Agreement dated as of February 2, 2001, amending and
restating that certain Credit Agreement dated as of April 28, 2000, by and among
said aforementioned parties, in the capacities set forth therein, and the other
parties thereto that:

                    1.  All representations and warranties made by it in any
          Loan Document shall be true in all material respects on and as of the
          date hereof (except to the extent that the facts upon which such
          representations are based (i) have been changed by the extension of
          credit hereunder and (ii) are true and correct only when taken
          together with all other representations and warranties thereof in any
          Loan Document previously delivered) as if such representations and
          warranties had been made as of the date hereof.

                    2.  No Default exists at the date hereof.

                    3.  No Material Adverse Effect as described in Section
          3.2(c) of the Credit Agreement has occurred since the date of the
          Credit Agreement.

                    4.  It has performed and complied in all material respects
          with all agreements and conditions required in the Loan Documents to
          be performed or complied with by it on or prior to the date hereof.

          Capitalized terms used herein but not otherwise defined shall have the
meanings ascribed thereto in the Credit Agreement.

          DATED AND EFFECTIVE as of this _____ day of February, 2001.

                              TIPPERARY CORPORATION, a Texas corporation

                              By:______________________________________________
                                Name:__________________________________________
                                Title:  [President]

<PAGE>

                                  EXHIBIT R-1

                         OPINION OF AUSTRALIAN COUNSEL

<PAGE>

                                  EXHIBIT R-2

                          OPINION OF NEW YORK COUNSEL

<PAGE>

                                  EXHIBIT R-3

                            OPINION OF TEXAS COUNSEL

<PAGE>

                                   EXHIBIT S

                             COLLATERAL PROPERTIES

1. PL 90 (Petroleum Lease)

   Principal Holder: Tri-Star Petroleum Company
   Location: Fairview Field

2. PL 91 (Petroleum Lease)

   Principal Holder: Tri-Star Petroleum Company
   Location: Fairview Field

3. PL 92 (Petroleum Lease)

   Principal Holder: Tri-Star Petroleum Company
   Location: Fairview Field

4. PL 99 (Petroleum Lease)

   Principal Holder: Tri-Star Petroleum Company
   Location: Fairview South Extended

5. PL 100 (Petroleum Lease)

   Principal Holder:  Tri-Star Petroleum Company
   Location:  Fairview Field

6. ATP 526 (Authority to Prospect)

   Principal Holder: Tri-Star Petroleum Company
   Location: North east of Injune (Bowen/Surat Basins)

7. ATP 655 (Authority to Prospect)

   Principal Holder: Tipperary Corporation
   Location: Surrounding Injune (Bowen/Surat Basins)

8. ATP 675 (Authority to Prospect)

   Principal Holder: Tipperary Corporation
   Location: North west of Injune (Bowen/Surat Basins)

<PAGE>

Operating Agreement between Tri-Star Petroleum Company, Tipperary Oil & Gas
(Australia) Pty Ltd and the Comet Ridge Participants dated May 15, 1992, as
amended from time to time.

<PAGE>

                                   EXHIBIT T

                        SUPPLEMENT TO ROYALTY AGREEMENTExhibit 10.54

                       FIFTH AMENDMENT TO CREDIT AGREEMENT

     CROSSMANN COMMUNITIES,  INC., an Indiana corporation (the "Borrower"), BANK
ONE, INDIANA, NA, a national banking association, individually and as Agent (the
"Agent") for the Lenders (the  "Lenders") who are parties to that certain Credit
Agreement dated as of April 1, 1999, as amended (collectively, the "Agreement"),
and the Lenders, agree to further amend the Agreement by this Fifth Amendment to
Credit Agreement (the "Amendment") as follows.

     1.   DEFINITIONS.   The  definitions  of  "Fifth   Amendment,   "  "Hedging
Obligations,"  "Non-Current  Subsidiary" and "Unconsolidated  Joint Venture" are
hereby  added  to the  Article  I of  the  Agreement,  and  the  definitions  of
"Applicable Spread," "Commitment,"  "Indebtedness," "Facility Termination Date,"
"Fixed  Charges,"  "Interest  Period,"  "Required  Lenders,"  and  "Consolidated
Tangible Net Worth"  appearing  in Article I are hereby  amended and restated in
their respective entireties as follows:

     "Applicable Spread" means that number of percentage points to be taken into
account in  determining  the per annum rate at which interest will accrue on the
Revolving  Loan  based on the  Eurodollar  Base  Rate or  Alternative  Base Rate
determined by reference of the ratio of the  Borrower's  Total Debt to its Total
Capitalization in accordance with the following table:

<TABLE>
<CAPTION>
                                                              Applicable Spread
Ratio of Total Debt to                         Alternate                  Eurodollar Base Rate
  Total Capitalization                         Base Rate         (1,2,3, or 6 month)     (12 month)

<S>                                             <C>                   <C>                  <C>
Less than .33:1.00                              -50 b.p.              +130 b.p.            +140 b.p.

Equal to or greater than .33:1.00               -25 b.p.              +145 b.p.            +155 b.p.
   but less than or equal to .50:1.00

Greater  than .50:1.00                            0 b.p.              +160 b.p.            +170 b.p.
</TABLE>

     The  Applicable  Spread shall be  determined  on the basis of the financial
statements  of the  Borrower  for each fiscal  quarter  furnished to the Lenders
pursuant to the requirements of Section 6.1(ii) with prospective  effect for the
following  fiscal  quarter.  Interest  will  accrue and be payable in any fiscal
quarter on the basis of Applicable  Spread in effect during the preceding fiscal
quarter  until an  adjustment  is made  under the terms of this  provision.  The
Applicable  Spread  shall be adjusted on the first  interest  payment date which
follows  receipt by the  Lenders  of the  financial  statements  upon which such

<PAGE>

adjustment  is based.  In the  event  that the  Borrower  fails to  deliver  the
financial statements and compliance  certificates required under Section 6.1(ii)
for any month which ends a fiscal quarter,  then the Applicable  Spread shall be
the  largest  spread  shown on the  above  table  from the date  such  financial
statements were required to be delivered  until the first interest  payment date
which follows delivery to the Lenders of such financial statements.  It is noted
that the above table provides an Applicable  Spread for a ratio of Total Debt to
Total  Capitalization  greater than that which is  permitted  under the terms of
Section 6.18.3 hereof.  For the avoidance of doubt,  it is agreed that it is the
intent of the parties  that the Lenders  shall be free to exercise  all remedies
otherwise  provided  for in this  Agreement  in the event of a violation  of the
Borrower of the covenants stated in Section 6.18.3,  notwithstanding the accrual
of  interest  upon  the  Loan  at a rate  determined  in  accordance  with  this
definition.   As  used  herein,  "b.p."  means  a  basis  point,  which  is  one
one-hundredth of one percent.

     "Consolidated   Tangible  Net  Worth"   means,   as  of  the  date  of  the
determination,  the  consolidated  shareholders'  equity of the Borrower and its
Current Subsidiaries, less any goodwill, patents, trademarks, trade secrets, and
any other assets which would be classified  as  intangible  assets in accordance
with Agreement Accounting Principles, and less the Investment of the Borrower or
any Current Subsidiary in all Non-Current Subsidiaries.

     "Facility  Termination  Date" means April 1, 2004,  or any earlier  date on
which the  Aggregate  Commitment  is  reduced  to zero or  otherwise  terminated
pursuant to the terms hereof.

     "Fifth Amendment" means that agreement  entitled "Fifth Amendment to Credit
Agreement" entered into among the Borrower, the Lenders, and the Agent effective
as of May 4, 2001.

     "Fixed  Charges"  means,  for any  period,  the sum  of:  (i)  Consolidated
Interest Expense,  (ii) any interest capitalized during such period, (iii) lease
expense incurred in connection with the  sale/leaseback of model homes, and (iv)
rent  expense of the  Borrower  and the  Current  Subsidiaries  determined  on a
consolidated basis in accordance with Agreement Accounting Principles.

     "Hedging  Obligations"  means any and all obligations of a Person,  whether
absolute  or  contingent,  and  howsoever  and  when  soever  created,  arising,
evidenced or acquired  (including  all renewals,  extensions  and  modifications
thereof and substitutions  therefor) under (i) any and all agreements,  devices,
or arrangements designed to protect at least one of the parties thereto from the
fluctuations  of interest  rates,  commodity  prices,  exchange rates or forward
rates applicable to such party's assets,  liabilities or exchange  transactions,
including,  but not limited to,  dollar-denominated  or cross-currency  interest
rate exchange agreements,  forward currency exchange  agreements,  interest rate
cap or collar  protection  agreements,  forward rate  currency or interest  rate
options,  puts and  warrants,  and (ii) any and all  cancellations,  buy  backs,
reversals, terminations or assignments of any of the foregoing.

                                       2
<PAGE>

     "Indebtedness" of a Person means such Person's (i) obligations for borrowed
money,  including  capital lease  obligations (ii) obligations  representing the
deferred  purchase  price of Property or services  (other than accounts  payable
arising  in the  ordinary  course of such  Person's  business  payable  on terms
customary in the trade), (iii) obligations,  whether or not assumed,  secured by
Liens  or  payable  out of the  proceeds  or  production  from  Property  now or
hereafter owned or acquired by such Person, (iv) obligations which are evidenced
by notes, acceptances,  or other instruments,  (v) obligations of such Person to
purchase  securities or other Property  arising out of or in connection with the
sale  of  the  same  or  substantially  similar  securities  or  Property,  (vi)
Capitalized Lease Obligations and (vii)  reimbursement and all other obligations
in connection with letters of credit including the Letters of Credit, (viii) all
guaranties of such Person of the indebtedness of any other person,  (ix) the net
liabilities  of all  Hedging  Obligations,  and (x)  any  other  obligation  for
borrowed  money or  other  financial  accommodation  which  in  accordance  with
Agreement   Accounting   Principles  would  be  shown  as  a  liability  on  the
consolidated balance sheet of such Person.

     "Interest Period" means, with respect to a Eurodollar  Advance, a period of
one, two,  three six or twelve  months  commencing on a Business Day selected by
the Borrower  pursuant to this Agreement.  Such Interest Period shall end on the
day which  corresponds  numerically to such date one, two, three,  six or twelve
months  thereafter,  provided,  however,  that if there  is no such  numerically
corresponding  day in such next,  second,  third,  sixth or  twelfth  succeeding
month,  such  Interest  Period shall end on the last  Business Day of such next,
second,  third,  sixth or twelfth  succeeding month. If an Interest Period would
otherwise end on a day which is not a Business  Day, such Interest  Period shall
end on the next succeeding  Business Day, provided,  however,  that if said next
succeeding  Business Day falls in a new calendar  month,  such  Interest  Period
shall end on the immediately preceding Business Day.

     "Non-Current  Subsidiary"  means a Subsidiary of the Borrower which has not
delivered a Guaranty or otherwise  fulfilled all of the  requirements of Section
4.3 in order to become a Current Subsidiary.

     "Required  Lenders" means three (3) or more Lenders having in the aggregate
at least 55.56% of the Aggregate Commitment, or, if the Aggregate Commitment has
been  terminated,  three (3) or more Lenders  holding in the  aggregate at least
55.56% of the aggregate unpaid principal amount of all outstanding Advances. For
purposes hereof, the aggregate  outstanding  principal balance of the Swing Line
Loan at the time of the  determination  of the Required  Lenders shall be deemed
allocated  to the Lenders  ratably in  accordance  with the  relation  that each
Lender's Commitment bears to the Aggregate Commitment.

     "Unconsolidated  Joint Venture" means a joint venture partnership formed by
the  Borrower  or  any  Current  Subsidiary  and a  third  party  which  is  not
consolidated with the Borrower for financial reporting purposes.

     All other terms defined in the Agreement and used in this  Amendment  shall
have their respective  meanings stated in the Agreement unless otherwise defined
herein.

                                       3
<PAGE>

     2. DEBT.  section 6.10 of the  Agreement is hereby  amended and restated in
its entirety as follows:

     6.10. Debt. Neither the Borrower nor any Current Subsidiary shall incur nor
permit to exist any  Indebtedness  in excess of  $500,000.00,  in the aggregate,
except:

     (i)       to the Lenders under this Agreement;

     (ii)      to the holders of the Senior Notes;

     (iii)     for  standby  letters  of  credit  issued by  affiliate  national
               banking  associations of the Lenders pursuant to the requirements
               of local  municipalities  for  development  projects  outside  of
               Indianapolis, Indiana;

     (iv)      for seller financing of the future acquisition of unimproved real
               estate by the Borrower or by a Current Subsidiary,  provided that
               no Default or Unmatured Default exists and that such financing is
               unsecured  or is  secured  only by the  real  estate  to which it
               relates and is  subordinated  to the Obligations and has received
               the Required  Lenders' prior written consent,  which shall not be
               unreasonably withheld;

     (v)       indebtedness  related to  mortgages  assumed by the Borrower or a
               Current  Subsidiary on residential  real estate acquired from its
               customers  in the ordinary  course of business  contemporaneously
               with the sale of a new  residence by the Borrower or such Current
               Subsidiary  to  such  customer,   provided  that  no  Default  or
               Unmatured   Default  exists  and  that  the  assumption  of  such
               indebtedness  shall  not  result  in a  Default  or an  Unmatured
               Default;

     (vi)      for those existing obligations disclosed on the Schedule attached
               hereto as Schedule 6.10;

     (vii)     indebtedness  of  Unconsolidated  Joint  Ventures  which  is  not
               guaranteed by the Borrower or any Current Subsidiary; and

     (viii)    Hedging Obligations;

provided,  however,  that the  amount  of all  such  indebtedness  described  in
paragraphs (iv), (v), (vi), and (vii) of this Section 6.10 together with the net
liability of all Hedging  Obligations  shall at no time exceed in the  aggregate
five percent (5%) of Total Capitalization.

                                       4
<PAGE>

     3.   MERGERS,   CONSOLIDATIONS,   SALES,   ACQUISITION   OR   FORMATION  OF
SUBSIDIARIES.  Section 6.14 of the  Agreement is hereby  amended and restated in
its entirety as follows:

               6.14. Mergers, Consolidations, Sales, Acquisition or Formation of
          Subsidiaries.  Neither the Borrower nor any Current  Subsidiary  shall
          (i) be a party to any  consolidation  or to any merger or purchase the
          capital stock of or otherwise acquire any equity interest in any other
          business  entity,  except  for  investment  purposes  only in  readily
          marketable  securities  where the aggregate  amount of equity interest
          held is less  than  ten  percent  (10%)  of the  voting  power  of the
          acquired  party;  (ii) acquire any material  part of the assets of any
          other  business  entity,  except in the  ordinary  course of business;
          (iii)  except in the  ordinary  course of  business,  sell,  transfer,
          convey,  lease or otherwise  dispose of all or any substantial part of
          the assets of the Borrower or of the Current Subsidiaries,  except for
          sale/leaseback  transactions  to finance model homes;  or (iv) sell or
          assign with or without  recourse any  receivable;  provided,  however,
          that the Borrower may consolidate or merge with any other  corporation
          if the surviving or continuing  corporation  shall be the Borrower and
          at the time of such  consolidation  or merger and after giving  effect
          thereto no Default or  Unmatured  Default  shall have  occurred  or be
          continuing.  For purposes of the preceding sentence,  a sale, lease or
          other disposition of assets shall be deemed to be a "substantial part"
          of the assets of the Borrower or of a Current  Subsidiary  if the book
          value of such assets, when added to the book value of all other assets
          sold,  leased or otherwise  disposed by the Borrower  and/or a Current
          Subsidiary (other than in the ordinary course of business), during the
          12-month  period  ending  with the date of such  sale,  lease or other
          disposition,  exceeds five percent (5%) of Total Assets.  The Borrower
          shall not cause to be created or  otherwise  acquire any  Subsidiaries
          unless  within  thirty (30)  calendar  days after such  Subsidiary  is
          formed  or  acquired  by the  Borrower  it  either  becomes  a Current
          Subsidiary for all purposes of this Agreement  pursuant to Section 4.3
          hereof,  or such  requirement  is waived by the  Required  Lenders  in
          writing prior to the creation or acquisition of such Subsidiary by the
          Borrower.

     4.  FINANCIAL  COVENANTS.  A new Section  6.18.2 of the Agreement is hereby
amended and restated in its entirety as follows:

               6.18.2.  Consolidated  Tangible Net Worth.  Commencing  as of the
          date of the Fifth Amendment,  the Borrower shall maintain at all times
          its Consolidated Tangible Net Worth at a level not less than an amount
          equal to the sum of (i) One  Hundred  Fifty-Eight  Million  and 00/100
          Dollars   ($158,000,000.00)   plus  (ii)   fifty   percent   (50%)  of
          Consolidated  Net Income  determined  on a  cumulative  basis for each
          fiscal quarter ending on and after December 31, 2000;  provided,  that
          for the  purposes  of the  foregoing  calculation,  in the event  that
          Consolidated  Net  Income  is a  deficit  figure  for any such  fiscal
          quarter,  Consolidated  Net Income for such  fiscal  quarter  shall be
          deemed to be zero and,  accordingly,  shall not  reduce  the amount of
          Consolidated  Tangible Net Worth required to be maintained pursuant to
          this  Section,  plus  (iii)  one  hundred  percent  (100%)  of the net
          proceeds  received by the Borrower from any capital stock issued after
          December 31, 2000.

                                       5
<PAGE>

     5.  REPRESENTATIONS AND WARRANTIES.  To induce the Agent and the Lenders to
enter into this Amendment,  the Borrower  affirms that the  representations  and
warranties  contained  in the  Agreement  are  correct  as of the  date  of this
Amendment, except that (i) they shall be deemed also to refer to this Amendment,
as well as all documents named herein, and (ii) Section 5.4 shall be deemed also
to refer to the most recent  audited and unaudited  financial  statements of the
Borrower delivered to the Lenders.

     6. EVENTS OF DEFAULT.  The Borrower  certifies that no Default or Unmatured
Default under the Agreement,  as amended by this Amendment,  has occurred and is
continuing as of the execution date of this Amendment  except as shall have been
expressly waived herein.

     7. CONDITIONS  PRECEDENT.  As conditions  precedent to the effectiveness of
this  Amendment,  the Agent shall first receive with  sufficient  copies for the
Lenders the following  contemporaneously with the execution and delivery of this
Amendment,  each duly executed,  dated and in form and substance satisfactory to
the Lenders:

     (i)       A certified copy of a Resolution of the Board of Directors of the
               Borrower  authorizing  the execution,  delivery and  performance,
               respectively,  of this Amendment,  its Promissory Note payable to
               the order of Bank One, and the other Loan Documents  provided for
               in this Amendment to which the Borrower is a party.

     (ii)      A  certificate  of the Secretary of the Board of Directors of the
               Borrower   certifying  the  names  of  the  officer  or  officers
               authorized to sign this  Amendment  and the other Loan  Documents
               provided for in this  Amendment to which the Borrower is a party,
               together  with a  sample  of the  true  signature  of  each  such
               officer.

     (iii)     A certified copy of a Resolution of General  Partner of Crossmann
               Communities   Partnership,   an  Indiana   general   partnership,
               authorizing    the   execution,    delivery   and    performance,
               respectively,  of its Reaffirmation of Guaranty Agreement and the
               other Loan  Documents  provided  for in this  Amendment  to which
               Crossmann Communities Partnership is a party.

     (iv)      A  certificate  of the General  Partner of Crossmann  Communities
               Partnership  certifying  the  names of the  officer  or  officers
               authorized to sign its  Reaffirmation  of Guaranty  Agreement and
               the other Loan Documents  provided for in this Amendment to which
               Crossmann  Communities  Partnership  is a party,  together with a
               sample  of  the  true  signature  of  each  such  officer.

                                       6
<PAGE>

     (v)       A certified  copy of a  Resolution  of the Board of  Directors of
               Deluxe  Homes  of  Lafayette,   Inc.,  an  Indiana   corporation,
               authorizing    the   execution,    delivery   and    performance,
               respectively,  of its Reaffirmation of Guaranty Agreement and the
               other Loan  Documents  provided  for in this  Amendment  to which
               Deluxe Homes of Lafayette, Inc. is a party.

     (vi)      A  certificate  of the  Secretary  of the Board of  Directors  of
               Deluxe  Homes of  Lafayette,  Inc.  certifying  the  names of the
               officer  or  officers  authorized  to sign its  Reaffirmation  of
               Guaranty  Agreement and the other Loan Documents  provided for in
               this  Amendment  to which Deluxe  Homes of  Lafayette,  Inc. is a
               party,  together with a sample of the true signature of each such
               officer.

     (vii)     A certified  copy of a  Resolution  of the Board of  Directors of
               Crossmann   Communities  of  Ohio,  Inc.,  an  Ohio  corporation,
               authorizing    the   execution,    delivery   and    performance,
               respectively,  of its Reaffirmation of Guaranty Agreement and the
               other Loan  Documents  provided  for in this  Amendment  to which
               Crossmann Communities of Ohio, Inc. is a party.

     (viii)    A  certificate  of the  Secretary  of the Board of  Directors  of
               Crossmann  Communities of Ohio, Inc.  certifying the names of the
               officer  or  officers  authorized  to sign its  Reaffirmation  of
               Guaranty  Agreement and the other Loan Documents  provided for in
               this Amendment to which Crossmann  Communities of Ohio, Inc. is a
               party,  together with a sample of the true signature of each such
               officer.

     (ix)      A certified  copy of a  Resolution  of the Board of  Directors of
               Merit  Realty,  Inc.,  an Indiana  corporation,  authorizing  the
               execution,   delivery  and  performance,   respectively,  of  its
               Reaffirmation of Guaranty  Agreement and the other Loan Documents
               provided for in this  Amendment to which Merit Realty,  Inc. is a
               party.

     (x)       A certificate of the Secretary of the Board of Directors of Merit
               Realty,  Inc.  certifying  the names of the  officer or  officers
               authorized to sign its  Reaffirmation  of Guaranty  Agreement and
               the other Loan Documents  provided for in this Amendment to which
               Merit Realty, Inc. is a party, together with a sample of the true
               signature of each such officer.

     (xi)      A certified  copy of a  Resolution  of the Board of  Directors of
               Crossmann   Mortgage   Corporation,   an   Indiana   corporation,
               authorizing    the   execution,    delivery   and    performance,
               respectively,  of its Reaffirmation of Guaranty Agreement and the
               other Loan  Documents  provided  for in this  Amendment  to which
               Crossmann Mortgage Corporation is a party.

                                       7
<PAGE>

     (xii)     A  certificate  of the  Secretary  of the Board of  Directors  of
               Crossmann  Mortgage  Corporation  certifying  the  names  of  the
               officer  or  officers  authorized  to sign its  Reaffirmation  of
               Guaranty  Agreement and the other Loan Documents  provided for in
               this  Amendment  to which  Crossmann  Mortgage  Corporation  is a
               party,  together with a sample of the true signature of each such
               officer.

     (xiii)    A certified  copy of a  Resolution  of the Board of  Directors of
               Deluxe Aviation,  Inc., an Indiana  corporation,  authorizing the
               execution,   delivery  and  performance,   respectively,  of  its
               Reaffirmation of Guaranty  Agreement and the other Loan Documents
               provided for in this Amendment to which Deluxe Aviation,  Inc. is
               a party.

     (xiv)     A  certificate  of the  Secretary  of the Board of  Directors  of
               Deluxe  Aviation,  Inc.  certifying  the names of the  officer or
               officers   authorized  to  sign  its  Reaffirmation  of  Guaranty
               Agreement  and the  other  Loan  Documents  provided  for in this
               Amendment to which  Deluxe  Aviation,  Inc. is a party,  together
               with a sample of the true signature of each such officer.

     (xv)      A certified  copy of a  Resolution  of the Board of  Directors of
               Cutter  Homes,  Ltd.,  a Kentucky  corporation,  authorizing  the
               execution,   delivery  and  performance,   respectively,  of  its
               Reaffirmation of Guaranty  Agreement and the other Loan Documents
               provided for in this  Amendment to which Cutter Homes,  Ltd. is a
               party.

     (xvi)     A  certificate  of the  Secretary  of the Board of  Directors  of
               Cutter  Homes,  Ltd.  certifying  the  names  of the  officer  or
               officers   authorized  to  sign  its  Reaffirmation  of  Guaranty
               Agreement  and the  other  Loan  Documents  provided  for in this
               Amendment to which Cutter Homes, Ltd. is a party, together with a
               sample of the true signature of each such officer.

     (xvii)    A certified  copy of a  Resolution  of the  Members of  Crossmann
               Communities  of  Tennessee,  LLC, a Tennessee  limited  liability
               company,  authorizing  the execution,  delivery and  performance,
               respectively,  of its Reaffirmation of Guaranty Agreement and the
               other Loan  Documents  provided  for in this  Amendment  to which
               Crossmann Communities of Tennessee, LLC is a party.

     (xviii)   A certificate of the Managing Member of Crossmann  Communities of
               Tennessee,  LLC  certifying  the names of the officer or officers
               authorized to sign its  Reaffirmation  of Guaranty  Agreement and
               the other Loan Documents  provided for in this Amendment to which
               Crossmann Communities of Tennessee, LLC is a party, together with
               a sample of the true signature of each such officer.

     (xix)     A certified  copy of a  Resolution  of the Board of  Directors of
               Crossmann  Communities of North Carolina,  Inc., a North Carolina
               corporation, authorizing the execution, delivery and performance,
               respectively,  of its Reaffirmation of Guaranty Agreement and the
               other Loan  Documents  provided  for in this  Amendment  to which
               Crossmann Communities of North Carolina, Inc. is a party.

                                       8
<PAGE>

     (xx)      A  certificate  of the  Secretary  of the Board of  Directors  of
               Crossmann  Communities  of North  Carolina,  Inc.  certifying the
               names  of  the  officer  or  officers   authorized  to  sign  its
               Reaffirmation of Guaranty  Agreement and the other Loan Documents
               provided for in this Amendment to which Crossmann  Communities of
               North  Carolina,  Inc. is a party,  together with a sample of the
               true signature of each such officer.

     (xxi)     A certified  copy of a  Resolution  of the  Members of  Pinehurst
               Builders,  LLC,  a  South  Carolina  limited  liability  company,
               authorizing    the   execution,    delivery   and    performance,
               respectively,  of its Reaffirmation of Guaranty Agreement and the
               other Loan  Documents  provided  for in this  Amendment  to which
               Pinehurst Builders, LLC is a party.

     (xxii)    A certificate of the Managing Member of Pinehurst  Builders,  LLC
               certifying  the names of the  officer or officers  authorized  to
               sign its  Reaffirmation of Guaranty  Agreement and the other Loan
               Documents  provided  for in this  Amendment  to  which  Pinehurst
               Builders,  LLC is a party,  together  with a  sample  of the true
               signature of each such officer.

     (xxiii)   A certified  copy of a  Resolution  of the Board of  Directors of
               Crossmann Management,  Inc., an Indiana corporation,  authorizing
               the execution,  delivery and  performance,  respectively,  of its
               Reaffirmation of Guaranty  Agreement and the other Loan Documents
               provided  for in this  Amendment to which  Crossmann  Management,
               Inc. is a party.

     (xxiv)    A  certificate  of the  Secretary  of the Board of  Directors  of
               Crossmann Management, Inc. certifying the names of the officer or
               officers   authorized  to  sign  its  Reaffirmation  of  Guaranty
               Agreement  and the  other  Loan  Documents  provided  for in this
               Amendment  to  which  Crossmann  Management,  Inc.  is  a  party,
               together  with a  sample  of the  true  signature  of  each  such
               officer.

     (xxv)     A certified  copy of a  Resolution  of the Board of  Directors of
               Crossmann Investments, Inc., an Indiana corporation,  authorizing
               the execution,  delivery and  performance,  respectively,  of its
               Reaffirmation of Guaranty  Agreement and the other Loan Documents
               provided for in this  Amendment to which  Crossmann  Investments,
               Inc. is a party.

     (xxvi)    A  certificate  of the  Secretary  of the Board of  Directors  of
               Crossmann  Investments,  Inc. certifying the names of the officer
               or  officers  authorized  to sign its  Reaffirmation  of Guaranty
               Agreement  and the  other  Loan  Documents  provided  for in this
               Amendment  to  which  Crossmann  Investments,  Inc.  is a  party,
               together  with a  sample  of the  true  signature  of  each  such
               officer.

     (xxvii)   A certified  copy of a  Resolution  of the Board of  Directors of
               Deluxe Homes of Ohio, Inc., an Ohio corporation,  authorizing the
               execution,   delivery  and  performance,   respectively,  of  its
               Reaffirmation of Guaranty  Agreement and the other Loan Documents
               provided  for in this  Amendment  to which  Deluxe Homes of Ohio,
               Inc. is a party.

                                       9
<PAGE>

     (xxviii)  A  certificate  of the  Secretary  of the Board of  Directors  of
               Deluxe Homes of Ohio, Inc. certifying the names of the officer or
               officers   authorized  to  sign  its  Reaffirmation  of  Guaranty
               Agreement  and the  other  Loan  Documents  provided  for in this
               Amendment  to  which  Deluxe  Homes  of  Ohio,  Inc.  is a party,
               together  with a  sample  of the  true  signature  of  each  such
               officer.

     (xxix)    A certified copy of a Resolution of the Members of Trinity Homes,
               LLC,  an  Indiana  limited  liability  company,  authorizing  the
               execution,   delivery  and  performance,   respectively,  of  its
               Reaffirmation of Guaranty  Agreement and the other Loan Documents
               provided for in this Amendment to which Trinity  Homes,  LLC is a
               party.

     (xxx)     A  certificate  of the  Managing  Member of  Trinity  Homes,  LLC
               certifying  the names of the  officer or officers  authorized  to
               sign its  Reaffirmation of Guaranty  Agreement and the other Loan
               Documents  provided for in this Amendment to which Trinity Homes,
               LLC is a party,  together with a sample of the true  signature of
               each such officer.

     (xxxi)    The Promissory Note (Revolving Loan) ($60,000,000.00)  payable to
               the order of Bank One, Indiana,  N.A. in the form attached hereto
               as Exhibit "A."

     (xxxii)   The Promissory Note (Revolving Loan) ($18,750,000.00)  payable to
               the order of  Huntington  National  Bank of  Indiana  in the form
               attached hereto as Exhibit "B."

     (xxxiii)  The Promissory Note (Revolving Loan) ($18,750,000.00)  payable to
               the  order of Fifth  Third  Bank,  Indiana  in the form  attached
               hereto as Exhibit "C."

     (xxxiv)   The Promissory Note (Revolving Loan) ($18,750,000.00)  payable to
               the  order of PNC  Bank,  N.A.  in the form  attached  hereto  as
               Exhibit "D."

     (xxxv)    The Promissory Note (Revolving Loan) ($18,750,000.00)  payable to
               the order of KeyBank  National  Association  in the form attached
               hereto as Exhibit "E."

     (xxxvi)   A Reaffirmation  Guaranty  Agreement from each Current Subsidiary
               in the form of Exhibit "B" attached  hereto,  duly  completed for
               each such Current Subsidiary.

     (xxxvii)  Such other instruments,  agreements, and documents that the Agent
               or any Lender may reasonably require.

                                       10
<PAGE>

     8. EFFECT OF  AMENDMENT.  Except as amended in this  Amendment,  all of the
terms and conditions of the Agreement shall continue unchanged and in full force
and effect together with this Amendment.

     IN WITNESS  WHEREOF,  the Borrower,  the Lenders,  and the Agent,  by their
respective duly authorized officers, have executed and delivered in Indiana this
Fifth Amendment to Credit Agreement as of May 4, 2001.

                           CROSSMANN COMMUNITIES, INC., an Indiana corporation

                           By: /s/ Jennifer A. Holihen
                               -------------------------------------------------
                               Jennifer A. Holihen, Chief Financial Officer,
                                 Treasurer and Secretary

                           9210 North Meridian Street
                           Indianapolis, Indiana 46260

                           Attention:  Jennifer A. Holihen, Chief Financial
                                         Officer, Treasurer and Secretary
                           Telephone:  (317) 843-9514
                           Telecopy:   (317) 571-2210
                           E-mail:     jholihen@croscom.com

                                       11
<PAGE>

Commitments:

$60,000,000.00             BANK ONE, INDIANA, NA, a national banking
    44.44%                   association, individually and as Agent

                           By: /s/ Patrick D. Lease
                               -------------------------------------------------
                               Patrick D. Lease, First Vice President

                               Bank One Center/Circle - Suite 203
                               111 Monument Circle
                               Indianapolis, Indiana 46277

                           Attention:  Patrick D. Lease, First Vice President
                           Telephone:  (317) 321-3844
                           Telecopy:   (317) 321-7647
                           E-mail:     Patrick_D_Lease@EM.FCNBD.com

$18,750,000.00             HUNTINGTON NATIONAL BANK OF INDIANA
    13.89%

                           By: /s/ Russell R. Swan, Jr.
                               -------------------------------------------------
                               Russell R. Swan, Jr., Senior Vice President
                               Capital Center, Suite 1800
                               201 North Illinois Street
                               Indianapolis, Indiana 46204

                           Attention:  Russell R. Swan, Jr., Senior Vice
                                         President
                           Telephone:  (317) 237-2547
                           Telecopy:   (317) 237-2505
                           E-mail:     Russell.Swan@Huntington.com

$18,750,000.00             FIFTH THIRD BANK, INDIANA
    13.89%

                           By: /s/ Jeffrey K. Lockhart
                               -------------------------------------------------
                               Jeffrey K. Lockhart, Vice President

                           Capital Center, North Tower
                           251 North Illinois Street, Suite 1000
                           Indianapolis, Indiana 4604

                           Attention:  Jeffrey K. Lockhart, Vice President
                           Telephone:  (317) 383-2287
                           Telecopy:   (317) 383-2764
                           E-mail:     Jeffrey.Lockhart@53.com

                                       12
<PAGE>

$18,750,000.00             PNC BANK,  N.A.
    13.89%

                           By:  /s/ James A. Harmann
                                ------------------------------------------------
                                James A. Harmann, Vice President

                           201 East Fifth Street, Suite 200
                           Real Estate Finance
                           Cincinnati, Ohio 45201-1198

                           Attention:  James A. Harmann, Vice President
                           Telephone:  (513) 651-8988
                           Telecopy:   (513) 651-8931
                           E-mail:     James.Harmann@pncbank.com

$18,750,000.00             KEYBANK NATIONAL ASSOCIATION
    13.89%

                           By: /s/ Jane E. Butler
                               -------------------------------------------------
                               Jane E. Butler,  Vice President

                           10 West Market Street
                           Indianapolis, Indiana 46204

                           Attention:  Jane E. Butler, Vice President
                           Telephone:  (317) 464-8319
                           Telecopy:   (317) 464-8301
                           E-Mail:     Jane_Butler@keybank.com

                                       13
<PAGE>

                              SCHEDULE OF EXHIBITS

Exhibit "A"    -    Promissory Note (Revolving Loan) ($60,000,000.00)
                    (Bank One, Indiana, NA)

Exhibit "B"    -    Promissory Note (Revolving Loan) ($18,750,000.00)
                    (Huntington National Bank of Indiana)

Exhibit "C"    -    Promissory Note (Revolving Loan) ($18,750,000.00)
                   (Fifth Third Bank, Indiana)

Exhibit "D"    -    Promissory Note (Revolving Loan) ($18,750,000.00)
                    (PNC Bank, N.A.)

Exhibit "E"    -    Promissory Note (Revolving Loan) ($18,750,000.00)
                    (KeyBank National Association)

Exhibit "F"    -    Reaffirmation of Guaranty Agreement (Current Subsidiaries)

                                       14
<PAGE>
                                 PROMISSORY NOTE
                                (Revolving Loan)

                                                  Indianapolis, Indiana
$60,000,000.00                                    Dated: May 4, 2001
                                                  Final Maturity: April 1, 2004

     On or before April 1, 2004 ("Final Maturity"), CROSSMANN COMMUNITIES, INC.,
an Indiana  corporation (the "Maker")  promises to pay to the order of BANK ONE,
INDIANA,  NA, a national  banking  association  (the  "Lender") at the principal
office of BANK ONE, INDIANA, NA, a national banking association (the "Agent") in
Indianapolis,  Indiana,  the principal  sum of Sixty Million and 00/100  Dollars
($60,000,000.00)  or so much of the principal  amount of the Loan represented by
this Note as may be  disbursed  by the  Lender  under  the  terms of the  Credit
Agreement  described below, and to pay interest on the unpaid principal  balance
outstanding from time to time as provided in this Note.

     This Note evidences indebtedness (the "Loan") incurred or to be incurred by
the Maker under a revolving  line of credit  extended to the Maker by the Lender
under a Credit  Agreement  dated as of April 1, 1999 (as  amended,  the  "Credit
Agreement"), entered into by and among the Maker, the Lender, the Agent, and the
other lenders from time to time parties thereto.  All references in this Note to
the Credit  Agreement  shall be construed as references to that  Agreement as it
may be  amended  from  time to  time.  The  Loan is  referred  to in the  Credit
Agreement as the  "Revolving  Loan."  Subject to the terms and conditions of the
Credit  Agreement,  the  proceeds  of the Loan may be  advanced  and  repaid and
re-advanced  until Final Maturity.  The principal amount of the Loan outstanding
from time to time shall be  determined  by reference to the books and records of
the Lender on which all Advances under the Loan and all payments by the Maker on
account of the Loan shall be  recorded.  Such books and records  shall be deemed
prima facie to be correct as to such matters.

     The terms  "Advance" and "Business Day" are used in this Note as defined in
the Credit Agreement.

     Interest on the unpaid principal  balance of the Loan outstanding from time
to time prior to and after maturity will accrue at the rate or rates provided in
the Credit  Agreement.  Prior to  maturity,  accrued  interest  shall be due and
payable on the last  Business Day of each month  commencing on the last Business
Day of the month in which this Note is executed. After maturity,  interest shall
be due and payable as accrued and without demand. Interest will be calculated by
applying  the  ratio  of the  annual  interest  rate  over a year  of 360  days,
multiplied by the outstanding principal balance, multiplied by the actual number
of days the principal balance is outstanding.

     The  entire  outstanding  principal  balance  of this Note shall be due and
payable, together with accrued interest, at Final Maturity. Reference is made to
the Credit  Agreement for  provisions  requiring  prepayment of principal  under
certain  circumstances.  Principal  may be prepaid,  but only as provided in the
Credit  Agreement.  If any  installment  of interest due under the terms of this
Note is not paid within two (2) Business  Days when due,  then the Lender or any
subsequent  holder  of  this  Note  may,  subject  to the  terms  of the  Credit
Agreement, at its option and without notice, declare the entire principal amount
of the Note and all accrued interest  immediately due and payable.  Reference is
made to the Credit  Agreement which provides for acceleration of the maturity of
this Note upon the happening of other "Defaults" as defined therein.

<PAGE>

     All  payments  on account of this Note shall be applied as  provided in the
Credit Agreement.

     The Maker and any endorsers severally waive demand, presentment for payment
and notice of nonpayment of this Note, and each of them consents to any renewals
or extensions of the time of payment of this Note without notice.

     All  amounts  payable  under the terms of this Note shall be  payable  with
expenses of  collection,  including  attorneys'  fees,  and without  relief from
valuation and appraisement laws.

     This Note  supersedes  and  replaces  that  certain  Promissory  Note dated
October 20, 2000,  made by the Maker to the order of the Lender in the principal
amount of $60,000,000.00, with a final maturity date of March 31, 2003.

     This  Note  is  made  under  and  will  be  governed  in all  cases  by the
substantive laws of the State of Indiana,  notwithstanding the fact that Indiana
conflicts of law rules might otherwise  require the substantive  rules of law of
another jurisdiction to apply.

                              CROSSMANN COMMUNITIES, INC.,
                               an Indiana corporation

                              By: /s/ Jennifer A. Holihen
                                  ----------------------------------------------
                                  Jennifer A. Holihen, Chief Financial Officer,
                                    Treasurer and Secretary

<PAGE>

                                 PROMISSORY NOTE
                                (Revolving Loan)

                                                  Indianapolis, Indiana
$18,750,000.00                                    Dated: May 4, 2001
                                                  Final Maturity: April 1, 2004

     On or before April 1, 2004 ("Final Maturity"), CROSSMANN COMMUNITIES, INC.,
an Indiana  corporation (the "Maker") promises to pay to the order of HUNTINGTON
NATIONAL  BANK OF INDIANA (the  "Lender") at the  principal  office of BANK ONE,
INDIANA,  NA, a national  banking  association  (the  "Agent") in  Indianapolis,
Indiana,  the principal sum of Eighteen Million Seven Hundred Fifty Thousand and
00/100 Dollars  ($18,750,000.00)  or so much of the principal amount of the Loan
represented  by this Note as may be  disbursed  by the Lender under the terms of
the  Credit  Agreement  described  below,  and to  pay  interest  on the  unpaid
principal balance outstanding from time to time as provided in this Note.

     This Note evidences indebtedness (the "Loan") incurred or to be incurred by
the Maker under a revolving  line of credit  extended to the Maker by the Lender
under a Credit  Agreement  dated as of April 1, 1999 (as  amended,  the  "Credit
Agreement"), entered into by and among the Maker, the Lender, the Agent, and the
other lenders from time to time parties thereto.  All references in this Note to
the Credit  Agreement  shall be construed as references to that  Agreement as it
may be  amended  from  time to  time.  The  Loan is  referred  to in the  Credit
Agreement as the  "Revolving  Loan."  Subject to the terms and conditions of the
Credit  Agreement,  the  proceeds  of the Loan may be  advanced  and  repaid and
re-advanced  until Final Maturity.  The principal amount of the Loan outstanding
from time to time shall be  determined  by reference to the books and records of
the Lender on which all Advances under the Loan and all payments by the Maker on
account of the Loan shall be  recorded.  Such books and records  shall be deemed
prima facie to be correct as to such matters.

     The terms  "Advance" and "Business Day" are used in this Note as defined in
the Credit Agreement.

     Interest on the unpaid principal  balance of the Loan outstanding from time
to time prior to and after maturity will accrue at the rate or rates provided in
the Credit  Agreement.  Prior to  maturity,  accrued  interest  shall be due and
payable on the last  Business Day of each month  commencing on the last Business
Day of the month in which this Note is executed. After maturity,  interest shall
be due and payable as accrued and without demand. Interest will be calculated by
applying  the  ratio  of the  annual  interest  rate  over a year  of 360  days,
multiplied by the outstanding principal balance, multiplied by the actual number
of days the principal balance is outstanding.

     The  entire  outstanding  principal  balance  of this Note shall be due and
payable, together with accrued interest, at Final Maturity. Reference is made to
the Credit  Agreement for  provisions  requiring  prepayment of principal  under
certain  circumstances.  Principal  may be prepaid,  but only as provided in the
Credit Agreement.

<PAGE>

     If any installment of interest due under the terms of this Note is not paid
within two (2) Business Days when due, then the Lender or any subsequent  holder
of this Note may,  subject to the terms of the Credit  Agreement,  at its option
and  without  notice,  declare the entire  principal  amount of the Note and all
accrued  interest  immediately due and payable.  Reference is made to the Credit
Agreement which provides for  acceleration of the maturity of this Note upon the
happening of other "Defaults" as defined therein.

     All  payments  on account of this Note shall be applied as  provided in the
Credit Agreement.

     The Maker and any endorsers severally waive demand, presentment for payment
and notice of nonpayment of this Note, and each of them consents to any renewals
or extensions of the time of payment of this Note without notice.

     All  amounts  payable  under the terms of this Note shall be  payable  with
expenses of  collection,  including  attorneys'  fees,  and without  relief from
valuation and appraisement laws.

     This Note supersedes and replaces that certain  Promissory Note dated March
31, 2000,  made by the Maker to the order of the Lender in the principal  amount
of $18,750,000.00, with a final maturity date of March 31, 2003.

     This  Note  is  made  under  and  will  be  governed  in all  cases  by the
substantive laws of the State of Indiana,  notwithstanding the fact that Indiana
conflicts of law rules might otherwise  require the substantive  rules of law of
another jurisdiction to apply.

                              CROSSMANN COMMUNITIES, INC.,
                                an Indiana corporation

                              By: /s/ Jennifer A. Holihen
                                  ----------------------------------------------
                                  Jennifer A. Holihen, Chief Financial Officer,
                                    Treasurer and Secretary

<PAGE>

                                 PROMISSORY NOTE
                                (Revolving Loan)

                                                  Indianapolis, Indiana
$18,750,000.00                                    Dated: May 4, 2001
                                                  Final Maturity: April 1, 2004

     On or before April 1, 2004 ("Final Maturity"), CROSSMANN COMMUNITIES, INC.,
an Indiana corporation (the "Maker") promises to pay to the order of FIFTH THIRD
BANK, INDIANA (the "Lender") at the principal office of BANK ONE, INDIANA, NA, a
national  banking  association  (the  "Agent")  in  Indianapolis,  Indiana,  the
principal  sum of Eighteen  Million  Seven  Hundred  Fifty  Thousand  and 00/100
Dollars  ($18,750,000.00)  or so  much  of the  principal  amount  of  the  Loan
represented  by this Note as may be  disbursed  by the Lender under the terms of
the  Credit  Agreement  described  below,  and to  pay  interest  on the  unpaid
principal balance outstanding from time to time as provided in this Note.

     This Note evidences indebtedness (the "Loan") incurred or to be incurred by
the Maker under a revolving  line of credit  extended to the Maker by the Lender
under a Credit  Agreement  dated as of April 1, 1999 (as  amended,  the  "Credit
Agreement"), entered into by and among the Maker, the Lender, the Agent, and the
other lenders from time to time parties thereto.  All references in this Note to
the Credit  Agreement  shall be construed as references to that  Agreement as it
may be  amended  from  time to  time.  The  Loan is  referred  to in the  Credit
Agreement as the  "Revolving  Loan."  Subject to the terms and conditions of the
Credit  Agreement,  the  proceeds  of the Loan may be  advanced  and  repaid and
re-advanced  until Final Maturity.  The principal amount of the Loan outstanding
from time to time shall be  determined  by reference to the books and records of
the Lender on which all Advances under the Loan and all payments by the Maker on
account of the Loan shall be  recorded.  Such books and records  shall be deemed
prima facie to be correct as to such matters.

     The terms  "Advance" and "Business Day" are used in this Note as defined in
the Credit Agreement.

     Interest on the unpaid principal  balance of the Loan outstanding from time
to time prior to and after maturity will accrue at the rate or rates provided in
the Credit  Agreement.  Prior to  maturity,  accrued  interest  shall be due and
payable on the last  Business Day of each month  commencing on the last Business
Day of the month in which this Note is executed. After maturity,  interest shall
be due and payable as accrued and without demand. Interest will be calculated by
applying  the  ratio  of the  annual  interest  rate  over a year  of 360  days,
multiplied by the outstanding principal balance, multiplied by the actual number
of days the principal balance is outstanding.

<PAGE>

     The  entire  outstanding  principal  balance  of this Note shall be due and
payable, together with accrued interest, at Final Maturity. Reference is made to
the Credit  Agreement for  provisions  requiring  prepayment of principal  under
certain  circumstances.  Principal  may be prepaid,  but only as provided in the
Credit Agreement.

     If any installment of interest due under the terms of this Note is not paid
within two (2) Business Days when due, then the Lender or any subsequent  holder
of this Note may,  subject to the terms of the Credit  Agreement,  at its option
and  without  notice,  declare the entire  principal  amount of the Note and all
accrued  interest  immediately due and payable.  Reference is made to the Credit
Agreement which provides for  acceleration of the maturity of this Note upon the
happening of other "Defaults" as defined therein.

     All  payments  on account of this Note shall be applied as  provided in the
Credit Agreement.

     The Maker and any endorsers severally waive demand, presentment for payment
and notice of nonpayment of this Note, and each of them consents to any renewals
or extensions of the time of payment of this Note without notice.

     All  amounts  payable  under the terms of this Note shall be  payable  with
expenses of  collection,  including  attorneys'  fees,  and without  relief from
valuation and appraisement laws.

     This Note supersedes and replaces that certain  Promissory Note dated March
31, 2000,  made by the Maker to the order of the Lender in the principal  amount
of $18,750,000.00, with a final maturity date of March 31, 2003.

     This  Note  is  made  under  and  will  be  governed  in all  cases  by the
substantive laws of the State of Indiana,  notwithstanding the fact that Indiana
conflicts of law rules might otherwise  require the substantive  rules of law of
another jurisdiction to apply.

                              CROSSMANN COMMUNITIES, INC.,
                                an Indiana corporation

                              By: /s/ Jennifer A. Holihen
                                  ----------------------------------------------
                                  Jennifer A. Holihen, Chief Financial Officer,
                                    Treasurer and Secretary

<PAGE>

                                 PROMISSORY NOTE
                                (Revolving Loan)

                                                  Indianapolis, Indiana
$18,750,000.00                                    Dated: May 4, 2001
                                                  Final Maturity: April 1, 2004

     On or before April 1, 2004 ("Final Maturity"), CROSSMANN COMMUNITIES, INC.,
an Indiana  corporation (the "Maker")  promises to pay to the order of PNC BANK,
N.A. (the "Lender") at the principal office of BANK ONE, INDIANA, NA, a national
banking association (the "Agent") in Indianapolis, Indiana, the principal sum of
Eighteen   Million   Seven   Hundred   Fifty   Thousand   and   00/100   Dollars
($18,750,000.00)  or so much of the principal  amount of the Loan represented by
this Note as may be  disbursed  by the  Lender  under  the  terms of the  Credit
Agreement  described below, and to pay interest on the unpaid principal  balance
outstanding from time to time as provided in this Note.

     This Note evidences indebtedness (the "Loan") incurred or to be incurred by
the Maker under a revolving  line of credit  extended to the Maker by the Lender
under a Credit  Agreement  dated as of April 1, 1999 (as  amended,  the  "Credit
Agreement"), entered into by and among the Maker, the Lender, the Agent, and the
other lenders from time to time parties thereto.  All references in this Note to
the Credit  Agreement  shall be construed as references to that  Agreement as it
may be  amended  from  time to  time.  The  Loan is  referred  to in the  Credit
Agreement as the  "Revolving  Loan."  Subject to the terms and conditions of the
Credit  Agreement,  the  proceeds  of the Loan may be  advanced  and  repaid and
re-advanced  until Final Maturity.  The principal amount of the Loan outstanding
from time to time shall be  determined  by reference to the books and records of
the Lender on which all Advances under the Loan and all payments by the Maker on
account of the Loan shall be  recorded.  Such books and records  shall be deemed
prima facie to be correct as to such matters.

     The terms  "Advance" and "Business Day" are used in this Note as defined in
the Credit Agreement.

     Interest on the unpaid principal  balance of the Loan outstanding from time
to time prior to and after maturity will accrue at the rate or rates provided in
the Credit  Agreement.  Prior to  maturity,  accrued  interest  shall be due and
payable on the last  Business Day of each month  commencing on the last Business
Day of the month in which this Note is executed. After maturity,  interest shall
be due and payable as accrued and without demand. Interest will be calculated by
applying  the  ratio  of the  annual  interest  rate  over a year  of 360  days,
multiplied by the outstanding principal balance, multiplied by the actual number
of days the principal balance is outstanding.

     The  entire  outstanding  principal  balance  of this Note shall be due and
payable, together with accrued interest, at Final Maturity. Reference is made to
the Credit  Agreement for  provisions  requiring  prepayment of principal  under
certain  circumstances.  Principal  may be prepaid,  but only as provided in the
Credit Agreement.

<PAGE>

     If any installment of interest due under the terms of this Note is not paid
within two (2) Business Days when due, then the Lender or any subsequent  holder
of this Note may,  subject to the terms of the Credit  Agreement,  at its option
and  without  notice,  declare the entire  principal  amount of the Note and all
accrued  interest  immediately due and payable.  Reference is made to the Credit
Agreement which provides for  acceleration of the maturity of this Note upon the
happening of other  "Defaults"  as defined  therein.  All payments on account of
this Note shall be applied as provided in the Credit Agreement.

     The Maker and any endorsers severally waive demand, presentment for payment
and notice of nonpayment of this Note, and each of them consents to any renewals
or extensions of the time of payment of this Note without notice.

     All  amounts  payable  under the terms of this Note shall be  payable  with
expenses of  collection,  including  attorneys'  fees,  and without  relief from
valuation and appraisement laws.

     This Note supersedes and replaces that certain  Promissory Note dated March
31, 2000,  made by the Maker to the order of the Lender in the principal  amount
of $18,750,000.00, with a final maturity date of March 31, 2003.

     This  Note  is  made  under  and  will  be  governed  in all  cases  by the
substantive laws of the State of Indiana,  notwithstanding the fact that Indiana
conflicts of law rules might otherwise  require the substantive  rules of law of
another jurisdiction to apply.

                              CROSSMANN COMMUNITIES, INC.,
                                an Indiana corporation

                              By: /s/ Jennifer A. Holihen
                                  ----------------------------------------------
                                  Jennifer A. Holihen, Chief Financial Officer,
                                    Treasurer and Secretary

<PAGE>

                                PROMISSORY NOTE
                                (Revolving Loan)

                                                  Indianapolis, Indiana
$18,750,000.00                                    Dated: May 4, 2001
                                                  Final Maturity: April 1, 2004

     On or before April 1, 2004 ("Final Maturity"), CROSSMANN COMMUNITIES, INC.,
an Indiana  corporation  (the  "Maker")  promises to pay to the order of KEYBANK
NATIONAL  ASSOCIATION  (the  "Lender")  at the  principal  office  of BANK  ONE,
INDIANA,  NA, a national  banking  association  (the  "Agent") in  Indianapolis,
Indiana,  the principal sum of Eighteen Million Seven Hundred Fifty Thousand and
00/100 Dollars  ($18,750,000.00)  or so much of the principal amount of the Loan
represented  by this Note as may be  disbursed  by the Lender under the terms of
the  Credit  Agreement  described  below,  and to  pay  interest  on the  unpaid
principal balance outstanding from time to time as provided in this Note.

     This Note evidences indebtedness (the "Loan") incurred or to be incurred by
the Maker under a revolving  line of credit  extended to the Maker by the Lender
under a Credit  Agreement  dated as of April 1, 1999 (as  amended,  the  "Credit
Agreement"), entered into by and among the Maker, the Lender, the Agent, and the
other lenders from time to time parties thereto.  All references in this Note to
the Credit  Agreement  shall be construed as references to that  Agreement as it
may be  amended  from  time to  time.  The  Loan is  referred  to in the  Credit
Agreement as the  "Revolving  Loan."  Subject to the terms and conditions of the
Credit  Agreement,  the  proceeds  of the Loan may be  advanced  and  repaid and
re-advanced  until Final Maturity.  The principal amount of the Loan outstanding
from time to time shall be  determined  by reference to the books and records of
the Lender on which all Advances under the Loan and all payments by the Maker on
account of the Loan shall be  recorded.  Such books and records  shall be deemed
prima facie to be correct as to such matters.

     The terms  "Advance" and "Business Day" are used in this Note as defined in
the Credit Agreement.

     Interest on the unpaid principal  balance of the Loan outstanding from time
to time prior to and after maturity will accrue at the rate or rates provided in
the Credit  Agreement.  Prior to  maturity,  accrued  interest  shall be due and
payable on the last  Business Day of each month  commencing on the last Business
Day of the month in which this Note is executed. After maturity,  interest shall
be due and payable as accrued and without demand. Interest will be calculated by
applying  the  ratio  of the  annual  interest  rate  over a year  of 360  days,
multiplied by the outstanding principal balance, multiplied by the actual number
of days the principal balance is outstanding.

     The  entire  outstanding  principal  balance  of this Note shall be due and
payable, together with accrued interest, at Final Maturity. Reference is made to
the Credit  Agreement for  provisions  requiring  prepayment of principal  under
certain  circumstances.  Principal  may be prepaid,  but only as provided in the
Credit Agreement.

<PAGE>

     If any installment of interest due under the terms of this Note is not paid
within two (2) Business Days when due, then the Lender or any subsequent  holder
of this Note may,  subject to the terms of the Credit  Agreement,  at its option
and  without  notice,  declare the entire  principal  amount of the Note and all
accrued  interest  immediately due and payable.  Reference is made to the Credit
Agreement which provides for  acceleration of the maturity of this Note upon the
happening of other "Defaults" as defined therein.

     All  payments  on account of this Note shall be applied as  provided in the
Credit Agreement.

     The Maker and any endorsers severally waive demand, presentment for payment
and notice of nonpayment of this Note, and each of them consents to any renewals
or extensions of the time of payment of this Note without notice.

     All  amounts  payable  under the terms of this Note shall be  payable  with
expenses of  collection,  including  attorneys'  fees,  and without  relief from
valuation and appraisement laws.

     This Note supersedes and replaces that certain  Promissory Note dated March
31, 2000,  made by the Maker to the order of the Lender in the principal  amount
of $18,750,000.00, with a final maturity date of March 31, 2003.

     This  Note  is  made  under  and  will  be  governed  in all  cases  by the
substantive laws of the State of Indiana,  notwithstanding the fact that Indiana
conflicts of law rules might otherwise  require the substantive  rules of law of
another jurisdiction to apply.

                              CROSSMANN COMMUNITIES, INC.,
                                an Indiana corporation

                              By: /s/ Jennifer A. Holihen
                                  ----------------------------------------------
                                  Jennifer A. Holihen, Chief Financial Officer,
                                    Treasurer and Secretary

<PAGE>

                       REAFFIRMATION OF GUARANTY AGREEMENT

     The  undersigned  being a Guarantor under that certain  Guaranty  Agreement
dated as of [April 1,  1999\December  31,  1999\October 20, 2000] (the "Guaranty
Agreement"),  pursuant to which the  undersigned  guaranteed the  obligations of
CROSSMANN  COMMUNITIES,  INC., an Indiana  corporation  (the "Borrower") to BANK
ONE, INDIANA, NA, a national banking association,  in its capacity as Agent (the
"Agent") for the ratable benefit of the Lenders  ("Lenders")  under the terms of
that certain Credit Agreement, as amended (the "Agreement") dated April 1, 1999,
entered  into by and among the  Borrower,  the  Lenders,  and the Agent,  hereby
consents to the execution of that certain Fifth Amendment to Credit Agreement to
be entered into by and among the Company, the Lenders, and the Agent dated as of
even date herewith (the "Fifth Amendment").  Further, the Guarantor acknowledges
that while it may be the present practice of the Agent in the past to obtain the
undersigned's  consent  to any  amendment  to or  waiver of any of the terms and
conditions  of the  Agreement,  the Agent shall not be required to continue  any
such practice in the future, and any such discontinuance  shall not be construed
as a waiver of the Agent's rights, in its discretion,  to enter into any further
amendments  to or grant any  waivers of any of the terms and  conditions  of the
Agreement  without the consent of the undersigned,  and that the Agent's failure
to request or obtain the consent of the  undersigned  to any such  amendment  or
waiver shall not affect the liability of the  undersigned to the Lenders and the
Agent under the Guaranty Agreement.

     IN WITNESS  WHEREOF,  the  undersigned  have signed this  Reaffirmation  of
Guaranty Agreement as of the 4th day of May, 2001.

                              ---------------------------------------

                              By: /s/ Jennifer A. Holihen
                                  ----------------------------------------------
                                  Jennifer A. Holihen, -----------------------

STATE OF INDIANA   )
                   )  SS:
COUNTY OF MARION   )

     Before  me,  a  Notary  Public  in and  for the  above  County  and  State,
personally appeared Jennifer A. Holihen, the Chief Financial Officer, Treasurer,
and Secretary of Crossmann  Communities,  Inc., an Indiana  corporation,  who as
such officer  acknowledged  the  execution  of the  foregoing  Reaffirmation  of
Guaranty  Agreement  for and on behalf of the said  corporation  this 4th day of
May, 2001.

                                       Signature: /s/ Kathy S. Whitlow
                                       -----------------------------------------

                                       Printed: Kathy S. Whitlow
                                       -----------------------------------------
                                                     Notary Public

My Commission Expires:     10/28/07
                        ---------------

My County of Residence:    Johnson
                        ---------------

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00025-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00025-of-00352.parquet"}]]