Document:

<PAGE>

                                                                   EXHIBIT 10.32

                              STANDSTILL AGREEMENT

         This STANDSTILL AGREEMENT, dated as of December 21, 2001 (this
"AGREEMENT"), is entered into by and among Aviall, Inc., a Delaware corporation
(the "COMPANY"), Carlyle Partners III, L.P., a Delaware limited partnership
("CPIII"), and CP III Coinvestment L.P., a Delaware limited partnership ("CPIII
CO." together with CPIII, the "CARLYLE FUNDS"). CPIII and CPIII Co. are
sometimes referred to herein individually as an "INVESTOR" and collectively, as
the "INVESTORS".

         WHEREAS, the Investors and the Company have entered into a Securities
Purchase Agreement, dated December 17, 2001 (the "PURCHASE AGREEMENT");

         WHEREAS, an affiliate of the Investors and the Company and other
purchasers named therein have entered into a Note Purchase Agreement, dated
December 17, 2001 (the "NOTE PURCHASE AGREEMENT");

         WHEREAS, as a condition to the consummation of the Purchase Agreement,
the Company desires that the Investors make certain representations, warranties,
covenants and agreements as set forth in this Agreement.

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

         1. Definitions. Capitalized terms used herein but not otherwise defined
herein shall have the meaning ascribed thereto in the Purchase Agreement.

         2. Representations and Warranties of Each Investor. To induce the
Company to enter into this Agreement, the Purchase Agreement and the Note
Purchase Agreement and to consummate the transactions contemplated hereby and
thereby, each Investor represents and warrants to the Company as follows:

                  2.1 Binding Agreement. The execution, delivery and performance
         of this Agreement by such Investor and the consummation by such
         Investor of the transactions contemplated hereby have been duly and
         validly authorized by all necessary corporate or partnership action on
         the part of such Investor. This Agreement has been duly executed and
         delivered by such Investor, and, assuming the valid authorization,
         execution and delivery hereof by the Company, is a valid and binding
         obligation of such Investor, enforceable against such Investor in
         accordance with its terms, except as such enforcement may be limited by
         bankruptcy, insolvency, reorganization, moratorium, and other similar
         laws affecting or relating to the enforcement of creditors' rights
         generally and by general principles of equity (whether applied in a
         proceeding at law or in equity).

                  2.2 Execution; No Violations. The execution and delivery of
         this Agreement by such Investor does not, and the consummation by such
         Investor of the transactions contemplated hereby will not: (a) violate
         or conflict with the organizational documents of such Investor or any
         agreement, order, injunction, decree, or judgment to which such
         Investor is a party or by which such Investor or any of its respective
         properties is bound; or (b) violate any law, rule or regulation
         applicable to such Investor .

                  2.3 Governmental and Other Consents. No consent, approval or
         authorization of, or designation, registration, declaration or filing
         with, any governmental entity or third Person is required

<PAGE>

         on the part of such Investor in connection with the execution or
         delivery of this Agreement or the consummation by it of the
         transactions contemplated hereby.

                  2.4 Share Ownership. Such Investor does not own any voting
         securities of the Company, or any securities convertible into or
         exchangeable or exercisable for any voting securities of the Company,
         or which, upon redemption thereof could result in such Investor or any
         of its Affiliates receiving any voting securities of the Company, or
         options, warrants, contractual rights or other rights of any kind to
         acquire or vote any voting securities of the Company (collectively, the
         "VOTING SECURITIES"), except those securities acquired pursuant to the
         Purchase Agreement, the Note Purchase Agreement or issuable upon
         conversion of the securities acquired pursuant to the Purchase
         Agreement (the "COMPANY SHARES").

         3. Standstill Arrangements.

                  3.1 Acquisition of Additional Voting Securities. Each Investor
         hereby covenants and agrees that prior to the Termination Date (as
         hereinafter defined), neither such Investor nor any of its controlled
         Affiliates will, without the prior approval of the Board of Directors
         of the Company, directly or indirectly, purchase or otherwise acquire
         (other than pursuant to a stock split or stock dividend) or make any
         proposal, other than a confidential proposal to the Board of Directors
         of the Company, to or agree to acquire, or become or agree to become
         the beneficial owner of, more than 5% of the outstanding Voting
         Securities, other than (i) the Company Shares; (ii) any Voting
         Securities acquired through the exercise, conversion or exchange of the
         Company Shares (the "CONVERSION SHARES"), (iii) any Voting Securities
         acquired through the exercise, conversion or exchange of the Conversion
         Shares (together with the Company Shares and the Conversion Shares, the
         "INVESTOR SHARES") or (iv) any voting securities issued as dividends on
         or otherwise issued in exchange or in consideration of or with respect
         to the Investor Shares (the "DIVIDEND SHARES") or shares issued as
         dividends on the Dividend Shares or in exchange for or in respect of
         the Dividend Shares.

                  3.2 Prohibited Actions. Each Investor hereby agrees that prior
         to the Termination Date, neither such Investor nor any of its
         Affiliates will, without the prior approval of the board of Directors
         of the Company, directly or indirectly, solicit, request, advise,
         assist or encourage others to, take any of the following actions:

                           (a) form, join in or in any other way participate in
                  a "partnership, limited partnership, syndicate or other group"
                  within the meaning of Section 13(d)(3) of the Exchange Act
                  with respect to Voting Securities or deposit any Voting
                  Securities in a voting trust or similar arrangement or subject
                  any Voting Securities to any voting agreement or pooling
                  arrangement, other than with one or more Affiliates of such
                  Investor with respect to the Company Shares or with one or
                  more beneficial owners of the Company Shares that does not own
                  any Voting Securities other than the Company Shares;

                           (b) solicit proxies or written consents of
                  stockholders with respect to Voting Securities (other than the
                  Investor Shares) under any circumstances, or make, or in any
                  way participate in, any "solicitation" of any "proxy" to vote
                  any Voting Securities (other than conducted by the Company),
                  or become a "participant" in any election contest with respect
                  to the Company (as such terms are defined or used in Rules
                  14a-1 and 14a-11 under the Exchange Act) other than an
                  election contest related to election of members of the Board
                  of Directors elected solely by the holders of the Investor
                  Shares;

                                      -2-
<PAGE>

                           (c) seek to call, or request the call of, a special
                  meeting of the stockholders of the Company (other than as
                  contemplated by the Purchase Agreement) or seek to make, or
                  make, a stockholder proposal at any meeting of the
                  stockholders of the Company that has not first been presented
                  to the Board of Directors;

                           (d) commence, or announce any intention to commence,
                  any tender offer for any Voting Securities;

                           (e) make, announce any intention or desire to make,
                  or facilitate the making of, any proposal (other than a
                  confidential proposal to the Company) or bid with respect to
                  (i) the acquisition of any substantial portion of the assets
                  of the Company or of the assets or stock of any of its
                  subsidiaries or of all or any portion of the outstanding
                  Voting Securities, or (ii) any merger, consolidation, other
                  business combination, restructuring, recapitalization or
                  liquidation involving the Company or any of its subsidiaries;

                           (f) knowingly arrange, or in any way knowingly
                  participate in, any financing for any transaction referred to
                  in clauses 3(a) through 3(e) above; or

                           (g) make any request, or otherwise seek (in any
                  fashion that would require public disclosure by the Company,
                  such Investor or their respective Affiliates) to obtain any
                  waiver or amendment of any provision of this Agreement or take
                  any action restricted hereby.

         4. Termination. This Agreement shall terminate with respect to a
particular Investor on the date that such Investor and its Affiliates no longer
own Voting Securities representing at least 15% of the outstanding Voting
Securities of the Company (the "TERMINATION DATE").

         5. Remedies. Each party hereto hereby acknowledges and agrees that
irreparable harm would occur in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to specific performance hereunder, including, without limitation, an injunction
or injunctions to prevent and enjoin breaches of the provisions of this
Agreement and to enforce specifically the terms and provisions hereof in any
state or federal court in the State of New York, in addition to any other remedy
to which they may be entitled at law or in equity. Any requirements for the
securing or posting of any bond with such remedy are waived. All rights and
remedies under this Agreement are cumulative, not exclusive, and shall be in
addition to all rights and remedies available to either party at law or in
equity.

         6. Jurisdiction; Venue. The parties hereto hereby irrevocably and
unconditionally consent to and submit to the jurisdiction of the courts of the
State of New York and of the United States of America located in the State of
New York for any actions, suits or proceedings arising out of or relating to
this Agreement or the transactions contemplated hereby, and further agree that
service of any process, summons, notice or document by U.S. certified mail to
the respective addresses set forth in Section 11 hereof shall be effective
service of process for any such action, suit or proceeding brought against any
party in any such court. The parties irrevocably and unconditionally waive any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement, or the transactions contemplated hereby, in the courts of the
States of New York or the United States of America located in the State of New
York, and hereby further irrevocably and unconditionally waive and agree not to
plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in any inconvenient forum.

                                      -3-
<PAGE>

         8. Entire Agreement. This Agreement contains the entire understanding
of the parties with respect to the subject matter hereof and may be amended only
by an agreement in writing executed by the parties hereto.

         9. Headings. Descriptive headings are for convenience only and shall
not control or affect the meaning or construction of any provision of this
Agreement.

         10. Number; Gender. Whenever the singular number is used herein, the
same shall include the plural where appropriate, and words of any gender shall
include each other gender where appropriate.

         11. Notices. All notices, consents, requests, instructions, approvals
and other communications provided for herein and all legal process in regard
hereto shall be validly given, made or served, if in writing and sent by U.S.
certified mail, return receipt requested:

                  if to the Company:          Aviall, Inc.
                                              2750 Regent Boulevard
                                              DFW Airport, Texas 75261
                                              Attention: Jeffrey J. Murphy

                  with a copy to:             Haynes and Boone, LLP
                                              901 Main Street
                                              Suite 3100
                                              Dallas, Texas 75202
                                              Attention: Janice V. Sharry, Esq.

                  if to CPIII or CPIII Co:    The Carlyle Group
                                              1001 Pennsylvania Avenue, NW
                                              Washington, DC 20004
                                              Attention: Allan M. Holt
                                                         Peter J. Clare

                  with a copy to:             Latham & Watkins
                                              555 Eleventh Street, NW
                                              Suite 1000
                                              Washington, DC 20004
                                              Attention: Daniel Lennon

         12. Enforceability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. It is hereby the stipulated and
declared to be the intention of the parties that the parties would have executed
the remaining terms, provisions, covenants and restrictions without including
any of such which may be hereafter declared invalid, void or unenforceable. In
addition, the parties agree to use their best efforts to agree upon and
substitute a valid and enforceable term, provision, covenant or restriction for
any of such that is held invalid, void or unenforceable by a court of competent
jurisdiction.

         13. Law Governing. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York, without
regard to any conflict of laws provisions thereof.

                                      -4-
<PAGE>

         14. Binding Effect; No Assignment. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the successors and assigns of
the parties hereto. Nothing in this Agreement, expressed or implied, is intended
to confer on any Person other than the parties hereto or their respective heirs,
successors, executors, administrators and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement. Neither party
to this Agreement may assign its rights or delegate its obligations hereunder
(whether voluntarily, involuntarily, or by operation of law) without the prior
written consent of the other party. Any such attempted assignment shall be null
and void.

         15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         16. Section Headings. The headings contained in this Agreement are for
reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement.

                                    * * * * *

                                      -5-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written hereinabove.

                                  AVIALL, INC.

                                  By:        /s/ Jeffrey J. Murphy
                                           -------------------------------------
                                           Name:   Jeffrey J. Murphy
                                           Title:  Senior Vice President,
                                                   Law and Human Resources,
                                                   Secretary and General Counsel

                                  CARLYLE PARTNERS III, L.P.

                                  By:      TC GROUP III, L.P.,
                                           its general partner

                                  By:      TC GROUP III, L.L.C.,
                                           its general partner

                                  By:      TC Group, L.L.C.,
                                           its sole member

                                  By:      TCG Holdings, L.L.C.
                                           its managing member

                                           By:        /s/ Peter J. Clare
                                                    ----------------------------
                                                    Name:   Peter J. Clare
                                                    Title:  Managing Director

                                  CP III COINVESTMENTS, L.P.,

                                  By:      TC GROUP III, L.P.,
                                           its general partner

                                  By:      TC GROUP III, L.L.C.,
                                           its general partner

                                  By:      TC Group, L.L.C.,
                                           its sole member

                                  By:      TCG Holdings, L.L.C.
                                           its managing member

                                           By:        /s/ Peter J. Clare
                                                    ----------------------------
                                                    Name:    Peter J. Clare
                                                    Title:   Managing Director

                                      -6-<PAGE>
                                                                   EXHIBIT 10.83

THIS WARRANT AND THE RIGHTS REPRESENTED HEREBY SHALL NOT BE TRANSFERABLE AT ANY
TIME UNLESS (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, SHALL BE IN EFFECT WITH RESPECT TO THIS WARRANT OR THE SHARES ISSUABLE
HEREUNDER AT SUCH TIME, OR (ii) THE TRANSFER IS MADE IN COMPLIANCE WITH THE
PROVISIONS OF SECTION 5.

NUMBER:                                                    50,000 SHARES

                                     WARRANT
                               TO PURCHASE SHARES
                                       OF
                              TIPPERARY CORPORATION

         This certifies that, for value received, Jeff T. Obourn, an individual
residing in Greenwood Village, Colorado ("Obourn"), or his registered assigns,
is entitled to purchase from TIPPERARY CORPORATION, a Texas corporation (the
"Company"), fifty thousand (50,000) Shares, at the price of Three Dollars and
75/100 ($3.75) per Share (as defined in Section 3) at any time, or in part from
time to time in accordance with the following Vesting Schedule ("Vesting
Schedule"):

<Table>
<Caption>
         Date:                            Total Shares Subject to Exercise

<S>                                       <C>
From and after January 30, 2002                        16,667
From and after January 30, 2003                        33,334
From and after January 30, 2004                        50,000
</Table>

This Warrant shall expire, if not exercised prior thereto, two (2) years after
the resignation or removal of Obourn as an employee of the Company. If Obourn
should resign or be removed as an employee from the Company, then this Warrant
shall be vested only to the extent vested on such date of resignation or removal
according to the Vesting Schedule. The provisions as to adjustment of the
initial exercise price set forth above and the number of Shares to be issued
upon the occurrence of certain events (the Provisions as to Adjustment) are more
fully set forth in Annex 1 hereto. (Hereinafter, the initial exercise price set
forth above in this paragraph for the purchase of Shares upon the exercise of
this Warrant, as adjusted pursuant to the Provisions as to Adjustment, is
referred to as the "Exercise Price"). This Warrant is subject to the following
provision, terms and conditions:

         1. EXERCISE OF WARRANT.

         (a) The rights represented by this Warrant may be exercised by the
holder hereof, in whole or in part, (but not as to a fractional Share), by the
surrender of this Warrant at the Company's principal office located in Denver,
Colorado (or such other office or agency of the Company as the Company may
designate by notice in writing to the holder hereof at the address of such
holder appearing on the books of the Company at any time within the period above
named) and delivery of a completed subscription form in the form attached to
this Warrant as Exhibit A, and upon payment to the Company of the Exercise Price
for such Shares.

<PAGE>

         (b) Payment of the Exercise Price shall be made by a combination of any
one or more of the following:

                  (i)      By application, to the extent permitted by applicable
                           law, of Shares or other securities of the Company
                           owned by the holder hereof, the value of which for
                           such purpose shall be the fair market value thereof
                           determined in good faith by the Company and the
                           holder hereof at the time of such exercise; provided,
                           however, that in order to apply such Shares or other
                           securities of the Company in the exercise hereof,
                           each of the following conditions must be met:

                           (A)      Such Shares or other securities of the
                                    Company shall have been owned, without
                                    material encumbrance, contingency or risk of
                                    forfeiture relating to the ownership rights,
                                    for at least six months and at all times
                                    during said six month period by the holder
                                    hereof, and within said six month period
                                    such Shares or other securities of the
                                    Company shall not have been obtained through
                                    exercise of any option, warrant or right to
                                    obtain such Shares of other securities or
                                    through the conversion of any other
                                    security; and

                           (B)      Such Shares or other securities shall not be
                                    or include: (1) options, warrants or similar
                                    rights to acquire Shares or other securities
                                    of the Company by the holder hereof; or (2)
                                    securities owned by the holder hereof which
                                    are convertible in whole or in part into
                                    Shares or other securities of the Company.

                  (ii)     in cash or by certified check or bank draft in New
                           York Clearing House funds.

         (c) The Company agrees that any Shares so purchased by the exercise of
this Warrant shall be deemed to be issued to the holder hereof as the record
owner of such Shares as of the close of business on the date on which this
Warrant shall have been surrendered, the completed subscription form delivered,
and payment in full is made and delivered to the Company for such Shares as
aforesaid.

         (d) Stock certificates evidencing Shares so purchased shall be
delivered to the holder hereof as promptly as practicable, after the rights
represented by this Warrant shall have been so exercised. If this Warrant shall
have been exercised only in part, and unless this Warrant has expired, a new
Warrant representing the number of Shares with respect to which this Warrant
shall not then have been exercised shall also be delivered to the holder hereof
within such time. Notwithstanding the foregoing, however, the Company shall not
be required to deliver any stock certificate evidencing Shares upon exercise of
this Warrant except in accordance with the provisions,

PAGE 2 - WARRANT TO PURCHASE SHARES

<PAGE>

and subject to the limitations, of Section 5. The Company will pay all expenses
and charges payable in connection with the preparation, execution and delivery
of stock certificates and any new Warrants or promissory notes.

         2. CERTAIN COVENANTS OF THE COMPANY. The Company covenants and agrees
as follows:

         (a) All Shares which may be issued upon the exercise of the rights
represented by this Warrant (all such Shares, whether previously issued or
subject to issuance upon the exercise of this Warrant, are from time to time
referred to herein as "Warrant Shares") will, upon issuance, be duly authorized
and issued, fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issuance thereof.

         (b) During the period within which the rights represented by this
Warrant may be exercised, and only insofar as the Vesting Schedule herein
permits the exercise of this Warrant, the Company will at all times have
authorized and reserved free of preemptive or other rights for the exclusive
purpose of issuance upon exercise of the purchase rights evidenced by this
Warrant, a sufficient number of Shares to provide for the exercise of rights
represented by this Warrant.

         (c) The Company will not, by amendment or restatement of the Articles
of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, issuance or sale of securities or otherwise, avoid or
take any action which would have the effect of avoiding the performance of any
of the terms to be performed hereunder by the Company, but will at all times in
good faith carry out all of the provisions of this Warrant and take all such
action as may be necessary or appropriate to protect the rights of the holder
hereof against dilution or other impairment and, in particular, will not permit
the par value of any Share to be or become greater than the then effective
Exercise Price.

         3. DEFINITION OF SHARES. As used herein, the term "Shares" shall mean
and include shares of the Common Stock, par value $.02 per share, of the Company
as are constituted and exist on the date hereof, and shall also include any
other class of the capital stock of the Company hereafter authorized which shall
neither be limited to a fixed sum or percentage of par value in respect to the
rights of the holders thereof to receive dividends and to participate in the
distribution of assets upon the voluntary or involuntary liquidation,
dissolution or winding up of the Company, nor be subject at any time to
redemption by the Company; provided that the Shares receivable upon exercise of
this Warrant shall include only Shares of the type as are constituted and exist
on the date hereof or Shares resulting from any reclassification of the Shares
as provided for in paragraph (C) of the Provisions as to Adjustment.

         4. NO RIGHTS OR LIABILITIES AS A SHAREHOLDER. This Warrant shall not
entitle the holder hereof as such to any rights whatsoever, including, without
limitation, voting rights, as a holder of Shares of the Company. No provisions
hereof, in the absence of affirmative action by the holder hereof to purchase
Shares, and no mere enumeration herein of the rights or privileges of such
holder,

PAGE 3 - WARRANT TO PURCHASE SHARES

<PAGE>

shall give rise to any liability of such holder as a holder of Shares of the
Company, regardless of who may assert such liability.

         5. RESTRICTIONS ON TRANSFER.

         (a) This Warrant shall not be exercisable by a transferee hereof and/or
transferable and the Warrant Shares shall not be transferable except upon the
conditions specified in this Section 5, which conditions are intended, among
other things, to ensure compliance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations of the Securities and Exchange
Commission (the "Commission") thereunder (collectively the "Securities Act"), in
respect of the exercise and/or transfer of this Warrant and/or transfer of such
Warrant Shares.

         (b) This Warrant and the Warrant Shares shall not be transferable
(except for a transfer of this Warrant or the Warrant Shares in an offering
registered under the Securities Act, including, without limitation, a transfer
in a registered offering effected pursuant to Section 6, and any subsequent
transfer) unless, prior to any transfer, the holder hereof shall have received
from its transferee reasonable assurances that such person is aware that this
Warrant and the Warrant Shares have not been registered under the Securities Act
and that such person is acquiring this Warrant or the Warrant Shares for
investment only and not with the view to the disposition or public offering
thereof (unless in an offering registered under the Securities Act of 1933 or
exempt therefrom), and that such person is aware that the stock certificates
evidencing the Warrant Shares shall bear a legend restricting transfer and
disposition thereof in accordance with the Securities Act unless, in the opinion
of counsel to the Company, such legend may be omitted. In the event of any
transfer of this Warrant (other than a transfer in an offering registered under
the Securities Act, including, without limitation, a transfer in a registered
offering effected pursuant to Section 6, and any subsequent transfer), the
holder hereof shall provide an opinion of counsel, who shall be reasonably
satisfactory to the Company, that an exemption from the registration
requirements of the Securities Act is available.

         (c) Any permitted subsequent holder of this Warrant shall be subject to
all the terms and conditions herein, and shall acknowledge, in writing, upon
receipt of this Warrant his or her acceptance of the terms and conditions
herein.

         (d) To facilitate sales by a holder of this Warrant or Warrant Shares
in transactions qualifying under Rule 144 promulgated by the Commission under
the Securities Act, if available, the Company agrees to satisfy the current
public information requirements of said Rule 144, for as long as the Shares
remain registered under the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission thereunder (collectively the "Exchange
Act"), and to provide said holder upon request with such other information as
such holder may require for compliance with the provisions of said Rule 144.

PAGE 4 - WARRANT TO PURCHASE SHARES

<PAGE>

         6. REGISTRATION UNDER SECURITIES ACT.

         (a) If the Company at any time proposes to register any issuance of its
securities under the Securities Act (other than a registration on Form S-8 in
connection with an employee stock purchase or option plan or on Form S-4 in
connection with mergers, acquisitions or exchange offerings), the Company will
at such time give prompt written notice to the holder hereof and to the holders
of all other Warrant Shares issuable from any outstanding Warrants (such holders
are hereinafter referred to as the "Prospective Sellers") of its intention to do
so. Upon the written request of a Prospective Seller, given within 30 days after
receipt of any such notice (which request shall state the intended method of
disposition of the Warrant Shares to be transferred by such Prospective Seller),
the Company shall use its best efforts to cause all Warrant Shares, the holders
of which (or of the Warrants to which the same are related), to the extent
vested in accordance with the Vesting Schedule, shall have so requested
registration of the transfer thereof, to be registered under the Securities Act,
all to the extent requisite to permit the sale or other disposition (in
accordance with the intended method thereof as aforesaid) by the Prospective
Sellers of such Warrant Shares. The rights granted pursuant to this Section 6(a)
shall not be effective with respect to the Prospective Seller in the case of an
underwritten public offering of securities of the Company by the Company unless
each Prospective Seller agrees to the terms and conditions, including
underwriting discounts and allowances, specified by the managing underwriter of
such offering with respect to such Warrant Shares. The Company shall have the
right to reduce the number of Warrant Shares of the Prospective Sellers to be
included in a registration statement pursuant to the exercise of the rights
granted by this Section 6(a) if, and to the extent, that the managing
underwriter of such offering is of the good faith opinion, supported by written
reasons therefor, that the inclusion of such Warrant Shares would materially
adversely affect the marketing of the securities of the Company to be offered;
provided, that any such reduction of the number of Warrant Shares the transfer
of which is to be registered on behalf of the Prospective Sellers shall be made
on the basis of a pro rata reduction of all Warrant Shares of all Prospective
Sellers.

         (b) If and whenever the Company is required by the provisions of this
Section 6 to use its best efforts to effect the registration of any transfer of
Warrant Shares under the Securities Act, the Company will, as expeditiously as
possible,

                  (i)      prepare and file with the Commission a registration
                           statement with respect to such transfer and use its
                           best efforts to cause such registration statement to
                           become and remain effective, but not for any period
                           longer than nine months;

                   (ii)    prepare and file with the Commission such amendments
                           and supplements to such registration statement and
                           the prospectus used in connection therewith as may be
                           necessary to keep such registration statement
                           effective, and to comply with the provisions of the
                           Securities Act with respect to the transfer of all
                           securities covered by such registration statement,
                           including, without

PAGE 5 - WARRANT TO PURCHASE SHARES

<PAGE>

                           limitation, taking all necessary actions whenever the
                           Prospective Sellers of the Warrant Shares covered by
                           such registration statement shall desire to dispose
                           of the same;

                  (iii)    furnish to each Prospective Seller such number of
                           copies of a prospectus, including a preliminary
                           prospectus, in conformity with the requirements of
                           the Securities Act, and such other documents, as such
                           Prospective Seller may reasonably request in order to
                           facilitate the disposition of the Warrant Shares
                           owned by such Prospective Seller and covered by such
                           registration statement;

                  (iv)     use its best efforts to register or qualify the
                           securities covered by such registration statement
                           under such other securities or blue sky laws of such
                           jurisdictions as each Prospective Seller shall
                           request, and use its best efforts to do any and all
                           other acts and things which may be reasonably
                           necessary to enable such Prospective Seller to
                           consummate the disposition in such jurisdiction of
                           the Warrant Shares owned by such Prospective Seller
                           and covered by such registration statement; provided
                           that, notwithstanding the foregoing, the Company
                           shall not be required to register in any jurisdiction
                           as a broker or dealer of securities or to grant its
                           consent to service of process in any such
                           jurisdiction solely on account of such intended
                           disposition by such Prospective Seller;

                  (v)      furnish to the Prospective Sellers whose intended
                           dispositions are registered a signed copy of an
                           opinion of counsel for the Company, in form and
                           substance acceptable to such Prospective Sellers, to
                           the effect that: (A) a registration statement
                           covering such dispositions of Warrant Shares has been
                           filed with the Commission under the Securities Act
                           and has been made effective by order of the
                           Commission, (B) such registration statement and the
                           prospectus contained therein and any amendments or
                           supplements thereto comply as to form in all material
                           respects with the requirements of the Securities Act,
                           and nothing has come to such counsel's attention
                           which would cause him to believe that the
                           registration statement or such prospectus, amendment
                           or supplement, at the time such registration
                           statement or amendment became effective or such
                           supplement was filed with the Commission, contained
                           any untrue statement of a material fact or omitted to
                           state a material fact required to be stated therein
                           or necessary to make the statements therein (in the
                           case of such prospectus, amendment or supplement, in
                           the light of the circumstances under which they were
                           made) not misleading (provided that such counsel need
                           not render any opinion with respect to the financial
                           statements and other financial, engineering and
                           statistical data included therein), and (C) to the
                           best of such counsel's knowledge, no stop order has
                           been issued by the Commission suspending the
                           effectiveness of

PAGE 6 - WARRANT TO PURCHASE SHARES

<PAGE>

                           such registration statement and no proceedings for
                           the issuance of such a stop order are threatened or
                           contemplated;

                  (vi)     furnish to the Prospective Sellers whose intended
                           dispositions are required a blue sky survey in the
                           form and of the substance customarily prepared by
                           counsel for the Company and accepted by sellers of
                           securities in similar offerings, discussing and
                           describing the application provisions of the
                           securities or blue sky laws of each state or
                           jurisdiction in which the Company shall be required,
                           pursuant to Section 6(c)(iv), to register or qualify
                           such intended dispositions of such Warrant Shares,
                           or, in the event counsel for the underwriters in such
                           offering shall be preparing a blue sky survey, cause
                           such counsel to furnish such survey to, and to allow
                           reliance thereon by, such Prospective Sellers;

                  (vii)    otherwise use its best efforts to comply with all
                           applicable rules and regulations of the Commission
                           under the Securities Act and the Exchange Act,
                           insofar as they relate to such registration and such
                           registration statement; and

                  (viii)   use its best efforts to list such Warrant Shares on
                           any securities exchange on which any securities of
                           the Company are then listed or to admit such Warrant
                           Shares for trading in any national market system in
                           which any securities of the Company are then admitted
                           for trading, if the listing or admission of such
                           securities is then permitted under the rules of such
                           exchange or system.

         (c) With respect to the registration by the Company of transfers of
Warrant Shares under the Securities Act pursuant to Section 6(a), the Company
shall pay all expenses incurred by it in complying with this Section 6
(including, without limitation, all registration and filing fees, printing
expenses, blue sky fees and expenses, costs and expenses of audits, and
reasonable fees and disbursements of counsel for the Company and special counsel
designated by Prospective Sellers owning a majority of the Warrant Shares
covered by such registration, but specifically excluding any underwriting
discounts and allowances that are allocable to the Warrant Shares being sold by,
and which shall be paid by, the Prospective Sellers; provided, however, that if
any registration statement filed with the Commission by the Company under
Section 6(a) shall not be declared effective by the Commission, such attempted
registration shall not constitute a registration under this Section 6(c).

         (d) It shall be a condition precedent to the obligations of the Company
to take any action pursuant to this Section 6 that each Prospective Seller, the
transfer of whose Warrant Shares is registered or to be registered under each
such registration, shall furnish to the Company such written information
regarding the securities held by such Prospective Seller as the Company shall
reasonably request and as shall be required in connection with the action to be
taken by the Company.

PAGE 7 - WARRANT TO PURCHASE SHARES

<PAGE>

         (e) (i) In the event of any registration of any transfer of Warrant
Shares under the Securities Act pursuant to this Section 6, the Company will
indemnify and hold harmless each Prospective Seller of such securities, each of
its officers, directors and partners, and each other person, if any, who
controls such Prospective Seller within the meaning of the Securities Act, and
each underwriter, if any, who participates in the offering of such securities,
against any losses, claims, damages or liabilities (or actions in respect
thereof), joint or several, to which each Prospective Seller, officer, director
or partner, controlling person or underwriter may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained, on
the effective date thereof, in any registration statement under which such
transfer of securities was registered under the Securities Act, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or any violation by the Company of the
Securities Act, and will reimburse such Prospective Seller and each of its
officers, directors and partners, and each such controlling person or
underwriter, for any legal or any other expenses reasonably incurred by such
Prospective Seller or its officers, directors and partners or controlling
persons or by each such underwriter, in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement, preliminary prospectus or prospectus or such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company through an instrument duly executed by such
Prospective Seller specifically for use in the preparation thereof. In the event
of any registration by the Company or any transfer of securities under the
Securities Act pursuant to this Section 6, each Prospective Seller of Warrant
Shares covered by such registration will indemnify and hold harmless the
Company, each other person, if any, who controls the Company within the meaning
of the Securities Act and each officer and director of the Company and the other
Prospective Sellers to the same extent that the Company agrees to indemnify it,
but only with respect to the written information relating to such Prospective
Seller furnished to the Company by such Prospective Seller aforesaid.

                  (ii) Each indemnified party shall, as promptly as practicable
upon receipt of notice of the commencement of any action against such
indemnified party or its officers, directors or partners, or any controlling
person of such indemnified party, in respect of which indemnity may be sought
from an indemnifying party on account of the indemnity agreement contained in
Section 6(e)(i), notify the indemnifying party in writing of the commencement
thereof. The omission of such indemnified party to so notify the indemnifying
party of any such action shall not relieve the indemnifying party from any
liability which it may have on account of the indemnity agreement contained in
Section 6(e)(i) to the extent that the failure to receive such notice within a
reasonable period of time shall not have caused harm, loss or damage to the
indemnifying party, provided that, conversely, if such failure to receive notice
shall have caused any harm, loss or damage to the

PAGE 8 - WARRANT TO PURCHASE SHARES

<PAGE>

indemnifying party, such failure shall constitute a defense to any liability
which such indemnifying party may have on account of such agreement to the
extent of the harm, loss or damage so caused. In case any such action shall be
brought against any indemnified party, its officers, directors and partners, or
any such controlling person, and such indemnified party shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in (and, to the extent that the indemnifying party shall
wish, to direct) the defense thereof at the indemnifying party's own expense, in
which event the defense shall be conducted by recognized counsel chosen by the
indemnifying party and approved by the indemnified party (whose approval shall
not unreasonably be withheld) and the indemnified party may participate in such
defense at its own expense (unless it is advised by counsel that actual or
potential differing interests or defenses exist or may exist, in which case such
expenses shall be paid by the indemnifying party, provided that the indemnifying
party shall not be required to pay the expenses for more than one counsel for
all such indemnified parties).

         7. TRANSFER; OWNERSHIP. Subject to Section 5, this Warrant and all
rights hereunder are transferable, in whole or in part, at the office or agency
of the Company referred to in Section 1 by the holder hereof in person or by a
duly authorized attorney, upon surrender of this Warrant, with an assignment,
acceptable to the Company, duly completed, at which time a new Warrant shall be
made and delivered by the Company, of the same tenor as this Warrant but
registered in the name of the transferee. The holder of this Warrant, by taking
or holding the same, consents and agrees that this Warrant, when endorsed in
blank, shall be deemed negotiable, and that the holder hereof, when this Warrant
shall have been so endorsed, may be treated by the Company and all other persons
dealing with this Warrant as the absolute owner hereof for any purpose and as
the person entitled to exercise the rights represented by this Warrant and to
transfer this Warrant on the books of the Company, any notice to the contrary
notwithstanding; but until such transfer on such books, the Company may treat
the registered holder hereof as the owner hereof for all purposes. Any transfer
of this Warrant shall be made in compliance with the Securities Act and any
applicable statute securities or blue sky laws.

         8. EXCHANGE AND REPLACEMENT. Subject to Section 7, this Warrant is
exchangeable, upon the surrender hereof by the holder hereof at the office or
agency of the Company referred to in Section 1, for new Warrants of like tenor
and date representing in the aggregate the right to purchase the number of
Shares which may be purchased hereunder, each of such new Warrants to represent
the right to purchase such number of Shares as shall be designated by said
holder hereof at the time of such surrender. Upon receipt by the Company at the
office or agency referred to in Section 1 of evidence reasonably satisfactory to
it of the loss, theft or destruction of this Warrant and of indemnity or
security reasonably satisfactory to it (provided that the written indemnity of
the holder hereof shall be deemed reasonably satisfactory to the Company for
such purposes), the Company will deliver a new Warrant of like tenor and date in
replacement of this Warrant. This Warrant shall be promptly canceled by the
Company upon the surrender hereof in connection with any transfer, exchange or
replacement. The Company will pay all expenses and charges payable in

PAGE 9 - WARRANT TO PURCHASE SHARES

<PAGE>

connection with the preparation, execution and delivery of Warrants pursuant to
Section 7 and this Section 8.

         9. NOTICES. Any notice or other document required or permitted to be
given or delivered to the holder hereof shall be delivered at, or sent by
certified or registered mail to, 5585 Cherryville Way, Greenwood Village,
Colorado 80121, or to such other address as shall have been furnished to the
Company in writing by the holder hereof. Any notice or other document required
or permitted to be given or delivered to the Company shall be delivered at, or
sent by certified or registered mail to, 633 Seventeenth Street, Suite 1550,
Denver, Colorado 80202, or to such other address as shall have been furnished in
writing to the holder hereof by the Company. Any notice so addressed and mailed
by registered or certified mail or otherwise delivered, shall be deemed to be
given when actually received by the addressee.

         10. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.

         11. MISCELLANEOUS. This Warrant will be binding upon any entity
succeeding to the Company by consolidation or acquisition of all or
substantially all of the Company's assets, and upon any successor or assign of
the holder hereto. This Warrant and any provision hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
(or any predecessor in interest thereof) against whom enforcement of the same is
sought. The headings in this Warrant are for purposes of reference only and
shall not affect the meaning or construction of any of the provisions hereon.

         IN WITNESS WHEREOF, Tipperary Corporation has caused this Warrant to be
signed by its duly authorized officers, under its corporate seal, to be dated
January 30, 2001.

                                         TIPPERARY CORPORATION

                                         BY:   /s/ David L. Bradshaw
                                            ------------------------------------
                                            ITS:   President
                                                --------------------------------

(CORPORATE SEAL)

ATTEST:        Elaine R. Treece
          ---------------------------
  ITS:    Secretary

PAGE 10 - WARRANT TO PURCHASE SHARES

<PAGE>

                                                                         Annex 1

                              TIPPERARY CORPORATION

                         PROVISIONS AS TO ADJUSTMENT OF
                       EXERCISE PRICE AND NUMBER OF SHARES
                    ISSUED UPON OCCURRENCE OF CERTAIN EVENTS

         The Exercise Price and the number of Shares issuable upon the exercise
of the annexed Warrant to purchase shares of TIPPERARY CORPORATION, a Texas
corporation (herein and in this Warrant referred to as the "Company"), shall be
subject to adjustment from time to time as hereinafter provided; that in no
event shall the Exercise Price be increased to a price greater than Three
Dollars and 75/100 ($3.75) per Share, except as provided by paragraph (C). Upon
each adjustment of the Exercise Price, the holder of this Warrant shall
thereafter be entitled to purchase, at the Exercise Price resulting from such
adjustment, the number of Shares obtained by multiplying the number of Shares
purchasable pursuant hereto immediately prior to such adjustment by a fraction,
the numerator of which is the Exercise Price in effect immediately prior to such
adjustment and the denominator of which is the Exercise Price resulting from
such adjustment. In making the adjustments to the Exercise Price and the number
of Shares issuable upon the exercise of this Warrant, the following provisions
shall be applicable:

         (A) If and whenever the Company shall issue or sell any Shares for
consideration per Share that is less than the Exercise Price in effect
immediately prior to the time of such issue or sale at less than the Market
Price (as hereinafter defined) of such Shares on the date of such issue or sale,
then forthwith upon such issue or sale the Exercise Price in effect immediately
prior thereto shall be adjusted to an amount (calculated to the nearest cent)
determined by dividing (i) an amount equal to the sum of (a) the number of
Shares outstanding immediately prior to such issue or sale multiplied by the
Exercise Price in effect immediately prior to such issue or sale, and (b) the
consideration, if any, received by the Company upon such issue or sale by (ii)
the total number of Shares outstanding immediately after such issue or sale;
provided, however, that no adjustment shall be made hereunder by reason of:

                  (i)      the grant of this Warrant or the issuance of Shares
                           upon the exercise of this Warrant or any other
                           outstanding Warrant;

                  (ii)     the grant by the Company of options to purchase
                           shares in connection with any purchase or option plan
                           for the benefit of employees of the Company, or any
                           affiliates or subsidiaries thereof; or

                  (iii)    the issuance (whether directly or by assumption in a
                           merger or otherwise) or sale (including any issuance
                           or sale to holders of Shares) of any securities
                           convertible into or exchangeable for Shares (such
                           convertible or exchangeable securities are herein
                           referred to as "Convertible Securities"), or the
                           grant of

<PAGE>

                           rights to subscribe for or to purchase, or of options
                           for the purchase of (including any grant of such
                           rights or options to holders of shares, other than
                           pursuant to a dividend on Shares), Shares of
                           Convertible Securities, regardless of whether the
                           right to convert or exchange such Convertible
                           Securities or such rights or options are immediately
                           exercisable.

No adjustment of the Exercise Price shall be required to be made by the Company
and no notice hereunder must be given if the amount of any required adjustment
is less than 5% of the Exercise Price. In such case any such adjustment shall be
carried forward and shall be made (and notice thereof shall be given hereunder)
at the time of and together with the next subsequent adjustment which, together
with any adjustment so carried forward, shall amount to not less than 5% of the
Exercise Price.

         (B) For the purposes of paragraph (A), the following provisions (i)
through (vi), inclusive, shall also be applicable:

                  (i)      If, at the time Shares are issued and sold upon the
                           conversion or exchange of Convertible Securities or
                           upon the exercise of rights or options previously
                           granted by the Company, the price per Share for which
                           such Shares are issued (determined by dividing (a)
                           the total amount, if any, received by the Company as
                           consideration for such Convertible Securities or for
                           the granting of such rights or options, plus the
                           aggregate amount of additional consideration paid to
                           the Company upon the conversion or exchange of such
                           Convertible Securities (which, if so provided in such
                           Convertible Securities, shall be deemed to be equal
                           to the outstanding principal amount of the
                           indebtedness represented by such Convertible
                           Securities) or upon the exercise of such rights or
                           options, by (b) the total number of Shares issued
                           upon the conversion or exchange of such Convertible
                           Securities or upon the exercise of such rights or
                           options) shall be less than the Exercise Price in
                           effect immediately prior to such issue, sale or
                           exercise, then the adjustments provided for by the
                           first paragraph of this Annex 1 and paragraph (A)
                           shall be made. In making the adjustment of the
                           Exercise Price provided for by paragraph (A), the
                           amount described in clause (a) of this paragraph
                           (B)(i) shall be considered the consideration received
                           by the Company upon the issue or sale of the Shares
                           for purposes of clause (i)(b) of paragraph (A).

                  (ii)     In case at any time any Shares or Convertible
                           Securities or any rights or options to purchase any
                           Shares or Convertible Securities shall be issued or
                           sold for cash, the consideration received therefor
                           shall be deemed to be the amount received by the
                           Company therefor without deduction therefrom of any
                           expenses incurred or any underwriting commissions or
                           concessions paid or allowed by the Company in
                           connection therewith. In case any Shares or
                           Convertible

PAGE 2 - ANNEX 1

<PAGE>

                           Securities or any rights or options to purchase any
                           Shares or Convertible Securities shall be issued or
                           sold, in whole or in part, for consideration other
                           than cash, the amount of the consideration other than
                           cash received by the Company in exchange for the
                           issue or sale of such Convertible Securities shall be
                           deemed to be the fair value of such consideration as
                           determined in good faith by the Board of Directors of
                           the Company, without deduction therefrom of any
                           expenses incurred or any underwriting commissions or
                           concessions paid or allowed by the Company in
                           connection therewith; provided that if the holder or
                           holders of at least 66-2/3% of the Warrant Shares
                           purchasable under this Warrant shall request in
                           writing, the value of such consideration shall be
                           determined by an independent expert selected by such
                           holders, the costs and expenses of which shall be
                           borne by the Company, and, if the value of such
                           consideration as so determined is less than the value
                           determined by the Board of Directors of the Company,
                           the lesser value shall be utilized in calculating the
                           consideration per Share received by the Company for
                           purposes of making the adjustment provided by
                           paragraph (A). In the event of any merger or
                           consolidation of the Company in which the Company is
                           not the surviving corporation or in the event of any
                           sale of all or substantially all of the assets of the
                           Company for stock or other securities of any
                           corporation, the Company shall be deemed to have
                           issued a number of Shares for stock or securities of
                           such other corporation computed on the basis of the
                           actual exchange ratio on which the transaction was
                           predicated and for consideration that is equal to the
                           fair market value on the date of such transaction of
                           such stock or securities of the other corporation,
                           and if any such calculation results in adjustment of
                           the Exercise Price, the determination of the number
                           of Shares issuable upon exercise of this Warrant
                           immediately prior to such merger, consolidation or
                           sale, for purposes of paragraph (A), shall be made
                           after giving effect to such adjustment of the
                           Exercise Price.

                  (iii)    The number of Shares outstanding at any given time
                           shall not include Shares that have been redeemed by
                           the Company and not canceled, if any, and that are
                           thus owned or held by or for the account of the
                           Company, and the disposition of any such Shares shall
                           be considered an issue or sale of Shares for purposes
                           of paragraph (A).

                  (iv)     "Market Price" shall mean the lower of (a) the
                           average closing sales prices of Shares recorded on
                           the principal national securities exchange on which
                           the Shares are listed or in a national market system
                           for securities in which the Shares are admitted to
                           trading or (b) the average of the closing bid and
                           asked prices of Shares reported in the domestic
                           over-the-counter market, for the 20 trading days
                           immediately prior to the day as of which the Market
                           Price is being determined. If the Shares are not
                           listed on any national securities exchange or

PAGE 3 - ANNEX 1

<PAGE>

                           admitted for trading in any national market system or
                           traded in the domestic over-the-counter market, the
                           Market Price shall be the higher of (y) the book
                           value of the Shares as determined by a firm of
                           independent public accountants of recognized standing
                           selected by the Board of Directors of the Company as
                           of the last day of any month ending within 60 days
                           preceding the date as of which the determination is
                           to be made or (z) the fair market value of the Shares
                           determined in good faith by the Board of Directors of
                           the Company, provided that if the holder or holders
                           of at least 66-2/3% of the Warrant Shares purchasable
                           under the Warrant shall request in writing, the fair
                           market value of the Shares shall be determined by an
                           independent investment banking firm or other
                           independent expert selected by such holders and
                           reasonably satisfactory to the Company, which
                           determination shall be as of a date which is within
                           15 days of the date as of which the determination is
                           to be made.

                  (v)      Anything herein to the contrary notwithstanding, in
                           case the Company shall issue any Shares in connection
                           with the acquisition by the Company of the stock or
                           assets of any other corporation or the merger of any
                           other corporation into the Company under
                           circumstances where, on the date of the issuance of
                           such Shares, the consideration received for such
                           Shares is less than the Market Price of the Shares,
                           but on the date the number of Shares was determined,
                           the consideration received for such Shares would not
                           have been less than the Market Price thereof, such
                           Shares shall not be deemed to have been issued for
                           less than the Market Price.

                  (vi)     Anything in clause (ii) of this paragraph (B) to the
                           contrary notwithstanding, in the case of an
                           acquisition where all or part of the purchase price
                           is payable in Shares or Convertible Securities but is
                           stated as a dollar amount, where the Company upon
                           making the acquisition pays only part of a maximum
                           dollar purchase price which is payable in Shares or
                           Convertible Securities and where the balance of such
                           purchase price is deferred or is contingently payable
                           under a formula related to earnings over a period of
                           time, (a) the consideration received for any Shares
                           or Convertible Securities delivered at the time of
                           the acquisition shall be deemed to be such part of
                           the total consideration as the portion of the dollar
                           purchase price then paid in Shares or Convertible
                           Securities bears to the total maximum dollar purchase
                           price payable in Shares or Convertible Securities and
                           (b) in connection with each issuance of additional
                           Shares or Convertible Securities pursuant to the
                           terms of the agreement relating to such acquisition,
                           the consideration received shall be deemed to be such
                           part of the total consideration as the portion of the
                           dollar purchase price then and theretofore paid in
                           Shares or Convertible Shares bears to the total
                           maximum dollar purchase price payable in Shares or
                           Convertible Securities multiplied by a fraction, the
                           numerator of which shall be the number of Shares (or
                           in the case

PAGE 4 - ANNEX 1

<PAGE>

                           of Convertible Securities other than capital stock of
                           the Company, the aggregate principal amount of such
                           Convertible Securities) then issued and the
                           denominator of which shall be the total number of
                           shares (or in the case of Convertible Securities
                           other than capital stock of the Company, the
                           aggregate principal amount of such Convertible
                           Securities) then and theretofore issued under such
                           acquisition agreement. In the event only a part of
                           the purchase price for an acquisition is paid in
                           Shares or Convertible Securities in the manner
                           referred to in this clause (vi), the term "total
                           consideration" as used in this clause (vi) shall mean
                           that part of the aggregate consideration as is fairly
                           allocable to the purchase price paid in Shares or
                           Convertible Securities in the manner referred to in
                           this clause (vi), as determined by the Board of
                           Directors of the Company.

         (C) In the case at any time the Company shall subdivide its outstanding
Shares into a greater number of Shares, then from and after the record date for
such subdivision the Exercise Price in effect immediately prior to such
subdivision shall be proportionately reduced and the number of Shares
purchasable upon the exercise of this Warrant shall be correspondingly
increased, and, conversely, in case the outstanding Shares shall be combined
into a smaller number of Shares, then from and after the record date for such
combination the Exercise Price in effect immediately prior to such combination
shall be proportionately increased and the number of Shares purchasable upon the
exercise of this Warrant shall be correspondingly decreased.

         (D) Unless the provisions of paragraph (E) apply, if any capital
reorganization or reclassification of the capital stock of the Company, or
consolidation or merger of the Company with another corporation, or sale of all
or substantially all of its assets to another corporation, shall be effected in
such a way that holders of Shares (or any other securities of the Company then
issuable upon the exercise of this Warrant) shall be entitled to receive stock,
securities or assets with respect to or exchange for Shares (or such other
securities) then, as a condition of such reorganization, reclassification,
consolidation, merger or sale, lawful and adequate provision shall be made
whereby the holder hereof shall thereafter have the right to purchase and
receive upon the basis and upon the terms and conditions specified in this
Warrant and in lieu of the Shares (or other securities) of the Company
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby, such shares of stock, securities or assets as may be
issued or payable with respect to or in exchange for a number of outstanding
Shares (or other securities) equal to the number of Shares (or other securities)
immediately theretofore so purchasable and receivable had such reorganization,
reclassification, consolidation, merger or sale not taken place, and in any such
case appropriate provision shall be made with respect to the rights and
interests of the holder of this Warrant to the end that the provisions hereof
(including, without limitation, provisions for adjustment of the Exercise Price
and of the number of Shares (or other securities) purchasable upon the exercise
of this Warrant and for the registration thereof as provided in Section 6 of
this Warrant) shall thereafter be applicable, as nearly as may be, in relation
to any shares of stock, securities or assets thereafter deliverable upon the
exercise hereof (including an immediate adjustment, by reason

PAGE 5 - ANNEX 1

<PAGE>

of such consolidation, merger or sale, of the Exercise Price to the value of the
Shares (or other securities) reflected by the terms of such consolidation,
merger or sale if the value so reflected is less than the Exercise Price in
effect immediately prior to such consolidation, merger or sale). In the event of
a consolidation or merger of the Company with or into another corporation as a
result of which a greater or lesser number of securities of the surviving
corporation are issuable to holders of Shares in respect of the number of Shares
outstanding immediately prior to such consolidation or merger, then the Exercise
Price in effect immediately prior to such consolidation or merger shall be
adjusted in the same manner as though there were a subdivision or combination of
the outstanding Shares. The Company shall not effect any such consolidation,
merger or sale, unless prior to or simultaneously with the consummation thereof
the surviving or successor corporation (if other than the Company) resulting
from such consolidation or merger of the corporation purchasing such assets
shall assume, by written instrument executed and mailed to the registered holder
hereof at the last address of such holder appearing on the books of the Company,
the obligation to deliver to such holder such Shares of stock, securities or
assets as, in accordance with the foregoing provisions, such holder may be
entitled to purchase, and containing the express assumption of such surviving or
successor corporation of the due performance of every provision of this Warrant
to be performed by the Company and of all liabilities and obligations of the
Company hereunder.

         (E) In the event of a change in control of the Company, as defined in
this paragraph (E), then the Board of Directors shall accelerate the exercise
date of the Warrant or make this Warrant fully vested and exercisable and, in
its sole discretion, may take any or all of the following actions: (a) grant a
cash bonus award to any holder of this Warrant in an amount necessary to pay the
Exercise Price of all or any portion of the Warrant then held by such person;
(b) pay cash to any holder of this Warrant in exchange for the cancellation of
the holder's Warrant in an amount equal to the difference between the Exercise
Price of such Warrant and the greater of the tender offer price for the
underlying Shares or the Market Price of the Shares on the date of the
cancellation of the Warrant; and (c) make any other adjustments or amendments to
this Warrant. For purposes of this paragraph (E), a "change in control" shall be
deemed to have occurred if (a) any "person" or "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended
("1934 Act"), other than a trustee or other fiduciary holding securities under
an employee benefit plan of the Company is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of more than
50% of the then outstanding voting stock of the Company; or (b) at any time
during any period of three consecutive years after the date of this Warrant,
individuals who at the beginning of such period constitute the Board (and any
new director whose election by the Board or whose nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority thereof; or (c) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 50% of the
combined voting power

PAGE 6 - ANNEX 1

<PAGE>

of the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation.

         (F) In case at any time the Company shall pay any dividend on or make
any other distribution with respect to Shares (or any other securities of the
Company then issuable upon the exercise of the Warrant) that is payable in
Shares, Convertible Securities, any other securities of the Company or other
stock, securities or assets, other than cash, then thereafter, and in lieu of
any adjustment of the Exercise Price and the number of Shares issuable upon the
exercise of this Warrant, the holder of this Warrant, upon any exercise of the
rights represented hereby, shall be entitled to receive the number of Shares (or
other securities) being purchased upon such exercise and, in addition to and
without further payment, the Shares, Convertible Securities, other securities of
any company or other stock, securities or assets which the holder of this
Warrant would have received by way of such distributions if continuously since
the date of the Warrant (or, if this Warrant shall have been issued pursuant to
Section 7 of this Warrant, the date of the predecessor Warrant to which this
Warrant relates) such holder had been the record holder of the number of Shares
(or other securities), then being purchased and had retained all such Shares,
Convertible Securities, other securities of the Company or other stock,
securities or assets distributable with respect to such Shares (or other
securities) and, furthermore, all cash, stock, securities or assets payable as
dividends or distributions with respect to the foregoing and originating
directly or indirectly therefrom. The Company shall reserve and retain in escrow
from any such dividend or distribution of Shares, Convertible Securities, other
securities of the Company or other stock, securities or assets, and from any
such dividends or distributions with respect thereto and originating directly or
indirectly therefrom, such Shares, Convertible Securities, other securities of
the Company and other stock, securities, assets and cash as shall be necessary
to fulfill its obligations to the holder hereof pursuant to this paragraph (F).

         (G) If at any time conditions arise by reason of action taken by the
Company, which in the good faith opinion of the Board of Directors of the
Company, are not adequately covered by the provisions of this Annex 1, and which
might materially adversely affect the rights of the holder of this Warrant, the
Company shall appoint a firm of independent public accountants of recognized
standing (which may be the regular accountants or auditors of the Company),
which shall give their opinion as to the adjustments, if any, in the Exercise
Price and the number of Shares purchasable upon the exercise of this Warrant, or
other change in the rights of the holder hereof, on a basis consistent with the
other provisions of this Annex 1, necessary to preserve without diminution the
rights of the holder hereof. Upon receipt of such opinion, the Company shall
forthwith make the adjustments described therein.

         (H) (i)      Within ten (10) days of any adjustment of the Exercise
                      Price or change in the number of Shares purchasable upon
                      the exercise of this Warrant made pursuant to paragraphs
                      (A), (B), (C) , or (F) or any change in the rights of the
                      holder of this Warrant by reason of the occurrence of
                      events described in paragraphs (D), (E), or (F), the
                      Company shall give written notice by certified or
                      registered mail to the registered holder of this Warrant
                      at the address of such holder as shown

PAGE 7 - ANNEX 1

<PAGE>

                      on the books of the Company, which notice shall describe
                      the event requiring such adjustments (with respect to any
                      adjustment made pursuant to paragraphs (C), (D), (E) or
                      (F), the Exercise Price resulting from such adjustment,
                      the increase or decrease, if any, in the number of Shares
                      purchasable upon the exercise of this Warrant, or the
                      other change in the rights of such holder, and set forth
                      in reasonable detail the method of calculation of such
                      adjustments and the facts upon which such calculations are
                      based. Within two (2) days of receipt from the holder of
                      this Warrant upon the surrender hereof for exercise
                      pursuant to Section 1 of this Warrant, and within three
                      (3) days of receipt from the holder hereof a written
                      request therefor (which request shall not be made more
                      than once each calendar quarter), the Company shall give
                      written notice by certified or registered mail to such
                      holder at his address as shown on the books of the Company
                      of the Exercise Price in effect as of the date of receipt
                      by the Company of this Warrant for exercise, or the date
                      of receipt of such written request, and the number of
                      Shares purchasable or the number or amount of other shares
                      of stock, securities or assets receivable as of such date,
                      and set forth in reasonable detail the method of
                      calculation of such numbers; provided that no further
                      adjustments to the Exercise Price or the number of Shares
                      purchasable or number or amount of shares, securities or
                      assets receivable on exercise of this Warrant shall be
                      made after receipt of this Warrant by the Company for
                      exercise.

             (ii)     Upon each adjustment of the Exercise Price and each change
                      in the number of Shares purchasable upon the exercise of
                      this Warrant, and change in the rights of the holder of
                      this Warrant by reason of the occurrence of other events
                      herein set forth, then and in each case, upon written
                      request of the holder of this Warrant (which request shall
                      be made not more often than once each calendar year), the
                      Company will at its expense promptly obtain an opinion of
                      independent public accountants reasonably satisfactory to
                      each holder stating the then effective Exercise Price and
                      the number of Shares then purchasable, or specifying the
                      other shares of stock, securities or assets and the amount
                      thereof then receivable, and setting forth in reasonable
                      detail the method of calculation of such numbers and the
                      facts upon which such calculations are based. The Company
                      will promptly mail a copy of such opinion to the
                      registered holder hereof.

         (I) In case at any time:

             (i)      The Company shall pay any dividend payable in capital
                      stock on its outstanding Shares or make any distribution
                      (other than regular cash dividends) to the holders of
                      Shares;

PAGE 8 - ANNEX 1

<PAGE>

             (ii)     The Company shall offer for subscription pro rata to the
                      holders of Shares any additional capital stock or other
                      rights;

             (iii)    There shall be authorized any capital reorganization or
                      reclassification of the capital stock of the Company, or
                      consolidation or merger of the Company with, or sale of
                      all or substantially all of its assets to, another
                      corporation; or

             (iv)     There shall be authorized or commence a voluntary or
                      involuntary dissolution, liquidation or winding up of the
                      Company.

then, in one or more of said cases, the Company shall given written notice by
certified or registered mail to Obourn at the address of Obourn as shown on the
books of the Company on the date on which (1) the books of the Company shall
close or a record shall be taken for such dividend, distribution, or
subscription rights, or (2) such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up shall take
place or be voted upon by the shareholders of the Company, as the case may be.
Such notice shall also specify the date as of which the holders of record of
Shares shall participate in such dividend, distribution or subscription rights,
or shall be entitled to exchange their Shares for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding up, as the case may be. Such written
notice shall be given at least thirty (30) days prior to the action in question
and no less than thirty (30) days prior to the record date or the date on which
the Company's books are closed in respect thereto.

PAGE 9 - ANNEX 1

<PAGE>

                                                                       EXHIBIT A

                                SUBSCRIPTION FORM

                     To be Executed by the Registered Holder
                   Desiring to Exercise the Within Warrant of
                              TIPPERARY CORPORATION

         The undersigned registered holder hereby exercises the right to
purchase _______ Shares covered by the within Warrant according to the
conditions thereof, and herewith makes payment of the Exercise Price of such
Shares, $ _____________.

Name of Registered Holder:
                          ------------------------------------------------------

Signature:
          ----------------------------------------------------------------------

Title of Signing Officer or Agent (if any):
                                           -------------------------------------

Address of Registered Holder:
                             ---------------------------------------------------

Tax I.D. No.:
             -------------------------------------------------------------------

Dated:                          , 20   .
        ------------------------    ---

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00036-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00036-of-00352.parquet"}]]