UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 2, 2021

HUGOTON ROYALTY TRUST

(Exact name of Registrant as specified in its charter)

Registrant’s Telephone Number, including area code: (855) 588-7839

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Hugoton Royalty Trust (the “Trust”) is an express trust formed under the laws of the state of Texas and governed by the terms of the Hugoton Royalty Trust Royalty Trust Indenture dated December 1, 1998, as amended and restated on March 24, 1999 (the “Indenture”).

On July 2, 2021, Simmons Bank, a bank organized under the laws of the United States, acting not in its individual corporate capacity but solely as trustee of the Trust under the Indenture (the “Trustee”), entered into a Purchase and Sale Agreement (the “Purchase Agreement”) by and between the Trustee and XTO Energy Inc., a Delaware corporation (“XTO Energy”). Pursuant to the Purchase Agreement, the Trustee has agreed to sell, and XTO Energy agreed to purchase, for an aggregate consideration of $6,600,000 in cash (i) the net overriding royalty interest (the “Royalty Interest”) created pursuant to certain net overriding royalty conveyances, and any and all rights of Trustee and the Trust under such conveyances; (ii) all of Trustee’s and the Trust’s right, title and interest in and to the Chieftain Arbitration (as defined in the Purchase Agreement) and all audit rights and claims of Trustee and the Trust related to disputed amounts on the computation of the net profits; and (iii) all of Trustee’s and the Trust’s right, title and interest in and to any geological, geophysical or reserve data relating to the lands relating to the leases subject to the net overriding royalty conveyances described above, other than such data that is interpretive in nature (collectively, the “Trust Assets”).

At the closing of the sale of the Trust Assets (the “Closing”), the Purchase Price shall be increased by the amount of any taxes allocated to XTO Energy but paid, payable or otherwise economically borne by the Trustee. The Purchase Price shall be decreased by: the deposit equal to 10% of the purchase price payable by XTO upon execution of the Purchase Agreement and any computed interest on the deposit; the amount attributable to any fire or other casualty event (or takings by condemnation or eminent domain) in an amount reasonably expected to impact any future economic benefits that could be realized under the net overriding royalty conveyances described above or the Royalty Interest; the amount of any taxes allocated to the Trustee but paid, payable, or otherwise economically borne by XTO Energy; the allocated value of any portion of the Royalty Interest sold pursuant to Section 3.02(b) of the Indenture between the execution date of the Purchase Agreement and the Closing; and the amount of any Royalty Interests payments received by the Trustee between the execution date of the Purchase Agreement and the Closing or accruing thereto.

The Purchase Agreement contains customary representations and warranties, covenants and agreements. As part of the Purchase Agreement, the Trustee and XTO Energy agreed to stay the arbitration currently pending between them from the date of execution of the Purchase Agreement through the earlier of either the termination of the Purchase Agreement or the Closing date of the sale of Trust Assets.

The Purchase Agreement may be terminated at any time prior to Closing, under circumstances described in the Purchase Agreement that include: by the mutual written consent of the Trustee and XTO Energy; by one party upon certain uncured breaches by the other party; by either party if the Closing has not occurred by the eighteen (18) month anniversary of the execution date of the Purchase Agreement; and by either party if any governmental authority shall have issued an order, judgment or decree or taken any other action challenging, delaying, restraining, enjoining, prohibiting or invalidating the consummation of any of the transactions contemplated by the Purchase Agreement and such order, judgment, decree or other action shall have become final and nonappealable.

The consummation of the sale of the Trust Assets and other transactions contemplated by the Purchase Agreement is subject to the satisfaction of customary closing conditions, including, among other things, the performance by the parties, in all material respects, of their respective obligations, covenants and agreements as set forth in the Purchase Agreement and the accuracy, in all material respects, of their respective representations and warranties as set forth in the Purchase Agreement. The sale of Trust Assets is also subject to either approval of the sale from holders of units of beneficial interest in the Trust (“Units”) holding Units representing eighty percent (80%) or more of all the Units outstanding, or a final judicial determination authorizing the Trustee to consummate the sale of the Trust Assets.

The sale of the Trust Assets would constitute a disposition of all the Royalties of the Trust, and as a result, pursuant to the Indenture, the Trust would be terminated following the Closing.

The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement, a copy of which is attached hereto as Exhibit 2.1.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: July 2, 2021

Exhibit 2.1

EXECUTION VERSION

PURCHASE AND SALE AGREEMENT

BETWEEN

SIMMONS BANK (AS TRUSTEE OF HUGOTON ROYALTY TRUST)

AS SELLER

AND

XTO ENERGY INC.

AS BUYER

TABLE OF CONTENTS

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EXHIBITS AND SCHEDULES

Exhibit A – Net Overriding Royalty Conveyance Instruments

Exhibit B – Subject Interests

Exhibit C – Release, Reconveyance and Termination of Net Overriding Royalty Interest

Schedule 4.02(a) – Consents under Indenture

Schedule 4.02(b) – Preferential Rights and Consents

Schedule 4.06 – Existing Claims and Litigation

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EXECUTION VERSION

PURCHASE AND SALE AGREEMENT

This Purchase and Sale Agreement is made and entered into this 2nd day of July, 2021 (the “Execution Date”), by and between Simmons Bank, a bank organized under the laws of the United States, acting not in its individual corporate capacity but solely as trustee under that certain Royalty Trust Indenture of Hugoton Royalty Trust dated December 1, 1998 and amended and restated as of March 24, 1999 (“Seller”), and XTO Energy Inc., a Delaware corporation (“Buyer”). Buyer and Seller are collectively referred to herein as the “Parties”, and are sometimes referred to individually as a “Party.”

W I T N E S S E T H:

WHEREAS, Seller is willing to sell to Buyer, and Buyer is willing to purchase from Seller, the Assets (as defined in Section 2.02), all upon the terms and conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the mutual benefits derived and to be derived from this Agreement by each Party, Seller and Buyer hereby agree as follows:

ARTICLE 1

DEFINITIONS

Section 1.01    Defined Terms. The following terms when used herein and in the Exhibits and Schedules have the following meanings:

“Assets” is defined in Section 2.02.

“Agreement” means this Purchase and Sale Agreement, together with all of the Exhibits and Schedules hereto, as the same may be amended in writing from time to time.

“Allocated Values” is defined in Section 3.03.

“Applicable Percentage” means eighty percent (80%).

“Assumed Obligations” is defined in Section 13.01.

“Business Day(s)” means any day excluding Saturdays, Sundays and U.S. federal legal holidays.

“Buyer” is defined in the introductory paragraph.

“Chieftain Arbitration” is defined in Schedule 4.06.

“Closing” is defined in Section 9.01.

“Closing Date” is defined in Section 9.01.

“Code” means the Internal Revenue Code of 1986, as amended.

“Computed Interest” is defined in Section 3.02.

“Deposit” is defined in Section 3.02.

“Disputes” is defined in Section 15.01.

“Documents” is defined in Section 16.02.

“Effective Time” is defined in Section 3.04.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exhibit” means any of the exhibits attached hereto and incorporated herein.

“Final Settlement Date” is defined in Section 11.02.

“Final Settlement Statement” is defined in Section 11.02.

“GAAP” means United States generally accepted accounting principles as applied in the oil and gas industry.

“Governmental Authority” means: (i) any federal, tribal, state, local, municipal, foreign or other government, any governmental or quasi-governmental authority of any nature (including any governmental board, agency, branch, department, official, or entity and any court or other tribunal); and (ii) any body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power or any nature (including any stock exchange and over-the-counter market).

“Hazardous Material” means any substance regulated or that may form the basis of liability under any Environmental Law, including but not limited to any substance defined or regulated as “hazardous,” “toxic,” a “pollutant,” a “contaminant,” a “waste,” or words of similar meaning and regulatory effect, including but not limited to oil and gas exploration and production waste and NORM.

“Hydrocarbons” means oil, gas or other hydrocarbons.

“Indenture” means that certain Royalty Trust Indenture of Hugoton Royalty Trust dated December 1, 1998 and amended and restated as of March 24, 1999.

“Knowledge” means, with respect to Seller, the actual knowledge (after reasonable inquiry, which inquiry shall be limited to employees of Simmons Bank) of Ron Hooper and Nancy Willis.

“Law” means any applicable federal, tribal, state, local, municipal, foreign, international, multinational, or other administrative Order, constitution, law, ordinance, principle of common law, rule, regulation, statute or treaty or other requirement of any Governmental Authority.

“Leases” means the oil, gas and mineral leases described in Schedule A to the Net Overriding Royalty Conveyance.

“Net Overriding Royalty Conveyance” is defined in Section 2.02(a).

“Net Profits” has the meaning given it in the Net Overriding Royalty Conveyance.

“NORM” means naturally occurring radioactive material.

“Notice of Disagreement” is defined in Section 11.02(a).

“Order” means any award, decision, injunction, judgment, order, consent decree, ruling, subpoena or verdict entered, issued, made or rendered by any Governmental Authority.

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“Party” or “Parties” is defined in the introductory paragraph.

“Permitted Encumbrances” means any of the following matters to the extent the same are valid and subsisting and affect the Assets:

(i)    any (A) undetermined or inchoate liens or charges constituting or securing the payment of expenses that were incurred incidental to the maintenance, development, production or operation of the Leases or for the purpose of developing, producing or processing the Hydrocarbons therefrom or therein, and (B) materialman’s, mechanics’, repairman’s, employees’, contractors’, operators’ liens or other similar liens or charges for liquidated amounts arising in the ordinary course of business for sums not yet due or being contested in good faith by appropriate action promptly initiated and diligently conducted if such reserve as shall be required by GAAP shall have been made therefor;

(ii)    any liens for taxes and assessments not yet delinquent or, if delinquent, that are being contested in good faith in the ordinary course of business and for which Seller has agreed to pay pursuant to the terms hereof or which have been prorated pursuant to the terms hereof, and for which adequate reserves have been established in accordance with applicable accounting principles;

(iii)    any (A) easements, rights-of-way, servitudes, permits, surface leases and other rights in respect of surface operations, pipelines, grazing, hunting, lodging, canals, ditches, reservoirs or the like, and (B) easements for streets, alleys, highways, pipelines, telephone lines, power lines, railways and other similar rights-of-way on, over or in respect of the lands covered by the Subject Interests, to the extent that same do not materially interfere with the oil and gas operations to be conducted on the Subject Interests;

(iv)    all lessors’ royalties, overriding royalties, or reversionary interests reflected of record as of the Effective Time, provided that such matters do not operate to (A) reduce the Net Profits of Seller below the Applicable Percentage, (B) reduce the net revenue interests as to a well or unit set forth on Exhibit B below those set forth in Exhibit B or (C) increase the working interests as to a well or unit set forth on Exhibit B above those set forth in Exhibit B without a corresponding increase in the net revenue interest;

(v)    preferential rights to purchase or similar agreements with respect to which (A) waivers or consents are obtained from the appropriate parties for the transaction contemplated hereby, and/or (B) required notices have been given for the transaction contemplated hereby to the holders of such rights and the appropriate period for asserting such rights has expired without an exercise of such rights;

(vi)    required Third Party consents to assignments or similar agreements with respect to which (A) waivers or consents are obtained from the appropriate parties for the transaction contemplated hereby, and/or (B) required notices have been given for the transaction contemplated hereby to the holders of such rights and the appropriate period for asserting such rights has expired without an exercise of such rights;

(vii)    all rights to consent by, required notices to, filings with, or other actions by Governmental Authorities in connection with the sale or conveyance of oil and gas leases or interests therein that are customarily obtained subsequent to such sale or conveyance;

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(viii)    contracts or agreements affecting the Subject Interests that are expressly allowed pursuant to the Net Overriding Royalty Conveyance that have terms that are ordinary and customary to the oil, gas, sulphur and other mineral exploration, development, processing or extraction business or in the business of processing of gas and gas condensate production for the extraction of products therefrom, to the extent the same do not (A) reduce the Net Proceeds of Seller below the Applicable Percentage, (B) reduce the net revenue interests as to a well or unit set forth on Exhibit B below those set forth in Exhibit B, or (C) increase the working interests as to a well or unit set forth on Exhibit B above those set forth in Exhibit B without a corresponding increase in the net revenue interest; and

(ix)    rights reserved to or vested in any Governmental Authority to control or regulate any of the Assets or the Leases and the applicable Laws, rules, and regulations of such Governmental Authorities.

“Preliminary Statement” is defined in Section 9.03.

“Proxy Statement” is defined in Section 13.05(a).

“Purchase Price” is defined in Section 3.01.

“Purchase Price Adjustments” is defined in Section 9.02(c).

“Recommendation” is defined in Section 4.03.

“Royalty Interest” is defined in Section 2.02(a).

“Sale” means the purchase and sale of the Assets pursuant to and in accordance with this Agreement.

“SEC” means the Securities and Exchange Commission.

“Schedule” means any of the schedules attached hereto and incorporated herein.

“Seller” is defined in the introductory paragraph.

“Subject Interests” has the meaning given in the Net Overriding Royalty Conveyance.

“Third Party” means any person or entity, governmental or otherwise, other than Seller, Buyer and Exxon Mobil Corporation and its subsidiaries; the term includes, but is not limited to, working interest owners, royalty owners, lease operators, landowners, service contractors and governmental agencies.

“Trust” means Hugoton Royalty Trust which was established pursuant to the Indenture.

“Trust Accounting Principles” means the cash basis of accounting permitted by the Securities and Exchange Commission for royalty trusts.

“Unitholder Approval” means the approval of the Sale by the holders of eighty percent (80%) or more of the outstanding units of beneficial interest of the Trust.

“Unitholder Meeting” is defined in Section 13.05(c).

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“XTO” means XTO Energy Inc.

Section 1.02    References and Rules of Construction. All references in this Agreement to Exhibits, Schedules, Articles, Sections, subsections and other subdivisions refer to the corresponding Exhibits, Schedules, Articles, Sections, subsections and other subdivisions of or to this Agreement unless expressly provided otherwise. Titles appearing at the beginning of any Articles, Sections, subsections and other subdivisions of this Agreement are for convenience only, do not constitute any part of this Agreement, and shall be disregarded in construing the language hereof. The words “this Agreement,” “herein,” “hereby,” “hereunder” and “hereof,” and words of similar import, refer to this Agreement as a whole and not to any particular Article, Section, subsection or other subdivision unless expressly so limited. The words “this Article,” “this Section” and “this subsection,” and words of similar import, refer only to Article, Section or subsection hereof in which such words occur. Wherever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limiting the foregoing in any respect.” All references to “$” or “dollars” shall be deemed references to United States dollars. Each accounting term not defined herein will have the meaning given to it under GAAP as interpreted as of the Execution Date. Pronouns in masculine, feminine or neuter genders shall be construed to state and include any other gender, and words, terms and titles (including terms defined herein) in the singular form shall be construed to include the plural and vice versa, unless the context otherwise requires.

ARTICLE 2

ASSETS

Section 2.01    Agreement to Sell and Purchase. Subject to and in accordance with the terms and conditions of this Agreement, Buyer agrees to purchase the Assets from Seller, and Seller agrees to sell the Assets to Buyer.

Section 2.02    Assets. The term “Assets” shall mean the following described properties, rights and interests:

(a)    the net overriding royalty interest (the “Royalty Interest”) created pursuant to the instruments described on Exhibit A (such instruments are herein called collectively, the “Net Overriding Royalty Conveyance”), and any and all rights of Seller and the Trust under the Net Overriding Royalty Conveyance;

(b)    all of Seller’s and the Trust’s right, title and interest in and to the Chieftain Arbitration and all audit rights and claims of Seller and the Trust related to disputed amounts on the computation of the Net Profits; and

(c)    all of Seller’s and the Trust’s right, title and interest in and to any geological, geophysical or reserve data relating to the lands relating to the leases subject to the Net Overriding Royalty Conveyance, other than such data that is interpretive in nature.

ARTICLE 3

PURCHASE PRICE; WITHHOLDING

Section 3.01    Purchase Price. The total consideration for the purchase, sale and conveyance of the Assets to Buyer is Buyer’s payment to Seller of the sum of SIX MILLION, SIX HUNDRED-THOUSAND Dollars ($6,600,000) (the “Purchase Price”), as adjusted in accordance with the provisions of this Agreement. Purchase Price shall be paid to Seller at Closing (as defined in Section 9.01) by means of a completed federal funds transfer to an account designated in writing to Buyer by Seller no later than two (2) Business Days before the Closing.

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Section 3.02    Deposit. Concurrently with the execution of this Agreement by Buyer and Seller, Buyer shall deliver to Seller a performance guarantee deposit equal to ten percent (10%) of the Purchase Price (the “Deposit”). The Deposit shall be paid by Buyer to Seller by means of a completed federal funds transfer to:

Simmons Bank/Trust

Acct #10118174

ABA 082900432

Attn: Trust Ops

FBO: 5522000277 – Hugoton Royalty Trust

Trust Operations Contacts:        Debbie Neal (870) 541-1109

                 Tracy Bradley (817) 916-6020

The Deposit shall bear interest based on the interest rate, if any, paid by the depository institution (“Computed Interest”) and shall be subject to the terms of this Agreement.

Section 3.03    Purchase Price Allocation. Seller and Buyer hereby agree to the following allocation of the Purchase Price (the “Allocated Values”) among the Assets for U.S. federal income tax purposes:

Seller and Buyer shall file all information reports and tax returns (including IRS Form 8594 and any amended tax returns or claims for refund) in a manner consistent with the Purchase Price allocation, and neither Seller nor Buyer shall take, or shall permit any affiliate to take, any position inconsistent with such Purchase Price allocation on any tax return or otherwise, unless required to do so by applicable Law. The Allocated Values shall take into account any adjustments to the Purchase Price pursuant to this Agreement, as mutually agreed upon by the Parties in writing.

Section 3.04    Effective Time. At the Closing, the ownership of the Assets shall be transferred from the Trust and Seller to Buyer effective as of 7:00 a.m. local time where the Assets are located on the Closing Date (the “Effective Time”).

Section 3.05    Withholding. Buyer and its affiliates shall be entitled to deduct and withhold, from any amounts payable to any Seller under this Agreement, amounts required to be deducted and withheld

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under the Code or any other applicable Law; provided however, that, except with respect to (i) withholding under Section 1445 of the Code, if the Seller fails to provide the certifications described in Section 9.04(b) of this Agreement, (ii) U.S. federal backup tax withholding and (ii) any compensatory payments, Buyer shall provide Seller with written notice of such withholding no later than three (3) days prior to the Closing Date. To the extent any amount is so withheld and paid to the appropriate Governmental Authority pursuant to applicable Law, such withheld amounts shall be treated for all purposes of the Agreement as having been paid to Seller.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF SELLER

Subject to the provisions of this Article 4 and the other terms and conditions of this Agreement and the exceptions and matters set forth on the Schedules, Seller represents and warrants to Buyer that:

Section 4.01    Existence. The Trust is duly organized and validly existing under the laws of the State of Texas. The Trust has full legal power, right and authority to carry on its business as such is now being conducted. Seller is duly organized and validly existing under the laws of the State of Arkansas. Seller has full legal power, right and authority to carry on its business as such is not being conducted. Seller is the duly appointed and authorized trustee of the Trust.

Section 4.02    Legal Power. Seller has the legal power and right to enter into and perform this Agreement and the transactions contemplated hereby (including the Sale). The consummation of the transactions contemplated by this Agreement (including the Sale) will not violate, nor be in conflict with:

(a)    any provision of the Indenture or other governing documents of the Trust or any governing documents of Seller, assuming receipt of the consents set forth on Schedule 4.02(a);

(b)    except for any preferential purchase rights and consents to assignment listed on Schedule 4.02(b), any material agreement or instrument to which Seller or the Trust is a party or by which Seller or the Trust is bound (except any such violation or conflict that (i) does not materially affect the ability of the Trust or Seller to consummate the transactions contemplated herein or (ii) would not be material to the Assets or the Assumed Obligations); or

(c)    any judgment, order, ruling or decree applicable to Seller or the Trust as a party in interest or any law, rule or regulation applicable to Seller or the Trust (except any such violation or conflict that (i) does not materially affect the ability of the Trust or Seller to consummate the transactions contemplated herein or (ii) would not be material to the Assets or the Assumed Obligations).

Section 4.03    Execution.

(a)    Assuming the receipt of all consents set forth on Schedules 4.02(a) and 4.02(b), the execution, delivery and performance of this Agreement and the transactions contemplated hereby are duly and validly authorized by all requisite action on the part of Seller and the Trust. This Agreement constitutes (and the closing documents described in Section 9.04 will constitute, when delivered pursuant to this Agreement) the legal, valid and binding obligation of Seller (and, as applicable, the Trust) enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium, and other similar Laws affecting creditors’ rights generally and by general principles of equity.

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(b)    Seller has adopted resolutions (i) approving the execution, delivery and performance by Seller of this Agreement and the consummation of the transactions contemplated hereby, (ii) determining that the Sale is in the best interest of the unitholders of the Trust and (iii) submitting the Sale for approval by the Trust’s unitholders and recommending that the unitholders of the Trust approve the Sale (the “Recommendation”).

Section 4.04    Brokers. EnergyNet.com has acted for or on behalf of Seller in connection with this Agreement and the transactions contemplated by this Agreement. No broker or finder is entitled to any brokerage or finder’s fee, or to any commission, based in any way on agreements, arrangements or understandings made by or on behalf of Seller or any affiliate of Seller for which Buyer or any affiliate of Buyer has or will have any liabilities or obligations (contingent or otherwise).

Section 4.05    Bankruptcy. There are no bankruptcy, reorganization or arrangement proceedings pending, being contemplated by or to the Knowledge of Seller threatened against Seller or the Trust.

Section 4.06    Suits. There is no suit, action, claim, investigation or inquiry by any person or entity or by any administrative agency or Governmental Authority and no legal, administrative or arbitration proceeding pending or, to Seller’s Knowledge, threatened against the Trust, Seller or any affiliate of Seller or the Assets (or to the Knowledge of Seller, the Subject Interests) except as shown on Schedule 4.06.

Section 4.07    Taxes.

(a)    All material taxes based on or measured by the ownership of the Assets or, to Seller’s Knowledge, the ownership or operation of the Subject Interests, or production of Hydrocarbons attributable to the Subject Interests or the receipt of proceeds therefrom, that have become due and payable have been paid.

(b)    All tax returns with respect to the ownership of the Assets required to be filed have been duly and timely filed, and all such tax returns are true, correct and complete in all material respects.

(c)    No written notice of any pending claims (which remain outstanding) from any applicable taxing authority for assessment of taxes with respect to the ownership of the Assets or, to Seller’s Knowledge, the ownership, operation or use of the Subject Interests has been received, and, to Seller’s Knowledge, no such claim has been threatened.

(d)    None of the Assets is subject to a tax partnership agreement for U.S. federal tax purposes.

(e)    No audit, litigation or other proceeding with respect to taxes applicable to the ownership of the Assets is presently pending.

(f)    No extension or waiver of any statute of limitations of any jurisdiction regarding the assessment or collection of any tax relating to the Assets is in effect.

(g)    There are no outstanding liens or other encumbrances with respect to taxes upon any of the Assets or, to Seller’s Knowledge, the Subject Interests, except for liens with respect to real property taxes not yet due.

(h)    No power of attorney that is currently in force has been granted with respect to any tax matter relating to the Assets.

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Notwithstanding anything to the contrary in this Agreement, the representations and warranties set forth in this Section 4.07 are the sole representations and warranties relating to tax matters relating to the Assets or the Subject Interests. The representations and warranties made in this Section 4.07 refer to the past activities, status and positions and are not intended to serve as representations to, or a guarantee of, nor can they be relied upon with respect to, taxes attributable to any taxable period (or portion thereof) beginning after the Closing Date.

Section 4.08    Defaults. (a) Except for disputes described in Schedule 4.06, neither the Trust nor the Trustee is in default under the Net Overriding Royalty Conveyance nor, to Seller’s Knowledge, is any other party thereto in default thereunder, and (b) XTO has not provided notice to Seller of any suit, action or claim that has been made or threatened in writing against XTO or any Subject Interests contesting the validity or enforceability of any Lease or that if adversely determined could reasonably be expected to terminate or invalidate any Lease or to reduce XTO’s net revenue interest as to a well or unit set forth on Exhibit B to less than the percentage set forth in Exhibit B for such well or unit.

Section 4.09    Liens. Except for Permitted Encumbrances, the Assets are held by Seller and Trust, and will be conveyed to Buyer at Closing, free and clear of all liens, mortgages and encumbrances. To Seller’s Knowledge, the Subject Interests are free and clear of all liens, mortgages and encumbrances except for Permitted Encumbrances.

Section 4.10    Modifications of Net Overriding Royalty Conveyance. There are not any amendments, supplements, restatements, waivers, releases or other instruments, written or otherwise, that affect, in any way, the Net Overriding Royalty Conveyance other than those agreements set forth on Exhibit A. The Net Overriding Royalty Conveyance is in full force and effect and Seller is legally entitled to receive not less than the full Royalty Interest set forth in the Net Overriding Royalty Interest Conveyance.

Section 4.11    Preference Rights and Consent Requirements. Except as disclosed in Schedule 4.02(b), the conveyance of the Royalty Interest is not and will not be subject to, and Seller is not bound by, any preferential purchase rights or consents to assignment which apply to the Assignment of the Assets to Buyer, or the performance of any obligations under the Net Overriding Royalty Conveyance.

Section 4.12    Proxy Statement. The Proxy Statement to be filed with the SEC and any amendment or supplement thereto will, when filed, comply as to form with the applicable requirements of the Exchange Act. At the time the Proxy Statement and any amendments or supplements thereto are first mailed to the unitholders of the Trust, and at the time such unitholders vote on approval of the Sale, the Proxy Statement, as supplemented or amended, if applicable, will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The representations and warranties contained in this Section 4.12 will not apply to statements or omissions included or incorporated by reference in the Proxy Statement based upon information supplied by Buyer or any of its representatives or advisors specifically for use or incorporation by reference therein.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF BUYER

Subject to the provisions of this Article 5 and the other terms and conditions of this Agreement, Buyer represents and warrants to Seller that:

Section 5.01    Buyer’s Existence. Buyer is a corporation, duly organized and validly existing under the laws of the State of Delaware and is qualified to conduct business in the State of Texas. Buyer has full legal power, right and authority to carry on its business as such is now being conducted and as contemplated to be conducted.

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Section 5.02    Legal Power. Buyer has the legal power and right to enter into and perform this Agreement and the transactions contemplated hereby. The consummation of the transactions contemplated by this Agreement will not violate, nor be in conflict with:

(a)    any provision of Buyer’s articles of incorporation or other governing documents;

(b)    any material agreement or instrument to which Buyer is a party or by which Buyer is bound (except any such violation or conflict that does not materially affect Buyer’s ability to consummate the transactions contemplated herein); or

(c)    any judgment, order, ruling or decree applicable to Buyer as a party in interest or any law, rule or regulation applicable to Buyer (except any such violation or conflict that does not materially affect Buyer’s ability to consummate the transactions contemplated herein).

Section 5.03    Execution. The execution, delivery and performance of this Agreement and the transactions contemplated hereby are duly and validly authorized by all requisite corporate action on the part of Buyer. This Agreement constitutes the legal, valid and binding obligation of Buyer enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium, and other similar Laws affecting creditors’ rights generally and by general principles of equity.

Section 5.04    Brokers. No broker or finder has acted for or on behalf of Buyer or any affiliate of Buyer in connection with this Agreement or the transactions contemplated by this Agreement. No broker or finder is entitled to any brokerage or finder’s fee, or to any commission, based in any way on agreements, arrangements or understandings made by or on behalf of Buyer or any affiliate of Buyer for which Seller has or will have any liabilities or obligations (contingent or otherwise).

Section 5.05    Bankruptcy. There are no bankruptcy, reorganization or arrangement proceedings pending, being contemplated by, or to the knowledge of Buyer, threatened against Buyer or Exxon Mobil Corporation.

Section 5.06    Suits. There is no suit, action, claim, investigation or inquiry by any person or entity or by any administrative agency or Governmental Authority and no legal, administrative or arbitration proceeding pending or, to Buyer’s knowledge, threatened against Buyer or any affiliate of Buyer that will materially affect Buyer’s ability to consummate the transactions contemplated herein.

Section 5.07    Investment. Prior to entering into this Agreement, Buyer was advised by and has relied solely on its own legal, tax and other professional counsel concerning this Agreement, the Assets and the value thereof. Buyer is acquiring the Assets for its own account and not for distribution or resale in any manner that would violate any state or federal securities law, rule, regulation or order. Buyer understands and acknowledges that if any of the Assets were held to be securities, they would be restricted securities and could not be transferred without registration under applicable state and federal securities laws or the availability of an exemption from such registration.

Section 5.08    Funds. Buyer will have available by the Closing funds readily available without any restriction upon their use sufficient to enable Buyer to pay in full the Purchase Price as herein provided and otherwise to perform its obligations under this Agreement.

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Section 5.09    Proxy Statement. At the time the Proxy Statement and any amendments or supplements thereto are first mailed to the unitholders of the Trust, and at the time such unitholders vote on approval of the Sale, the information regarding Buyer provided by Buyer specifically for use (or incorporation by reference) in the Proxy Statement, as supplemented or amended, if applicable, will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The representations and warranties contained in this Section 5.09 will not apply to statements or omissions included or incorporated by reference in the Proxy Statement based upon information supplied by Seller or any of its representatives or advisors specifically for use or incorporation by reference therein.

ARTICLE 6

SELLER’S CONDITIONS TO CLOSE

The obligations of Seller to consummate the Sale are subject to the fulfillment (or waiver) on or prior to the Closing of each of the following conditions:

Section 6.01    Representations. The representations and warranties of Buyer herein contained shall be true and correct in all material respects (except as to representations and warranties qualified by materiality, which shall be true in all respects only giving effect to such materiality qualification to such representation) as of the Closing as though made at and as of such time.

Section 6.02    Performance. Buyer shall have performed in all material respects its obligations, covenants and agreements contained in this Agreement required to be performed or complied with by it at or prior to the Closing.

Section 6.03    Pending Matters. No suit, action or other proceeding shall be pending or threatened that seeks to restrain, enjoin or otherwise prohibit the consummation of the transactions contemplated by this Agreement.

Section 6.04    Purchase Price. Buyer shall have delivered to the Trust the Purchase Price, as the same may be adjusted hereunder, in accordance with the provisions of Section 9.02.

Section 6.05    Execution and Delivery of the Closing Documents. Buyer shall have executed, acknowledged and delivered, as appropriate, to Seller all closing documents described in Section 9.05.

Section 6.06    Consents and Preferential Rights to Purchase. Seller shall have received either (i) the Unitholder Approval or (ii) a final judicial determination authorizing Seller to consummate the sale of the Assets.

ARTICLE 7

BUYER’S CONDITIONS TO CLOSE

The obligations of Buyer to consummate the Sale are subject to the fulfillment (or waiver) on or prior to the Closing of each of the following conditions:

Section 7.01    Representations. The representations and warranties of Seller herein contained shall be true and correct in all material respects (except as to representations and warranties qualified by materiality, which shall be true in all respects only giving effect to such materiality qualification to such representation) as of the Closing as though made at and as of such time.

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Section 7.02    Performance. Seller and the Trust shall have performed in all material respects its obligations, covenants and agreements contained in this Agreement required to be performed or complied with by it at or prior to the Closing.

Section 7.03    Pending Matters. No suit, action or other proceeding shall be pending or threatened that seeks to restrain, enjoin, or otherwise prohibit the consummation of the transactions contemplated by this Agreement.

Section 7.04    Execution and Delivery of the Closing Documents. Seller and the Trust shall have executed, acknowledged and delivered, as appropriate, to Buyer all closing documents described in Section 9.04.

Section 7.05    Consents and Preferential Rights to Purchase. Seller shall have received either (i) the Unitholder Approval or (ii) a final judicial determination authorizing Seller to consummate the sale of the Assets.

ARTICLE 8

TAX MATTERS

Section 8.01    Transfer Taxes. All sales, use or other similar taxes (other than taxes on gross income or net income) and duties, levies, recording fees or other governmental charges incurred by or imposed with respect to the property transfers undertaken pursuant to this Agreement (such taxes, “Transfer Taxes”) shall be borne by Buyer. Seller and Buyer shall use commercially reasonable efforts and cooperate in good faith to exempt the sale and transfer of the Assets from any such Transfer Taxes. The Party required by applicable Law to file the tax returns with respect to any Transfer Taxes shall prepare and file such tax returns or other documents, and Buyer shall provide reimbursement for any Transfer Taxes paid by Seller.

Section 8.02    Ad Valorem, Severance, and Similar Taxes. Ad valorem, real or personal property, production, severance and similar taxes and assessments based upon or measured by the value of the Assets or the production of Hydrocarbons therefrom shall be allocated between Seller and Buyer as of the Effective Time. As between Buyer and Seller, Seller shall retain responsibility for such taxes attributable to the period of time prior to the Effective Time and Buyer shall assume responsibility for such taxes attributable to the period of time from and after the Effective Time; provided, however, that this Section 8.02 of the Agreement shall not be construed to relieve XTO and XTO is not relieved of its obligation to pay for any and all taxes pursuant to the terms of the Net Overriding Royalty Conveyance. For purposes of this Section 8.02, (i) taxes that are attributable to the severance or production of Hydrocarbons shall be allocated to the period in which the severance or production giving rise to such taxes occurred, (ii) taxes that are based upon or related to income or receipts or imposed on a transactional basis (other than such taxes described in clause (i) or (iii)), shall be allocated to the period in which the transaction giving rise to such taxes occurred, and (iii) taxes that are ad valorem, property or other similar taxes imposed on a periodic basis pertaining to a tax period that begins before, but ends after, the Effective Time shall be allocated between the portion of such period ending immediately prior to the Effective Time and the portion of such period beginning at the Effective Time by prorating each such tax based on the number of days in the applicable period that occur before the date on which the Effective Time occurs, on the one hand, and the number of days in such period that occur on or after the date on which the Effective Time occurs, on the other hand. The Parties will make final settlement of all ad valorem, property, and similar taxes described in the immediately preceding clause (iii) by estimating the total amount of such taxes to be due for the tax period in which the Effective Time occurs based on the total amount of such taxes assessed and paid for the immediately prior concluded tax period, and Seller’s unpaid portion of such taxes as so determined shall be part of the Preliminary Settlement Statement between the Parties.

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ARTICLE 9

THE CLOSING

Section 9.01    Time and Place of the Closing. The closing of the Sale (the “Closing”) shall take place at the offices of Thompson & Knight LLP, whose address is 1722 Routh Street, Suite 1500, Dallas, Texas 75201, on the last Business Day of the month in which the conditions referred to in Article 6 and Article 7 have been satisfied or waived (other than such conditions as may, by their terms, only be satisfied at the Closing or on the Closing Date but subject to the satisfaction or waiver of such condition by the Party entitled to the benefit of such condition) or, if such last Business Day is not at least three (3) Business Days after the aforementioned satisfaction or waiver, then the last Business Day of the immediately following calendar month, or at such location, time and date otherwise agreed to by Buyer and Seller in writing (the “Closing Date”).

Section 9.02    Adjustments to Purchase Price at the Closing.

(a)    At the Closing, the Purchase Price shall be increased by the following amounts:

(i)    the amount of any taxes allocated to Buyer pursuant to Section 8.02 but paid, payable or otherwise economically borne by Seller; and

(ii)    any other amount provided for in this Agreement.

(b)    At the Closing, the Purchase Price shall be decreased by the following amounts:

(i)    any other amount provided for in this Agreement;

(ii)    the Deposit and any Computed Interest on the Deposit;

(iii)    the amount attributable to any fire or other casualty event (or takings by condemnation or eminent domain) in an amount reasonably expected to impact any future economic benefits that could be realized under the Net Overriding Royalty Conveyance or the Royalty Interest;

(iv)    the amount of any taxes allocated to Seller pursuant to Section 8.02 but paid, payable, or otherwise economically borne by Buyer;

(v)    the Allocated Value of any portion of the Royalty Interest sold pursuant to Section 3.02(b) of the Indenture between the Execution Date and the Effective Time; and

(vi)    the amount of any Royalty Interests payments received by Seller between the Execution Date and the Effective Time or accruing thereto.

(c)    The adjustments described in Section 9.02(a) and (b) are hereinafter referred to as the “Purchase Price Adjustments.”

Section 9.03    Preliminary Statement . Not later than three (3) Business Days prior to the Closing Date, Seller shall prepare in accordance with the Trust Accounting Principles and deliver to Buyer a statement of the estimated Purchase Price Adjustments (the “Preliminary Statement”). Buyer and Seller shall negotiate in good faith and attempt to agree on such estimated Purchase Price Adjustments prior to Closing. In the event any estimated adjustment amounts are not agreed upon prior to Closing, the Preliminary Statement adjustments for purposes of Closing shall be calculated based on Seller’s and

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Buyer’s agreed-upon, estimated adjustments and the average of the Parties’ estimation of any other disputed amounts, subject to adjustment in the Final Settlement Statement referred to in Section 11.02. At the Closing, Buyer shall pay the Purchase Price, as adjusted by the estimated Purchase Price Adjustments as set forth in the preceding sentence.

Section 9.04    Actions of Seller at the Closing.

At the Closing, Seller shall (and, as applicable, shall cause the Trust to):

(a)    execute, acknowledge and deliver to Buyer the Assignment (as defined in Exhibit D of this Agreement) and such other instruments (in form and substance mutually agreed upon by Buyer and Seller) as provided for herein or necessary to convey the Assets to Buyer;

(b)    execute and deliver to Buyer a certificate, in a form reasonably acceptable to Buyer, certifying that Seller is not a “foreign person” within the meaning of Section 1445 of the Code;

(c)    execute and deliver to Buyer a Certification of Trust, substantially in the same form as the Certification of Trust delivered by Seller to Buyer as of the date hereof; and

(d)    execute, acknowledge and deliver any other agreements provided for herein or necessary or desirable to effectuate the transactions contemplated hereby.

Section 9.05    Actions of Buyer at the Closing.

At the Closing, Buyer shall:

(a)    deliver to the Trust the Purchase Price (as adjusted pursuant to the provisions hereof) by wire transfer to an account designated in writing by Seller no later than two (2) Business Days before the Closing; and

(b)    execute, acknowledge and accept delivery of the Assignment and such other instruments (in form and substance mutually agreed upon by Buyer and Seller) as provided for herein or necessary to convey the Assets to Buyer.

ARTICLE 10

TERMINATION

Section 10.01    Right of Termination. This Agreement may be terminated at any time prior to the Closing:

(a)    by mutual written consent of the Parties;

(b)    by written notice of Seller if Buyer has breached, is in breach of or has failed to perform any representation, warranty, covenant or agreement on the part of Buyer contained in this Agreement in any respect, which breach or failure to perform would, individually or together with all such other then-uncured breaches by Buyer, constitute grounds for the conditions set forth in Section 6.01 or Section 6.02, not to be satisfied (which breach has not been waived in writing by Seller prior to such time) and such breach either is not cured prior to the earlier of: (i) the End Time; and (ii) the thirtieth (30^th) day after written notice thereof to Buyer describing such breach or failure in reasonable detail, or by its nature or timing cannot be cured within such time period;

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(c)    by written notice of Buyer if Seller has breached, is in breach of or has failed to perform any representation, warranty, covenant or agreement on the part of Seller or the Trust contained in this Agreement in any respect, which breach or failure to perform would, individually or together with all such other then-uncured breaches by Seller, constitute grounds for the conditions set forth in Section 7.01 or Section 7.02 not to be satisfied (which breach has not been waived in writing by Buyer prior to such time) and such breach either is not cured prior to the earlier of: (i) the End Time; and (ii) the thirtieth (30^th) day after written notice thereof to Seller describing such breach or failure in reasonable detail, or by its nature or timing cannot be cured within such time period;

(d)    by written notice of either Party if the Closing shall not have occurred by the eighteen (18) month anniversary of the Execution Date (the “End Time”);

(e)    by written notice of either Party if any Governmental Authority shall have issued an order, judgment or decree or taken any other action challenging, delaying, restraining, enjoining, prohibiting or invalidating the consummation of any of the transactions contemplated herein and such order, judgment, decree or other action shall have become final and nonappealable; or

(f)    as otherwise provided herein;

provided, however, that no Party shall have the right to terminate this Agreement pursuant to clause (b), (c), or (d) above if such Party is at such time in material breach of any provision of this Agreement.

Section 10.02    Effect of Termination. In the event that the Closing does not occur as a result of any Party exercising its right to terminate pursuant to Section 10.01, then except as set forth in Section 10.03, this Agreement shall be null and void and no Party shall have any further rights or obligations under this Agreement, except that, subject to Section 10.03 nothing herein shall relieve any Party from any liability for any intentional breach hereof.

Section 10.03    Termination Damages.

(a)    If all conditions precedent to the obligations of Buyer set forth in Article 7 have been met and the Sale is not consummated in accordance with Section 9.01 because of the failure of Buyer to perform any of its material obligations hereunder or the material breach of any representation herein by Buyer, then in such event, Seller shall have the option to terminate this Agreement pursuant to Section 10.01(b), in which case Seller shall retain the Deposit as liquidated damages on account of Buyer’s failure to perform its material obligations under this Agreement or Buyer’s material breach of any representation under this Agreement, which remedy shall be the sole and exclusive remedy available to Seller for Buyer’s such failure to perform or breach. Buyer and Seller acknowledge and agree that (i) Seller’s actual damages upon the event of such a termination are difficult to ascertain with any certainty, (ii) that the Deposit is a reasonable estimate of such actual damages and (iii) such liquidated damages do not constitute a penalty.

(b)    If this Agreement is terminated by the mutual written agreement of Buyer and Seller or terminated in any other situation other than as described in Section 10.03(a), then Seller shall return the Deposit with Computed Interest to Buyer in immediately available funds within three (3) Business Days after the event giving rise to such payment to Buyer. Buyer and Seller shall thereupon have the rights and obligations set forth elsewhere herein.

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Section 10.04    Attorneys’ Fees, Etc.. If either Party to this Agreement resorts to legal proceedings to enforce this Agreement, the prevailing Party in such proceedings shall be entitled to recover all costs incurred by such Party, including reasonable attorneys’ fees, in addition to any other relief to which such Party may be entitled. Notwithstanding anything to the contrary in this Agreement, in no event shall either Party be entitled to receive any punitive, indirect or consequential damages unless same are a part of a Third Party claim for which a Party is seeking indemnification hereunder, REGARDLESS OF WHETHER CAUSED OR CONTRIBUTED TO BY THE SOLE, JOINT, COMPARATIVE OR CONCURRENT NEGLIGENCE OR STRICT LIABILITY OF THE OTHER PARTY.

ARTICLE 11

POST CLOSING OBLIGATIONS

Section 11.01    Allocation of Expense and Revenues.

(a)    Provided that the Closing occurs, appropriate adjustments shall be made between Buyer and Seller so that Buyer will receive all the Applicable Percentage of all Net Proceeds arising out of the ownership of the Assets from and after the Effective Time without any reduction resulting from any accounting adjustments made under the Net Overriding Royalty Conveyance with respect to any period prior to the Effective Time (including without limitation any such accounting adjustments to the Net Proceeds).

(b)    All amounts due under this Section 11.01 will be settled in accordance with Final Settlement Statement under Section 11.02.

Section 11.02    Final Settlement Statement.

(a)    On or before sixty (60) days after the Closing Date, Seller shall prepare and deliver to Buyer a post-closing statement (“Final Settlement Statement”) setting forth a detailed calculation of all Purchase Price Adjustments. The Final Settlement Statement shall include any adjustment or payment which was not finally determined as of the Closing Date pursuant to Section 9.02, Section 9.03, and the allocation of revenues and expenses as determined in accordance with Section 11.01. To the extent reasonably required by Seller, Buyer shall reasonably assist in the preparation of the Final Settlement Statement. Seller shall provide Buyer such data and information as Buyer may reasonably request supporting the amounts reflected on the Final Settlement Statement in order to permit Buyer to perform or cause to be performed an audit. The Final Settlement Statement shall become final and binding upon the Parties on the thirtieth (30th) day following receipt thereof by Buyer (the “Final Settlement Date”) unless Buyer gives written notice of its disagreement (a “Notice of Disagreement”) to Seller prior to such date. Any Notice of Disagreement shall specify in detail the dollar amount, nature and basis of any disagreement so asserted. If a Notice of Disagreement is received by Seller in a timely manner, then the Parties shall resolve the Dispute (as defined in Section 15.01) evidenced by the Notice of Disagreement in accordance with Article 15.

(b)    Within five (5) Business Days after the Final Settlement Date, Seller shall pay to Buyer or Buyer shall pay to Seller in immediately available funds the net amount due.

Section 11.03    Further Cooperation. After the Closing Date, each Party, at the request of the other and without additional consideration, shall execute and deliver, or shall cause to be executed and delivered, from time to time such further instruments of conveyance and transfer and shall take such other action as the other Party may reasonably request to convey and deliver the Assets to Buyer and to

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accomplish the orderly transfer of the Assets to Buyer in the manner contemplated by this Agreement. After the Closing, the Parties will cooperate to have all proceeds received attributable to the Assets be paid to the proper Party hereunder and to have all expenditures to be made with respect to the Assets be made by the proper Party hereunder.

Section 11.04    Termination of Trust. Following and subject to the Closing, Seller shall (as promptly as practicable): (i) fulfil its obligations under Section 9.03 of the Indenture, (ii) following the final distribution to the Trust’s unitholders as contemplated in Section 9.03 of the Indenture, delist and deregister the outstanding units of beneficial interest of the Trust under applicable Law and (iii) take all actions necessary to terminate the Trust under applicable Law.

ARTICLE 12

OPERATION OF THE ASSETS

Section 12.01    Operations after Effective Time. Seller agrees, from and after the date hereof until Closing, except as expressly contemplated by this Agreement, as expressly consented to in writing by Buyer, or in situations wherein emergency action is taken in the face of risk to life, property or the environment, to:

(a)    manage the Assets in the usual, regular and ordinary manner consistent with past practice and as permitted by the Net Overriding Royalty Conveyance;

(b)    maintain the books of account and records relating to the Assets in the usual, regular and ordinary manner, in accordance with the usual accounting practices; and

(c)    not transfer, sell, mortgage, pledge or dispose of any portion of the Assets, except as set forth in Section 3.02(b) of the Indenture.

ARTICLE 13

OBLIGATIONS AND INDEMNIFICATION

Section 13.01    Assumed Obligations. Provided that the Closing occurs, Buyer hereby assumes all duties, obligations and liabilities of Seller of every kind and character with respect to (a) the Assets or the ownership or management thereof, attributable to periods on and after the Effective Time, (b) incurred in respect of all litigation relating to the Assets and existing as of the Effective Time, and (c) any other duty, obligation, event, condition or liability of Seller expressly assumed by Buyer under the terms of this Agreement (collectively, the “Assumed Obligations”).

Section 13.02    Buyer’s Indemnification. Provided that the Closing occurs, Buyer shall release, defend, indemnify and hold harmless the Trust, Seller, its respective officers, directors, employees, shareholders, affiliates, and subsidiaries, from and against any and all claims, damages, liabilities, losses, causes of action, costs and expenses (including, without limitation, those involving theories of negligence or strict liability and including court costs and attorneys’ fees) as a result of, arising out of, or related to the Assumed Obligations, REGARDLESS OF WHETHER CAUSED OR CONTRIBUTED TO BY THE SOLE, JOINT, COMPARATIVE OR CONCURRENT NEGLIGENCE OR STRICT LIABILITY OF ANY OF THE SELLER INDEMNITEES.

Section 13.03    Notices and Defense of Indemnified Matters. Each Party shall promptly notify the other Party of any matter of which it becomes aware and for which it is entitled to indemnification from the other Party under this Agreement. The indemnifying Party shall be entitled to defend, at the indemnifying

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Party’s sole expense, any litigation or other administrative or adversarial proceeding against the indemnified Party relating to any matter for which the indemnifying Party has agreed to indemnify and hold the indemnified Party harmless under this Agreement. However, the indemnified Party shall have the right to participate with the indemnifying Party in the defense of any such matter at its own expense.

Section 13.04    Tax Treatment of Indemnity Payments. Seller and Buyer agree to treat any indemnity payment made pursuant to this Agreement as an adjustment to the Purchase Price for U.S. federal, state, local and non-U.S. income tax purposes.

Section 13.05    Proxy Statement; Unitholder Meeting.

(a)    As promptly as reasonably practicable after the execution of this Agreement (and in any event no later than forty-five (45) Business Days after the date of this Agreement), Seller shall prepare and file with the SEC a proxy statement relating to the Unitholders Meeting (as amended or supplemented from time to time, including the letter to unitholders, notice of meeting and form of proxy, the “Proxy Statement”) in preliminary form, which shall include the Recommendation. Seller shall use commercially reasonable efforts to respond as promptly as practicable to any comments by the SEC staff in respect of the Proxy Statement and to cause the definitive Proxy Statement to be mailed to the Trust’s unitholders as promptly as practicable after the date of this Agreement. Buyer shall exercise reasonable best efforts to furnish all information relating to it required by the Exchange Act and the rules and regulations promulgated thereunder to be set forth in the Proxy Statement. Seller shall promptly notify Buyer upon the receipt of any comments from the SEC or its staff or any request from the SEC or its staff for amendments or supplements to the Proxy Statement and shall provide Buyer with copies of all correspondence between it and its representatives, on the one hand, and the SEC and its staff, on the other hand, relating to the Proxy Statement. Seller shall provide Buyer a reasonable opportunity (not to exceed ten (10) Business Days) to review and propose comments on the Proxy Statement prior to the filing thereof (and any amendments or supplements thereto) or any responses or other communications to the SEC or its staff and shall in good faith consider such comments reasonably proposed by Buyer or its counsel for inclusion therein. Seller shall use its commercially reasonable efforts to resolve all SEC comments with respect to the Proxy Statement as promptly as practicable after receipt thereof. Seller shall use commercially reasonable efforts to cause the Proxy Statement to be mailed to the Trust’s unitholders as of the record date established for the Unitholder Meeting as promptly as practicable, and in no event more than fifteen (15) Business Days, after the date on which the SEC confirms that it has no further comments on the Proxy Statement.

(b)    If at any time prior to the Unitholders Meeting any information relating to the Trust, Seller or Buyer, or any of their respective affiliates, should be discovered by a party, which information should be set forth in an amendment or supplement to the Proxy Statement, the Party that discovers such information shall promptly notify the other Party and Seller shall use commercially reasonable efforts to prepare (with the assistance of Buyer) and mail to the Trust’s unitholders such an amendment or supplement, in each case, to the extent required by applicable Law. Seller further agrees to use commercially reasonable efforts to cause the Proxy Statement as so corrected or supplemented promptly to be filed with the SEC and to be disseminated to the Trust’s unitholders, in each case as and to the extent required by applicable Law.

(c)    Seller shall (i) take all actions required under the Indenture to duly call, give notice of, convene and hold a meeting of the Trust’s unitholders promptly following the mailing of the Proxy Statement for the purpose of obtaining the Unitholder Approval (the “Unitholder Meeting”), with the location, record date and meeting date of the Unitholder Meeting to be selected in

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compliance with the Indenture and after reasonable consultation with Buyer, and (ii) use commercially reasonable efforts to solicit from the Trust’s unitholders proxies in favor of the approval of this Agreement and the transactions contemplated hereby. Except as Buyer shall have otherwise consented to in writing in advance, the approval of this Agreement and termination of the Trust shall be the only matter (other than procedural matters and matters that are required by the Exchange Act or other applicable Law or the Indenture to be voted on by the Trust’s unitholders in connection therewith) which Seller shall propose to be acted on by the Trust’s unitholders at the Unitholder Meeting.

(d)    Notwithstanding anything to the contrary in this Agreement, unless and until this Agreement is terminated in accordance with its terms, once established, Seller shall not change the location or the record date for the Unitholder Meeting or postpone or adjourn the Unitholder Meeting without the prior written consent of Buyer. Notwithstanding the foregoing, (i) if Seller reasonably determines in good faith that the Unitholder Approval is unlikely to be obtained at the Unitholder Meeting, including due to an absence of quorum, then prior to the vote contemplated having been taken, Seller shall have the right to require an adjournment, delay or postponement of the Unitholder Meeting for the purpose of soliciting additional votes in favor of the approval of this Agreement, and (ii) if requested by Buyer on up to one occasion, Seller shall adjourn, delay or postpone the Unitholder Meeting, if Buyer reasonably determines in good faith that the Unitholder Approval is unlikely to be obtained at the Unitholder Meeting. Seller shall keep Buyer informed on a reasonably current basis regarding its solicitation efforts and proxy tallies following the dissemination of the Proxy Statement to the Trust’s unitholders.

ARTICLE 14

LIMITATIONS ON REPRESENTATIONS AND WARRANTIES

Section 14.01    Disclaimers of Representations and Warranties. The express representations and warranties of Seller contained in this Agreement are exclusive and are in lieu of all other representations and warranties, express, implied or statutory. EXCEPT FOR THE EXPRESS REPRESENTATIONS OF SELLER IN THIS AGREEMENT, BUYER ACKNOWLEDGES THAT SELLER HAS NOT MADE, AND SELLER HEREBY EXPRESSLY DISCLAIMS AND NEGATES, AND BUYER HEREBY EXPRESSLY WAIVES, ANY REPRESENTATION OR WARRANTY, EXPRESS, IMPLIED, AT COMMON LAW, BY STATUTE OR OTHERWISE RELATING TO (a) PRODUCTION RATES, RECOMPLETION OPPORTUNITIES, DECLINE RATES, GAS BALANCING INFORMATION OR THE QUALITY, QUANTITY OR VOLUME OF THE RESERVES OF HYDROCARBONS, IF ANY, ATTRIBUTABLE TO THE SUBJECT INTERESTS, (b) THE ACCURACY, COMPLETENESS OR MATERIALITY OF ANY INFORMATION, DATA OR OTHER MATERIALS (WRITTEN OR ORAL) NOW, HERETOFORE OR HEREAFTER FURNISHED TO BUYER BY OR ON BEHALF OF SELLER UNLESS SELLER SHOULD HAVE REASONABLY CONCLUDED BASED ON ITS ACTUAL PRESENT KNOWLEDGE THAT SUCH MATERIAL WAS INCOMPLETE OR INACCURATE, AND (c) THE ENVIRONMENTAL CONDITION OF THE SUBJECT INTERESTS. WITHOUT LIMITING SELLER’S REPRESENTATIONS AND WARRANTIES IN THIS AGREEMENT, BUYER FURTHER ACKNOWLEDGES THAT (i) THE SUBJECT INTERESTS HAVE BEEN AND ARE USED FOR EXPLORATION, DEVELOPMENT, PRODUCTION, AND TRANSPORTATION OF OIL AND GAS AND OIL AND GAS WASTE AND THAT THERE MAY BE PETROLEUM, PRODUCED WATER, WASTES OR OTHER SUBSTANCES OR MATERIALS LOCATED IN, ON OR UNDER OR ASSOCIATED WITH THE SUBJECT INTERESTS; (ii) EQUIPMENT, FACILITIES, PROPERTIES, OR SITES INCLUDED IN THE SUBJECT INTERESTS MAY CONTAIN ASBESTOS, NORM, OR OTHER HAZARDOUS MATERIALS (NORM MAY AFFIX OR ATTACH ITSELF TO THE INSIDE OF WELLS, MATERIALS, AND EQUIPMENT AS SCALE, OR IN OTHER FORMS); (iii) NORM-

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CONTAINING MATERIAL OR OTHER WASTES OR HAZARDOUS MATERIALS MAY HAVE AND MAY IN THE FUTURE DURING OPERATION OF THE SUBJECT INTERESTS COME IN CONTACT WITH VARIOUS ENVIRONMENTAL MEDIA, INCLUDING WITHOUT LIMITATION, WATER, SOILS, SUBSURFACE, OR SEDIMENT; AND (iv) SPECIAL PROCEDURES MAY BE REQUIRED FOR THE ASSESSMENT, REMEDIATION, REMOVAL, TRANSPORTATION OR DISPOSAL OF ENVIRONMENTAL MEDIA, WASTES, ASBESTOS, NORM, AND OTHER HAZARDOUS MATERIALS FROM OR ASSOCIATED WITH THE SUBJECT INTERESTS. SELLER AND BUYER AGREE THAT, TO THE EXTENT REQUIRED BY APPLICABLE LAW TO BE EFFECTIVE, THE DISCLAIMERS OF CERTAIN WARRANTIES CONTAINED IN THIS SECTION ARE “CONSPICUOUS” DISCLAIMERS FOR THE PURPOSES OF ANY APPLICABLE LAW, RULE OR ORDER. The express representations and warranties of Buyer contained in this Agreement are exclusive and are in lieu of all other representations and warranties, express, implied or statutory. EXCEPT FOR THE EXPRESS REPRESENTATIONS OF BUYER IN THIS AGREEMENT, SELLER ACKNOWLEDGES THAT BUYER HAS NOT MADE, AND SELLER HEREBY EXPRESSLY DISCLAIMS AND NEGATES, AND SELLER HEREBY EXPRESSLY WAIVES, ANY REPRESENTATION OR WARRANTY.

Section 14.02    Independent Investigation. Buyer represents and acknowledges that (a) it is knowledgeable of the oil and gas business and that it has had (or will have prior to the Closing) access to the Assets, the officers and employees of Seller, and the books, records and files of Seller relating to the Assets, (b) it has completed (or will complete prior to Closing) all diligence in connection with this Agreement that Buyer deems necessary or appropriate, (c) it is deemed to have knowledge of all facts, materials and documents described, contained or set forth in the VDR on or prior to the Execution Date and (d) in making the decision to enter into this Agreement and consummate the transactions contemplated hereby, Buyer has relied solely on the basis of its own independent due diligence investigation of the Assets and upon the representations and warranties made in Article 4, and not on any other representations or warranties of Seller or any other person or entity.

Section 14.03    Survival. All covenants and obligations of Buyer and Seller under this Agreement shall indefinitely survive the Closing, and all representations and warranties of Buyer and Seller under this Agreement shall terminate at the Closing.

ARTICLE 15

DISPUTE RESOLUTION

Section 15.01    General. Any and all claims, disputes, controversies or other matters in question arising out of or relating to title issues, environmental issues, or calculation of the Statement or revisions thereto (all of which are referred to herein as “Disputes” which term shall not include any other disputes claims, disputes, controversies or other matters in question arising under this Agreement) shall be resolved in the manner prescribed by this Article 15.

Section 15.02    Senior Management. If a Dispute occurs that the senior representatives of the Parties responsible for the transaction contemplated by this Agreement have been unable to settle or agree upon within a period of fifteen (15) days after such Dispute arose, Seller shall nominate and commit one of its senior officers, and Buyer shall nominate and commit one of its senior officers, to meet at a mutually agreed time and place (which may include a virtual web-based meeting) not later than thirty (30) days after the Dispute has arisen to attempt to resolve same. If such senior management have been unable to resolve such Dispute within a period of fifteen (15) days after such meeting, or if such meeting has not occurred within forty-five (45) days following such Dispute arising, then either Party shall have the right, by written notice to the other, to resolve the Dispute through arbitration pursuant to Section 15.03.

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Section 15.03    Arbitration.

(a)    Except as set forth in Section 16.12, the Parties agree that any dispute, controversy or claim that may arise between or among Buyer and Seller in connection with this Agreement shall be finally, conclusively and exclusively settled by binding arbitration in Dallas, Texas in accordance with the Commercial Arbitration Rules (the “Rules”) of the American Arbitration Association or any successor thereto (“AAA”) then in effect. The Parties hereby expressly waive their right to seek remedies in court, including, without limitation, the right to trial by jury, with respect to any matter subject to arbitration pursuant to this Article 15. Any Party may bring an action, including, without limitation, a summary or expedited proceeding, in any court having jurisdiction, to compel arbitration of any dispute, controversy or claim to which this Article 15 applies. Except with respect to the following provisions (the “Special Provisions”) which shall apply with respect to any arbitration pursuant to this Article 15, the initiation and conduct of arbitration shall be as set forth in the Rules, which Rules are incorporated in this Agreement by reference with the same effect as if they were set forth in this Agreement.

(b)    In the event of any inconsistency between the Rules and the Special Provisions, the Special Provisions shall control. References in the Rules to a sole arbitrator shall be deemed to refer to the tribunal of arbitrators provided for under subparagraph (d) below in this Article 15.

(c)    The arbitration shall be administered by AAA.

(d)    The arbitration shall be conducted by a tribunal of three arbitrators. Within ten days after arbitration is initiated pursuant to the Rules, the initiating party or parties (the “Claimant”) shall send written notice to the other party or parties (the “Respondent”), with a copy to the Dallas office of AAA, designating the first arbitrator (who shall not be a representative or agent of any party but may or may not be an AAA panel member and, in any case, shall be reasonably believed by the Claimant to possess the requisite experience, education and expertise in respect of the matters to which the claim relates to enable such person to completely perform arbitral duties). Within ten days after receipt of such notice, the Respondent shall send written notice to the Claimant, with a copy to the Dallas office of AAA and to the first arbitrator, designating the second arbitrator (who shall not be a representative or agent of any party, but may or may not be an AAA panel member and, in any case, shall be reasonably believed by the Respondent to possess the requisite experience, education and expertise in respect of the matters to which the claim relates to enable such person to competently perform arbitral duties). Within ten days after such notice from the Respondent is received by the Claimant, the Respondent and the Claimant shall cause their respective designated arbitrators to select any mutually agreeable AAA panel member as the third arbitrator. If the respective designated arbitrators of the Respondent and the Claimant cannot so agree within said ten day period, then the third arbitrator will be determined pursuant to the Rules. For purposes of this Article 15, Buyer and Seller shall each be entitled to the selection of one arbitrator. Prior to commencement of the arbitration proceeding, each arbitrator shall have provided the parties with a resume outlining such arbitrator’s background and qualifications and shall certify that such arbitrator is not a representative or agent of any of the parties. If any arbitrator shall die, fail to act, resign, become disqualified or otherwise cease to act, then the arbitration proceeding shall be delayed for fifteen (15) days and the party by or on behalf of whom such arbitrator was appointed shall be entitled to appoint a substitute arbitrator (meeting the qualifications set forth in this Article 15) within such fifteen (15) day period; provided, however, that if the party by or on behalf of whom such arbitrator was appointed shall fail to appoint a substitute arbitrator within such fifteen (15) day period, the substitute arbitrator shall be a neutral arbitrator appointed by the AAA arbitrator within fifteen (15) days thereafter.

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(e)    All arbitration hearings shall be commenced within one hundred twenty (120) days after arbitration is initiated pursuant to the Rules, unless, upon a showing of good cause by a party to the arbitration, the tribunal of arbitrators permits the extension of the commencement of such hearing; provided, however, that any such extension shall not be longer than sixty (60) days.

(f)    All claims presented for arbitration shall be particularly identified and the parties to the arbitration shall each prepare a statement of their position with recommended courses of action. These statements of position and recommended courses of action shall be submitted to the tribunal of arbitrators chosen as provided hereinabove for binding decision. The tribunal of arbitrators shall not be empowered to make decisions beyond the scope of the position papers.

(g)    The arbitration proceeding will be governed by the substantive laws of the State of Texas and will be conducted in accordance with such procedures as shall be fixed for such purpose by the tribunal of arbitrators, except that (i) discovery in connection with any arbitration proceeding shall be conducted in accordance with the Federal Rules of Civil Procedure and applicable case law, (ii) the tribunal of arbitrators shall have the power to compel discovery and (iii) unless the parties otherwise agree and except as may be provided in this Article 15, the arbitration shall be governed by the United States Arbitration Act, 9 §§ 1-16, to the exclusion of any provision of state law or other applicable Law or procedure inconsistent therewith or which would produce a different result. The parties shall preserve their right to assert and to avail themselves of the attorney-client and attorney-work-product privileges, and any other privileges to which they may be entitled pursuant to applicable Law. No party to the arbitration or any arbitrator may compel or require mediation and/or settlement conferences without the prior written consent of all such parties and the tribunal of arbitrators.

(h)    The tribunal of arbitrators shall make an arbitration award as soon as possible after the later of the close of evidence or the submission of final briefs, and in all cases, the award shall be made not later than thirty (30) days following submission of the matter. The finding and decision of a majority of the arbitrators shall be final and shall be binding upon the parties. Judgment upon the arbitration award or decision may be entered in any court having jurisdiction thereof or application may be made to any such court for a judicial acceptance of the award and an order of enforcement, as the case may be. The tribunal of arbitrators shall have the authority to assess liability for pre-award and post-award interest on the claims, attorneys’ fees, expert witness fees and all other expenses of arbitration as such arbitrators shall deem appropriate based on the outcome of the claims arbitrated. Unless otherwise agreed by the parties to the arbitration in writing, the arbitration award shall include findings of fact and conclusions of law.

(i)    Nothing in this Article 15 shall be deemed to (i) limit the applicability of any otherwise applicable statute of limitations or repose or any waivers contained in this Agreement or (ii) constitute a waiver by any party hereto of the protections afforded by 12 U.S.C. § 91 or any successor statute thereto or any substantially equivalent state law.

(j)    Without limiting the Party’s rights under the Indenture and the Net Overriding Royalty Conveyance, disputes between Buyer and Seller related to this Agreement, the Indenture, and the Net Overriding Royalty Conveyance relating to the same subject matter may be consolidated into a single arbitration proceeding.

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ARTICLE 16

MISCELLANEOUS

Section 16.01    Expenses. Each Party shall be solely responsible for all expenses, including due diligence expenses, incurred by it in connection with this transaction, and neither Party shall be entitled to any reimbursement for such expenses from the other Party.

Section 16.02    Document Retention. As used in this Section, the term “Documents” shall mean all files, documents, books, records and other data, including, but not limited to: financial and tax accounting records; land, title and division of interest files; contracts; engineering and well files; and books and records related to the operation of the Assets prior to the Closing Date. Seller shall retain and preserve the Documents for a period of no less than seven years following the Closing Date (or for such longer period as may be required by law or governmental regulation), and shall allow Buyer or its representatives to inspect the Documents for legitimate business purposes at reasonable times and upon reasonable notice during regular business hours during such time period. Buyer shall have the right during such period to make copies of the Documents that relate to the period prior to the Closing at its expense. Notwithstanding anything to the contrary in this Agreement, Seller shall not be required to disclose any information to Buyer if such disclosure would, in Seller’s sole discretion, (A) jeopardize any attorney-client or other legal privilege or (B) otherwise contravene any applicable Laws or binding agreement. Notwithstanding anything in Section 16.02 to the contrary, in no event shall such inspection be permitted for a purpose related to any adverse litigation, arbitration or other proceeding between Seller and any of its affiliates, on the one hand, and Buyer and any of its affiliates, on the other hand. Buyer shall retain and preserve Documents relating to the calculation of Net Profits for the period prior to the Closing for a period of no less than seven years following the Closing Date (or for such longer period as may be required by law or governmental regulation), and shall allow Seller or its representatives to inspect the Documents for legitimate business purposes at reasonable times and upon reasonable notice during regular business hours during such time period. Seller shall have the right during such period to make copies of the Documents that relate to the period prior to the Closing at its expense. Notwithstanding anything to the contrary in this Agreement, Buyer shall not be required to disclose any information to Seller if such disclosure would, in Buyer’s sole discretion, (A) jeopardize any attorney-client or other legal privilege or (B) otherwise contravene any applicable Laws or binding agreement. Notwithstanding anything in Section 16.02 to the contrary, in no event shall such inspection be permitted for a purpose related to any adverse litigation, arbitration or other proceeding between Seller and any of its affiliates, on the one hand, and Buyer and any of its affiliates, on the other hand.

Section 16.03    Entire Agreement. This Agreement, the documents to be executed hereunder, and the exhibits attached hereto constitute the entire agreement between the Parties pertaining to the subject matter hereof and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties pertaining to the subject matter hereof. No supplement, amendment, alteration, modification or waiver of this Agreement shall be binding unless executed in writing by the Parties and specifically referencing this Agreement.

Section 16.04    Waiver. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided.

Section 16.05    Publicity. Neither Seller nor Buyer will issue any public announcement or press release concerning this transaction without the written consent of the other Party (except as required by law, the rules and regulations of the SEC or the rules and regulations of any stock exchange or over-the-counter market applicable to such Party and in such case, the Party required to make the announcement or release shall use its reasonable best efforts to allow the other Party reasonable time to comment on such announcement or release in advance of such issuance).

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Section 16.06    Construction. The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement. The Parties acknowledge that they have participated jointly in the negotiation and drafting of this Agreement and as such the Parties agree that if an ambiguity or question of intent or interpretation arises hereunder, this Agreement shall not be construed more strictly against one Party than another on the grounds of authorship.

Section 16.07    No Third Party Beneficiaries. Except as provided in Section 13.02 , nothing in this Agreement shall provide any benefit to any Third Party or entitle any Third Party to any claim, cause of action, remedy or right of any kind, it being the intent of the Parties that this Agreement shall otherwise not be construed as a Third Party beneficiary contract.

Section 16.08    Assignment. Neither Party may assign or delegate any of its rights or duties hereunder without the prior written consent of the other Party and any assignment made without such consent shall be void; provided, however, (1) that Buyer may assign this Agreement or any of its rights and obligations under this Agreement to one or more of its affiliates without the prior written consent of Seller; provided, further, that such assignment shall not relieve Buyer of its obligations hereunder, and (2) that Seller may assign this Agreement or any of its rights and obligations under this Agreement to any successor; provided further, that such assignment shall not relieve Seller of its obligations hereunder. Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective permitted successors, assigns and legal representatives.

Section 16.09    Governing Law. This Agreement, other documents delivered pursuant hereto and the legal relations between the Parties shall be governed and construed in accordance with the laws of the State of Texas, without giving effect to principles of conflicts of laws that would result in the application of the laws of another jurisdiction. The Parties agree to venue in Dallas County, Texas.

Section 16.10    Notices. Any notice, communication, request, instruction or other document required or permitted hereunder shall be given in writing and delivered in person or sent by U.S. Mail postage prepaid, return receipt requested, overnight courier, email or facsimile to the addresses of Seller and Buyer set forth below. Any such notice shall be effective only upon receipt.

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Seller:

Simmons Bank, Trustee

Hugoton Royalty Trust

2911 Turtle Creek Boulevard, Suite 850

Dallas, TX 75219

Attn: Ron Hooper

Email: ron.hooper@simmonsbank.com

Fax:

With a copy to:

Thompson & Knight, LLP

1722 Routh Street, Suite 1500

Dallas, Texas 75201

Attn: Amy R. Curtis

Email: amy.curtis@tklaw.com

Fax: 214-999-1564

Buyer:

XTO Energy Inc.

Attention: Land Acquisition and Divestment Manager

22777 Springwoods Village Parkway, Loc. 115

Spring, Texas 77389

With a copy to (which shall not constitute notice to Buyer):

XTO Energy Inc.

Attention: UOG Acquisitions and Trades Manager

22777 Springwoods Village Parkway, Loc. 119

Spring, Texas 77389

Either Party may, by written notice so delivered to the other Party, change its address for notice purposes hereunder.

Section 16.11    Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect and the Parties shall negotiate in good faith to modify this Agreement so as to affect their original intent as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.

Section 16.12    Specific Performance. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, each Party shall be entitled to seek specific performance of the terms hereof, including an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any federal or state court situated in Dallas County, Texas, this being in addition to any other remedy to which such Party is entitled at law or in equity. Each Party hereby further waives (a) any defense in any action for specific performance that a remedy at law would be adequate and (b) any requirement under any law to post security as a prerequisite to obtaining equitable relief.

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Section 16.13    Time of the Essence. Time shall be of the essence with respect to all time periods and notice periods set forth in this Agreement.

Section 16.14    Counterpart Execution. This Agreement may be executed in any number of counterparts, and each counterpart hereof shall be effective as to each Party that executes the same whether or not all of such Parties execute the same counterpart. If counterparts of this Agreement are executed, the signature pages from various counterparts may be combined into one composite instrument for all purposes. All counterparts together shall constitute only one Agreement, but each counterpart shall be considered an original.

Section 16.15    Pending Arbitration. The Parties agree to take all commercially reasonable actions with the AAA to stay the Chieftain Arbitration effective from the Execution Date to the earlier of either (i) the date, if any, on which this Agreement is terminated or (ii) the Closing Date. The time period during which the Chieftain Arbitration is stayed is the “Tolling Period.” The Parties agree that any and all limitations periods, statutes of repose, laches, or other time limitations (whether statutory, equitable, contractual, or otherwise) with respect to the claims asserted by the Parties in the Chieftain Arbitration and claims relating to challenges by Seller with respect to charges and deductions made by Buyer during audit periods prior to the Execution Date are tolled during the Tolling Period. This Agreement does not prevent the application of any statute of limitations or other similar time related equitable, contractual or statutory defense that may have existed to bar any such claims as of the Execution Date. Nor does this Agreement have any effect on reviving any claim or cause of action that was time barred by any such defense as of the Execution Date.

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EXECUTION VERSION

IN WITNESS WHEREOF, Seller and Buyer have executed and delivered this Agreement as of the date first set forth above.

Signature Page to

Purchase and Sale Agreement

EXHIBIT A

NET OVERRIDING ROYALTY CONVEYANCE INSTRUMENTS

See attached document listing.

Exhibit A

Exhibit A

Attached to and made a part of that certain Purchase and Sale Agreement dated effective July 2, 2021 by and between Simmons Bank as Trustee of Hugoton Royalty Trust, as Seller, and XTO Energy Inc., as Buyer

Page 1 of 1

EXHIBIT B

SUBJECT INTERESTS

See attached document listing.

Exhibit B

Attached to and made a part of that certain Purchase and Sale Agreement dated effective July 2, 2021 by and between Simmons Bank as Trustee of Hugoton Royalty Trust, as Seller, and XTO Energy Inc., as Buyer

Page 1 of 104

Page 2 of 104

Page 3 of 104

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