Document:

Exhibit 10.1

MUTUAL RELEASE AND
SETTLEMENT AGREEMENT

The parties to this Mutual
Release and Settlement Agreement (this “Agreement”) are Pioneer Natural Resources Company and Pioneer Natural
Resources USA, Inc. (“PNR”) (collectively “Pioneer”); and the Mesa Offshore
Trust (the “Mesa Trust”), acting by and through JPMorgan Chase Bank, N.A., in
its capacity as trustee of the Mesa Trust (the “Trustee”).  Pioneer, the Mesa
Trust,  and the Trustee are collectively
referred to as the “Parties.”

WHEREAS, the Mesa Trust  was created in 1982, pursuant to that certain
Royalty Trust Indenture dated December 1, 1982 (the “Trust Indenture”), to hold
an interest in the Mesa Offshore Royalty Partnership (the “Mesa Partnership”), to discharge liabilities incurred in the operation of
the Mesa Trust, and to distribute remaining amounts to the beneficiaries of the
Mesa Trust.

WHEREAS, the Mesa
Partnership is a Texas general partnership created in 1982, pursuant to
Articles of General Partnership dated November 30, 1982 (as amended by First
Amended and Restated Articles of General Partnership dated December 1, 1982 and
Amendment to First Amended and Restated Articles of General Partnership dated
December 27, 1985) (the “Partnership Agreement”), to receive and hold certain
overriding royalty interests (the “Overriding Royalty Interest”), to discharge
liabilities incurred in the operation of the Mesa Partnership, and to
distribute remaining amounts to the partners of the Mesa Partnership.  The Mesa Trust owns 99.99% of the Mesa Partnership.

WHEREAS, PNR is the sole
managing general partner of the Mesa Partnership and also owns or operates
leases that are burdened by the Overriding Royalty Interest owned by the Mesa
Partnership.  PNR owns 0.01% of the Mesa
Partnership.

WHEREAS, the Overriding
Royalty Interest owned by the Mesa Partnership was transferred and conveyed to
the Mesa Partnership under that certain Overriding Royalty Conveyance (the “Conveyance
Agreement”), effective December 1, 1982.

WHEREAS, Pioneer Natural
Resources Company is the parent company of PNR.

WHEREAS, JPMorgan Chase
Bank, N.A. serves as the trustee of the Mesa Trust and has executed this
Agreement on behalf of the Mesa Trust.

WHEREAS, beneficial
ownership of the Mesa Trust is divided among record and beneficial holders (the
“Beneficiaries”)
of the 71,980,216 Units of Beneficial Interest in the Mesa Trust.

WHEREAS, on or about January
20, 2003, Woodside Energy (USA) Inc. (“Woodside”) and PNR entered into a
Farmout Agreement under which PNR agreed to transfer to Woodside, subject to
the terms and conditions of the referenced Farmout Agreement, all of PNR’s
right, title, and interest to certain leasehold rights in Brazos Area Blocks
A-7 and A-39, which rights were burdened by Overriding Royalty Interest owned
by the Mesa Partnership under the Conveyance Agreement (the “Woodside Farmout
Agreement”).

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WHEREAS, pursuant to the
Woodside Farmout Agreement, PNR transferred to Woodside certain rights to
Brazos Area Block A-39 by that certain Partial Assignment of Operating Rights
executed on or about April 7, 2005, reserving an overriding royalty interest of
10% of 8/8ths, proportionately reduced, which would increase to 12.5% of
8/8ths, proportionately reduced, after payout (the “Woodside Partial Assignment
of Operating Rights”).

WHEREAS, Pioneer maintains
that, under the terms of the Conveyance Agreement, the farmout to Woodside of
rights to Brazos Block A-39 caused the interest to be transferred to Woodside
free and clear of the Overriding Royalty Interest owned by the Mesa Partnership
burdening Block A-39 and caused the Mesa Partnership Overriding Royalty
Interest in Block A-39 to be extinguished, subject only to the Mesa Partnership’s
right to share in the 10% (increasing after payout to 12.5%) overriding royalty
interest retained by PNR in the Woodside Farmout Agreement and the Woodside
Partial Assignment of Operating Rights.

WHEREAS, on April 11, 2005,
MOSH Holding, L.P. (“MOSH”) sued
the Parties to this Agreement and Woodside in the 250th District Court of
Travis County, Texas (the “Lawsuit”).  MOSH, a
Beneficiary of the Mesa Trust, is a Texas limited partnership that claims to
own approximately 10% of the units of the Mesa Trust.  The Lawsuit has been transferred and is now
pending in the 334th District Court of Harris County, Texas (the “Court”).

WHEREAS, on December 8,
2006, Dagger-Spine Hedgehog Corporation (“Dagger-Spine”) filed a petition to
intervene in the Lawsuit alleging claims virtually identical to those alleged
by MOSH.  Dagger-Spine is a Texas
corporation that claims to own approximately 3.5% of the units of the Mesa
Trust.

WHEREAS, MOSH and
Dagger-Spine (“Plaintiffs”) allege claims against Pioneer in the Lawsuit for,
among other things, (1) a wrongful farmout of Brazos A-39 by Pioneer, (2) a
wrongful delay by Pioneer in producing Brazos A-39, (3) fraudulent
accounting practices by Pioneer, (4) breach of fiduciary duty by Pioneer,
(5) aiding and abetting breach of fiduciary duty by Woodside, (6) misapplication
of Mesa Trust property by Pioneer, (7) conspiracy to misapply fiduciary
property by Woodside and Pioneer, (8) common law fraud by Pioneer, (9) gross
negligence by Pioneer, and (10) breach of the Conveyance Agreement by
Pioneer, such claims as more fully stated in MOSH’s First Amended Original
Petition, Verified Application for Temporary Restraining Order, Temporary
Injunction, Show Cause Order, Permanent Injunction, and Request for Disclosure
(“MOSH’s Petition”) and in Dagger-Spine’s Petition in Intervention and Request
for Disclosure (“Dagger-Spine’s Petition”) on file in the Lawsuit.

WHEREAS, Plaintiffs also
allege claims against the Trustee in the Lawsuit for, among other things, (1) an
accounting, (2) breaches of fiduciary duty, including the duty to refrain
from self-dealing, duty of loyalty, and duty of full disclosure, (3) fraud,
(4) gross negligence, and (5) partner (vicarious) liability, such
claims as more fully stated in MOSH’s Petition and in Dagger-Spine’s Petition..

WHEREAS, through the
Lawsuit, Plaintiffs seek various remedies from the Parties including, among
other things, (a) reconstruing the Royalty Trust Indenture to prevent the
Mesa Trust from terminating for failing to reach certain performance thresholds
set forth in the Trust Indenture; (b) requiring the Trustee to pursue
certain claims against Pioneer and Woodside, or to

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allow
Plaintiffs to pursue such claims on behalf of the Mesa Trust; (c) setting
aside any farmouts by Pioneer in which there have been conveyances to an
affiliate of Pioneer; (d) removing JPMorgan Chase Bank, N.A. as Trustee;
(e) seeking return or forfeiture of compensation to JPMorgan Chase Bank,
N.A.; (f) recovering monetary damages from Pioneer, Woodside, and JPMorgan
Chase Bank, N.A.; and (g) pursuing exemplary damages.

WHEREAS, controversies exist
whether Pioneer and Woodside are liable to the Mesa Trust as Plaintiffs allege.

WHEREAS, by reason of such
controversies, the Parties have agreed to the following settlement and
compromise of any and all claims that the Mesa Trust or the Mesa Partnership
has or might have against Pioneer and Woodside, conditioned on approval by the
Court as set forth herein.

NOW, THEREFORE, in
consideration of the mutual promises contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which the Parties acknowledge,
the Parties agree as follows, subject to approval by the Court as set forth
herein.

ARTICLE I.

CONVEYANCES AND ADJUSTMENTS

1.1.          PNR shall assign and transfer to the
Mesa Partnership, or shall cause to be assigned and transferred to the Mesa Partnership,
the A-39B ORRI (as defined in Schedule 1.1). 
The A-39B ORRI shall be in lieu of and shall replace and supersede any
rights and interests that the Mesa Partnership and/or the Mesa Trust might
otherwise own, claim or be entitled to in the A-39B Property (as defined in
Schedule 1.1).  The assignment provided
for in this Section 1.1 shall be effective as of first production from the A-39
No. 5 Well and shall be substantially in the form of the Assignment of Overriding
Royalty Interest attached as Schedule 1.1 hereto.  On behalf of the Mesa Trust and the Mesa
Partnership, the Trustee hereby agrees and consents to this assignment and
transfer and to the related Amendment to the Conveyance Agreement attached as
Schedule 1.1A hereto.

1.2.          Pioneer, the Mesa Trust and the
Trustee acknowledge that as of October 31, 2006, PNR’s books and records
reflected accrued but unsatisfied plugging, abandonment, and decommissioning
costs incurred and projected to be incurred in the future allocable to the
Overriding Royalty Interest held by the Mesa Partnership under the Conveyance
Agreement of approximately $1.4 million (the “Prior P&A Costs”).  The Prior P&A Costs relate to facilities
now or previously located on the areas designated as Brazos Block A-7A, Brazos
Block A-7B, Brazos Block A-39A, Matagorda Block 624, and South Marsh Island
Block 155 (the “P&A Properties”). 
PNR represents that as of October 31, 2006, it had accrued no plugging,
abandonment, or decommissioning costs allocable to the Overriding 

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Royalty Interest held by the Mesa Partnership under
the Conveyance Agreement relating to any properties other than the P&A
Properties.  PNR agrees to amend, and to
cause the Mesa Partnership to amend, the Conveyance Agreement such that
effective October 31, 2006, the Overriding Royalty Interest held by the Mesa
Partnership shall not be subject to or liable for deductions for allocated
accruals of the Prior P&A Costs relating to the P&A Properties.  Such amendment shall also provide that no
plugging, abandonment or decommissioning costs shall be allocated to the
Overriding Royalty Interest held by the Mesa Partnership, or be sought to be
recovered from the Mesa Partnership, with respect to the Brazos A-39 No. 5 Well
and facilities related to that well.  The
amendment shall contain a statement to the effect that the Mesa Partnership’s
interest under the Conveyance Agreement is unencumbered by and bears no share
of or responsibility for additional plugging, abandonment, or decommissioning
costs associated with activities occurring on or before October 31, 2006 with
respect to any Lease (as defined in the Conveyance Agreement) or related
facilities existing as of October 31, 2006 on or used in connection with any
Lease.  This amendment shall be
substantially in the form of Schedule 1.2. 
On behalf of the Mesa Trust and the Mesa Partnership, the Trustee hereby
agrees and consents to such amendment.

1.3.          Pioneer, the Mesa Trust, and the
Trustee acknowledge that PNR has negotiated an agreement with a Non-Affiliate
(as such term is defined in the Conveyance Agreement), Hydro Gulf of Mexico,
L.L.C. (“Hydro”), pursuant to which PNR is to farmout and assign to Hydro
operating rights in the NE/4 of the NE/4 of Brazos Block A-39 (the “Farmout
Lands”) including the 50% undivided interest in such property currently
burdened by the Overriding Royalty Interest under the Conveyance Agreement (the
“Hydro Farmout Agreement”).  The Hydro
Farmout Agreement currently provides—in summary—that if Hydro drills an earning
well in the area designated by the parties as the Nimitz prospect (consisting
of the Farmout Lands and certain acreage owned by Hydro in adjoining lease
blocks, the “Hydro Nimitz Prospect”) and otherwise performs its obligations
under the Hydro Farmout Agreement, then (i) PNR will assign to Hydro
operating rights in the Farmout Lands, reserving a cost-free overriding royalty
interest of 12.5% of 20% of 8/8ths production in the Farmout Lands, and (ii) Hydro
will assign to PNR a like overriding royalty interest in the remainder of the Hydro
Nimitz Prospect.  Conditioned on the
absence of any material changes to the Hydro Farmout Agreement as currently
executed, and subject to Hydro’s compliance with the terms of the Hydro Farmout
Agreement and satisfaction of all requirements for Hydro to earn an assignment
under the Hydro Farmout Agreement, PNR shall assign and transfer to, or cause
to be assigned and transferred to, the Mesa Partnership an Overriding Royalty
Interest (as such term is defined in the Conveyance Agreement) in 50% of the Retained
Interest (as such term is defined in the Conveyance Agreement) reserved or
otherwise acquired by PNR in the Hydro transaction.  Based on the commercial terms currently
expressed in the Hydro Farmout Agreement and subject to Hydro’s compliance as
stated above, PNR will assign and transfer to, or cause to be assigned and
transferred to, the Mesa Partnership an interest equal to 90% of 50% of 20% of
12.5% of 8/8ths, or a 1.125% overriding royalty interest in the Hydro Nimitz
Prospect, subject to the terms of the Conveyance Agreement and the Hydro
Farmout Agreement.  A copy of the Hydro
Farmout Agreement is attached as Schedule 1.3 hereto.  The Trustee acknowledges that Farmouts to
Non-Affiliates of parts of the Subject Interests (as each of the foregoing
capitalized terms are defined in the Conveyance Agreement) made in accordance
with the Conveyance Agreement are permitted in PNR’s discretion and that such
Farmouts allow assignment of a portion of the Subject Interests free and clear
of the Overriding Royalty Interest provided that the  Royalty Owner receives an Overriding Royalty
Interest in any Retained Interest reserved or acquired under such Farmout (as
each of the foregoing capitalized terms are defined in the Conveyance
Agreement).

1.4           Pioneer, the Mesa Trust, and the Trustee acknowledge that
pursuant to Article 3.02 of the Trust Indenture the Trustee is directed to sell
the Trust’s interest in the Mesa Partnership, or to cause the Partnership to
sell the assets of the Partnership, if the total amount of 

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cash
per year received by the Trust for each of three successive years after
December 31, 1987 is less than 10 times one-third of the total amount payable
to the Trustee for management of the Trust for such three-year period.  Based upon the audited books and records of
the Trust, the amount of cash received by the Trust for each of the calendar
years 2002, 2003 and 2004 was less than 10 times one-third of the total amount
payable to the Trustee for management in such three-year period.  The Parties acknowledge that pursuant to
Article 6.04 of the Partnership Agreement the managing general partner, at the
direction of the Trustee, is required to use its best efforts to sell or
otherwise dispose of, upon such terms as may be specified by the Trustee, the
assets of the Partnership including the Overriding Royalty Interest.  The Parties further acknowledge that the
Trustee must provide at least sixty (60) days written notice to MOSH
concerning the Trustee’s causing or consenting to the sale of the Overriding
Royalty Interest owned by the Mesa Partnership. 
In accordance with the provisions of the Trust Indenture and the
Partnership Agreement, and subject to the Court’s orders in the Lawsuit, the
Trustee intends and directs, subject to the provisions of Article II below, as
follows.

(a)           PNR, as managing general partner of
the Mesa Partnership, shall use its best efforts to undertake the following
steps to sell the assets of the Partnership on the timetable stated at section
1.4(b) below:

(i)            PNR shall arrange for the sale
through The Oil and Gas Clearinghouse, or another similar third-party firm
routinely engaged in conducting auctions of mineral interests.

(ii)           PNR shall provide to the auction firm
non-confidential information commonly utilized in creating a data room such as
a description of the assets to be sold and production and operational
information relating to the properties that are currently the subject of the
Overriding Royalty Interest.  The Trust
shall provide to PNR non-confidential information in its possession concerning
the properties that are currently the subject of the Overriding Royalty
Interest as would commonly be provided to potential bidders in auction sales
for inclusion in the data room.

(iii)          PNR shall cause the assets of the
Partnership to be sold at public auction to the highest cash bidder.  Pioneer shall not bid on or purchase any of
the Partnership’s assets.

(iv)          PNR shall promptly pay or make
provision for the payment of any liabilities of the Partnership from and
distribute the cash received in the sale of the Partnership’s assets in
accordance with the Partners’ Sharing Ratios as provided in the Partnership
Agreement.

(b)           PNR shall cause the sale to occur as
soon as practicable, considering the required schedule of events imposed by the
selected auction firm, after the first occurring of the dates specified below:

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(i)            90 days following the logging and/or
testing at objective depth of the well planned to be drilled to the Nimitz
prospect described in section 1.2 above; or

(ii)           90 days following written notice to
PNR from the Trustee to sell the assets of the Partnership.

(c)           In any event, however, the sale shall
occur on, or as soon as practicable after, July 1, 2007.

(d)           Notice to the Beneficiaries of the
Mesa Trust of this Agreement, provided in accordance with Section 2.1 below,
shall constitute notice of sale as provided in Article 3.02 of the Trust
Indenture; provided, however, that the Trustee shall issue an appropriate Form
8-K providing notice of the specific date selected for the sale and of the
specific auction firm selected to conduct the sale at least 30 days prior to
such sale.

(e)           PNR shall be reimbursed, pursuant to
Article V of the Partnership Agreement, for any out-of-pocket expenses
incurred, and for any fees and expenses to third parties, associated with the
actions described in this Section 1.4.

(f)            The timetable provided for in 1.4(b)
above may be subject to adjustment by Pioneer and/or the Trustee in the event
of appeal of the Order provided for in Article II below subject, further, to
the status of the bonding of such appeal.

ARTICLE II.

CONDITIONS PRECEDENT

2.1.          Court
Approval.  This Agreement
shall be expressly conditioned upon an Order by the Court approving of the
Agreement, and this Agreement shall not be effective absent such an Order of
the Court.  This Order shall include a
determination by the Court (1) that the Agreement is in the best interests of
the Mesa Trust and its Beneficiaries, and (2) that the Trustee has the capacity
and authority to settle all claims on behalf of the Mesa Trust against Pioneer
and Woodside, including the claims brought by Plaintiffs in the Lawsuit, and to
enter into this Agreement.

(a)           Motion
to Approve Settlement Agreement and Petition for Instructions.  The Trustee shall seek Court approval of this
Agreement by filing a Motion to Approve Settlement Agreement and Petition for
Instructions (the “Motion”).

(b)           Hearing
on the Motion.  The Trustee
shall set a preliminary hearing with the Court on the Motion at which the
Trustee shall request the Court to issue an Order setting a final hearing on
the Motion to occur no fewer than 30 days after the Trustee provides the notice
required by the Court.

(c)           Notice to
Beneficiaries.  The
Trustee shall provide notice of this Agreement and the final hearing on the
Motion to all Beneficiaries of the Mesa Trust in accord with Sections 115.015
and 115.016 of the TEXAS PROPERTY CODE. 
Within five days of serving notice on all Beneficiaries, the Trustee
shall confirm to the Court and the 

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parties to the
Lawsuit, in writing, that the Trustee provided notice to all Beneficiaries as
ordered by the Court.  The costs of
providing the notice required by the Court shall be borne by the Mesa Trust.

(d)           Order.  The Trustee shall submit an Order approving
the Motion and this Agreement substantially in the form attached as Exhibit A
to this Agreement.

2.2.          Failure to Obtain Court Approval.  Court approval of the Agreement as set forth
in Section 2.1 and the entry of a final Order as contemplated in Section 2.1(d)
are necessary prerequisites to the enforceability of this Agreement.  The Court’s refusal to enter an Order
substantially in the form of the order set forth in Section 2.1(d) renders this
Agreement void and unenforceable between the Parties.

2.3.          Modified Procedures.  In the event that the Parties desire or are
required to modify any of the procedures to be undertaken pursuant to this
Agreement, they shall petition the Court, with notice to the parties to the
Lawsuit, identifying the modification and seeking the Court’s review and/or
approval of the modification.

ARTICLE III.

RELEASES

3.1.          Release by the Mesa Trust, the
Trustee, and the Beneficiaries.  Upon
entry of the Order provided for in Article II above, JPMorgan Chase Bank, NA,
in its capacity as Trustee, on behalf of itself, the Mesa Trust, and the
Beneficiaries, and their respective parents, subsidiaries, affiliates,
predecessors, successors and assigns, do hereby fully, finally, and forever
release, acquit, and discharge Pioneer and Woodside, their respective parent
companies, subsidiary companies, and affiliated companies and entities, and
their directors, trustees, officers, employees, agents, and successors and
assigns, from any and all claims that arise from or relate in any way to the
claims, matters, or theories that are, or could have been, asserted in the
Lawsuit; including, without limitation, any and all claims relating to alleged
wrongful, imprudent, and/or unreasonable actions (or omissions) concerning (i)
abandonment costs for the Subject Interests under the Conveyance Agreement,
(ii) operation of the Subject Interests including allegations of improper delay
of production and improper failure to drill additional wells, (iii) concealment
of the value of the Subject Interests, (iv) capturing or converting profits
belonging to the Trust, (v) enrichment at the expense of the Trust, and (vi)
premature termination of the Trust and/or of the Mesa Partnership.  This release shall also include any and all
claims relating in any way to the Exploration Agreement between PNR and
Woodside, effective January 20, 2003, the Farmout Agreement between PNR and
Woodside, effective January 20, 2003, and the Partial Assignment of Operating
Rights from PNR to Woodside dated on or about April 7, 2005.  This release shall include and encompass any
such claims, matters, or theories whether based in contract or in tort and
whether based on alleged breaches of fiduciary duty, misapplication of
fiduciary property, fraud, negligence or gross negligence, breach of contract,
conspiracy, or aiding or abetting.

3.2.          Release by Pioneer.  Upon entry of the order provided for in
Article II above,  Pioneer, on their
behalf and on behalf of their directors, trustees, officers, employees, agents,
successors and assigns, do hereby fully, finally, and forever release, acquit,
and discharge the 

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Mesa Trust and the Trustee, including their respective
parent companies, subsidiary companies, and affiliated companies and entities,
and their directors, trustees, officers, employees, agents, and successors and
assigns, from any and all claims that arise from or relate in any way to the
claims, matters, and theories that were, or could have been, asserted in the
Lawsuit, including, without limitation, any and all claims described in Section
3.1 above.

3.3.          Notwithstanding anything in this
Article III to the contrary, the Parties, and each of them, reserve the right
to enforce the terms of this Agreement including, without limitation, the
rights and obligations provided in Article I above.

3.4.          Nothing herein is intended to affect
the rights or obligations existing as between Pioneer and Woodside.  This Agreement does not express a release of
any rights or obligations as between Pioneer and Woodside.

ARTICLE IV. 

SALE AND WINDUP

4.1.          The Parties acknowledge and agree
that, subject to the Court’s review and approval as provided in Article II
above, upon completion of the sale and windup procedures described in Section
1.4 above, Pioneer and the Mesa Trust’s relationship under the Overriding
Royalty Conveyance, the Trust Indenture, and the Partnership Agreement shall be
resolved and concluded and that the Mesa Partnership shall be dissolved and
terminated in accordance with the Partnership Agreement.

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

5.1.          The Trustee’s
Representations and Warranties. 
The Trustee represents, warrants, and agrees that:

(a)           it has consulted with competent legal
counsel in connection with the Lawsuit and this Agreement, and that it fully
understands all aspects of this Agreement;

(b)           no promise, agreement, or
representation that is not contained in this Agreement has been made to or
relied on by the Trustee in executing this Agreement.  It is relying on its own judgment in entering
this Agreement, and has been fully represented and advised by legal counsel;

(c)           in its professional judgment, this
Agreement is in the best interests of the Mesa Trust and its Beneficiaries
given (i) the probable validity, or lack thereof, of the claims asserted in the
Lawsuit, (ii) the difficulty and expense of litigation, and (iii) the terms of
the compromise among the Parties as set forth in this Agreement;

(d)           this Agreement has been duly
authorized by all requisite action by the Trustee on behalf of the Mesa Trust;
and

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(e)           subject to approval by the Court of
this Agreement as set forth in Article II, the Trustee has the full right and
authority to enter into this Agreement on behalf of the Mesa Trust and to fully
commit and bind the Mesa Trust to its terms.

5.2.          Pioneer’s
Representations and Warranties. 
Pioneer represents, warrants and agrees that:

(a)           it has consulted with competent legal
counsel in connection with the Lawsuit and this Agreement, and that it fully
understands all aspects of this Agreement;

(b)           no promise, agreement, or
representation that is not contained in this Agreement has been made to or
relied on by Pioneer in executing this Agreement.  It is relying on its own judgment in entering
this Agreement, and has been fully represented and advised by legal counsel;

(c)           it has the full right and authority
to enter into the Agreement,

(d)           this Agreement has been duly authorized
by all requisite action on behalf of Pioneer; and

(e)           the person executing this Agreement
has the full right and authority to fully commit and bind Pioneer.

ARTICLE VI.

JURISDICTION, VENUE, AND CHOICE OF LAW

6.1.          Enforcement
of Agreement.  Any dispute
related to this Agreement must be raised by a Motion to Enforce Agreement in
District Court in Harris County, Texas, or in any other court of competent
jurisdiction located in Harris County, Texas. 
In executing this Agreement, the Parties hereby submit to the
jurisdiction of any such court of competent jurisdiction located in Harris
County, Texas.

6.2.          Choice of
Law.  The laws of the State of
Texas shall govern this Agreement and any disputes arising from its execution,
validity, interpretation, construction, or enforcement.

ARTICLE VII.

MISCELLANEOUS PROVISIONS

7.1.          Amendments
in Writing.  Any amendment to
this Agreement must be in writing, must specifically refer to this Agreement,
and must be signed by duly authorized representatives of each of the Parties.

7.2.          Neutral
Interpretation and Construction. 
Given that the Parties to this Agreement and their respective counsel
have had the opportunity to draft, review, and edit the language of this
Agreement, no presumption for or against any Party arising out of drafting all
or any part of this Agreement shall be applied in any action relating to,
connected to, or involving this Agreement.

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7.3.          No
Liability by Any Party.  This
Agreement is made for the purpose of avoiding the expense, inconvenience, and
uncertainty of litigation and is the result of a compromise of disputed
claims.  This Agreement shall not be
construed as an admission of liability by any Party, and all Parties expressly
deny any liability to any Party.

7.4.          Merger
Clause.  This Agreement
contains the entire agreement of the Parties; all prior negotiations,
statements, or representations are hereby superseded and displaced.  The Parties expressly disclaim reliance on
any statements concerning this Agreement or the Lawsuit that are not expressly
included in the terms of this Agreement.

7.5.          Headings.  The headings to the Articles and Sections of
this Agreement are inserted for convenience only and shall not affect the
construction or interpretation of this Agreement.

7.6.          Executable
in Counterparts.  This
Agreement may be executed in counterparts by the Parties, and when each Party
has signed and delivered at least one such counterpart to the other Parties,
each counterpart shall be deemed an original and taken together shall
constitute one and the same Agreement.

7.7           Successor
Liability.  This Agreement and the
obligations, contained herein, are binding obligations of the Parties, their
respective successors and assigns.

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EXECUTED ON January 26, 2007

	
  

  	
   

  	
  MESA OFFSHORE TRUST

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  JPMORGAN CHASE BANK, N.A., as Trustee

  
	
   

  	
   

  	
   

  	
   

  	
  for the Mesa Offshore Trust

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  Bank of New York Trust Company, N.A.,

  
	
   

  	
   

  	
   

  	
   

  	
  as attorney in fact

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Mike Ulrich

  
	
   

  	
   

  	
  Name:

  	
   

  	
  Mike Ulrich

  
	
   

  	
   

  	
  Title:

  	
   

  	
  Vice President

  
						

 

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  PIONEER NATURAL RESOURCES COMPANY

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Mark S. Berg

  
	
   

  	
   

  	
  Name:

  	
   

  	
  Mark S. Berg

  
	
   

  	
   

  	
  Title:

  	
   

  	
  Executive Vice President & General Counsel

  

 

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  PIONEER NATURAL RESOURCES USA, INC.

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Mark S. Berg

  
	
   

  	
   

  	
  Name:

  	
   

  	
  Mark S. Berg

  
	
   

  	
   

  	
  Title:

  	
   

  	
  Executive Vice President & General Counsel

  

 

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SCHEDULE
1.1

Form
of

ASSIGNMENT
OF OVERRIDING ROYALTY INTEREST

This Assignment of
Overriding Royalty Interest (“Assignment”), dated effective 7:00 a.m. on April
20, 2006, is from PIONEER NATURAL RESOURCES
USA, INC., a Delaware corporation, whose address is 5205 North O’Conner
Blvd., Suite 200, Irving, Texas 75039 (“Assignor”), to MESA OFFSHORE ROYALTY PARTNERSHIP, a Texas general
partnership, whose address is 5205 N. O’Conner Blvd., Suite 200, Irving, Texas
75039-3746 (“Assignee”).  Assignor and
Assignee are sometimes collectively referred to herein as the “Parties” and
individually as a “Party.”

RECITALS

1.             Reference is made to that certain Overriding Royalty
Conveyance from Mesa Petroleum Co. (predecessor to Assignor) to Assignee,
effective December 1, 1982, as amended (the “Original Conveyance”).

2.             Reference is also made to that certain Mutual Release
and Settlement Agreement among Pioneer Natural Resources Company, Pioneer
Natural Resources USA, Inc., Assignor, and the Mesa Offshore Trust (the “Mesa
Trust”), acting by and through JPMorgan Chase Bank, N.A., in its capacity as
trustee of the Mesa Trust (the “Trustee”), dated                                
(the “Settlement Agreement”).

3.             Reference is also made to that certain Partial
Assignment of Operating Rights from Assignor to Woodside Energy (USA) Inc. (“Woodside”)
dated on or about April 7, 2005, approved by the United States Department of
the Interior, Minerals Management Service, Gulf of Mexico Regional Office. (the
“Woodside Assignment”).

4.             Pursuant to the Settlement Agreement, Assignor desires
to assign to Assignee, and Assignee desires to accept, the A-39B ORRI (as
defined below) in substitution and in lieu of any interest Assignee now holds,
or is deemed to hold, in and to the A-39B Property (as defined
below).

NOW THEREFORE, for and in
consideration of the mutual agreements, covenants and conditions herein
contained, the receipt and sufficiency of which are hereby acknowledged, and
intending hereby to be legally bound, the Parties hereby agree as follows:

1.             Defined Terms.  As
used in this Assignment, the following terms shall have the meanings set forth
below.

“After Acquired Leasehold
Interests” means the 50% leasehold interest and associated operating
rights assigned to Assignor in and to the A-39B Property by the Subsequent
Assignments.

 1
 

  

“A-39B ORRI”
means an overriding royalty interest in oil, gas and other hydrocarbons
produced and saved from the A-39B Property, and being further described as
follows:

(a)                                  until
Payout, an Overriding Royalty Interest in the Pre-Payout Woodside ORRI; and

(b)                                 from
and after Payout, an Overriding Royalty Interest in and to the After Acquired
Leasehold Interests;

in each case subject to
the terms of the Original Conveyance, as amended, this Assignment, and the Operating
Agreement.

“A-39B Property”
means the Oil and Gas Lease bearing Serial No. OCS-G 4559, effective January 1,
1981, by and between the United States of America, as Lessor, and Mesa
Petroleum Co. and Texaco Inc., as Lessee, covering all of Block A-39, Brazos
Area, as shown on OCS Leasing Map, Texas Map No. 5, containing 5,760 acres,
more or less; INSOFAR AND ONLY INSOFAR as such lease covers the South Half of
Block A-39, Brazos Area, containing 2,880 acres, more or less, from the surface
down to 50,000 feet subsurface.

“Operating Agreement”
means Offshore Operating Agreement dated effective January 20, 2003, as
amended, by and between Pioneer Natural Resources USA, Inc., as Operator, and
Woodside, as Non-Operator, covering the A-39B Property.

“Original ORRI”
means any and all rights, titles and interests of Assignee in and to, or with
respect to, the A-39B Property pursuant to the Original Conveyance.

“Overriding Royalty
Interest” has the meaning given that term in the Original
Conveyance.

“Payout” means the
following:  the first day of the month
following the month in which Woodside has recouped from its share of the total
proceeds from the sale of production from the initial well, and any subsequent
well(s), drilled on the lands assigned to Woodside under the Woodside
Assignment or lands pooled therewith, as applicable, after deducting lessor’s
and any overriding royalties, reasonable and necessary leasehold operating
expenses, all taxes on production, an amount equal to all costs and expenses
borne by or allocated to Woodside in respect of drilling, testing, completing,
equipping, including the cost of constructing a platform or the cost of tying
in the initial well to a third party platform, and operating the initial well
and any subsequent wells drilled on the lands assigned to Woodside or the lands
pooled therewith, and the costs of processing, transporting and marketing
production including fees paid for and costs associated with production
handling.

“Pre-Payout Woodside ORRI”
means that portion of the overriding royalty interest reserved by Assignor
pursuant to the Woodside Assignment attributable to periods, and oil, gas and
other hydrocarbons produced and saved from the A-39B Property, prior to Payout,
being ten percent of eight-eighths (10% of 8¤8),
proportionately reduced to the 50% interest conveyed in the Woodside
Assignment, being five percent of eight-eighths (5% of 8¤8).

 2
 

  

“Subsequent
Assignments” means, collectively,

(a)                          that
certain Assignment of Record Title Interest by and between Texaco Exploration
and Production Inc., as Assignor, and Mesa Operating Co., as Assignee, executed
December 29, 1995 and effective December 31, 1995, approved by the United
States Department of the Interior, Minerals Management Service, Gulf of Mexico
Regional Office on June 18, 1996; and

(b)                         that
certain Assignment of Record Title Interest by and between Bechtel Energy
Partners Ltd., as Assignor, and Pioneer Natural Resources USA, Inc., as
Assignee, executed June 13, 2000 and effective May 1, 2000, approved by the United
States Department of the Interior, Minerals Management Service, Gulf of Mexico
Regional Office on July 13, 2000.

2.             ORRI.

(a)                                  Conveyance.  Assignor hereby assigns and transfers the
A-39B ORRI to Assignee.

(b)                                 Replacement
of Original ORRI.  Assignor and
Assignee hereby acknowledge and agree that the Original ORRI is hereby
terminated and discharged, that Assignor and the property that was the subject
of the Original ORRI are released from any further burden or obligation with
respect thereto, and that if and to the extent the Original ORRI survives, or
is deemed to survive, such termination and discharge, the same is hereby
re-assigned and re-transferred to Assignor, it being understood and agreed that
the A-39B ORRI is in full replacement of and in lieu of the Original ORRI.  For the avoidance of doubt, Assignee shall
have no interest, pursuant to this Assignment or the Original Conveyance or
otherwise, in or to that portion of the overriding royalty interest reserved by
Assignor pursuant to the Woodside Assignment attributable to periods, and oil,
gas and other hydrocarbons produced and saved from the A-39B Property,
after Payout.

3.             Subject to Original
Conveyance.  The Parties stipulate and agree that as a
consequence of the execution, delivery and acceptance of this Assignment, the
Subject Interests under the Original Conveyance (as the term “Subject Interests”
is defined in the Original Conveyance) shall include (i) the Pre-Payout
Woodside ORRI until Payout, and (ii) the After Acquired Leasehold Interests
from and after Payout, subject to all limitations set forth in such definition
of Subject Interests, but shall otherwise exclude the A-39B Property.  The Parties stipulate and agree that, from
and after Payout, Net Proceeds (as defined in the Original Conveyance)
attributable to the A-39B ORRI as a Subject Interest shall not be subject to or
reduced by any costs or expenses relating to the period prior to Payout that
were deducted in calculating the occurrence of payout.  The interest conveyed herein to be held, and
to inure to the benefit of, Assignee and its successors and assigns.

4.             Special Warranty.  Notwithstanding anything herein to the contrary, this Assignment
without warranty, either express or implied, except for a limited warranty by,
through and under Assignor but not otherwise.

 3
 

  

IN WITNESS WHEREOF, the
Parties have duly executed this Assignment effective as of the date first above
written.

	
  ASSIGNOR:

  	
   

  	
  PIONEER NATURAL RESOURCES USA, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ASSIGNEE:

  	
   

  	
  MESA OFFSHORE ROYALTY PARTNERSHIP

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
                    ,
  its managing general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  

 

 4
 

  

 

	
  STATE OF TEXAS

  	
   

  	
  §

  
	
   

  	
   

  	
  §

  
	
  COUNTY OF DALLAS

  	
   

  	
  §

  

 

This instrument was acknowledged before me on                               ,
2007, by                               ,
                               ,
of Pioneer Natural Resources USA, Inc., a
Delaware corporation, on behalf of said corporation.

	
   

  	
   

  	
   

  
	
  Notary Seal:

  	
   

  	
  Notary Public in and for

  
	
   

  	
   

  	
  The State of Texas

  

 

	
  STATE OF TEXAS

  	
   

  	
  §

  
	
   

  	
   

  	
  §

  
	
  COUNTY OF

  	
   

  	
  §

  

 

This instrument was acknowledged before me on                               ,
2007, by                               ,
                              
of                               ,
managing general partner, on behalf of Mesa Offshore Royalty
Partnership, a Texas general partnership.

	
   

  	
   

  	
   

  
	
  Notary Seal:

  	
   

  	
  Notary Public in and for

  
	
   

  	
   

  	
  The State of Texas

  

 

 5

SCHEDULE 1.2

Form of

AMENDMENT TO OVERRIDING ROYALTY CONVEYANCE

This Amendment to Overriding Royalty Conveyance is
entered into effective                                           ,
by and between Pioneer Natural Resources USA, Inc., a Delaware corporation,
whose address is 5205 North O’Conner Blvd., Suite 200, Irving, Texas 75039
(“PNR”) and Mesa Offshore Royalty Partnership, a Texas general partnership,
whose address is 5205 N. O’Conner Blvd., Suite 200, Irving, Texas 75039-3746 (“Mesa
Partnership”). PNR and Mesa Partnership are sometimes collectively referred to
herein as the “Parties” and individually as a “Party.”

RECITALS

(1)           Reference is made to that certain
Overriding Royalty Conveyance from Mesa Petroleum Co. (predecessor to PNR) to
Mesa Partnership, effective December 1, 1982 (the “Original Conveyance”).

(2)           Reference is also made to that
certain Mutual Release and Settlement Agreement among Pioneer Natural
Resources Company, PNR, and the Mesa Offshore Trust (the “Mesa Trust”), acting
by and through JPMorgan Chase Bank, N.A., in its capacity as trustee of the
Mesa Trust (the “Trustee”), dated                                      
(the “Settlement Agreement”).

(3)           Pursuant to the Settlement Agreement,
PNR and Mesa Partnership desire to amend the Original Conveyance as provided
herein.

NOW THEREFORE,for and in consideration of the mutual
agreements, covenants and conditions herein contained, the receipt and
sufficiency of which are hereby acknowledged, and intending hereby to be
legally bound, the Parties hereby agree as follows:

1.             Abandonment Costs Definition. Article I of the Original
Conveyance is hereby amended by adding the following proviso to the end of the
definition of Abandonment Costs:

“;
provided however, that effective as of October 31, 2006, Abandonment Costs
shall exclude (i) the Prior P&A Costs and (ii) the Brazos A-39 No. 5 Well
P&A Costs.”

2.             New Definitions. Article I of the Original Conveyance is
hereby further amended by adding the following new definitions:

“‘Brazos A-39 No. 5 Well
P&A Costs’ means the plugging, abandonment, and decommissioning
costs with respect to the well designated as No. 5 and located on the Brazos
Block A-39 Lease and the related facilities allocated to such well.

 1
 

‘Brazos Block A-39 Lease’
means the Oil and Gas Lease bearing Serial No. OCS-G 4559, effective January 1,
1981, by and between the United States of America, as Lessor, and Mesa
Petroleum Co. and Texaco Inc., as Lessee, covering all of Block A-39, Brazos
Area, as shown on OCS Leasing Map, Texas Map No. 5, containing 5,760
acres, more or less.

‘Designated
Facilities’ means, collectively,

(a)           Concerning Brazos Block A-7A, the
Block A-7 No. A4 Well and well bore, and associated Block A-7 Pioneer Platform
A (now abandoned and removed) bearing MMS Platform ID No. 10189 1, said
platform comprised of three decks with four (4) slots.

(b)           Concerning Brazos Block A-7B, the
Block A-7 No. B1 Well and well bore, and associated Block A-7 Newfield Platform
B bearing MMS Platform ID No. 146 1, said platform comprised of two decks with
one (1) slot.

(c)           Concerning Brazos Block A-39A, the
Block A-39 No. A1 Well and well bore, the Block A-39 No. A2 Well and well bore,
the Block A-39 No. A3 Well and well bore, and the associated Block A-39
Pioneer Platform A (now abandoned and removed) bearing MMS Platform ID No.
10202 1, said platform comprised of three decks with four (4) slots.

(d)           Concerning Matagorda Island Block
624, the Block 624 Pioneer Platform A, bearing MMS Platform ID No. 10198 1,
removed in year 2003, said platform comprised of three decks with nine (9)
slots, said platform currently located at the Omega yard in New Iberia,
Louisiana, awaiting disposal.

(e)           Concerning South Marsh Island Block
155, the Block 155 Pioneer Platform A, bearing MMS Platform ID No. 22473 1,
removed in year 2002, said platform comprised of three decks with twenty four
(24) slots, said platform currently located at the Omega yard in New Iberia,
Louisiana, awaiting disposal.

‘Prior P&A Costs’ means the approximately $1,400,000 of
accrued plugging, abandonment and decommissioning costs related to Designated
Facilities, expended and projected to be expended as reflected in the books and
records of Assignor as of October 31, 2006, which costs have not, as of such
date, been used in the calculation of Net Proceeds.”

3.             No Currently Outstanding Abandonment Costs. The Parties
acknowledge and agree that effective as of October 31, 2006 Mesa Partnership’s
interest under the Original Conveyance is unencumbered by, and bears no share
of or responsibility for plugging, abandonment or decommissioning costs
associated with activities occurring on or before October 31, 2006, with
respect to any Leases (as defined in the Original Conveyance), or associated
with any facilities located on or used in connection with any Lease as of
October 31, 2006, and that

 2
 

Mesa Partnership
has fully satisfied and discharged its share of and responsibility for
plugging, abandonment and decommissioning costs associated with activities
occurring on or before October 31, 2006 and facilities existing as of October
31, 2006 by virtue of charges previously assessed against Mesa Partnership’s
interest.

IN WITNESS
WHEREOF, the Parties have
duly executed this Amendment effective as of the date first above written.

	
  

  	
   

  	
  PIONEER NATURAL RESOURCES USA, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MESA OFFSHORE ROYALTY PARTNERSHIP

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
                                 ,
  its managing general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
						

 

 3
 

 

	
  

  	
   

  	
   

  
	
  STATE OF TEXAS

  	
   

  	
  §

  
	
   

  	
   

  	
  §

  
	
  COUNTY OF DALLAS

  	
   

  	
  §

  

 

This instrument was acknowledged before me on                               ,
2007, by                               ,
                              ,
of Pioneer Natural Resources USA, Inc., a
Delaware corporation, on behalf of said corporation.

	
   

  	
   

  	
   

  
	
  Notary Seal:

  	
   

  	
  Notary Public in and for

  
	
   

  	
   

  	
  The State of Texas

  

 

	
  

  	
   

  	
   

  
	
  STATE OF TEXAS

  	
   

  	
  §

  
	
   

  	
   

  	
  §

  
	
  COUNTY OF                               

  	
   

  	
  §

  

 

This instrument was acknowledged before me on                               ,
2007 by                               ,
                              
of                               ,
managing general partner, on behalf of Mesa Offshore Royalty
Partnership, a Texas general partnership.

	
   

  	
   

  	
   

  
	
  Notary Seal:

  	
   

  	
  Notary Public in and for

  
	
   

  	
   

  	
  The State of Texas

  

 

 4

No. 2006-01984

	
  MOSH HOLDING, L.P.,

  	
   

  	
  §

  	
   

  	
  IN THE DISTRICT COURT OF

  
	
   

  	
   

  	
  §

  	
   

  	
   

  
	
                  PLAINTIFF,

  	
   

  	
  §

  	
   

  	
   

  
	
   

  	
   

  	
  §

  	
   

  	
   

  
	
  V.

  	
   

  	
  §

  	
   

  	
   

  
	
   

  	
   

  	
  §

  	
   

  	
   

  
	
  PIONEER NATURAL RESOURCES COMPANY;

  	
   

  	
  §

  	
   

  	
  HARRIS COUNTY, TEXAS

  
	
  PIONEER NATURAL RESOURCES USA, INC.;

  	
   

  	
  §

  	
   

  	
   

  
	
  WOODSIDE ENERGY (USA), INC.; AND

  	
   

  	
  §

  	
   

  	
   

  
	
  JPMORGAN CHASE BANK, N.A., AS

  	
   

  	
  §

  	
   

  	
   

  
	
  TRUSTEE OF THE MESA OFFSHORE TRUST

  	
   

  	
  §

  	
   

  	
   

  
	
   

  	
   

  	
  §

  	
   

  	
   

  
	
                  DEFENDANTS.

  	
   

  	
  §

  	
   

  	
  334TH JUDICIAL DISTRICT

  

 

FINAL ORDER APPROVING MUTUAL
RELEASE AND

SETTLEMENT AGREEMENT AND
DISMISSAL WITH PREJUDICE

Pending
before the Court is the Motion for Approval of Settlement and Petition for
Instructions to the Trustee Regarding Final Settlement Approval (the “Motion”).  After a hearing conducted on                           ,
the Court has reviewed the Motion, all responses and objections to the Motion
and the Mutual Release and Settlement Agreement (the “Settlement Agreement”)
that is the subject of the Motion, the evidence presented by the parties and
interested persons, the arguments of counsel, and finds that the Motion should
be granted.

The Court makes the following findings in
connection with this Order:

1.             The Court has the authority under
Texas law to approve the Settlement Agreement and to dismiss with prejudice the
claims asserted in this lawsuit against Pioneer Natural Resources Company and
Pioneer Natural Resources USA, Inc. (together, “Pioneer”) and Woodside Energy
(USA), Inc. (“Woodside”) pursuant to the Motion and the Settlement Agreement.

2.             The Trustee provided appropriate
notice to beneficiaries of the Trust in accord with the provisions of Texas
Property Code, including Sections 115.015 and 115.016.

3.             Pursuant to Texas law, the Royalty
Trust Indenture dated December 1, 1982 (the Trust Indenture”), the Overriding
Royalty Conveyance dated December 1, 1982, and the Articles of General
Partnership dated November 30, 1982 (as amended by First Amended and Restated
Articles of General Partnership dated December 1, 1982 and Amendment to First
Amended and Restated Articles of General Partnership dated December 27, 1985)
(the “Partnership Agreement”), JPMorgan Chase Bank, as Trustee of the Mesa
Offshore Trust (the “Trustee”), has standing and the authority to cause the
Mesa Offshore Trust (the “Trust”), the beneficiaries of the Trust, and (as the
99.99% General Partner of the Mesa Offshore Royalty Partnership (the “Partnership”))
the Partnership to enter into the Settlement Agreement, to compromise the
claims asserted against Pioneer and Woodside in this lawsuit, and to receive
the benefits and consideration provided to the Trust and the Partnership
pursuant to the Settlement Agreement.

4.             The Trustee, Pioneer, and Woodside
conducted settlement negotiations at arms’ length and in good faith.  The Trustee negotiated the Settlement
Agreement in the best interests of the Trust and the Trust’s beneficiaries.

5.             The Trustee has diligently
investigated the claims asserted against Pioneer and Woodside in the pleadings
filed by MOSH Holding, L.P. and Dagger-Spine Hedgehog Corporation in this
lawsuit.  The claims against Pioneer and
Woodside asserted in this lawsuit are not valid or are too speculative to
justify using the Trust’s assets to pursue.

6.             The evidence that the parties would
offer on the trial of this case would be voluminous, complex, and sharply
conflicting, and a trial on the merits of this action would be extremely
lengthy, complex, and expensive.

7.             The proposed settlement agreement
gives the Partnership, the Trust, and the Trust’s beneficiaries substantial
benefits and advantages that would not be available to them 

 2
 

even if Pioneer
and Woodside were found liable on all of the claims raised in this
lawsuit.  The benefits achieved by the
Settlement Agreement are more certain and greater than the benefits that likely
could be obtained in a trial of this lawsuit.

8.             The Settlement Agreement is
advantageous for and in the best interest of the Trust and all of the
beneficiaries of the Trust, including, without limitation, MOSH Holding, L.P.
and Dagger-Spine Hedgehog Corporation.

9.             The Trustee acted reasonably and
properly in negotiating and executing the Settlement Agreement.

10.           The actions of JPMorgan Chase Bank,
in its capacity as Trustee and in its individual capacity, do not create any
conflicts, including any conflicts arising from JPMorgan Chase Bank’s lending
relationship with Pioneer and its responsibilities as Trustee.  No conflict of interest exists between the
Trust, the beneficiaries of the Trust, and the Trustee.

11.           The claims asserted in this lawsuit
against Pioneer and Woodside belong to the Partnership or the Trust.  Any recovery that could be obtained pursuant
to the claims raised in this lawsuit would belong to and be for the benefit of
the Partnership or the Trust, and not directly for the beneficiaries of the Trust,
including MOSH Holding, L.P. and Dagger-Spine Hedgehog Corporation.  The beneficiaries of the Trust do not have
standing to assert the claims stated in this lawsuit against Pioneer and
Woodside.

12.           The total amount of cash that the
Trust received per year in 2002, 2003, and 2004 was less than ten times
one-third the total amount payable to the Trustee under Article VII of the
Trust Indenture for such three-year period. 
Accordingly, the Trust Indenture requires the Trustee to sell the assets
of the Trust or to cause the Partnership to sell the Partnership’s assets.  The procedures for the sale of the assets of
the Partnership and the distribution of the net proceeds 

 3
 

from the sale of
those assets that are stated in the Settlement Agreement are reasonable,
necessary, and satisfy the obligations of Pioneer and the Trustee under the
Partnership Agreement, the Overriding Royalty Conveyance, and the Trust
Indenture.

It is therefore ORDERED that:

1.             The Court approves the Settlement
Agreement, which is attached as Exhibit A. 
All of the terms and provisions of the Settlement Agreement are
incorporated into this Order.  The
Trustee is instructed to consummate the Settlement Agreement and to enforce its
terms.

2.             The claims and causes of action
asserted against JPMorgan Chase Bank, N.A., as Trustee of the Mesa Offshore
Trust, in this lawsuit are severed from the main cause and shall be docketed
under cause number 2006-01984-A.

3.             Pioneer Natural Resources Company,
Pioneer Natural Resources USA, Inc., and Woodside Energy (USA), Inc., and all
claims asserted against them in this action, are dismissed with prejudice.  This order is final and appealable.

4.             The Trustee is released from any
liability from the Trust or the Trust beneficiaries for any claims arising from
its agreement to and performance of the Settlement Agreement.

5.             This Order and the Settlement
Agreement is binding on Pioneer, Woodside, the Trust, the Trustee, and all of
the beneficiaries of the Trust, including without limitation, MOSH Holding,
L.P., and Dagger-Spine Hedgehog Corporation.

Signed
this        day of                                            ,
         .

	
  

  	
   

  	
   

  
	
   

  	
   

  	
  Presiding Judge

  

 

 4Exhibit 4.01

LEHMAN BROTHERS HOLDINGS
INC.

Exchange Rate Adjusted
Absolute Buffer Notes Linked to a Basket of 

the Dow Jones EURO STOXX 50® Index, the FTSE 100 Index®, the TOPIX® Index 

and the S&P®/ASX 200 Index Due January 31, 2011

 

	
  Number
  R-1

  	
   

  	
  $1,864,000

  
	
  ISIN US524908UK46

  	
   

  	
  CUSIP 524908UK4

  

 

See Reverse for Certain
Definitions

THIS
SECURITY (THIS “SECURITY”) IS A GLOBAL SECURITY WITHIN THE MEANING OF
THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE THEREOF.  UNLESS AND UNTIL
IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN CERTIFICATED FORM, THIS
SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO SUCH DEPOSITORY
OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE
TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.  UNLESS THIS SECURITY IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TO LEHMAN BROTHERS HOLDINGS INC. OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

LEHMAN
BROTHERS HOLDINGS INC., a corporation duly organized and existing under the
laws of the State of Delaware (hereinafter called the “Company”), for
value received, hereby promises to pay to CEDE & CO. or registered assigns,
at the office or agency of the Company in the Borough of Manhattan, The City of
New York, on the Maturity Date, in such coin or currency of the United States
of America at the time of payment shall be legal tender for the payment of
public and private debts, for each $1,000 principal amount of the Securities
represented hereby, an amount equal to the Payment at Maturity.  THE SECURITIES REPRESENTED HEREBY SHALL NOT
BEAR ANY INTEREST.

Any amount payable on the Maturity Date hereon will be paid only upon
presentation and surrender of this Security.

 2
  
  

 

REFERENCE
IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET FORTH ON THE
REVERSE HEREOF WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME
EFFECT AS IF SET FORTH AT THIS PLACE.

Each
Basket Index is a trademark of the sponsor of such Basket Index and has been
licensed for use by the Company.  The
Securities, linked to the performance of the Basket Indices, are not sponsored,
endorsed, sold or promoted by the sponsors of the Basket Indices and the
sponsors of the Basket Indices make no representation regarding the
advisability of investing in the Securities.

This
Security shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been signed by the Trustee
under the Indenture referred to on the reverse hereof.

 3
  
  

 

IN
WITNESS WHEREOF, Lehman Brothers Holdings Inc. has caused this instrument to be
signed by its Chairman of the Board, its President, its Vice Chairman, its
Chief Financial Officer, one of its Vice Presidents or its Treasurer, by manual
or facsimile signature under its corporate seal, attested by its Secretary or
one of its Assistant Secretaries by manual or facsimile signature.

	
  Dated:   January 31, 2007

  	
   

  	
  LEHMAN BROTHERS HOLDINGS INC. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ James J. Killerlane
  III  

  
	
   

  	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  

 

	
  

  	
   

  	
  Attest: 

  	
  /s/ Jin Lee

  
	
   

  	
   

  	
   

  	
  Assistant Secretary

  

 

TRUSTEE’S CERTIFICATE OF
AUTHENTICATION

This
is one of the Securities of the series designated therein referred to in the
within-mentioned Indenture.

CITIBANK, N.A.
  as Trustee

	
  By: 

  	
  /s/ Wafaa Orfy

  	
   

  
	
   

  	
  Authorized Officer

  	
   

  

 

 4
  
  

 

Reverse of Security

This
Security is one of a duly authorized series of Securities of the Company
designated as Exchange Rate Adjusted Absolute Buffer Notes Linked to a Basket
of the Dow Jones EURO STOXX 50® Index, the FTSE 100 Index®, the TOPIX® Index
and the S&P®/ASX 200 Index Due January 31, 2011 (herein called the “Securities”).  The Company may, without the consent of the
holders of the Securities, create and issue additional notes ranking equally
with the Securities and otherwise similar in all respects so that such further
notes shall be consolidated and form a single series with the Securities;
provided that no additional notes can be issued if an Event of Default has
occurred with respect to the Securities. 
This series of Securities is one of an indefinite number of series of
debt securities of the Company, issued and to be issued under an indenture,
dated as of September 1, 1987, as amended (herein called the “Indenture”),
duly executed and delivered by the Company and Citibank N.A., as trustee
(herein called the “Trustee”, which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a description of the rights, limitations
of rights, obligations, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities.

The
Payment at Maturity, at the request of the Trustee, shall be determined by the
Calculation Agent pursuant to the Calculation Agency Agreement. The Trustee
shall fully rely on the determination by the Calculation Agent of the Payment
at Maturity and shall have no duty to make any such determination. The Calculation
Agent will provide written notice to the Trustee at its New York office, on
which notice the Trustee may conclusively rely, of the Payment at Maturity on
or prior to 11:00 a.m. on the Business Day preceding the Maturity Date.

All calculations with respect to the Ending Basket Level, the Basket Return
and the Final Local Currency Index Level and Final USD Index Level of each
Basket Index will be rounded to the nearest one hundred-thousandth, with five
one-millionths rounded upward (e.g.,
..876545 would be rounded to .87655); all dollar amounts related to
determination of the payment per $1,000 principal amount Security on the
Maturity Date, if any, will be rounded to the nearest ten-thousandth, with five
one hundred-thousandths rounded upward (e.g.,
..76545 would be rounded up to .7655); and all dollar amounts paid on the
aggregate principal amount of Securities per Holder will be rounded to the
nearest cent, with one-half cent rounded upward.

This
Security is not subject to any sinking fund.

If
an Event of Default with respect to the Securities shall occur and be
continuing, the amounts payable on all of the Securities may be declared due
and payable in the manner and with the effect provided in the Indenture.  The amount payable to the Holder hereof upon
any acceleration permitted under the Indenture will be equal to the Payment at
Maturity calculated as though the date of acceleration were the Observation
Date. If the maturity of the Securities is accelerated because of an Event of
Default, the Company shall, or shall cause the Calculation Agent to, provide
written notice to the Trustee at its New York office, on which notice the
Trustee may conclusively rely, and to The Depository Trust Company of the cash
amount due with respect to the Securities as promptly as possible and in no
event later than two Business Days after the date of acceleration.

 

 5
  
  

The Indenture contains
provisions permitting the Company and the Trustee, with the consent of the holders
of not less than 662¤3% in
aggregate principal amount of each series of Securities at the time
Outstanding to be affected (each series voting as a class), evidenced as in the
Indenture provided, to execute supplemental indentures adding any provisions
to, or changing in any manner or eliminating any of the provisions of the
Indenture or of any supplemental indenture or modifying in any manner the
rights of the holders of the Securities of all such series; provided, however, that no such
supplemental indenture shall, among other things, (i) change the fixed maturity
of any Security, or reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest thereon, if any, or reduce any premium
payable on redemption, or make the principal thereof, or premium, if any, or
interest thereon, if any, payable in any coin or currency other than that
hereinabove provided, without the consent of the holder of each Security so
affected, or (ii) change the place of payment on any Security, or impair the
right to institute suit for payment on any Security, or reduce the aforesaid
percentage of Securities, the holders of which are required to consent to any
such supplemental indenture, without the consent of the holders of each
Security so affected.  It is also
provided in the Indenture that, prior to any declaration accelerating the
maturity of any series of Securities, the holders of a majority in aggregate
principal amount of the Securities of such series Outstanding may on behalf of
the holders of all the Securities of such series waive any past default or
Event of Default under the Indenture with respect to such series and its
consequences, except a default in the payment of interest, if any, or the
principal of, or premium, if any, on any of the Securities of such series, or
in the payment of any sinking fund installment or analogous obligation with
respect to Securities of such series. 
Any such consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future holders and owners
of this Security and any Securities which may be issued in exchange or
substitution hereof, irrespective of whether or not any notation thereof is
made upon this Security or such other Securities.

No
reference herein to the Indenture and no provision of this Security or of the
Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the Payment at Maturity with respect to this
Security.

The
Securities are issuable in denominations of $1,000 and any whole multiples of
$1,000.

The
Company, the Trustee, and any agent of the Company or of the Trustee may deem
and treat the registered holder (the “Holder”) hereof as the absolute
owner of this Security (whether or not this Security shall be overdue and
notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment hereof, or on account hereof, and for all other
purposes and neither the Company nor the Trustee nor any agent of the Company
or of the Trustee shall be affected by any notice to the contrary.  All such payments made to or upon the order
of such registered holder shall, to the extent of the sum or sums paid,
effectually satisfy and discharge liability for moneys payable on this
Security.

No
recourse for the payment of the principal of, premium, if any, or interest on
this Security, or for any claim based hereon or otherwise in respect hereof,
and no recourse under or upon any obligation, covenant or agreement of the
Company in the Indenture or any indenture supplemental thereto or in any
Security, or because of the creation of any indebtedness 

 6
  
  

 

represented
thereby, shall be had against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.

As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Security is registrable in the Security Register, upon
surrender of this Security for registration of transfer at the Corporate Trust
Office or agency in a Place of Payment for this Security, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or such
Holder’s attorney duly authorized in writing, and thereupon one or more new
Securities of this series or of like tenor and of authorized denominations and
for the same aggregate principal amount, will be issued to the designated
transferee or transferees.

The
Company intends to treat, and by purchasing this Security, the Holder agrees to
treat, for all tax purposes, this Security as a cash-settled financial contract
giving rise to capital gain or loss, rather than as a debt instrument.

THE
INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.

Definitions

Set
forth below are definitions of the terms used in this Security.

“Basket”
shall mean the basket initially composed of the Basket Indices.

“Basket
Closing Level” shall mean, with respect to any day, the sum of the products
of the Final USD Index Level of each Basket Index on that day and the
applicable Basket Index Weight for such Basket Index.

“Basket
Index” shall initially mean any one of the Dow Jones EURO STOXX 50® Index,
as calculated, published and disseminated by STOXX Limited, the FTSE 100
Index®, as calculated, published and disseminated by FTSE International
Limited, the TOPIX® Index, as calculated, published and disseminated by the
Tokyo Stock Exchange, Inc., and the S&P®/ASX 200 Index, as calculated,
published and disseminated by Standard & Poor’s Australian Index Committee
and “Basket Indices” shall have the correlative meaning.

 7

“Basket Index Weight” of each Basket Index shall initially be as
follows:

	
  

  	
   

  	
  Basket Index

  	
   

  
	
  Basket Index

  	
   

  	
   

  	
   

  	
  Weight

  	
   

  
	
  The Dow Jones EURO
  STOXX 50 Index

  	
   

  	
  0.0681541

  	
   

  
	
  The FTSE 100 Index

  	
   

  	
  0.0258015

  	
   

  
	
  The TOPIX Index

  	
   

  	
  16.8115322

  	
   

  
	
  The S&P/ASX 200 Index

  	
   

  	
  0.0180688

  	
   

  
						

 

The Basket Index Weights
shall be subject to adjustment by the Calculation Agent pursuant to the
Calculation Agency Agreement.

“Basket
Return” shall equal the following:

Ending Basket Level — Starting Basket Level

Starting Basket Level

“Buffer Amount” shall mean 20%.

“Business Day”, notwithstanding any provision in the Indenture,
shall mean any day that is not a Saturday or Sunday and that is not a day on
which banking institutions in the City of New York are authorized or obligated
by law to close.

“Calculation
Agency Agreement” shall mean the Calculation Agency Agreement, dated as of
December 21, 2006 between the Company and the Calculation Agent, as amended
from time to time, or any successor calculation agency agreement.

“Calculation
Agent” shall mean the person that has entered into an agreement with the
Company providing for, among other things, the determination of the Payment at
Maturity, which term shall, unless the context otherwise requires, include its
successors and assigns.  The initial
Calculation Agent shall be Lehman Brothers Inc.

“Closing
Level,” as determined by the Calculation Agent, shall mean, with respect to
any Trading Day, in the case of any Basket Index or any Successor Index, the
official closing level of such Basket Index or Successor Index, as the case may
be, published following the regular official weekday close of trading of such
Basket Index or Successor Index, as the case may be, on such day or as
determined by the Calculation Agent pursuant to the Calculation Agency
Agreement as described below under “Discontinuation of a Basket Index;
Alteration of Method of Calculation”.

 “Closing Price” of a security, on any
particular day, means the last reported sales price for that security on the
Relevant Exchange at the scheduled weekday closing time of the regular trading
session of the Relevant Exchange.  If,
however, the security is not listed or traded on a bulletin board, then the
Closing Price of the security will be determined using the average execution
price per share that an affiliate of the Company pays or receives upon the
purchase or sale of the security used to hedge the Company’s obligations under
the Securities.

 8

“Company”
shall have the meaning set forth on the face of this Security.

“Ending
Basket Level” shall equal the Basket Closing Level on the Observation Date.

“Final
USD Index Level” of each Basket Index shall be the product of the Final
Local Currency Index Level of such Basket Index and the Final Exchange Rate
with respect to such Basket Index.

“Final
Local Currency Index Level” of each Basket Index shall equal the Closing
Level of such Basket Index on the Observation Date.

“Final
Exchange Rate” for the Euro is the mid-market exchange rate between the
Euro and the U.S. dollar as displayed on Bloomberg Financial Markets page “EUR
<Index> <GO>” (or its equivalent successor if such page is not
available) as of 4:30 p.m. (London time) on the Observation Date, expressed as
the number of U.S. dollars per Euro.

The
Final Exchange Rate for the British Pound is the mid-market exchange rate
between the British Pound and the U.S. dollar as displayed on Bloomberg
Financial Markets page “GBP <Index> <GO>” (or its equivalent
successor if such page is not available) as of 4:30 p.m. (London time) on the
Observation Date, expressed as the number of U.S. dollars per British Pound.

The
Final Exchange Rate for the Japanese Yen is the mid-market exchange rate
between the Japanese Yen and the U.S. dollar as displayed on Bloomberg
Financial Markets page “JPY <Index> <GO>” (or its equivalent
successor if such page is not available) as of 4:30 p.m. (London time) on the
Observation Date, expressed as the number of U.S. dollars per Japanese Yen.

The
Final Exchange Rate for the Australian dollar is the mid-market exchange rate
between the Australian dollar and the U.S. dollar as displayed on Bloomberg
Financial Markets page “AUD <Index> <GO>” (or its equivalent
successor if such page is not available) as of 4:30 p.m. (London time) on the
Observation Date, expressed as the number of U.S. dollars per Australian
dollar.

“Holder”
shall have the meaning set forth on the reverse of this Security.

“Indenture”
shall have the meaning set forth on the reverse of this Security.

“Market
Disruption Event”, with respect to any Basket Index or any Successor Index
shall mean any of the following events has occurred on any day as determined by
the Calculation Agent:

(1)           a suspension, absence or material limitation of
trading of stocks then constituting 20% or more of the level of the Basket
Index (or the relevant Successor Index) on the Relevant Exchanges for such
securities at any time during the one hour period preceding the close of the
principal trading session on such Relevant Exchange;

 9

(2)           a breakdown or
failure in the price and trade reporting systems of the primary market of any
Relevant Exchange as a result of which the reported trading prices for stocks
then constituting 20% or more of the level of the Basket Index (or the relevant
Successor Index) at any time during the one hour period preceding the close of
the principal trading session on such Relevant Exchange are materially
inaccurate;

(3)            a suspension, absence
or material limitation of trading on any major securities exchange for trading
in futures or options contracts related to the Basket Index (or the relevant
Successor Index) at any time during the one hour period preceding the close of
the principal trading session on such exchange; or

(4)           a decision to
permanently discontinue trading in the relevant futures or options contracts.

For the purpose of determining whether a Market Disruption Event exists
at any time, if trading in a security included in a Basket Index is materially
suspended or materially limited at that time, then the relevant percentage
contribution of that security to the level of the Basket Index shall be based
on a comparison of:

(1)           the portion of the
level of the Basket Index attributable to that security relative to

(2)           the overall level of
the Basket Index,

in each case immediately before
that suspension or limitation.

For purposes of determining whether a Market Disruption Event has
occurred:

(1)           a limitation on the
hours or number of days of trading will not constitute a Market Disruption
Event if it results from an announced change in the regular business hours of
the Relevant Exchange or market;

(2)           limitations pursuant
to the rules of any Relevant Exchange similar to NYSE Rule 80B (or any
applicable rule or regulation enacted or promulgated by any other
self-regulatory organization or any government agency of scope similar to NYSE
Rule 80B as determined by the Calculation Agent in its sole discretion) on
trading during significant market fluctuations will constitute a suspension,
absence or material limitation of trading;

(3)           a suspension of
trading in futures or options contracts on a Basket Index by the primary
securities market trading in such contracts by reason of (i) a price change
exceeding limits set by such exchange or market, (ii) an imbalance of orders
relating to such contracts, or (iii) a disparity in bid and ask quotes relating
to such contracts will, in each such case, constitute a suspension, absence or
material limitation of trading in futures or options contracts related to such
Basket Index; and

(4)           a suspension, absence or material
limitation of trading on any Relevant Exchange or on the primary market on
which futures or options contracts related to a Basket 

 10

Index are traded will not include
any time when such market is itself closed for trading under ordinary
circumstances.

“Maturity Date” shall
mean January 31, 2011, unless that day is not a Business Day, in which case the
amount equal to the Payment at Maturity will be made on the next succeeding
Business Day following January 31, 2011; provided, that if due to a
non-Trading Day or a Market Disruption Event, the Observation Date is postponed
so that it falls less than three Business Days prior to the scheduled Maturity
Date, the Maturity Date will be the third Business Day following the
Observation Date, as postponed.

“NYSE”
shall mean The New York Stock Exchange, Inc.

“Observation
Date” shall mean January 26, 2011; provided, that if an Observation
Date is not a Trading Day or if there is a Market Disruption Event on such day
with respect to a Basket Index, the Calculation Agent will: (1) with respect to
each Basket Index for which such day is a Trading
Day and for which a Market Disruption Event has not
occurred, determine the Closing Level of the Basket Index for use in
calculating the Final Local Currency Index Levelby reference to the Closing
Level of the Basket Index on that Trading Day; and (2) with respect to each
Basket Index for which such day is not a
Trading Day or for which a Market Disruption Event has
occurred, determine the Closing Level of the Basket Index for use in
calculating the Final Local Currency Index Levelby reference to the Closing
Level of the Basket Index on the next Trading Day for the Basket Index on which
there is not a Market Disruption Event; provided, however, if a Market Disruption Event with respect to the Basket
Index occurs on each of the eight Trading Days following the scheduled
Observation Date, then the Calculation Agent shall determine the Closing Level
of that Basket Index for use in calculating the Final Local Currency Index
Levelbased upon its good faith estimate of the Closing Level of the Basket
Index on that eighth Trading Day.

“Payment
at Maturity,” as calculated by the Calculation Agent, for each $1,000
principal amount Security, shall equal:

·                  If the Basket Return is positive, $1,000 + ($1,000 x the Upside Participation Rate x
the Basket Return).

·                  If the Basket Return is zero, $1,000.

·                  If the Basket Return is negative and the Ending Basket Level is below the Starting
Basket Level by an amount equal to or less than the
Buffer Amount, $1,000 + ($1,000 x the absolute value of the Basket Return).

·                  If the Basket Return is negative and the Ending Basket Level is below the Starting
Basket Level by an amount more than the
Buffer Amount, $1,000 + ($1,000 x the Basket Return).

“Place of Payment” shall mean the place or places where the
Payment at Maturity on the Securities is payable.

 11

“Relevant
Exchange” shall mean, for any security (or any combination thereof) then
included in any Basket Index or any Successor Index, the primary exchange,
quotation system (which includes bulletin board services) or other market of
trading for such security.

“Securities” shall have the meaning set forth on the reverse of
this Security.

“Security”
shall have the meaning set forth on the face of this Security.

“Starting
Basket Level” shall equal $1,000.

“Successor Index”
shall have the meaning specified under “Discontinuation of a Basket Index;
Alteration of Method of Calculation.”

“Trading
Day,” with respect to each Basket Index, means a day, as determined by the
Calculation Agent, on which trading is generally conducted on (i) the Relevant
Exchanges for securities underlying the Basket Index and (ii) the exchanges on
which futures or options contracts related to the Basket Index are traded,
other than a day on which trading on such Relevant Exchange or exchange on
which such securities, futures or options contracts are traded is scheduled to
close prior to its scheduled weekday closing time.

“Trustee”
shall have the meaning set forth on the reverse of this Security.

“Upside
Participation Rate” shall mean 128.0%.

All
terms used but not defined in this Security are used herein as defined in the
Calculation Agency Agreement or the Indenture.

Calculation Agent

The
Calculation Agent will determine, among other things, the Final Local Currency
Index Level of each Basket Index, the Final Exchange Rate applicable to each
Basket Index, the Final USD Index Level of each Basket Index, the Ending Basket
Level, the Basket Return and the Payment at Maturity, if any. In addition, the
Calculation Agent will determine whether there has been a Market Disruption
Event or a discontinuation of any Basket Index and whether there has been a
material change in the method of calculating any of the Basket Indices. All
calculations, determinations or adjustments made by the Calculation Agent will
be at the sole discretion of the Calculation Agent and will, in the absence of
manifest error, be conclusive for all purposes and binding on Holders and on
the Company. The Company may appoint a different Calculation Agent from time to
time after the date of the original issue of the Securities without Holders’
consent and without notifying Holders.

Discontinuation of a Basket Index; Alteration of
Method of Calculation

If
the sponsor of a Basket Index discontinues publication of such Basket Index and
such sponsor or another entity publishes a successor or substitute index that
the Calculation Agent determines, in its sole discretion, to be comparable to
the discontinued Basket Index (a “Successor Index”), then any Basket Index
Closing Level will be determined by reference to the 

 12

level
of such Successor Index at the close of trading on the Relevant Exchange or
market for the Successor Index on the Observation Date. Upon any selection by
the Calculation Agent of a Successor Index, the Calculation Agent will cause
written notice thereof to be promptly furnished to the Trustee, to the Company
and to the Holders.

If
the sponsor of a Basket Index discontinues publication of such Basket Index
prior to, and such discontinuation is continuing on, the Observation Date and
the Calculation Agent determines, in its sole discretion, that no Successor
Index is available at such time, or the Calculation Agent has previously
selected a Successor Index and publication of such Successor Index is
discontinued prior to, and such discontinuation is continuing on, the
Observation Date, or if such sponsor (or the publisher of any Successor Index)
fails to calculate and publish a Closing Level for such Basket Index (or any Successor
Index) on any date when it would ordinarily do so in accordance with its
customary practice, then the Calculation Agent will determine the Basket Index
Closing Level for such date.  The Basket
Index Closing Level will be computed by the Calculation Agent in accordance
with the formula for and method of calculating such Basket Index or Successor
Index, as applicable, last in effect prior to such discontinuation or failure
to calculate or publish a Closing Level for such Basket Index or Successor Index,
as applicable, using the Closing Price (or, if trading in the relevant
securities has been materially suspended or materially limited, its good faith
estimate of the Closing Price that would have prevailed but for such suspension
or limitation) at the close of the principal trading session on such date of
each security most recently comprising such Basket Index or Successor Index, as
applicable.

If
at any time the method of calculating a Basket Index or a Successor Index, or
the level thereof, is changed in a material respect, or if a Basket Index or a
Successor Index is in any other way modified so that such Basket Index or
Successor Index does not, in the opinion of the Calculation Agent, fairly
represent the level of the Basket Index or Successor Index had such changes or
modifications not been made, then the Calculation Agent will, at the close of
business in New York City on each date on which such Basket Index Closing Level
is to be determined, make such calculations and adjustments as, in the good faith
judgment of the Calculation Agent, may be necessary in order to arrive at a
level of a stock index comparable to such Basket Index or such Successor Index,
as the case may be, as if such changes or modifications had not been made, and
the Calculation Agent will calculate the Closing Level with reference to such
Basket Index or such Successor Index, as adjusted.  Accordingly, if the method of calculating
such Basket Index or a Successor Index is modified so that the level of such
Basket Index or such Successor Index is a fraction of what it would have been
if there had been no such modification (e.g., due to a split in such Basket
Index), then the Calculation Agent will adjust its calculation of such Basket
Index or such Successor Index in order to arrive at a level of such Basket
Index or such Successor Index as if there had been no such modification (e.g.,
as if such split had not occurred).

 

The
following abbreviations, when used in the inscription on the face of the within
Security, shall be construed as though they were written out in full according
to applicable laws or regulations:

	
  TEN COM -

  	
   

  	
  as tenants in common

  	
   

  	
  UNIF GIFT MIN ACT -             
  Custodian             

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (Cust)

  	
   

  	
  (Minor)

  
	
  TEN ENT -

  	
   

  	
  as tenants by the entireties

  	
   

  	
  under Uniform Gifts to Minors

  
	
  JT TEN -

  	
   

  	
  as joint tenants with right of

  	
   

  	
  Act

  	
   

  
	
   

  	
   

  	
  Survivorship and not as tenants in

  	
   

  	
   

  	
  (State)

  
	
   

  	
   

  	
  common

  	
   

  	
   

  
									

 

Additional abbreviations may
also be used though not in the above list.

 

FOR VALUE RECEIVED, the
undersigned hereby sells, assigns and transfers unto

PLEASE INSERT SOCIAL
SECURITY OR OTHER

IDENTIFYING NUMBER OF ASSIGNEE

	
  

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

	
   

  
	
  (Name and Address of Assignee, including zip
  code, must be printed or typewritten.)

  
	
   

  
	
   

  
	
  the within Security, and all rights thereunder,
  hereby irrevocably constituting and appointing

  
	
   

  
	
   

  
	
  to transfer the said Security on the books of the
  Company, with full power of substitution in the premises.

  

 

	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

NOTICE:  The signature to this assignment must correspond
with the name as it appears upon the face of the within Security in every
particular, without alteration or enlargement or any change whatever.

	
  Signature(s) Guaranteed:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

THE SIGNATURE(S) SHOULD
BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS,
SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
MEDALLION SIGNATURE GUARANTEE PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.

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