Estate of Algerine Allen Smith, Deceased, James Allen Smith, Executor - Page 6

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          vigorously defended against the DOE's allegations.  Nevertheless,           
          on October 9, 1980, Exxon announced to the HFU interest owners              
          that it would begin to withhold amounts owed to the interest                
          owners under Exxon's posted prices for the oil produced.  In                
          justification for tendering less than the amount due under                  
          Exxon's classification of the oil, Exxon stated that it desired             
          to create a fund for payment of any liability it might eventually           
          have to the DOE.  The amounts withheld represented the difference           
          between the higher price charged by Exxon and the lower price the           
          DOE contended was the maximum lawful selling price.  Exxon                  
          withheld these amounts from October 1, 1980, to January 28, 1981,           
          the date on which oil prices in the United States were                      
          decontrolled.                                                               
               In response, certain HFU royalty interest owners filed suit            
          against Exxon in October 1980 in the U.S. District Court for the            
          District of Texas (Tyler Division), arguing that Exxon was                  
          required to pay them the full amount of their royalty.  Jarvis              
          Christian College v. Exxon Corp., docket No. TY-80-432-CA (the              
          Jarvis Christian litigation).  On February 6, 1981, decedent,               
          individually and as executrix for the estate of Jessamine Allen,            
          along with Frankie and other members of the Allen family (the               
          Allen parties), filed a motion to intervene as party plaintiffs             
          in the Jarvis Christian litigation.  On February 24, 1981, the              
          District Court filed an order granting leave to intervene.                  






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