Form 8-K - Larclay Transaction.DOC UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): May 4, 2006 Southwest Oil & Gas Income Fund X-B, L.P. (Exact name of registrant as specified in its charter) Delaware 0-19585 75-2332176 (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 6 Desta Drive, Suite 6500 Midland, Texas 79705-5510 (Address of principal executive offices including zip code) Registrant's telephone number, including area code: (432) 682-6324 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 3.03 Material Modification to Rights of Security Holders On May 4, 2006, Southwest Oil & Gas Income Fund X-B, L.P. (the "Partnership") entered into an agreement (the "Agreement") with Southwest Royalties, Inc. (the "Company"), the Managing General Partner of the Partnership, to provide that the holders of a majority in interest of limited partnership interests or units in the Partnership, other than the Company and its affiliates (the "Unaffiliated Holders"), could vote to remove the Company as general partner of the Partnership. The Agreement generally requires the Company to abstain from voting any limited partnership interests now owned or hereafter acquired by the Company on the removal of the Company as general partner of the Partnership. However, if the Unaffiliated Holders voting for or in favor of the removal of the Company as general partner do not constitute a majority in interest of the limited partners and would constitute a majority in interest of the limited partners if the limited partnership interests held by the Company were not included in calculating a majority interest, the agreement provides that the Company shall vote its interests for or in favor of the removal of the Company as general partner. By entering into this Agreement, the Company and the Partnership intend to grant the Unaffiliated Holders the right to vote to remove the Company as general partner of the Partnership without the necessity of the concurrence of the Company. Item 9.01. Financial Statements and Exhibits. (d) Exhibits. 4.1 Agreement dated May 4, 2006 between Southwest Royalties, Inc. and Southwest Oil & Gas Income Fund X-B, L.P. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Southwest Oil & Gas Income Fund X-B, L.P. May 8, 2006 By: /s/ L. Paul Latham L Paul Latham President and Chief Executive Officer of Southwest Royalties, Inc., General Partner of Southwest Oil & Gas Income Fund X-B, L.P. May 8, 2006 By: /s/ Mel G. Riggs Mel G. Riggs Vice President and Chief Financial Officer of Southwest Royalties, Inc., General Partner of Southwest Oil & Gas Income Fund X-B, L.P.