**Exhibit10.2**

 

**ASSIGNMENT AND ASSUMPTION AGREEMENT**

 

THIS ASSIGNMENT ANDASSUMPTION AGREEMENT (this “Agreement”) is entered into effective as ofJuly 16, 2003 (“Effective Date”) by and between Reef Global EnergyI, L.P., a Nevada limited partnership (“Transferor”), and Reef GlobalEnergy II, L.P., a Nevada limited partnership (“Transferee”).

 

**Preliminary Statements**

 

A.                                   OnJanuary 14, 2003, Transferor entered into an agreement with CheniereEnergy, Inc. and Tri-C Resources, Inc. (the “Exploration Companies”) toparticipate in the drilling of an oil and gas well known as the “DolphinProspect” (the “Dolphin Participation Agreement”), a copy of which isset forth on Exhibit 1;

 

B.                                     Followingits execution of the Dolphin Participation Agreement, Transferor determinedthat the terms of its partnership agreement would likely prohibit itsparticipation in the Dolphin Prospect due to delays in the commencement ofdrilling activities;

 

C.                                     Transferorhas determined it to be in its best interest to transfer all of its right,title and interest to the Dolphin Prospect to Transferee in exchange for theProspect Fee (defined below) Transferor paid to participate in the DolphinProspect.

 

D.                                    Inconsideration of Transferor’s assignment and transfer of the DolphinParticipation Agreement, Transferee has agreed to assume certain liabilitiesand obligations of Transferor arising under the Dolphin ParticipationAgreement.

 

**Agreement**

 

The parties to thisAgreement, intending to be legally bound, agree as follows:

 

**1.****                                      Assignment**.  In exchange for the sum of $33,270 (the “ProspectFee”), the receipt and sufficiency of which is hereby acknowledged,Transferor hereby conveys, transfers and assigns to, and contributes to thecapital of, Transferee, its successor and assigns, forever, all of Transferor’srights, title, privileges and interest in and to the Dolphin Prospect arisingunder the Dolphin Participation Agreement. Transferor hereby represents and warrants that the Prospect Fee is theamount originally paid by Transferor to the Exploration Companies under theDolphin Participation Agreement.

 

**2.****                                      Assumptionof Obligations and Liabilities by Transferee**.  In connection with the transfer to Transferee of the DolphinParticipation Agreement, Transferor hereby assigns to Transferee and Transfereehereby assumes all of Transferor’s obligations and liabilities arising underDolphin Participation Agreement (collectively, the “Assumed Obligations”).

 

**3.****                                      FurtherAssurances**.  Transferor andTransferee, for themselves and their respective successors and assigns,covenant and agree that they will execute and deliver such additionalagreements, instruments or documents such as deeds, bills of sale, assignments,UCC financing

 

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statements, transfers andconveyances, powers of attorney, assurances, consents or assumptions, and willtake such further actions, as are necessary to transfer and assign more fullythe Dolphin Participation Agreement and to assume more fully the AssumedObligations.

 

**4.****                                      GoverningLaw**. This Agreement shall be construed in accordance with and all disputeshereunder shall be governed by the laws of the State of Nevada, excluding itsconflict of law rules.

 

**5.****                                      Counterparts**.  This Agreement may be executed in one ormore counterparts, each of which shall be deemed an original for all purposesand all of which together shall constitute one and the same instrument.

 

* * * * *

 

The parties to thisAgreement have executed and delivered this Agreement as of the Effective Date.

 
| TRANSFEROR:                 | TRANSFEREE:                  |
|-----------------------------|------------------------------|
|                        |                         |
| REEF GLOBAL ENERGY I,  L.P. | REEF GLOBAL ENERGY II,  L.P. |
|                        |                         |
|                        |                         |
|                        | By:  Reef Partners, LLC |   | By:  Reef Partners, LLC |
|                        |                         |   |   |   |   |
|                        | By:                          | /s/ MICHAEL J. MAUCELI |   |   | By: | /s/ MICHAEL J. MAUCELI |   |
|                        | Name:                        | Michael J. Mauceli |   | Name: | Michael J. Mauceli |
|                        | Title:                       | Manager |   | Title: | Manager |
|                             |                              |  |  |  |  |  |  |

 

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**EXHIBIT 1**

 

**DolphinParticipation Agreement**

 

(See Attached)

 

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**PARTICIPATIONAGREEMENT**

**AREAOF MUTUAL INTEREST**

 

**THIS AGREEMENT**, dated effectiveJanuary 14, 2003, is made and entered into by and between Cheniere Energy,Inc. (“Cheniere”) and Tri-C Resources, Inc. (“Tri-C”) and Reef Global Energy I,L.P. (“Reef”). Cheniere, Tri-C, and Reef shall sometimes be collectivelyreferred to as “Participants” and sometimes individually as “Participant”.

 

**WHEREAS**,Cheniere has identified a certain oil and/or gas prospect identified herein asthe Dolphin Prospect underlying the State of Texas offshore tracts listed onthe attached Exhibit “A”, that being the Area of Mutual Interest (“AMI”);

 

**WHEREAS**,these tracts are currently unleased, and the State of Texas General Land Office(“GLO”) is offering the tracts listed on the attached Exhibit “B” for lease atthe upcoming State of Texas Lease Sale to be held on January 15, 2003(“January Lease Sale”);

 

**WHEREAS**,Cheniere is soliciting participation by one or more industry partner(s) in theDolphin Prospect; and

 

**WHEREAS**,the Participants have evaluated the Dolphin Prospect so identified by Chenierewithin the AMI and have decided to participate with Cheniere under the termsand conditions stated below.

 

**NOWTHEREFORE**, for and in consideration of the mutual covenantsand promises herein stated, the Participants agree as follows:

 

1)                                      Commitmentto Bid a Mutually Agreeable Bid Amount – Each Participant agrees that itsundivided interest in the prospect shall be the following:

 

| Tri-C    |   | 70.00  | %      |
|----------|--------|--------|--------|
|     |   |   |   |
| Cheniere |   | 25.00  | %      |
|     |   |   |   |
| Reef     |   | 5.00   | %      |
|     |   |   |   |
|     |   | 100.00 | %      |

 

The amount of the bid oneach tract shall be the amount shown beside each tract listed on Exhibit “B”.Cheniere shall prepare and submit legal bids at the January Lease Sale oneach of the tracts listed on Exhibit “B”. If after publication of biddingresults of the January Lease Sale by the State of Texas General LandOffice Cheniere is the apparent high bidder on any tract shown on Exhibit “B”,each Participant agrees to immediately initiate and deliver by wire transfer toCheniere its proportional share of the successful bid amount.  If publication of the bidding results isdelayed beyond 12:00 PM January 15, 2003, by the General Land Office or ifthe high bid submitted by another company has not as yet been accepted, theneach Participant agrees to fund by wire transfer no later than 12:00 PMJanuary 15, 2003.

 

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2)                                      ProspectFee – In the event Cheniere is awarded the Dolphin “A” lease as describedon Exhibit “B” as a result of the January Lease Sale, each Participantshall within five (5) days of such award remit to Cheniere their proportionalshare of a one-time prospect fee of $200,000. In the event Cheniere is awardedthe Dolphin “B” lease as described on Exhibit “B” as a result of the January LeaseSale, each Participant shall within five (5) days of such award remit toCheniere their proportional share of a onetime prospect fee of $100,000. Uponpayment by Participants, Cheniere shall promptly execute and deliver to eachParticipant an assignment conveying their proportional share of 100% of 8/8thsrecord title interest in the acquired leases. A form of the assignment isattached hereto as Exhibit “C”.

 

3)                                      DesignatedOperator/Joint Operating Agreement – Tri-C shall be the designated Operatoron all tracts owned by the Participants within the AMI. Furthermore, withinfive (5) days of issuance of the lease(s), the Participants agree to execute aJoint Operating Agreement (“JOA”) in a form acceptable to Tri-C.

 

4)                                      Cheniere’sReserved Interest – Before Payout, as hereinafter defined, Cheniere shallbe entitled to receive a 5% of 8/8ths overriding royalty interest (“ORRI”) fromeach Participant proportionally reduced to each Participant’s working interestin all production attributable to the lease(s). At Payout of the costsdescribed below, Cheniere shall be entitled to receive an additional 2% of8/8ths overriding royalty interest (“ORRI”) from each Participantproportionally reduced to each Participant’s working interest in all productionattributable to the lease(s). After Payout, Cheniere will own a total of 7% of8/8ths overriding royalty interest.

 

5)                                      BeforePayout Costs – The Participants shall proportionally bear 100% of the coststo acquire, maintain, drill, evaluate, develop and produce the leases withinthe Dolphin Prospect, subject to Cheniere’s reservation of the ORRI’sreferenced above.

 

6)                                      PayoutDefinition – At such time as the value of 100% of the gross income receivedby the Participants from the sale of production from the Dolphin Prospect (lessexisting burdens, including the ORRI described in Paragraph 4 above, andproduction and severance taxes allocable thereto) equals 100% of (i) all leaseacquisition, lease maintenance costs, and the Prospect Fee described inParagraph 2 above. (ii) all costs incurred to drill the test well and anyadditional wells, including substitute wells, plus the costs to design,fabricate and install facilities, and (iii) the costs to develop, produce,operate and maintain the Dolphin Prospect, up to and until such time, thenPayout shall be deemed to have occurred.

 

7)                                      AMIObligation – Should any Participant acquire an interest in lease locatedwithin the Dolphin Prospect AMI through means other than a successful bid atthe January Lease Sale, in addition to the Prospect Fee set forth inParagraph 2 above, Cheniere shall be entitled to the reserved interest setforth in Paragraph 4 above, proportionately reduced to Participant’s workinginterest.

 

8)                                      TerminationDate – In the event that any portion of the Participants’ bid(s) at theJanuary Lease Sale is not successful, each Participant’s share of such bidshall be returned within two (2) days. In the event of an unsuccessful bid asdescribed above, this Agreement shall terminate on January 31, 2005.

 

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9)                                      RightTo Submit Bids At the January Lease Sale – Nothing contained hereinshall limit a Participant’s right to submit a bid at the January LeaseSale. Specifically, the other Participants shall have the option, within thirty(30) days following the Sale, to acquire their proportional share of all suchinterest acquired by the bidding Participant by reimbursing the biddingParticipant their proportional share of the costs paid by the biddingParticipant to acquire such interest. In the event a Participant exercises suchoption, the terms and conditions of this Agreement shall apply.

 

10)                                Miscellaneous- This Agreement shall be construed by and interpreted under the laws of theState of Texas.

 

11)                                ThisAgreement shall be binding on the Parties’ heirs, successors and assigns.

 

12)                                Inthe event of a conflict between the terms of this Agreement and any otheragreement between the Participants, written or oral, this Agreement shallsupercede and replace any such agreement or understanding.

 

**THISAGREEMENT** is executed effective as of the 14th day ofJanuary, 2003.

 

 
| **CHENIERE ENERGY, INC.**       | **TRI-C RESOURCES, INC.**                |
|---------------------------------|------------------------------------------|
|                            |                                     |
|                            |                                     |
| **By:**                         |  /s/ J.S. Gross                     |   | **By:** |  /s/ Robert T. Herrin |   |
|                            |                                     |
| **Name:** J. S. Gross           | **Name:** Robert T.  Herrin III          |
|                            |                                     |
| **Title:**                      |   Vice President - Exploration | **Title:** |   Vice President |
|                            |                                     |
|                            |                                     |
| **REEF  GLOBAL ENERGY I, L.P.** |                                     |
|                            |                                     |
|                            |                                     |
| **By:**                         |  /s/ Michael J.  Mauceli            |   |   |
|                            |                                     |
| **Name:**  Michael J. Mauceli   |                                     |
|                            |                                     |
| **Title:**                      |   Managing  General Partner    |   |
|                                 |                                          |  |  |  |  |  |  |  |

 

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**EXHIBIT“A”**

 

Attached to that certainParticipation Agreement dated January 14, 2003, by and between CheniereEnergy, Inc. and Tri-C Resources, Inc. and Reef Global Energy I, L.P.

 

| **Prospect**     |   | **Tracts**     |
|------------------|--------|----------------|
|             |   |           |
| Dolphin Prospect |   | GA 2781 S2 SE4 |
|             |   |           |
|             |   | GA 3061 N2 NE4 |
|             |   |           |
|             |   | GA 3061 S2 NE4 |

 

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**EXHIBIT“B”**

 

Attached to that certainParticipation Agreement dated January 14, 2003, by and between CheniereEnergy, Inc. and Tri-C Resources, Inc. and Reef Global Energy I, L.P.

 

Dolphin “A” Prospect

 

GA 306L S2 NE4

 
| MGL No. 378 |   | $216,000 Bid  ̧  1.5% GLO sales fee |
|-------------|--------|-----------------------------------------|

 

Dolphin “B” Prospect

 

GA 278L S2 SE4

 
| MGL No. 373 |   | $144,000 Bid ÷ 1.5% GLO  sales fee |
|-------------|--------|-----------------------------------------|

 

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**EXHIBIT“C”**

 

Attached to that certainParticipation Agreement dated January 14, 2003, by and between CheniereEnergy, Inc. and Tri-C Resources, Inc. and Reef Global Energy I, L.P.

 

## ***ASSIGNMENT OF RECORD TITLE***

## *** ***

| **STATE  OF TEXAS**                                                                                                                                | **{** |                                |
|----------------------------------------------------------------------------------------------------------------------------------------------------|-------|-------------------------------------|
| **OFFSHORE TEXAS**                                                                                                                                 | **{** | **KNOW ALL MEN BY THESE PRESENTS:** |
| **                       AREA** | **{** |                                |

 

This Assignment of Record Title to Oil and Gas Lease of Submerged Lands(“Assignment”) is made by **CHENIERE ENERGY,INC.,** whose address is 3400 Three Allen Center, 333 Clay Street,Houston, Texas 77002 (hereinafter referred to as “Assignor”) in favor of                                          ,whose address is                              ,(hereinafter referred to as “Assignee”).

 

### **WITNESSETH**

 

In consideration of One Hundred Dollars ($100.00) and other good andvaluable consideration, the receipt and sufficiency of which are herebyacknowledged, Assignor by these presents does hereby **CONVEY, TRANSFER**and **ASSIGN**to Assignee, subject to the further provisions hereof, a            %of 8/8ths working interest in the following described oil and gas lease(s) (the“Lease”):

 

1)                                                                                      Oiland Gas Lease No.M-                      by The State of Texas, as Lessor, to Cheniere Energy, Inc., as Lessee, datedeffective as of                              ,2003, covering the                of Tract             ,              Area, Offshore                   County, Texas, and containing             acres.

 

2)                                                                                      Oiland Gas Lease No. M-                      by The State of Texas, as Lessor, to Cheniere Energy, Inc., as Lessee, datedeffective as of                             2003, covering the                of Tract             ,              Area, Offshore             County, Texas, and containing             acres.

 

By acceptance of this Assignment, Assigneeacknowledges the existence of, and This Assignment is made without warranty oftitle express, implied or statutory; provided only that Assignor warrants thatit has not heretofore granted or conveyed to any other party any interest in

 

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orlien or encumbrance on the interest of assignor in the Lease except asdescribed herein.

 

This Assignment may beexecuted in any number of counterparts, each of which shall be valid andbinding with respect to the signatories thereto and the interest in theproperty conveyed hereby, but only upon execution by all signatories of theAssignment or a counterpart hereof.

 

This Assignment shallinure to the benefit of and be binding upon the successors, representatives andassigns of the parties hereto.

 

This Assignment shall beeffective                                                  ,2003.

 

 
| **WITNESSES:** | **ASSIGNOR:**              |
|----------------|----------------------------|
|           |                       |
|           | **CHENIERE  ENERGY, INC.** |
|           |                       |
|           |                       |
|           |                       |   |   |
|           |                       | By: | J.S. Gross |
|           | Title:                     | Vice President –  Exploration |
|           |                       |
|           |                       |
| **WITNESSES:** | **ASSIGNEE:**              |
|           |                       |
|           |                       |   |   |
|           |                       | By: |   |   |
|           | Title:                     |   |   |
|                |                            |  |  |  |  |  |  |

 

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| STATE OF TEXAS   | § |
|------------------|--------|
|             | § |
| COUNTY OF HARRIS | § |

 

On this       th dayof               ,2003, before me appeared **J.S. Gross,**to me personally known, who being by me duly sworn, did say that he is the VicePresident – Exploration of Cheniere Energy, Inc., a Delaware Corporation, andthat said instrument was signed in behalf of said corporation by authority ofits Board of Directors, and said Appearer acknowledged that he executed thesame as the free act and deed of said corporation.

 

**IN WITNESS WHEREOF,**I have hereunto set my official hand and seal on the date hereinabove written.

 

 
|   |                      |   |
|--------|---------------------------|--------|
|   | Notary Public in and  for |
|   | The State of Texas        |
|   |                      |
|   | STATE OF TEXAS            | § |
|   |                      | § |
|   | COUNTY OF HARRIS          | § |
|        |                           |        |  |  |

 

On this        th day of                   ,2003, before me appeared                                  ,to me personally known, who being by me duly sworn, did say that he is the                   of                                          ,a                                          Corporation,and that said instrument was signed in behalf of said corporation by authorityof its Board of Directors, and said Appearer acknowledged that he executed thesame as the free act and deed of said corporation.

 

**INWITNESS WHEREOF,** I have hereunto set my official hand andseal on the date hereinabove written.

 

 
|   |                      |   |
|--------|---------------------------|--------|
|   | Notary Public in and  for |
|   | The State of Texas        |

 

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