Exhibit
10.2


 


ASSIGNMENT AND ASSUMPTION AGREEMENT


 


THIS ASSIGNMENT AND
ASSUMPTION AGREEMENT (this “Agreement”) is entered into effective as of
July 16, 2003 (“Effective Date”) by and between Reef Global Energy
I, L.P., a Nevada limited partnership (“Transferor”), and Reef Global
Energy II, L.P., a Nevada limited partnership (“Transferee”).


 


Preliminary Statements


 


A.                                   On
January 14, 2003, Transferor entered into an agreement with Cheniere
Energy, Inc. and Tri-C Resources, Inc. (the “Exploration Companies”) to
participate in the drilling of an oil and gas well known as the “Dolphin
Prospect” (the “Dolphin Participation Agreement”), a copy of which is
set forth on Exhibit 1;


 


B.                                     Following
its execution of the Dolphin Participation Agreement, Transferor determined
that the terms of its partnership agreement would likely prohibit its
participation in the Dolphin Prospect due to delays in the commencement of
drilling activities;


 


C.                                     Transferor
has 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 the
Prospect Fee (defined below) Transferor paid to participate in the Dolphin
Prospect.


 


D.                                    In
consideration of Transferor’s assignment and transfer of the Dolphin
Participation Agreement, Transferee has agreed to assume certain liabilities
and obligations of Transferor arising under the Dolphin Participation
Agreement.


 


Agreement


 


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


 


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


 


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


 


3.                                      Further
Assurances.  Transferor and
Transferee, for themselves and their respective successors and assigns,
covenant and agree that they will execute and deliver such additional
agreements, instruments or documents such as deeds, bills of sale, assignments,
UCC financing


 

















 


statements, transfers and
conveyances, powers of attorney, assurances, consents or assumptions, and will
take such further actions, as are necessary to transfer and assign more fully
the Dolphin Participation Agreement and to assume more fully the Assumed
Obligations.


 


4.                                      Governing
Law. This Agreement shall be construed in accordance with and all disputes
hereunder shall be governed by the laws of the State of Nevada, excluding its
conflict of law rules.


 


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


 


* * * * *


 


The parties to this
Agreement 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

  
								



 

















 


EXHIBIT 1


 


Dolphin
Participation Agreement


 


(See Attached)


 

















 


PARTICIPATION
AGREEMENT


AREA
OF MUTUAL INTEREST


 


THIS AGREEMENT, dated effective
January 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 collectively
referred to as “Participants” and sometimes individually as “Participant”.


 


WHEREAS,
Cheniere has identified a certain oil and/or gas prospect identified herein as
the Dolphin Prospect underlying the State of Texas offshore tracts listed on
the 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 at
the 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 the
Dolphin Prospect; and


 


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


 


NOW
THEREFORE, for and in consideration of the mutual covenants
and promises herein stated, the Participants agree as follows:


 


1)                                      Commitment
to Bid a Mutually Agreeable Bid Amount – Each Participant agrees that its
undivided 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 on
each 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 on
each of the tracts listed on Exhibit “B”. If after publication of bidding
results of the January Lease Sale by the State of Texas General Land
Office Cheniere is the apparent high bidder on any tract shown on Exhibit “B”,
each Participant agrees to immediately initiate and deliver by wire transfer to
Cheniere its proportional share of the successful bid amount.  If publication of the bidding results is
delayed beyond 12:00 PM January 15, 2003, by the General Land Office or if
the high bid submitted by another company has not as yet been accepted, then
each Participant agrees to fund by wire transfer no later than 12:00 PM
January 15, 2003.


 

















 


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


 


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


 


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


 


5)                                      Before
Payout Costs – The Participants shall proportionally bear 100% of the costs
to acquire, maintain, drill, evaluate, develop and produce the leases within
the Dolphin Prospect, subject to Cheniere’s reservation of the ORRI’s
referenced above.


 


6)                                      Payout
Definition – At such time as the value of 100% of the gross income received
by the Participants from the sale of production from the Dolphin Prospect (less
existing burdens, including the ORRI described in Paragraph 4 above, and
production and severance taxes allocable thereto) equals 100% of (i) all lease
acquisition, lease maintenance costs, and the Prospect Fee described in
Paragraph 2 above. (ii) all costs incurred to drill the test well and any
additional 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, then
Payout shall be deemed to have occurred.


 


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


 


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


 

















 


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


 


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


 


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


 


12)                                In
the event of a conflict between the terms of this Agreement and any other
agreement between the Participants, written or oral, this Agreement shall
supercede and replace any such agreement or understanding.


 


THIS
AGREEMENT is executed effective as of the 14th day of
January, 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

  	
   

  
									



 

















 


EXHIBIT
“A”


 


Attached to that certain
Participation Agreement dated January 14, 2003, by and between Cheniere
Energy, 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

  






 

















 


EXHIBIT
“B”


 


Attached to that certain
Participation Agreement dated January 14, 2003, by and between Cheniere
Energy, 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

  



 

















 


EXHIBIT
“C”


 


Attached to that certain
Participation Agreement dated January 14, 2003, by and between Cheniere
Energy, 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 and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, 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)                                                                                      Oil
and Gas Lease No.
M-                      
by The State of Texas, as Lessor, to Cheniere Energy, Inc., as Lessee, dated
effective as of                              ,
2003, covering the
                
of Tract             ,
              
Area, Offshore
                   
County, Texas, and containing
             acres.


 


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


 


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


 

















 


or
lien or encumbrance on the interest of assignor in the Lease except as
described herein.


 


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


 


This Assignment shall
inure to the benefit of and be binding upon the successors, representatives and
assigns of the parties hereto.


 


This Assignment shall be
effective
                                                  ,
2003.


 


 


	
  WITNESSES:

  	
  ASSIGNOR:

  
	
   

  	
   

  
	
   

  	
  CHENIERE
  ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  J.S. Gross

  
	
   

  	
  Title:

  	
  Vice President –
  Exploration

  
	
   

  	
   

  
	
   

  	
   

  
	
  WITNESSES:

  	
  ASSIGNEE:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
								



 

















 


 


	
  STATE OF TEXAS

  	
  §

  
	
   

  	
  §

  
	
  COUNTY OF HARRIS

  	
  §

  



 


On this
       th day
of               ,
2003, before me appeared J.S. Gross,
to me personally known, who being by me duly sworn, did say that he is the Vice
President – Exploration of Cheniere Energy, Inc., a Delaware Corporation, and
that said instrument was signed in behalf of said corporation by authority of
its Board of Directors, and said Appearer acknowledged that he executed the
same 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 authority
of its Board of Directors, and said Appearer acknowledged that he executed the
same 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