Exhibit 10.2


 


ASSIGNMENT AGREEMENT


 


This ASSIGNMENT AGREEMENT
(this “Assignment”) is dated as of June 24, 2021, and effective as of June 30, 2021 (the “Effective
Date”), by and among SandRidge Permian Trust, a statutory trust formed under the laws of the State of Delaware (the “Assignor”),
and Montare Resources I, LLC (the “Assignee”) and consented to by Avalon Energy, LLC, a Texas limited liability
company (the “Company”). All capitalized terms used herein and not otherwise defined shall have the meanings
assigned to them in the Repayment Agreement (as defined below).


 


RECITALS


 


		A.	WHEREAS, reference is made to that certain Repayment Agreement, dated as of March 1, 2021, between
the Company and the Assignor (as it may be amended, restated, amended and restated, supplemented or otherwise modified from time to time,
the “Repayment Agreement”);



 


		B.	WHEREAS, pursuant to the Repayment Agreement, the Company has agreed to pay to the Assignor the Owed Amount;



 


		C.	WHEREAS, following entry by the Assignor and the Company into the Repayment Agreement, the Company has
paid to the Assignor a total of $1,351,875.00 in cash distributions received by the Company pursuant to the Trust Agreement;



 


		D.	WHEREAS, as of the Effective Date, (i) the accrued interest on the Missed May 2020 Payment,
from the date of the last payment under the Repayment Agreement to and including the Effective Date, is $9,350.00; (ii) the balance
of the Owed Amount that is currently due and owing by the Company to the Assignor is $3,461,774.00 (comprised of the balance of the Missed
May 2020 Payment of $3,452,423.00 plus the accrued interest as of the Effective Date of $9,350.00) and (iii) the Company
has directed The Bank of New York Mellon Trust Company, N.A., as trustee of the Assignor (the “Trustee”), to
offset $301,638.00 in fees and reimbursable expenses pursuant to the Administrative Services Agreement dated as of April 1, 2011
between the Company and the Assignor (the “ASA Offset Amount”) against the balance of the Owed Amount that is
currently due and owing by the Company to the Assignor; and



 


		E.	WHEREAS, pursuant to the terms and conditions of this Assignment, the Assignor wishes to sell and assign,
and the Assignee wishes to purchase and assume from the Assignor, the interest in and to all of the Assignor’s rights and obligations
under the Repayment Agreement.



 


NOW
THEREFORE, in consideration of the premises, representations, warranties, and the mutual covenants and agreements hereinafter
contained, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:


 


1.            Assignment.
Subject to and in accordance with the terms and conditions set forth herein and in the Repayment Agreement, and for an agreed consideration
of $3,160,136.00 (the “Consideration”) delivered by the Assignee to the Assignor in immediately available funds
contemporaneously with the execution and delivery of this Assignment, the Assignor hereby irrevocably sells and assigns to the Assignee,
and the Assignee hereby irrevocably purchases and assumes from the Assignor, as of the Effective Date, the interest in and to all of the
Assignor’s rights and obligations under the Repayment Agreement and all of the Assignor’s outstanding rights and obligations
thereunder, including but not limited to the right to receive the remainder of the Owed Amount (collectively, the “Assigned
Interest”). From and after the Effective Date, the Company shall make all payments
in respect of the Assigned Interest (including payments of the balance of the Owed Amount) to the Assignee.


 



    


     


    

 


2.            Representations
and Warranties. The Assignor represents and warrants to the Assignee that (a) the Assignor is the legal and beneficial owner
of the Assigned Interest, (b) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (c) the
Assignor has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and to consummate the
transactions contemplated hereby. The Assignee represents and warrants to the Assignor that the Assignee has full power and authority,
and has taken all action necessary, to execute and deliver this Assignment and to consummate the transactions contemplated hereby. The
Company and the Assignor represent and warrant to the Assignee that as of the Effective Date (i) the accrued interest on the Missed
May 2020 Payment, from the date of the last payment under the Repayment Agreement to and including the Effective Date, is $9,350.00;
(ii) the balance of the Owed Amount that is currently due and owing by the Company is $3,461,774.00 (which will continue to accrue
interest payable to the Assignee after the Effective Date), (iii) the Company has directed the Trustee to offset the ASA Offset
Amount of $301,638.00 against the balance of the Owed Amount that is currently due and owing by the Company to the Assignor and (iv) the
Consideration in the amount of $3,160,136.00 reflects the balance of the Owed Amount less the ASA Offset Amount of $301,638.00.


 


3.            General.
This Assignment shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and permitted assigns.
This Assignment may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed
counterpart of a signature page of this Assignment by telecopy or electronically shall be effective as delivery of a manually executed
counterpart of this Assignment. This Assignment shall be governed by, and construed in accordance with, the internal laws of the State
of Texas without regard to conflict of laws principles thereof. The division of this Assignment into Sections and other subdivisions and
the insertion of headings are for convenience of reference only and shall not affect or be utilized in construing or interpreting this
Assignment. If any term or other provision of this Assignment is invalid, illegal, or incapable of being enforced by any law or public
policy, all other terms or provisions of this Assignment shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal, or incapable of being enforced, such provision shall be modified so as to affect
the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are
consummated as originally contemplated to the greatest extent possible


 


4.            The
Assignor’s Covenants. The Assignor acknowledges and agrees that (a) the Consideration shall be included in the next regular
distribution made by the Assignor to its unitholders pursuant to the Trust Agreement, (b) as of the Effective Date, the Assignor
releases any claim to the Owed Amount or any other rights to repayment under the Repayment Agreement, (c) following the Effective
Date, the Company may use cash distributions, if any, received by the Company from the Assignor on each Quarterly Payment Date to repay
amounts due and owing to the Assignee under the Repayment Agreement.


 


5.            Notice.
Any notice or demand under this Assignment shall be made pursuant to Section 6 of the Repayment Agreement. The Assignee’s
notice information is: 400 East Las Colinas Blvd., Suite 680, Irving, TX 75039, Attention: Dickie D. Hunter.


 



    


     


    

 


IN
WITNESS WHEREOF, each party hereto has caused this Assignment to be duly executed as of the date first written above.


 


	 	ASSIGNOR:
	 	 	 
	 	SANDRIDGE PERMIAN TRUST
	 	 	 
	 	By: 	The Bank of New York Mellon Trust Company, N.A., as Trustee



 


	 	 	By:	/s/ Sarah Newell
	 	 	Name:	Sarah Newell
	 	 	Title:	Vice President



 


	 	ASSIGNEE:
	 	 
	 	MONTARE RESOURCES I, LLC




 


	 	By:	 /s/ Dickie D. Hunter







	 	Name: Dickie D. Hunter
	 	Title: President




 


	 	COMPANY:
	 	 
	 	AVALON ENERGY, LLC




 


	 	By:	/s/ Stephen C. Pugh







	 	Name: Stephen C. Pugh
	 	Title: President and CEO