Exhibit 10.2


 


TRANSITION SERVICES AGREEMENT


 


THIS
TRANSITION SERVICES AGREEMENT (this “Agreement”)
is entered into as of the 26th day of October, 2007, by and among Tradestar
Construction Services, Inc., a New Mexico corporation (the “Seller”), Stratum Holdings, Inc., a
Nevada corporation and sole stockholder of the Seller (the “Parent”), and Tradesmen
Services, Inc., an Ohio corporation (the “Buyer”).


 


RECITALS


 


A.                                   The
Seller, the Parent and the Buyer are, concurrently with the execution of this
Agreement, consummating the transactions contemplated by that certain Asset
Purchase Agreement, dated as of the date hereof (the “Purchase
Agreement”), whereby the Buyer will purchase from the Seller
substantially all of the assets of the Business.


 


B.                                     The
parties desire to set forth the terms and conditions by which the Seller and
the Parent will continue to provide or cause to be provided to the Buyer
certain identified services during the term of this Agreement.


 


C.                                     Capitalized
terms used herein but not otherwise defined have meanings ascribed to them in
the Purchase Agreement.


 


NOW,
THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
subject to the terms and conditions set forth herein, the parties hereby agree
as follows:


 


1.                                       Performance of Transition Services by the
Seller and the Parent. Subject to the terms and conditions set forth
in this Agreement, the Seller and the Parent shall perform, or cause to be
performed, the transition services set forth on Exhibit A (collectively, the “Transition Services”)
for the benefit of the Buyer during the Transition Services Period (as defined
below).


 


2.                                       Payment
for Transition Services. As a condition to the obligation of the Buyer to
close the transactions contemplated by the Purchase Agreement and, in
consideration of the Purchase Price paid to Seller thereunder, the Seller and
the Parent have agreed to enter into this Agreement on the terms and conditions
set forth herein. The Seller and the Parent will provide the Transition
Services to the Buyer during the Transition Services Period (as defined below) in
consideration of the payment by the Buyer to the Seller of a monthly fee in the
amount of $2,700 (the “Monthly
Fee”), which shall be prorated for any portion of a month in
which the Transition Services are provided.


 


3.                                       Term of Agreement. This Agreement
commences as of the date hereof and will continue in effect through December
31, 2007, unless earlier terminated in accordance with Section 5 (the “Transition Services Period”).
Termination or expiration of this Agreement will not act as a waiver of any
breach of this Agreement and will not act as a release of any party hereto for
any liability or obligations incurred under this Agreement through the
effective date of such termination or expiration.


 

















 


4.                                       Payment of the Expenses. The Buyer
shall reimburse the Seller and the Parent for all of their actual out-of-pocket
costs and expenses, including reasonable travel expenses and other out-of-pocket
costs and expenses incurred by any employee of the Seller or the Parent in
performing the Transition Services (the “Expenses”). The Seller or the Parent, as
applicable, will send to the Buyer an invoice setting forth the Expenses for
each month during which the Transition Services are provided. The Buyer shall
pay to the Seller or the Parent, as applicable, the amounts due and payable on
each such invoice within 30 days after receipt thereof.


 


5.                                       Termination of Transition Services.


 


(a)                                  The
Buyer may terminate this Agreement by providing the Seller and the Parent with
at least 10 days’ prior written notice, which notice must specify the date on
which the Transition Services are to be terminated; provided, that the Buyer
will be liable for any and all of the Expenses incurred in connection with the
Transition Services prior to the effective date of such termination.


 


(b)                                 The
Buyer may from time to time elect to terminate some of the Transition Services
by providing the Seller and the Parent with at least 10 days’ prior written
notice, which notice must specify which of the Transition Services are to be
terminated (the “Terminated Services”) and the
date on which the Terminated Services are to be terminated; provided,
that the Buyer will be liable for any and all of the Expenses incurred in
connection with the Terminated Services prior to the effective date of such
termination. The termination of the Terminated Services will not affect this
Agreement with respect to any Transition Services not terminated under this Section 5(b).


 


(c)                                  Upon
the breach of the Buyer’s obligations under Section 4 hereof, the Seller and the Parent may, upon 10
days’ prior written notice to the Buyer, terminate this Agreement without any
further obligation or liability to the Buyer; provided, that the Buyer may
cure any defaults under Section 4
during such 10-day period. If the Seller and the Parent terminate this
Agreement pursuant to this Section 5(c),
the Buyer will be liable for any and all of the Expenses incurred prior to the
effective date of such termination.


 


6.                                       Performance of Transition Services; Initial
Designee.


 


(a)                                  The
Buyer will give the Seller and the Parent reasonable advance notice of its need
for the Transition Services. The Transition Services will initially be provided
by Deborah Roberts (the “Initial
Designee”). Upon the Buyer’s reasonable request, and subject to
the parties’ mutual agreement on an appropriate increase to the Monthly Fee,
the Seller and the Parent shall cause an individual or individuals other than
the Initial Designee and reasonably acceptable to the Buyer to perform the
Transition Services.


 


(b)                                 Simultaneous
with the execution of this Agreement, the Buyer shall deliver, in writing, an
offer of employment (on an “at will” basis) to the Initial Designee to commence
such employment with the Buyer on January 1, 2008. The terms of employment
contained in the Buyer’s written offer to the Initial Designee shall not be
less favorable than the terms of the Initial Designee’s employment with the
Seller immediately prior to the Closing.


 


2

















 


7.                                       Maintenance of, and Access to, Records. The Buyer shall provide to the Seller and
the Parent access (with an opportunity to make copies), during normal business
hours, and upon reasonable notice, to any records relating to the Business to
enable the Seller and the Parent to close the books of account and prepare tax
returns and financial statements for the period immediately prior to the
Closing. The Buyer shall preserve and maintain such records for as long as
reasonably necessary after the Closing, and shall give the Seller and the
Parent reasonable written notice prior to transferring, destroying or
discarding any such records.


 


8.                                       Confidentiality. The Buyer, the
Seller, the Parent and their respective agents, representatives, employees and
Affiliates will hold all information relating to the Transition Services
confidential from third parties (other than their respective Affiliates) and
will not disclose the same to any Person. In addition, the Buyer, the Seller,
the Parent and their respective agents, representatives, employees and
Affiliates will not disclose to any Person any confidential information
concerning any other party hereto and obtained in the performance of this
Agreement during the Transition Services Period and for a period of three years
following its expiration. Notwithstanding the foregoing, nothing shall prevent any
party hereto from disclosing the foregoing confidential information (i) if such
information becomes generally available to the public, other than as a result
of a breach of this Agreement by the disclosing party; (ii) if such information
is within the possession of the disclosing party before being furnished to the
disclosing party pursuant to the terms of this Agreement, as corroborated by
written or electronic evidence; or (iii) if such information is required to be
produced by Law or Order.


 


9.                                       Independent Contractor. The
parties intend that their relationship hereunder will be that of independent
contractors. Nothing contained in this Agreement is to be construed as creating
any partnership, joint venture or other arrangement among the parties. None of
the parties have any authority to act for, obligate or bind the other parties
in any way, including, without limitation, by way of creating or incurring any
debts, expenses or other liabilities, whether express or implied. Neither the Seller, the Parent nor their
respective employees are or shall be deemed for any purpose to be agents or
employees of the Buyer. All employees and representatives providing the
Transition Services will be under the direction, control and supervision of the
Seller or the Parent (and not of the Buyer), and the Seller and the Parent will
have the sole right to exercise all authority with respect to such employees
and representatives and in no event will such employees and representatives be
deemed to be employees or agents of the Buyer. All persons employed by the
Seller or the Parent in the performance of the Seller and the Parent’s
obligations hereunder shall be the sole responsibility of the Seller and the
Parent, and the Buyer shall have no obligation or responsibility with respect
thereto.


 


10.                                 Indemnification. The Buyer shall indemnify, defend and hold
harmless the Seller and the Parent and their respective directors, officers,
employees and agents (the “Seller Indemnitees”) from and against any and all
damage, loss, liability and expense (including reasonable expenses of
investigation and reasonable attorneys’ fees and expenses) in connection with
any and all third-party actions or threatened actions (“Indemnifiable Losses”)
incurred or suffered by any of the Seller Indemnitees arising from, related to
or associated with the performance by the Seller or the Parent of this
Agreement, other than liabilities arising out of the willful misconduct or
gross negligence of the Seller or the Parent.


 


3

















 


11.                                 Successors and Assigns. The rights
and obligations of the parties hereunder may not be assigned without the prior
written consent of the other parties hereto.


 


12.                                 Headings. The headings contained
in this Agreement are included for purposes of convenience only, and shall not
affect the meaning or interpretation of this Agreement.


 


13.                                 Integration, Modification and Waiver.
This Agreement, together with Exhibit A,
constitutes the entire agreement between the parties hereto with respect to the
subject matter hereof and supersedes all prior understandings of the parties. No
supplement, modification or amendment to this Agreement shall be binding unless
executed in writing by each of the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed to be or shall constitute a
continuing waiver. No waiver shall be binding unless executed in writing by the
party making the waiver.


 


14.                                 Construction. The parties have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement. Any
reference to any federal, state, local or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder,
unless the context requires otherwise. The word “including” shall mean
including without limitation. Any reference to the singular in this Agreement
shall also include the plural and vice versa.


 


15.                                 Severability. If any provision of
this Agreement or the application of any provision hereof to any party or
circumstance shall, to any extent, be adjudged invalid or unenforceable, the
application of the remainder of such provision to such party or circumstance,
the application of such provision to other parties or circumstances, and the
application of the remainder of this Agreement shall not be affected thereby.


 


16.                                 Notices. All notices and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered in person or when dispatched by
electronic facsimile transfer (if confirmed in writing by mail simultaneously
dispatched) or one business day after having been dispatched by a nationally
recognized overnight courier service to the appropriate party at the address or
facsimile number specified below:


 


If to the
Parent or the Seller:


 


Stratum Holdings, Inc.


Three Riverway, Suite 1500


Houston, Texas  77056


Attn:   Chief Executive
Officer


Fax:    (713)
975-6271


 


4

















 


In each case, with a copy to:


 


Haynes and Boone, LLP


One Houston Center


1221 McKinney Street, Suite 2100


Attn:   Bryce
Linsenmayer, Esq.


Fax:    (713)
236-5540


 


If to the
Buyer:


 


Tradesmen Services, Inc.


9760 Shepard Road


Macedonia, Ohio  44056


Attn:   Joseph
Wesley


Fax:    (440)
349-4092


 


with a copy to:


 


Jones Day


North Point


901 Lakeside Avenue


Cleveland, Ohio  44114


Attn:   John M.
Saada, Jr., Esq.


Fax:    (216)
579-0212


 


Any party
hereto may change its address or facsimile number for the purposes of this Section 16 by giving notice as provided
herein.


 


17.                                 Governing Law. This Agreement shall
be governed by and construed and enforced in accordance with the laws of the
State of Delaware without regard to principles of conflict of laws.


 


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


 


(Signatures
are on the following page.)


 


5

















 


IN WITNESS
WHEREOF, the Seller and the Buyer have caused this Agreement to be executed by
their duly authorized officers as of the date and year first above written.


 


 


	
   

  	
  TRADESMEN SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Joseph O. Wesley

  
	
   

  	
   

  	
  Name: Joseph O. Wesley

  
	
   

  	
   

  	
  Title: President and CEO

  



 


 


	
   

  	
  TRADESTAR CONSTRUCTION 

  SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Kenneth Thomas

  
	
   

  	
   

  	
  Name: Kenneth Thomas

  
	
   

  	
   

  	
  Title: Senior Vice President – Finance

  and Treasurer

  



 


 


	
   

  	
  STRATUM HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ D. Hughes Watler

  
	
   

  	
   

  	
  Name: D. Hughes Watler

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  



 

















 


EXHIBIT A


 


Transition
Services


 


The Transition Services shall comprise (i) payroll
and accounting services, (ii) IT operational support and (iii) the provision of
access to customer and supplier lists and contact information.