Exhibit 10.3


 


OPTION AGREEMENT


 


This Option Agreement (the “Agreement”) is entered into as of March 11,
2008 by and between Stratum Holdings, Inc., a Nevada corporation (“Seller”),
Decca Consulting Ltd., an Alberta corporation (“Decca”), and Hamilton Acquisition, Inc.,
a Delaware corporation (“Buyer”).


 


RECITALS


 


A.            Pursuant to a
Securities Purchase Agreement dated the date hereof by and among Buyer, Seller
and CYMRI, L.L.C. (the “PEI Purchase Agreement”), Buyer will acquire all of the
issued and outstanding capital stock of PEI from Seller on the terms and
conditions and for the consideration set forth in the PEI Purchase Agreement.


 


B.            Seller
owns all of the issued and outstanding capital stock of Decca, which consists
of [200 common shares] (the “Decca Shares”) and Seller desires to grant Buyer
an option to purchase the Decca Shares.


 


C.            It
is a condition to the consummation of the transactions contemplated by the PEI
Purchase Agreement that Seller enter into this Agreement.


 


NOW, THEREFORE, the parties agree as follows:


 


1.             Defined
Terms.  Capitalized terms used in
this Agreement, unless otherwise defined in this Agreement, have the meanings
assigned to them in the PEI Purchase Agreement.


 


2.             Grant
of Option.  Seller hereby grants to
Buyer an option to purchase the Decca Shares (the “Decca Option”), which Buyer
may exercise at any time during the 90 day period commencing on the date hereof
and ending at 5:00 p.m., Central time, on June 9, 2008 (the “Decca
Option Period”).  Buyer shall evidence
its intent to exercise the Decca Option by providing written notice (the “Exercise
Notice”) thereof to Seller at any time prior to the end of the Decca Option
Period.  Commencing on the date Seller
receives the Exercise Notice, Buyer and Seller shall each make a good faith
effort to (i) negotiate the terms and conditions of Seller’s sale to Buyer
of the Decca Shares (as reflected in a written agreement between Seller and
Buyer) on the terms set forth in Section 3 of this Agreement and (ii) consummate
such transaction no more than 30 days after such date.


 


3.             Terms
of Purchase.  The terms of the
purchase and sale of the Decca Shares pursuant to the Decca Option shall be set
forth in a purchase agreement (the “Decca Purchase Agreement”) which will be
substantially similar to the terms for the purchase of the Decca Shares set
forth in the Securities Purchase Agreement included in the FORM DEFM14A
filed by Seller with the Securities and Exchange Commission on February 11,
2008 (the “Draft Agreement”); provided, that (i) the “$19,250,000”
set forth in Section 2.2(i) of the Draft  Agreement will be “$4,250,000”, (ii) the
Escrow Agreement will be amended to include any 


 

















 


claim made by Buyer pursuant to the Decca Purchase Agreement and the
PEI Purchase Agreement, (iii) the threshold and cap for breaches of
certain representations and warranties set forth in Section 7.4 of the Draft
Agreement will apply to both the Decca Purchase Agreement and the PEI Purchase
Agreement on an aggregate basis, and (iv) the Decca Purchase Agreement
would appropriately take into account any outstanding lawsuits or claims
against Decca to the satisfaction Buyer in its sole discretion.


 


4.             No
Shop.  From and after the date of
this Agreement and continuing through the consummation of the purchase of the
Decca Shares by Buyer or termination of this Agreement, Seller and Decca shall
not, nor shall they authorize or permit any officer, director, employee or
affiliate of Seller or Decca or any investment banker, attorney, accountant or
other representative retained by Seller or Decca or the shareholders of Seller,
to initiate, solicit or knowingly encourage, directly or indirectly, or take
any other action to facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, an Acquisition Proposal
(as defined below), or enter into or continue any discussions or negotiations
with any person or entity in the furtherance of such inquiries or to obtain an
Acquisition Proposal, or agree to or endorse any Acquisition Proposal, or
authorize any of the officers, directors, employees or affiliates of Seller or
Decca or the shareholders of Seller, or any investment banker, financial
advisor, attorney, accountant or other representative retained by Seller or
Decca or the shareholders of Seller  to
take any such action.  As used in this
Agreement, “Acquisition Proposal” shall mean (a) any sale of stock,
merger, consolidation, share exchange, business combination, stock redemption,
recapitalization, or similar transaction involving the Decca (other than the
transaction contemplated by this Agreement); or (b) any sale, lease,
exchange, mortgage, pledge or disposition of any of the assets of the Decca
other than in the ordinary course of business. 
In the event Seller or its affiliates receive an Acquisition Proposal,
Seller will notify Buyer promptly of Acquisition Proposal and the terms of the Acquisition
Proposal.


 


5.             Issuance
of Stock.  From and after the date of
this Agreement and continuing through the consummation of the purchase of the
Decca Shares by Buyer or termination of this Agreement, Seller will not permit
Decca to issue any shares of capital stock of Decca or grant or agree to grant
any options, warrants, purchase rights, subscription rights, conversion rights,
exchange rights, or other contracts or commitments that could require Decca to
issue, sell, or otherwise cause to become outstanding any of its capital stock


 


6.             Operation
of Decca.  From and after the date of
this Agreement and continuing through the consummation of the purchase of the
Decca Shares by Buyer or termination of this Agreement, the Seller and Decca
will (i) conduct the business and operations of Decca in the ordinary
course and in substantially the same manner as such business and operations
have been conducted prior to the date of this Agreement; (ii) use their
best efforts to preserve the current business organization of Decca, keep
available the services of Decca’s current officers, independent contractors and
agents, and maintain the relations and good will with all suppliers, customers,
distributors, landlords, creditors, independent contractors, agents and other
Persons having business relationships with Decca; (iii) report
periodically to Buyer concerning the status of (a) the business, operations
and finances of Decca and (b) any claims filed against Decca, including,
without limitation, Golden Eagle Exploration, LLC, vs. Weatherford U.S., L.P.
and  Decca, Civil No. 0707-119 filed
in the Seventh Judicial District Court, Grand County, Utah and 


 


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(iv) not permit Decca to pay any dividends or make any
distributions to Seller other than necessary to satisfy intercompany advances.


 


7.             Termination.  This Agreement will terminate upon the
expiration of the Decca Option Period, however, in the event Buyer exercises
the Option, all rights and obligations under this Agreement will continue until
through the consummation of the purchase of the Decca Shares.


 


8.             Miscellaneous.


 


(a)           Amendments.  No amendment, modification or waiver of this
Agreement will be effective unless made in writing and signed by the party to
be bound thereby.  No other course of
dealing between or among any of the parties or any delay in exercising any
rights pursuant to this Agreement will operate as a waiver of any rights of any
party.


 


(b)           Successors and
Assigns.  All covenants and
agreements set forth in this Agreement will bind and inure to the benefit of
the respective successors and permitted assigns of the parties.  No party may assign this Agreement nor any of
its rights, interests or obligations hereunder without the prior written
consent of the other parties; provided, however, that Buyer may
assign any or all of their rights, interests, and obligations hereunder (i) to
one or more of their affiliates, (ii) for collateral security purposes to
any lender providing financing to Buyer or any of its  affiliates and any such lender may exercise
all of the rights and remedies of Buyer hereunder, and (iii) to any
subsequent purchaser of Buyer or any material portion of its assets (whether
such sale is structured as a sale of equity, a sale of assets, a merger or
otherwise).


 


(c)           Governing Law.  This Agreement will be governed by and
construed in accordance with the laws of the State of Delaware, without giving
effect to any choice of law or conflict provision or rule (whether of such
State or any other jurisdiction) that would cause the laws of any other
jurisdiction to be applied.


 


(d)           Notices.  All demands, notices, communications and
reports provided for in this Agreement will be given in accordance with Section 8.6
of the Purchase Agreement.


 


(e)           Counterparts.  The parties may execute this Agreement in two
or more counterparts (no one of which need contain the signatures of all parties),
each of which will be an original and all of which together will constitute one
and the same instrument.


 


(f)            No Third Party
Beneficiaries.  Except as otherwise
expressly provided in this Agreement, no person which is not a party will have
any right or obligation pursuant to this Agreement.


 


(g)           Headings.  The headings used in this Agreement are for
the purpose of reference only and will not affect the meaning or interpretation
of any provision of this Agreement.


 


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(h)           Entire Agreement.  This Agreement constitutes the entire
agreement of the parties relating to the subject matter hereof, and all prior
understandings, whether written or oral are superseded by this Agreement, and
all prior understandings, and all related agreements and understandings are
terminated.


 


(i)            Severability.  In case any one or more of the provisions
contained in this Agreement are held to be invalid, illegal, or unenforceable
in any respect, such invalidity, illegality, or unenforceability will not
effect any other provision of this Agreement.


 


(j)            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 will be construed
as if drafted jointly by the parties and no presumption or burden of proof will
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement.


 


(k)           Cumulative Remedies.  The rights, remedies, powers and privileges
provided in this Agreement are cumulative and not exclusive and will be in
addition to any and all other rights, remedies, powers and privileges granted
by law, rule, regulation or instrument.


 


(l)            Further Assurances.
 Each of the parties will execute and
deliver such additional instruments and other documents and will take such
further actions as may be necessary or appropriate to effectuate, carry out and
comply with all of the terms of this Agreement.


 


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this page is intentionally left blank.]


 


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IN WITNESS WHEREOF, the
undersigned have executed this Agreement as of this date first above written.


 


	
   

  	
  STRATUM
  HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ D. Hughes
  Watler, Jr.

  
	
   

  	
     Its:

  	
   

  	
  Chief Financial
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DECCA CONSULTING
  LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ D. Hughes
  Watler, Jr.

  
	
   

  	
     Its:

  	
   

  	
  Chief Financial
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HAMILTON
  ACQUISITION, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Charles R.
  Brown II

  
	
   

  	
     Its:

  	
   

  	
  Chief Executive
  Officer

  



 


Signature page to Option
Agreement