Exhibit 10.17

SHARE EXCHANGE AGREEMENT

This SHARE EXCHANGE AGREEMENT (this “Agreement”) is made as of May 19, 2014 by
and among DAYBREAK OIL AND GAS, INC., a Washington corporation (the “Company”),
and MAXIMILIAN INVESTORS LLC, a Delaware limited liability company (the
“Shareholder”).

WHEREAS, the Shareholder is the owner, beneficially and of record, of 6,122,552
shares (the “Shares”) of the Company’s common stock, $0.001 par value (the
“Common Stock”).

WHEREAS, the Shareholder is also the owner, beneficially and of record, of
warrants (“Warrants”) to purchase up to 6,122,552 shares of Common Stock, all on
the terms and subject to the limitations set forth in that certain Warrant
Agreement dated as of August 28, 2013 by and between the Company and the
Shareholder, as amended by the First Amendment to Warrant Agreement dated as of
February 14, 2014 (as amended, the “Warrant Agreement”).

WHEREAS, the Shareholder wishes to exchange 427,729 Shares (such Shares, the
“Exchanged Shares”) for Warrants to purchase up to 427,729 shares of Common
Stock, as set forth in this Agreement (such Warrants, the “Exchanged Warrants”).

NOW THEREFORE, in consideration of the foregoing, the mutual covenants
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

Section 1.

Surrender of Exchanged Shares.  The Shareholder covenants and agrees to assign
and surrender to the Company the Exchanged Shares and, in consideration of such
assignment and surrender, the Company hereby agrees to issue to the Shareholder
the Exchanged Warrants, on the terms and subject to the conditions set forth in
the warrant certificate attached hereto as Exhibit A and the Warrant Agreement.

Section 2.

Closing.  The completion of the transactions contemplated in this Agreement
shall take place contemporaneously upon the execution of this Agreement by the
parties.

Section 3.

Representations and Warranties of the Shareholders.  The Shareholder hereby
represents and warrants to the Company that:

(a)

The Shareholder owns the Exchanged Shares, as described in the recitals hereto,
registered in its name on the books and records of the Company, and upon their
assignment and surrender to the Company in exchange for the Exchanged Warrants,
the Company shall have good and marketable title thereto, free of any claim,
lien, security interest or encumbrance of any nature or kind and free of any
rights or privileges capable of becoming claims, liens, security interests or
encumbrances, and the Shareholder is entitled to transfer and assign the
Exchanged Shares to the Company, free and clear of any such claims, liens,
security interests, encumbrances, rights and privileges.

(b)

There are no judgments or executions outstanding against the Shareholder, nor
are there any suits, actions or legal, administrative, arbitration or other
procedures or governmental investigations or any adverse change pending or, to
the knowledge of the Shareholder, threatened, against the Shareholder which
might impair or affect the ability of the Shareholder to transfer and assign the
Exchanged Shares to the Company in accordance with the provisions of this
Agreement.

--------------------------------------------------------------------------------

Section 4.

Representations and Warranties of the Company.  The Company hereby represents
and warrants to the Shareholder that:

(a)

There are no judgments or executions outstanding against the Company, nor are
there any suits, actions or legal, administrative, arbitration or other
procedures or governmental investigations or any adverse change affecting the
business, operations, prospects, property or affairs of the Company pending or,
to the knowledge of the Company, threatened, against the Company which might
impair or affect the ability of the Company to exchange the Exchanged Shares for
the Exchanged Warrants as contemplated by this Agreement.

Section 5.

Further Assurances.  Each party hereto agrees to perform any and all further
acts and to execute and deliver any documents which may reasonably be necessary
to carry out the provisions of this Agreement.

Section 6.

Governing Law.  This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to its conflict of laws
rules.

Section 7.

Binding Effect.  This Agreement is binding on, and will inure to the benefit of,
the parties hereto and their respective successors, permitted assigns, heirs,
and legal representatives.

Section 8.

Counterparts.  This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which, taken together, shall
constitute one and the same agreement.

Section 9.

Entire Agreement.  This Agreement contains the entire agreement of the parties
and embodies all the representations and warranties which have been made between
them with respect to the subject matter hereof.  All previous agreements or
understandings between the parties hereto with respect to its subject matter,
whether in writing or oral, are merged into this Agreement.

Section 10.

Severability.  In the event that any one or more of the provisions contained
herein shall, for any reason, be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions of this Agreement, but this Agreement shall be construed as
if such invalid, illegal or unenforceable provisions had never been contained
herein, unless the deletion of such provision or provisions would result in such
a material change so as to cause completion of the transactions contemplated
herein to be unreasonable.

[signature page follows]

2

--------------------------------------------------------------------------------

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

COMPANY:

 

 

 

 

 

 

 

 

 

 

DAYBREAK OIL AND GAS, INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/ JAMES F. WESTMORELAND

 

Name:

James F. Westmoreland

 

Title:

President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

SHAREHOLDER:

 

 

 

 

 

 

 

 

 

 

MAXIMILIAN INVESTORS LLC

 

 

 

 

 

 

 

 

 

 

By:

/s/ ROBERT LEVY

 

Name:

Robert Maximilian Levy

 

Title:

Portfolio Manager

 

 

 

 

 

 

 

Signature Page to Share Exchange Agreement

--------------------------------------------------------------------------------

EXHIBIT A

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT (I) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT, (II) TO THE EXTENT APPLICABLE, PURSUANT TO
RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING TO THE
DISPOSITION OF SECURITIES, OR (III) UPON THE DELIVERY BY THE HOLDER TO THE
COMPANY OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL TO THE
COMPANY, STATING THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS
AVAILABLE. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.”

EXERCISABLE ON OR BEFORE

5:00 P.M., NEW YORK TIME, August 28, 2016

No. W- 051914

427,729 Warrants

WARRANT CERTIFICATE

This Warrant Certificate is issued pursuant to, and subject to, the Warrant
Agreement as amended by the First Amendment to Warrant Agreement dated February
14, 2014.

This Warrant Certificate certifies that MAXIMILIAN RESOURCES LLC or registered
assigns is the registered holder of four hundred twenty-seven thousand, seven
hundred twenty-nine (427,729) Warrants to purchase, at any time from August 28,
2013 until 5:00 P.M.  New York City time on August 28, 2016 (“Expiration Date”)
up to four hundred twenty-seven thousand, seven hundred twenty-nine (427,729)
shares (“Shares”) of fully-paid and nonassessable common stock, $0.001 par value
(“Common Stock”), of Daybreak Oil and Gas, Inc., a Washington corporation (the
“Company”), at the initial exercise price, subject to adjustment in certain
events (the “Exercise Price”), of $0.10 per Share upon surrender of this Warrant
Certificate and payment of the Exercise Price at an office or agency of the
Company, but subject to the conditions set forth herein and in the Warrant
Agreement dated as of August 28, 2013, as amended by the First Amendment to
Warrant Agreement dated February 14, 2014 (as amended, the “Warrant Agreement”)
between the Company and the Subscriber therein.  Payment of the Exercise Price
may be made in cash, by certified or official bank check in New York Clearing
House funds payable to the order of the Company, or any combination of cash or
certified or official bank check, in accordance with paragraph 3 of the Warrant
Agreement.

No Warrant may be exercised after 5:00 P.M., New York City time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, shall thereafter be void.

The Warrants evidenced by this Warrant Certificate are part of a duly authorized
issue of Warrants issued pursuant to the Warrant Agreement, which Warrant
Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to in a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and the
holders (the words “holders” or “holder” meaning the registered holders or
registered holder) of the Warrants.

The Warrant Agreement provides that upon the occurrence of certain events, the
Exercise Price and/or number of the Company’s securities issuable thereupon may,
subject to certain conditions, be adjusted.  In such event, the Company will, at
the request of the holder, issue a new Warrant Certificate evidencing the
adjustment in the Exercise Price and the number and/or type of securities
issuable upon the exercise of the Warrants; provided, however, that the failure
of the Company to issue such new Warrant Certificates shall not in any way
change, alter, or otherwise impair, the rights of the holder as set forth in the
Warrant Agreement.

--------------------------------------------------------------------------------

Upon due presentment for registration of transfer of this Warrant Certificate at
an office or agency of the Company, a new Warrant Certificate or Warrant
Certificates of like tenor and evidencing in the aggregate a like number of
Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the Warrant
Agreement, without any charge except for any tax, or other governmental charge
imposed in connection therewith.

Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.

The Company may deem and treat the registered holder(s) hereof as the absolute
owner(s) of this Warrant Certificate (notwithstanding any notation of ownership
or other writing hereon made by anyone), for the purpose of any exercise hereof,
and of any distribution to the holder(s) hereof, and for all other purposes, and
the Company shall not be affected by any notice to the contrary.

All terms used in this Warrant Certificate which are defined in the Warrant
Agreement shall have the meanings assigned to them in the Warrant Agreement.

[Remainder of page intentionally left blank]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly
executed.

DAYBREAK OIL AND GAS, INC., a Washington corporation

 

 

 

 

 

 

 

 

 

 

By:

/s/ JAMES F. WESTMORELAND

 

 

Name: James F. Westmoreland

 

 

Title: President and Chief Executive Officer

 

--------------------------------------------------------------------------------

EXHIBIT B

FORM OF ELECTION TO PURCHASE

The undersigned registered owner of this Warrant hereby irrevocably elects to
exercise the right, represented by this Warrant Certificate, to purchase _______
Shares and herewith tenders in payment for such Shares cash or a certified or
official bank check payable in New York Clearing House Funds to the order of
_____________________ in the amount of $_______ all in accordance with the terms
this Warrant.

The undersigned requests that a certificate for such Shares be registered in the
name of ____________________, whose address is _____________________ and that
such Certificate be delivered to _____________, whose address is
___________________________.

The undersigned is an “accredited investor” as defined in Regulation D
promulgated under the Securities Act of 1933, as amended.

Name of Registered Owner

 

 

Signature of Registered Owner

 

 

Street Address

 

 

City, State, Zip

 

 

IRS Identification Number/Social Security Number

Signature Guaranteed:  ___________________________________________

NOTE:  The signature to this Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust company.  Officers of
corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.