Document:

dbog_ex1034-70228.htm

    Exhibit
      10.34

    CONSULTING
      SERVICES AGREEMENT

    

    This
      Consulting Services Agreement (“Agreement”) is made as of the __2nd day
      of January, 2007 to the _29th day of February, 2008, by and between Daybreak
      Oil
      and Gas, Inc., (“Daybreak”), a Washington corporation, and Timothy R. Lindsey,
      doing business as Lindsey Energy and Natural Resources (“Consultant”), 18331
      Langsbury Drive, Houston, Texas 77084.

    

    Whereas,
      Daybreak desires to be assured of the association and services of the Consultant
      in order to avail itself of the Consultant’s experience, skills, abilities,
      knowledge and background to facilitate long range strategic planning and to
      advise Daybreak in business and/or exploration matters, and

    

    Whereas,
      Daybreak wishes to engage Consultant to provide advisory and other services
      for
      Daybreak and Consultant wishes to accept such engagement, all on the terms
      and
      conditions set forth herein.

    

    Whereas,
      the Board of Directors of the Company considers it to be in the best interests
      of the Company to enter into this Agreement with the Consultant and this
      Agreement has been duly approved by the Board of Directors of the
      Company;

    

    Now
      therefore, in consideration of the mutual promises herein and other
      good and valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, the parties hereto agree as follows:

    

    1.           Engagement.  Daybreak
      hereby engages the Consultant on a non-exclusive basis, and the Consultant
      hereby accepts the engagement, to become a consultant to Daybreak and to render
      such advice, consultation, information, and services to the directors and
      officers of Daybreak regarding the exploration for and production of gas and
      oil
      energy including but not limited to:

    

    (a)           assess
      current capital allocation in existing exploration and production operations
      and
      to identify and develop future core areas for growth;

    

    (b)           create
      strategic exploration, acquisition, exploitation and development portfolio
      and
      to balance capital spending to enhance current financial returns while providing
      significant future reserves and production growth;

    

    (c)           review
      and interpret physical data such as maps, seismic sections, digital data bases,
      drilling reports, well files, gravity surveys, geochemical surveys and regional
      maps; and

    

    (d)           carry
      out exploration work in order to ascertain whether particular projects contain
      commercially exploitable gas and oil resources and make recommendations to
      the
      Board of Directors and officers of the Company.

    

    
      
        
          CONSULTING
            SERVICES
            AGREEMENT                                                                  

        

      

      
        -1-

        
          

        

      

      
         

      

    

    The
      Consultant will report to the person or positions designated by the Company
      to
      whom the Consultant will be reporting and will discharge such duties and
      responsibilities as are assigned to the Consultant from time to
      time.

    

    2.           Term.  The
      term of this Agreement shall commence on February ____, 2007 and continue in
      effect until February ____, 2008.  Notwithstanding the foregoing, this
      Agreement may be terminated prior to the end of the term by either Daybreak
      or
      Consultant, for any reason or for no reason, upon thirty (30) days written
      notice to the other party.  In the event of termination, Consultant
      shall be entitled to all fees and other consideration contained in this
      Agreement earned and accrued to the effective date of termination.

    

    3.           Compensation.

    

    (a)           Monetary.  In
      exchange for his commitment to provide services to Daybreak under Section One
      above, Daybreak agrees to pay Consultant a daily work rate in the amount of
      One
      Thousand Five Hundred Dollars ($1,500.00) per day rate plus out of pocket
      expenses.

    

    The
      Consultant shall submit invoices to the Corporation for each month or portion
      thereof for which services are provided during the period covered by the invoice
      and also including any proper claim for travel expenses.  Each invoice
      shall indicate the period covered, the month or portion of a month worked,
      the
      rate and the total charge for consulting services.

    

    The
      Company will reimburse the Consultant, at actual cost, for out-of-pocket
      expenses incurred in accordance with the Corporation’s standard practice for the
      reimbursement of reasonable travel expenses incurred by its contractors or
      its
      own personnel.  The Corporation will also reimburse the Consultant for
      any reasonable long distance telephone, fax or photocopying charges incurred
      by
      the Consultant.  Expenses claimed must be supported by the applicable
      receipts.

    

    (b)           
      Restricted Shares.

    

    (i)           Grant
      and Issuance.  As consideration for Consultant’s employment with
      Daybreak, Daybreak grants and issues to Consultant Two Hundred Thousand
      (200,000) unregistered and restricted common shares of its stock valued at
      $1.00
      per share (“Granted Shares”).  In addition, the term “Granted Shares”
shall include any shares of stock received by Consultant from any stock split,
      stock dividend, combination of shares, or any other change or exchange for
      other
      securities by reclassification, reorganization, merger, consolidation,
      recapitalization, or otherwise, derived from the Two Hundred Thousand (200,000)
      unregistered and restricted common shares granted and issued pursuant to Section
      3.b of this Agreement.  The Company acknowledges that the shares of
      Common Stock to be issued pursuant to this Agreement (collectively the “Shares”)
      have not been registered under the Securities Act of 1933 (the “Act”), and
      accordingly are “restricted shares” within the meaning of Rule 144 of the
      Act.  The Shares shall be restricted and as such the Shares may not be
      resold or transferred unless the Company has received an opinion of counsel
      reasonably satisfactory to the Company that such resale or transfer is exempt
      from the registration requirements of the Act.

    
      

      
        
          
            CONSULTING
              SERVICES
              AGREEMENT                                                                  

          

        

        
          -2-

          
            

          

        

        
           

      

    

    (ii)           Rights
      as Shareholder.  During the term of this Agreement, Consultant
      will have all the rights of a shareholder with respect to Granted Shares,
      including the right to vote them and to receive all dividends and other
      distributions paid with respect to them, provided however that the shares shall
      be subject to the restrictions provided for in Section 3.b of this
      Agreement.

    

    (iii)           Not
      Transferable.  Consultant may not sell, exchange, transfer,
      pledge, hypothecated, or otherwise dispose of (“Transfer”) Granted Shares to
      anyone other than Daybreak during the term of this Agreement, and Granted Shares
      may only be Transferred to Daybreak if Consultant forfeits Granted Shares
      pursuant to Section 3.b.iv of this Agreement.

    

    (iv)           Forfeiture.  If
      Consultant’s employment is terminated, except as provided below, either by
      Consultant or by Daybreak prior to the expiration of the term of this Agreement,
      Consultant shall forfeit and endorse over to Daybreak a proportionate number
      of
      Granted Shares based upon the number of months remaining on the term of this
      Agreement as compared to the entire term of this Agreement.  If
      Consultant’s employment is terminated prior to the end of a month, it is shall
      be presumed that the month of termination is a remaining month on the term
      of
      this Agreement.

    

    Example
      1.  The term of this Agreement is twelve (12) months.  If
      Consultant’s employment is terminated effective as of the end of the fifth month
      of employment, Consultant has completed five (5) months of employment and there
      are seven (7) months remaining on the term of this Agreement.  As
      such, Consultant forfeits 7/12ths of the
      Granted
      Shares and must endorse those shares of stock over to Daybreak for no
      consideration.

    

    Example
      2.  Same facts as in Example 1, except Consultant’s employment was
      terminated five (5) days into the eighth month of employment, Consultant has
      only completed seven (7) months of employment and there are six (5) months
      remaining on the term of this Agreement.  As such, Consultant forfeits
      7/12ths of the
      Granted Shares and must endorse those shares of stock over to Daybreak for
      no
      consideration.

    

    In
      the
      event of the death of the Consultant, the parties agree that the Consultant
      shall not forfeit any of the granted shares issued to the Consultant by Daybreak
      under the terms of this Agreement.

    

    (v)           Legend.  Stock
      certificates representing Granted Shares shall be imprinted with a legend in
      substantially the same form set forth herein stating that the shares represented
      thereby may not be sold, exchanged, transferred, pledged, hypothecated, or
      otherwise disposed of except as otherwise provided in this
      Agreement.

    
      

      
        
          
            CONSULTING
              SERVICES
              AGREEMENT                                                                  

          

        

        
          -3-

          
            

          

        

        
           

      

    

    THIS
      SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), IN RELIANCE UPON THE
      EXEMPTIONS FROM REGISTRATION PROVIDED IN THE ACT AND REGULATION D UNDER THE
      ACT.  AS SUCH, THE ACQUISITION OF THIS SECURITY WAS NECESSARILY WITH
      THE INTENT OF INVESTMENT AND NOT WITH A VIEW FOR
      DISTRIBUTION.  THEREFORE, ANY SUBSEQUENT TRANSFER OF THIS SECURITY OR
      ANY INTEREST THEREIN WILL BE UNLAWFUL UNLESS IT IS REGISTERED UNDER THE ACT
      OR
      UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.  FURTHERMORE, IT
      IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY OR ANY INTEREST
      THEREIN, WITHOUT THE OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT THE
      PROPOSED TRANSFER OR SALE DOES NOT AFFECT THE EXEMPTIONS RELIED UPON BY THE
      COMPANY IN ORIGINALLY DISTRIBUTING THE SECURITY AND THAT REGISTRATION IS NOT
      REQUIRED.

    

    (vi)           Stock
      Splits, Dividends, etc.  If, due to a stock split, stock
      dividend, combination of shares, or any other change or exchange for other
      securities by reclassification, reorganization, merger, consolidation,
      recapitalization, or otherwise, Consultant, as the owner of the Granted Shares
      subject to the restrictions hereunder, shall be entitled to new, additional,
      or
      different shares of stock or securities, the certificate or certificates for,
      or
      otherwise evidence of, such new, additional, or different shares or securities,
      together with a stock power or other instrument of transfer appropriately
      endorsed, also shall be endorsed with a legend as provided in Section 3.b.v
      of
      this Agreement.

    

    4.           Independent
      Contractor Status.  In the performance of the work
      contemplated in this Agreement, Consultant is an independent contractor with
      the
      authority to control and direct the performance of the details of the work,
      Daybreak being interested only in the results obtained.  Consultant is
      not an agent or employee of Daybreak for any purpose, and the employees of
      Consultant are not entitled to any of the benefits that Daybreak provides for
      its employees.  Consultant shall be responsible for payment of all
      taxes, including federal, state, and local taxes arising out of its activities
      under this Agreement, including, but not limited to, income tax, social security
      tax, and unemployment insurance tax that might be due.  It is
      understood that Daybreak does not agree to use Consultant
      exclusively.  Nothing in this Agreement shall constitute or be
      construed as a creation of a partnership or joint venture between Consultant
      and
      Daybreak, or their successors or assigns.  The parties acknowledge and
      agree that Consultant, its principals, associates and employees, are not engaged
      in the practice of law nor are they engaged in providing legal advice or counsel
      in connection with their representation of Daybreak.  

    
      

      
        
          
            CONSULTING
              SERVICES
              AGREEMENT                                                                  

          

        

        
          -4-

          
            

          

        

        
           

        

      

    

    The
      parties further acknowledge and agree that any association or referral with
      or
      to any law firm by or with Consultant shall not be considered or construed
      to be
      the practice of law by Consultant in connection with such association or
      referral.

    

    5.           Confidential
      Information.  In the course of providing services for
      Daybreak, each of Daybreak and Consultant may learn or discover information
      that
      is identified by the other as non-public, proprietary
      information.  Each of Daybreak and Consultant agrees that, during the
      term of engagement and for a period of twenty-four (24) months thereafter,
      it
      will not, directly or indirectly, disclose or use any such information of the
      other party (“Confidential Information”) without the consent of such
      party.  Confidential Information shall not include: information
      which is currently in the public domain or hereafter enters the public domain
      without the fault or involvement of the receiving party; information known
      to
      the receiving party prior to its disclosure by other party and information
      disclosed to a receiving party from a source (other than the other party) having
      a lawful right to make such disclosure to the receiving party, or information
      required to be disclosed under any court order or governmental directive. The
      terms of this Agreement shall be treated as Confidential Information by both
      parties.

    

    6.           Summons/Subpoenas.  In
      the event that Consultant or any party acting on behalf of Consultant
      (Consultant and any such person being a “Subpoenaed Party”) receives a subpoena
      or summons requesting that the Subpoenaed Party produce documents or records
      containing Confidential Information of Daybreak or otherwise pertaining to
      the
      services rendered hereunder or testify concerning such Confidential Information
      of Daybreak or services, the Subpoenaed Party will immediately notify
      Daybreak.  Daybreak may, within the time permitted for the Subpoenaed
      Party to respond to any such requests, initiate such legal action seeking a
      protective order or other relief as Daybreak deems appropriate to protect
      information from disclosure.  If Daybreak takes no action within the
      time permitted for the Subpoenaed Party to respond or if Daybreak’s actions do
      not result in a judicial order preventing the Subpoenaed Party from supplying
      or
      disclosing the requested information or testifying, the Subpoenaed Party may
      comply with the request.  Daybreak agrees to reimburse and pay the
      Subpoenaed Party for all costs and expenses incurred by the Subpoenaed Party
      (or
      such person) in connection with any such summons or subpoenas concerning
      Daybreak, including reasonable attorney’s fees and time spent by the Subpoenaed
      Party ‘s personnel, billed at their regular rates.

    

    7.           Indemnification.  Each
      party agrees to indemnify and hold the other party, its officers and employees,
      harmless against any and all claims, lawsuits, judgments, costs, liens, losses,
      expenses, fees (including reasonable attorney’s fees and costs of defense),
      proceedings, actions, demands, causes of action, liability and suits of any
      kind
      and nature, including but not limited to, personal injury (including death),
      property damage, or other harm for which recovery damages is sought that may
      arise out of or be occasioned or caused by each party’s negligent act, error or
      omission or the negligent act, error or omission of any agent, officer,
      director, representative, employee, consultant or subconsultant of each party
      and their respective officers, agents, employees, directors and representatives
      while in the exercise of performance of the rights or duties under this
      Agreement.

    
      

      
        
          
            CONSULTING
              SERVICES
              AGREEMENT                                                                  

          

        

        
          -5-

          
            

          

        

        
           

      

    

    8.           General.

    

    (a)           This
      Agreement shall be interpreted and construed in accordance with the laws of
      the
      State of Washington without giving effect to principles of conflict of
      law.  Any action arising in connection with this Agreement must be
      brought in Spokane County Superior Court, Spokane, Washington.  By
      this Agreement, the parties confer jurisdiction over the subject matter of
      and
      parties to this Agreement.  The party who prevails in any such action
      will be entitled to an award of the reasonable costs and attorneys’ fees
      incurred in the action.

    

    (b)           The
      terms and conditions set forth in this Agreement are intended by Daybreak and
      Consultant to constitute the final and complete statement of their agreement,
      and all prior proposals, communications, negotiations, understandings, and
      representations relating to the subject matter of this Agreement, whether verbal
      or written, are hereby superseded.  No modification or amendment of
      this Agreement shall be effected unless the same is in writing and signed by
      both parties.

    

    (c)           Any
      notice required or desired to be given under this Agreement shall be given
      in
      writing and sent by certified mail, return receipt requested, addressed as
      follows:

    

    i.           To
      Daybreak:

    

    Daybreak
      Oil and Gas, Inc.

    Thomas
      C.
      Kilbourne

    1012
      Washington Mutual Financial Center

    601
      West
      Main Avenue

    Spokane,
      Washington 99201

    

    ii.           To
      Consultant:

    

    Timothy
      R. Lindsey

    18331
      Langsbury Drive

    Houston,
      Texas 77084

    

    Notice
      shall be effective upon receipt.

    

    (d)           Consultant
      consents in advance to Daybreak’s right to assign this Agreement to any
      successor in interest that expressly assumes Daybreak’s obligations hereunder in
      writing.  Consultant may not assign its rights and obligations under
      this Agreement.

    

    (e)           Each
      of the sections contained herein shall be and remain separate from, independent
      of, and severable from all and any other sections herein except as otherwise
      indicated by the context of this Agreement.  Any decision or
      declaration that one or more of the sections or subsections are null and void
      shall have no effect on the remaining sections or subsections of this
      Agreement.

    

    (f)           Upon
      any termination of employment, Consultant shall within ten (10) business days,
      deliver or cause to be delivered to the Company all books, documents, effects,
      monies received in trust, or other property belonging to the Company or its
      subsidiaries for which the Company or its subsidiaries are liable to others,
      which are in possession, charge, control, or custody of the
      Consultant.

    
      

      
        
          
            CONSULTING
              SERVICES
              AGREEMENT                                                                  

          

        

        
          -6-

          
            

          

        

        
           

      

    

    (g)           This
      Agreement shall inure to the benefit of and be binding upon the Consultant
      and
      its heirs, executors, legal personal representatives, and administrators, and
      upon the Company.

    

    (h)           This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original and together shall constitute a single
      agreement.  Facsimile signatures shall be good and sufficient evidence
      of signature for all purposes of this Agreement.

    

    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of the 2nd day
      of
      January, 2007.

    

    COMPANY:

    Daybreak
      Oil and Gas, Inc.

    

    

    By: /s/
      Thomas C.
      Kilbourne               

           Thomas
      C. Kilbourne, Treasurer

    

    CONSULTANT:

    

    

    /s/
      Tim R.
      Lindsey                                  

    Timothy
      R. Lindsey

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      CONSULTING
        SERVICES AGREEMENT

      -7-dbog_ex1036-70228.htm

     

    Exhibit
      10.36

    CONSULTING
      SERVICES AGREEMENT

    

    This
      Consulting Services Agreement (“Agreement”) is entered into effective
      the 1st day of
      March, 2007, by and between Daybreak Oil and Gas, Inc., (“Daybreak”), a
      Washington corporation, and Jeffrey R. Dworkin located in Calgary, Alberta,
      Canada.

    

    Whereas,
      Daybreak desires to be assured of the association and services of the Consultant
      in order to avail itself of the Consultant’s experience, skills, abilities,
      knowledge and background to facilitate long range strategic planning and to
      advise Daybreak in business and/or exploration matters, and

    

    Whereas,
      Daybreak wishes to engage Consultant to provide advisory and other services
      for
      Daybreak and Consultant wishes to accept such engagement, all on the terms
      and
      conditions set forth herein.

    

    Whereas,
      the Board of Directors of the Company considers it to be in the best interests
      of the Company to enter into this Agreement with the Consultant and this
      Agreement has been duly approved by the Board of Directors of the
      Company;

    

    Whereas,
      the Consultant shall make his services available, as requested, to
      perform this Agreement;

    

    Now
      therefore, in consideration of the mutual promises herein and other
      good and valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, the parties hereto agree as follows:

    

    1.           Engagement.  Daybreak
      hereby engages the Consultant and the Consultant hereby accepts the engagement,
      to become a consultant to Daybreak and to render such advice, consultation,
      information, and services to the directors and officers of Daybreak regarding
      public company corporate governance and legal knowledge of oil and gas industry
      contracts including but not limited to:

    

    (a)           assist
      in creation and implementation of corporate governance standards

    

    (b)           review
      and advise on oil and gas mineral rights leases;

    

    The
      Consultant will report to the person or positions designated by the Company
      to
      whom the Consultant will be reporting and will discharge such duties and
      responsibilities as are assigned to the Consultant from time to
      time.

    

    The
      Consultant represents that he is duly qualified to perform the duties hereunder
      and further covenant that in performing his duties hereunder, he will not engage
      in activity that is in violation of applicable security laws or subject the
      Corporation to liability thereunder.

    

    2.           Term.  The
      term of this Agreement shall commence on March 1, 2007 and continue in effect
      until February 29, 2008.  Notwithstanding the foregoing, this
      Agreement may be terminated prior to the end of the term by either Daybreak
      or
      Consultant, for any reason or for no 

     

    
      
        CONSULTING
          SERVICES AGREEMENT

      

      
        -1-

        
          

        

      

      
        
        

      

    

    reason,
      upon thirty (30) days written notice to the other party.  In the event
      of termination, Consultant shall be entitled to all fees and other consideration
      contained in this Agreement earned and accrued to the effective date of
      termination.

    

    3.           Compensation.

    

    (a)           Monetary.  In
      exchange for his commitment to provide services to Daybreak under Section One
      above, Daybreak agrees to pay Consultant a hourly rate in the amount of One
      Hundred Fifty Dollars ($150.00) plus out of pocket expenses. The Consultant
      shall submit invoices to the Corporation for each month or portion thereof
      for
      which services are provided during the period covered by the invoice and also
      including any proper claim for travel expenses.  Each invoice shall
      indicate the period covered, the month or portion of a month worked, the rate
      and the total charge for consulting services.

    

    During
      the term of this agreement, Consultant is entitled to reimbursement for
      reasonable business expenses incurred on behalf of Daybreak in accordance with
      the standard practice for the reimbursement policies and procedures established
      by Daybreak. All out-of-pocket expenses submitted for reimbursement, shall
      be
      done in a timely manner. Such timely manner shall be defined as the expense
      reimbursement request shall be received by Daybreak no later than sixty (60)
      days after the date of the expense receipt or the occurrence of such expense.
      Any expense receipt dated sixty (60) days earlier than the expense reimbursement
      request is received shall not be eligible for reimbursement by Daybreak. If
      any
      receipt for a charge on a Company credit card is not submitted to Daybreak
      within sixty (60) days of the transaction date, the transaction amount can
      be
      charged back to the Consultant or be deducted from the Consultant’s next
      invoice. Compensation provided Consultant under this Agreement takes into
      account Consultant’s personal obligation to incur and pay certain additional
      expenses required of Consultant as a consultant of Daybreak for which Daybreak
      is under no obligation to reimburse Consultant.

    

    4.           Independent
      Contractor Status.  In the performance of the work
      contemplated in this Agreement, Consultant is an independent contractor with
      the
      authority to control and direct the performance of the details of the work,
      Daybreak being interested only in the results obtained.  Consultant is
      not an agent or employee of Daybreak for any purpose, and the employees of
      Consultant are not entitled to any of the benefits that Daybreak provides for
      its employees.  Consultant shall be responsible for payment of all
      taxes, including federal, state, and local taxes arising out of its activities
      under this Agreement, including, but not limited to, income tax, social security
      tax, and unemployment insurance tax that might be due.  It is
      understood that Daybreak does not agree to use Consultant
      exclusively.  Nothing in this Agreement shall constitute or be
      construed as a creation of a partnership or joint venture between Consultant
      and
      Daybreak, or their successors or assigns.  The parties acknowledge and
      agree that Consultant, its principals, associates and employees, are not engaged
      in the practice of law nor are they engaged in providing legal advice or counsel
      in connection with their representation of Daybreak.  The parties
      further acknowledge and agree that any association or referral with or to any
      law firm by or with Consultant shall not be considered or construed to be the
      practice of law by Consultant in connection with such association or
      referral.

    
       

      
        
          CONSULTING
            SERVICES AGREEMENT

        

        
          -2-

          
            

          

        

        
          
          
5.           Confidential
          Information.  In the course of providing services for
          Daybreak, each of Daybreak and Consultant may learn or discover information
          that
          is identified by the other as non-public, proprietary
          information.  Each of Daybreak and Consultant agrees that, during the
          term of engagement and for a period of twenty-four (24) months thereafter,
          it
          will not, directly or indirectly, disclose or use any such information
          of the
          other party (“Confidential Information”) without the consent of such
          party.  Confidential Information shall not include: information
          which is currently in the public domain or hereafter enters the public
          domain
          without the fault or involvement of the receiving party; information known
          to
          the receiving party prior to its disclosure by other party and information
          disclosed to a receiving party from a source (other than the other party)
          having
          a lawful right to make such disclosure to the receiving party, or information
          required to be disclosed under any court order or governmental directive.
          The
          terms of this Agreement shall be treated as Confidential Information by
          both
          parties.

      

    

    

    6.           Summons/Subpoenas.  In
      the event that Consultant or any party acting on behalf of Consultant
      (Consultant and any such person being a “Subpoenaed Party”) receives a subpoena
      or summons requesting that the Subpoenaed Party produce documents or records
      containing Confidential Information of Daybreak or otherwise pertaining to
      the
      services rendered hereunder or testify concerning such Confidential Information
      of Daybreak or services, the Subpoenaed Party will immediately notify
      Daybreak.  Daybreak may, within the time permitted for the Subpoenaed
      Party to respond to any such requests, initiate such legal action seeking a
      protective order or other relief as Daybreak deems appropriate to protect
      information from disclosure.  If Daybreak takes no action within the
      time permitted for the Subpoenaed Party to respond or if Daybreak’s actions do
      not result in a judicial order preventing the Subpoenaed Party from supplying
      or
      disclosing the requested information or testifying, the Subpoenaed Party may
      comply with the request.  Daybreak agrees to reimburse and pay the
      Subpoenaed Party for all costs and expenses incurred by the Subpoenaed Party
      (or
      such person) in connection with any such summons or subpoenas concerning
      Daybreak, including reasonable attorney’s fees and time spent by the Subpoenaed
      Party ‘s personnel, billed at their regular rates.

    

    7.           Indemnification.  Each
      party agrees to indemnify and hold the other party, its officers and employees,
      harmless against any and all claims, lawsuits, judgments, costs, liens, losses,
      expenses, fees (including reasonable attorney’s fees and costs of defense),
      proceedings, actions, demands, causes of action, liability and suits of any
      kind
      and nature, including but not limited to, personal injury (including death),
      property damage, or other harm for which recovery damages is sought that may
      arise out of or be occasioned or caused by each party’s negligent act, error or
      omission or the negligent act, error or omission of any agent, officer,
      director, representative, employee, consultant or subconsultant of each party
      and their respective officers, agents, employees, directors and representatives
      while in the exercise of performance of the rights or duties under this
      Agreement.

    

    8.           General.

    

    (a)           This
      Agreement shall be interpreted and construed in accordance with the laws of
      the
      State of Washington without giving effect to principles of conflict of
      law.  Any action arising in connection with this Agreement must be
      brought in Spokane County Superior Court, Spokane, Washington.  By
      this Agreement, the parties confer jurisdiction over the subject matter of
      and
      parties to this Agreement.  The party who prevails in any such action
      will be entitled to an award of the reasonable costs and attorneys’ fees
      incurred in the action.

    
       

      
        
          CONSULTING
            SERVICES AGREEMENT

        

        
          -3-

          
            

          

        

        
          
          

      

    

    (b)           The
      terms and conditions set forth in this Agreement are intended by Daybreak and
      Consultant to constitute the final and complete statement of their agreement,
      and all prior proposals, communications, negotiations, understandings, and
      representations relating to the subject matter of this Agreement, whether verbal
      or written, are hereby superseded.  No modification or amendment of
      this Agreement shall be effected unless the same is in writing and signed by
      both parties.

    

    (c)           Any
      notice required or desired to be given under this Agreement shall be given
      in
      writing and sent by certified mail, return receipt requested, addressed as
      follows:

    

    i.           To
      Daybreak:

    

    Daybreak
      Oil and Gas, Inc.

    Thomas
      C.
      Kilbourne

    1012
      Washington Mutual Financial Center

    601
      West
      Main Avenue

    Spokane,
      Washington 99201

    

    ii.           To
      Consultant:

    

    Jeffrey
      R. Dworkin

    1001
      13th Ave
      S.W.

    #
      320

    Calgary,
      AB  Canada T2R 0RL5

    

    Notice
      shall be effective upon receipt.

    

    (d)           Consultant
      consents in advance to Daybreak’s right to assign this Agreement to any
      successor in interest that expressly assumes Daybreak’s obligations hereunder in
      writing.  Consultant may not assign its rights and obligations under
      this Agreement.

    

    (e)    Each
      of the
      sections contained herein shall be and remain separate from, independent of,
      and
      severable from all and any other sections herein except as otherwise indicated
      by the context of this Agreement.  Any decision or declaration that
      one or more of the sections or subsections are null and void shall have no
      effect on the remaining sections or subsections of this Agreement.

    

    (f)    Upon
      any
      termination of employment, Consultant shall within ten (10) business days,
      deliver or cause to be delivered to the Company all books, documents, effects,
      monies received in trust, or other property belonging to the Company or its
      subsidiaries for which the Company or its subsidiaries are liable to others,
      which are in possession, charge, control, or custody of the
      Consultant.

    
       

      
        
          CONSULTING
            SERVICES AGREEMENT

        

        
          -4-

          
            

          

        

        
          
          

      

    

    (g)    This
      Agreement shall inure to the benefit of and be binding upon the Consultant
      and
      its heirs, executors, legal personal representatives, and administrators, and
      upon the Company.

     

    (h)    This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original and together shall constitute a single
      agreement.  Facsimile signatures shall be good and sufficient evidence
      of signature for all purposes of this Agreement.

    

    (i)    The
      waiver by
      any party hereto of a breach of any provision of this Agreement shall
      not
      operate or be construed as a waiver of any subsequent breach of the same or
      of
      any other provisions of this Agreement

    

    The
      parties have executed this Agreement as of the   31 
 day of May, 2007.

    

    COMPANY:

    Daybreak
      Oil and Gas, Inc.

    

    

    By: /s/
      Thomas C.
      Kilbourne                              

           Thomas
      C. Kilbourne, Treasurer

    

    CONSULTANT:

    Jeffrey
      R. Dworkin

    

    

    By: /s/
      Jeffrey R.
      Dworkin                                   

          Jeffrey
      R. Dworkin

     

     

     

     

     

    CONSULTING
      SERVICES AGREEMENT

    -5-

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