Document:

dbog_ex1037-70228.htm

     

    Exhibit
      10.37

    CONSULTING
      SERVICES AGREEMENT

    

    This
      Consulting Services Agreement (“Agreement”) is made as of the 1st
      day of March, 2007 to the 28th day of February, 2008, by and between Daybreak
      Oil and Gas, Inc., (“Daybreak”), a Washington corporation, and Michael J.
      Hooper, an individual.

    

    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 as an Accounting and Accounting Systems Analyst,
      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 accounting system design, accounting input and
      organization, management reports, internal control procedures and related
      matters.

    

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

    

    It
      shall
      be expressly understood that the Consultant shall have no power to bind the
      Company to any contract or obligation or to transact any business in the
      Company’s name or on behalf of the Company in any manner.

    

    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 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.

    

    
      
        CONSULTING
          SERVICES AGREEMENT

      

      
        -1-

        
          

        

      

      
        
        

      

    

    3.           Compensation.

    

    (a)           Monetary.  In
      exchange for his commitment to provide services to Daybreak under Section One
      above, Daybreak agrees to pay Consultant an hourly rate in the amount of Forty
      Dollars ($40.00) per hour plus out of pocket expenses incurred or advanced
      on
      behalf of the Company.

    

    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 agrees to pay the invoice within a reasonable period of time following
      its examination and review by the Treasurer or Chief Financial
      Officer.

    

    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.

    

    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.

    

    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 

    
      

      
        
          CONSULTING
            SERVICES AGREEMENT

        

        
          -2-

          
            

          

        

        
          
          

        

      

    

    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.

    

    (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.

    
      

      
        
          CONSULTING
            SERVICES AGREEMENT

        

        
          -3-

          
            

          

        

        
          
          

        

      

    

    (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
      Michael J. Hooper:

    

    Michael
      J. Hooper

    601
      W.
      Main Avenue   Suite 1017

    Spokane,
      WA 99201

    

    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.

    

    (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.

    
      

      
        
          CONSULTING
            SERVICES AGREEMENT

        

        
          -4-

          
            

          

        

        
          
          

      

    

    (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

    

    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of the 28th day
      of
      February, 2007.

    

    

    COMPANY:

    Daybreak
      Oil and Gas, Inc.

    

    

    By:
      /s/ Thomas C.
      Kilbourne                  

           Thomas
      C. Kilbourne, Treasurer

    

    

    CONSULTANT:

    Michael
      J. Hooper

    

    

    By:
      /s/ Michael J.
      Hooper                        

          Michael
      J. Hooper

     

     

     

     

     

     

     

     

    CONSULTING
      SERVICES AGREEMENT

    -5-dbog_ex1038-70228.htm

    Exhibit
      10.38

    EMPLOYMENT
      AGREEMENT

    
 

    THIS
      EMPLOYMENT AGREEMENT ("Agreement") is entered into effective the 1st day of
      March,
      2007, between Daybreak Oil and Gas Inc., a Washington corporation ("Daybreak,
      Employer, Company") and Eric L. Moe, ("Employee").

    

    It
      is
      agreed as follows:

    

    1.
      Employment. Employer employs Employee, and Employee accepts employment,
      upon the terms and conditions set forth in this Agreement.

    

    2.
      Term. This Agreement begins on March 1, 2007, and continues until May
      31, 2007, unless terminated earlier by either party in compliance with this
      Agreement's provisions governing termination. After May 31, 2007, employment
      will be month to month subject to approval each month, by the Daybreak Board
      of
      Directors.

    

    3.
      Compensation.

    

    a.
      Salary. Employer will pay Employee a monthly salary of Ten Thousand
      Five Hundred ($10,500) dollars during the term of this Agreement. The salary
      will be paid in accordance with Employer's existing payroll policies for
      comparable employees. Employee's compensation will be subject to prospective
      review by Employer in its sole discretion.

    

    b.
      Fringe Benefits. Employee may receive bonuses during the term of
      employment as determined by Employer, in its sole discretion. Employee will
      be
      entitled to participate in all other fringe benefit programs applicable to
      comparable employees of Employer. Employer may amend, eliminate, or add to
      the
      existing fringe benefit programs in its sole discretion.

    

    4.
      Duties. Employee will be employed initially as Chief Executive Officer
      (CEO) of Daybreak, and in such additional or other capacities and offices as
      may
      be assigned by the Board of Directors from time to time. The Employee warrants
      and represents that he is duly qualified to perform the duties hereunder and
      further covenants that in performing his duties hereunder, he will not engage
      in
      any activity that is in violation of applicable security laws or subject the
      Corporation to liability thereunder.

    

    It
      shall
      be expressly understood that the Employee shall have no power to bind the
      Company to any contract or obligation on behalf of Daybreak in any manner
      without approval of the Board of Directors.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    5.
      Other Employment. Without the prior consent of Daybreak, Employee is
      prohibited from directly or indirectly, during the term of this Agreement,
      rendering services of a business, professional, or commercial nature to any
      other person, firm or corporation, whether or not the services are rendered
      for
      compensation.

    

    6.
      Vacation Benefits. Employee is entitled to vacation periods with full
      pay in accordance with established Daybreak policy. Vacation will be scheduled
      by mutual agreement; however, Employee will be allowed sufficient discretion
      in
      scheduling to assure the vacation benefit may be used.

    

    7.
      Expenses. During the term of employment, Employee 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 Employer. 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 Employer
      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 Employer within sixty (60) days of the transaction date,
      the
      transaction amount can be charged back to the Employee or be deducted from
      the
      Employee’s next payroll check. Compensation provided Employee under this
      Agreement takes into account Employee's personal obligation to incur and pay
      certain additional expenses required of Employee as an employee of Employer
      for
      which Daybreak is under no obligation to reimburse Employee.

    

    8.
      Employment at Will. This is an agreement for employment of indefinite
      duration. The employment relationship may be terminated at will by either party.
      Termination by either party must be made by written notice to the other party
      given at least 7 days in advance of the termination date. Upon termination,
      Employee will be paid accrued unpaid salary prorated in accordance with
      Employer's general policies and procedures.

    

    9.
      Employer Business. All business revenues and fees produced or
      transacted through the efforts of Employee are the sole property of Daybreak.
      Employee will have no right to the business or to share in any revenues or
      fees
      resulting from the conduct of the business other than the compensation provided
      for in this Agreement.

    

    10.
      Confidential Information.

    

    a.
      Disclosure Prohibited. Employee acknowledges that, in the course of
      this employment, Employee will become acquainted with confidential information
      belonging to Daybreak. Employee may not, at any time during the period of
      Employee's employment or thereafter, except as authorized in writing by
      Daybreak, directly or indirectly, use, disclose, reproduce, or in any other
      way
      publicly or privately disseminate any "Confidential Information" as
      defined.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    b.
      Definition. "Confidential Information" means all information not
      generally known to the public, which relates to the business of Daybreak or
      any
      third parties doing business with Daybreak. By way of example, confidential
      information includes, but is not limited to, information relating to oil and
      gas
      plays, development information on oil and gas prospects, fundraising plans,
      customers and customer lists, pricing, contracts, costs and other financial
      information, merchandising and marketing techniques, inventions, plans
      specifications, and products disclosed to or known by Employee in connection
      with his employment by Employer.

    

    11.
      Protection of Daybreak Property. All records, files, manuals, lists of
      customers, blanks, forms, materials, supplies, computer programs, and other
      materials furnished to Employee by Daybreak, used on its behalf, or generated
      or
      obtained during the course of this employment remain the property of Daybreak.
      Employee is only a holder of this property for the sole use and benefit of
      Employer and will safely keep and preserve such property, except as consumed
      in
      the normal business operation of Employer. Upon termination of this employment,
      Employee will immediately deliver to Daybreak, or its authorized representative,
      all of Daybreak's property, including all copies, remaining in Employee's
      possession or control.

    

    12.
      Remedies. The parties recognize that irreparable injury will result to
      Daybreak and its business and property if Employee breaches the covenant of
      confidentiality contained in Section 10 of this Agreement. It is agreed that
      if
      Employee breaches the covenant of confidentiality, Daybreak will be entitled
      to
      an injunction to restrain further breach of that covenant by Employee or any
      of
      Employee's partners, agents, employers and employees, or any persons acting
      for
      or with Employee, in addition to any other remedies Daybreak may
      have.

    

    13.
      Assignability. These contractual obligations of Employee are personal
      and neither the rights nor obligations under this Agreement may be assigned
      or
      transferred by Employee to any other person. This Agreement will bind and
      benefit any successor of Employer, whether by merger, sale of assets,
      reorganization or other form of business acquisition, disposition, or business
      reorganization.

    

    14.
      Amendment. This Agreement contains the entire understanding of the
      parties. This Agreement may be changed only by a written document signed by
      Employee and Daybreak.

    

    15.
      Notices. All notices and other communications required or permitted to
      be given by this Agreement must be in writing and must be given and will be
      deemed received if and when either hand-delivered and a signed receipt is given,
      or mailed by registered or certified U.S. mail, return receipt requested,
      postage prepaid, and if to Employer to:

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Daybreak
      Oil and Gas, Inc.

    601
      W.
      Main Avenue  Suite 1012

    Spokane,
      WA 99201

    

    And,
      if
      to Employee to:

    

    Eric
      L.
      Moe

    8305
      North Colton Place

    Spokane,
      WA 99201

    

    Either
      party may change the address to which notice to it is to be addressed by
      notifying the other party of the change.

    

    16.
      Enforcement. This Agreement is to be construed in accordance with the
      laws of the State of Washington. 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.

    

    IN
      WITNESS WHEREOF, the parties have executed this Agreement.

     

    
      	 	"EMPLOYER"	 	 	“EMPLOYEE”	 
	 	 	 	 	 	 
	 	Daybreak
              Oil and Gas Inc.,	 	 	 	 
	 	a
              Washington corporation	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By:	
              /s/
                Thomas C.
                Kilbourne

            	 	 	
              /s/
                Eric L.
                Moe

            	 
	Its:	
              Treasurer

            	 	 	
              Eric
                L.
                Moe

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