EXHIBIT A
Exhibit
10.22
EXHIBIT
A
BROKER'S
NAME:______________________________________
IMPORTANT:
PLEASE READ CAREFULLY BEFORE SIGNING. SIGNIFICANT REPRESENTATIONS ARE CALLED
FOR
HEREIN.
and
LETTER OF INVESTMENT INTENT
Daybreak
Oil & Gas, Inc.
000
X.
Xxxx Xxx., Xxxxx 0000
Xxxxxxx,
XX 00000-0000
Gentlemen:
The
undersigned (the "Subscriber") hereby tenders this subscription for the purchase
of units ("Units" or the "Securities") consisting of shares of common stock
("Shares") of Daybreak Oil & Gas, Inc. (the "Company") and warrants to
purchase Shares. The Units are described in the Company's Private Placement
Memorandum dated June 30,2006 (the "Memorandum"). The Subscriber understands
that a subscription for the Securities may be rejected for any reason and
that,
in the event that this subscription is rejected, the funds delivered herewith
will be promptly returned, without interest thereon or deduction therefrom.
By
execution below, the Subscriber acknowledges that the Company is relying
upon
the accuracy and completeness of the representations contained herein in
complying with their obligations under applicable securities
laws.
1.
Subscription Commitment. The Subscriber acknowledges that the minimum
subscription is $30,000. The Subscriber hereby subscribes for the purchase
of
the number of Securities specified below and, as full payment therefor, agrees
to pay in cash, the amount set forth below by check made payable to "Daybreak
Oil & Gas Escrow Account," or by wire transfer to the escrow account of the
Company.
| Number of Units |
At
$3.00 per Unit for
an aggregate of $.
|
The
Subscriber understands that this subscription is not binding on the Company
until accepted by the Company, which acceptance is at the discretion of the
Company and is to be evidenced by the Company's execution of this Subscription
Agreement where indicated. If the subscription is rejected, or if the Minimum
Offering of 730,000 Units ($2,190,000) is not achieved within the offering
period set forth in the Memorandum (the "Offering Period"), the Company shall
return to the Subscriber, without interest or deduction, any payment tendered
by
the Subscriber, and the Company and the Subscriber shall have no further
obligation to each other hereunder. Unless and until rejected by the Company,
or
the Minimum Offering is not achieved within the Offering Period, this
subscription shall be irrevocable by the Subscriber. The Subscriber understands
that the Company may, in the event that the offering to which the Memorandum
relates is oversubscribed, reduce this subscription in any amount and to
any
extent, whether or not pro rata reductions are made of any other investor's
subscription.
2.
Representations and Warranties. In order to induce the Company to accept
this subscription, the Subscriber hereby represents and warrants to, and
covenants with, the Company as follows:
(a)
The Subscriber has received and had the opportunity to review the Memorandum
and
has been given access to full and complete information regarding the Company
and
has utilized such access to the
Daybreak
Oil & Gas, Inc.
1
Subscriber's
satisfaction for the purpose of obtaining such information regarding the
Company
as the Subscriber
has reasonably requested; and, particularly, the Subscriber has been given
reasonable opportunity to
ask
questions of, and receive answers from, representatives of the Company
concerning the terms and conditions
of the offering of the Securities and to obtain any additional information,
to
the extent reasonably available;
(b) Except
for the Memorandum, the Subscriber has not been furnished with any other
materials or
literature relating to the offer and sale of the Securities; except as set
forth
in the Memorandum, no representations
or warranties have been made to the Subscriber by the Company, any selling
agent
of the Company,
or any agent, employee, or affiliate of the Company or such selling
agent.
(c) The
Subscriber believes that an investment in the securities is suitable for
the
Subscriber based
upon the Subscriber investment objectives and financial needs. The Subscriber
(i) has adequate means for
providing for the Subscriber's current financial needs and personal
contingencies; (ii) has no need for liquidity
in this investment; (iii) at the present time, can afford a complete loss
of
such investment; and (iv) does
not
have an overall commitment to investments which are not readily marketable
that
is disproportionate to
the
Subscriber's net worth, and the Subscriber's investment in the Securities
will
not cause such overall commitment
to become excessive.
(d) The
Subscriber, in reaching a decision to subscribe, has such knowledge and
experience in financial
and business matters that the Subscriber is capable of reading and interpreting
financial statements and
evaluating the merits and risk of an investment in the Securities and has
the
net worth to undertake such risks.
(e) The
Subscriber was not offered or sold the Securities, directly or indirectly,
by
means of any form
of
general advertising or general solicitation, including, but not limited to,
the
following: (1) any advertisement,
article, notice or other communication published in any newspaper, magazine,
or
similar medium
of
or broadcast over television or radio; or (2) to the knowledge of the
undersigned, any seminar or meeting
whose attendees had been invited by any general solicitation or general
advertising.
(f) The
Subscriber has obtained, to the extent the Subscriber deems necessary, the
Subscriber's own
personal professional advice with respect to the risks inherent in the
investment in the securities, and the suitability
of an investment in the Securities in light of the Subscriber's financial
condition and investment needs;
(g) The
Subscriber recognizes that the Securities as an investment involves a high
degree of risk, including
those set forth under the caption "Risk Factors" in the Executive
Summary.
(h)
The information contained in this agreement is true, complete and correct
in all
material respects as of the date hereof; the Subscriber understands that
the
Company's determination that the exemption from the registration provisions
of
the Securities Act of 1933, as amended (the "Act"), which is based upon
non-public offerings and applicable to the offer and sale of the Securities,
is
based, in part, upon the representations, warranties, and agreements made
by the
Subscriber herein; and the Subscriber consents to the disclosure of any such
information, and any other information furnished to the Company, to any
governmental authority, self-regulatory organization, or, to the extent required
by law, to any other person.
(i)
The Subscriber realizes that (i) the purchase of the Securities is a long-term
investment; (ii) the purchaser of the Securities must bear the economic risk
of
investment for an indefinite period of time because the Securities have not
been
registered under the Securities Act of 1933 or under the securities laws
of any
state and, therefore, the Securities cannot be resold unless they are
subsequently registered under said laws or exemptions from such registrations
are available; (iii) there is presently no public market for the Securities
and
the Subscriber may be unable to liquidate the Subscriber's investment in
the
event of an emergency, or pledge the Securities as collateral for a loan;
and
(iv) the transferability of the Securities is
restricted
and (A) requires conformity with the restrictions contained in paragraph 2
below
and (B) legends will be placed on the certificate(s) representing the Securities
referring to the applicable restrictions on transferability; and
(j)
The Subscriber certifies, under penalties of perjury, that the Subscriber
is NOT
subject to the backup withholding provisions of Section 3406(a)(i)(C) of
the
Internal Revenue Code.
(k)
Stop transfer instructions will be placed with the transfer agent for the
Securities, and a legend may be placed on any certificate representing the
Securities substantially to the following effect:
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 PURCHASE 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.
3.
Restricted Nature of the Securities. The Subscriber has been advised and
understands that (a) the Securities have not been registered under the
Securities Act of 1933 or applicable state securities laws and that the
securities are being offered and sold pursuant to exemptions from such laws;
(b)
the Memorandum may not have been filed with or reviewed by certain state
securities administrators because of the limited nature of the offering;
(c) the
Company is under no obligation to register the Securities under the Act or
any
state securities laws, or to take any action to make any exemption from any
such
registration provisions available. The Subscriber represents and warrants
that
the Securities are being purchased for the Subscriber's own account and for
investment purposes only, and without the intention of reselling or
redistributing the same; the Subscriber has made no agreement with others
regarding any of the Securities; and the Subscriber's financial condition
is
such that it is not likely that it will be necessary to dispose of any of
such
Securities in the foreseeable future. The Subscriber is aware that, in the
view
of the Securities and Exchange Commission, a purchase of such securities
with an
intent to resell by reason of any foreseeable specific contingency or
anticipated change in market value, or any change in the condition of the
Company, or in connection with a contemplated liquidation settlement of any
loan
obtained for the acquisition of such securities and for which such securities
were pledged, would represent an intent inconsistent with the representations
set forth above. The Subscriber further represents and agrees that if, contrary
to the foregoing intentions, the Subscriber should later desire to dispose
of or
transfer any of such securities in any manner, the Subscriber shall not do
so
unless and until (i) said Securities shall have first been registered under
the
Act and all applicable securities laws; or (ii) the Subscriber shall have
first
delivered to the Company a written notice declaring such holder's intention
to
effect such transfer and describe in sufficient detail the manner and
circumstances of the proposed transfer, which notice shall be accompanied
either
by a written opinion of legal counsel who shall be reasonably satisfactory
to
the Company, which opinion shall be addressed to the Company and reasonably
satisfactory in form and substance to the Company's counsel, to the effect
that
the proposed sale or transfer is exempt from the registration provisions
of the
Act and all applicable state securities laws, or by a "no action" letter
from
the Securities and Exchange Commission to the effect that the transfer of
the
Securities without registration will not result in recommendation by the
staff
of the Commission that action be taken with respect thereto.
4. Residence.
The Subscriber represents and warrants that the Subscriber is a bona fide
resident of,
is
domiciled in and received the offer and made the decision to invest in the
Securities in the state set forth on
the
signature page hereof, and the Securities are being purchased by the Subscriber
in the Subscriber's name
solely for the Subscriber's own beneficial interest and not as nominee for,
or
on behalf of, or for the beneficial
interest of, or with the intention to transfer to, any other person, trust
or
organization, except as specifically
set forth in paragraph 15 of this Subscription Agreement and Letter of
Investment Intent.
5. Investor
Qualification. The Subscriber represents and warrants that the Subscriber or
the purchaser
of the Securities named in paragraph 15 comes within at least one category
marked below, and that for
any
category marked the Subscriber has truthfully set forth the factual basis
or
reason the Subscriber comes
within that category. ALL INFORMATION IN RESPONSE TO THIS PARAGRAPH WILL
BE
KEPT
STRICTLY CONFIDENTIAL. The Subscriber agrees to furnish any additional
information which the Company
deems necessary in order to verify the answers set forth
below.
| Category I |
The
Subscriber is an individual (not a partnership, corporation, etc.)
whose
individual net worth, or joint net worth with the Subscriber's
spouse,
presently exceeds $1,000,000.
|
| Explanation. In calculation of net worth the Subscriber may include equity in personal property and real estate, including the Subscriber's principal residence, cash, short term investments, stocks and securities. Equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property. | |
| Category II | The Subscriber is an individual (not a partnership, corporation, etc.) who had an individual net income in excess of $200,000 in each of the last two years, or joint income with his/her spouse in excess of $300,000 in each of the last two years, and has a reasonable expectation of reaching the same income level in the current year. |
| Category III | The Subscriber is an executive officer or director of the Company. |
| Category IV | The Subscriber is a bank; savings and loan; insurance company; registered broker or dealer; registered investment company; registered business development company; licensed small business investment company ("SBIC"); or employee benefit plan within the meaning of Title I of ERISA whose plan fiduciary is either a bank, savings and loan, insurance company or registered investment advisor or whose total assets exceed $5,000,000; or a self-directed employee benefit plan with investment decisions made solely by persons that are accredited investors. |
|
(describe
entity)
|
|
| Category V | The Subscriber is a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940. |
| Category VI |
The
Subscriber is an entity with total assets in excess of $5,000,000
which
was not formed for the purpose of investing in the Units and which
is one of the following:
|
|
a
corporation;
or
a partnership;
or
a business trust; or
a
tax-exempt organization described in Section 501(cX3) of the
Internal
Revenue Code of 1986, as amended.
|
|
|
Category
VII
|
The
Subscriber is a trustee for a trust that is revocable by the grantor
at
any time (including an XXX) and the grantor qualifies under either
Category I or Category II above. A copy of the declaration of trust
or
trust agreement and a representation as to the net worth or income
of the
grantor is enclosed.
|
|
Category
VIII
|
The
Subscriber is an entity all the equity owners of which are "accredited
investors" within one or more of the above categories, other than
Category
IV or Category V. [If relying upon this category alone, each
equity owner must complete a separate copy of this
Agreement.]
|
|
(describe
entity)
|
|
| Category DC | The Subscriber is a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, whose purchase is directed by a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment. |
6. Additional
Representations. The undersigned, if other than an
individual, makes the following additional representations:
(a)
The Subscriber was not organized for the specific purpose of acquiring the
Securities;
and
(b)
This Subscription Agreement and Letter of Investment Intent has been duly
authorized by all necessary action on the part of the Subscriber, has been
duly
executed by an authorized officer or representative of the Subscriber, and
is a
legal, valid and binding obligation of the Subscriber enforceable in accordance
with its terms.
7.
Sophistication. The Subscriber further represents and warrants that he
has such knowledge and experience in financial and business matters so as
to be
capable of evaluating the merits and risks of an investment in the Securities
and protecting the Subscriber's own interests in this transaction, and does
not
desire to utilize the services of any other person in connection with evaluating
such merits and risks.
8. Reliance
on Representations. The Subscriber understands the
meaning and legal consequences
of the representations, warranties, agreements, covenants, and confirmations
set
out above and agrees
that the subscription made hereby may be accepted in reliance thereon. The
Subscriber agrees to indemnify
and hold harmless the Company and any selling agent (including for this purpose
their employees, and
each
person who controls either of them within the meaning of Section 20 of the
Securities Exchange Act of
1934,
as amended) from and against any and all loss, damage, liability or expense,
including reasonable costs
and
attorney's fees and disbursements, which the Company, or such other persons
may
incur by reason of,
or in
connection with, any representation or warranty made herein not having been
true
when made, any misrepresentation
made by the Subscriber or any failure by the Subscriber to fulfill any of
the
covenants or agreements
set forth herein, in the Purchaser Questionnaire or in any other document
provided by the Subscriber
to the Company.
9. Transferabilitv
and Assignability. Neither this Subscription Agreement nor any of the rights
of
the
Subscriber hereunder may be transferred or assigned by the Subscriber. The
Subscriber agrees that the Subscriber
may not cancel, terminate, or revoke this Subscription Agreement or any
agreement of the Subscriber
made hereunder (except as otherwise specifically provided herein) and that
this
Subscription Agreement
shall survive the death or disability of the Subscriber and shall be binding
upon the Subscriber's heirs,
executors, administrators, successors, and assigns.
10. Escrow
Account. Until such time as the Minimum Units have been accepted, the cash
received
for the subscriptions will be held in a non-interest bearing account ("Escrow
Account") in the name of
the
Company at AMG Guaranty Trust, NA. Subscribers may not withdraw
funds from the Escrow Account,
and subscriptions may not be revoked, canceled or terminated by the subscriber.
Subsequent to acceptance
by the Company of subscriptions for at least 1,000,000 Units (the "Minimum
Units"), the Escrow Account
will be terminated, and additional Offering proceeds relating to accepted
subscriptions may be utilized
by the Company immediately upon acceptance by the Company. If the Minimum
Units
are not sold prior
to
the expiration of the Offering Period, the Offering will terminate and the
Company will withdraw the Offering,
whereupon each Subscriber will receive a refund of any subscription paid,
without deduction. Upon such
termination of the Offering by the Company, the Subscriber's subscription
will
be automatically canceled
and the undersigned will have no further rights or obligations under this
Agreement, and the Company
and the Placement Agent shall have no liability or other obligation to the
Subscriber.
11. NASD
Membership - Individual Investor. Are you a member of the NASD, 1 a person
associated with a member 2 of the NASD, or an affiliate of a
member?
Yes_____ No_____
1 The
NASD defines a "member" as being either any broker or dealer admitted to
membership in the NASD or
any
officer or partner of such a member, or the executive representative of such
a
member or the substitute for such
representative.
\
2 The
NASD defines a "person associated with a member" as being every sole proprietor,
general or limited partner,
officer, director or branch manager or such member, or any natural person
occupying a similar status or performing
similar functions, or any natural person engaged in the investment banking
or
securities business who is directly
or indirectly controlling or controlled by such member (for example, any
employee), whether or not any such
person is registered or exempt from registration without the NASD. Thus,
"person
associated with a member" includes
a sole proprietor, general or limited partner, officer, director or branch
manager or an organization of any kind
(whether a corporation, partnership or other business entity) which itself
is a
"member" or a "person associated with
a
member." ha addition, an organization of any kind is a "person associated
with a
member" if its sole proprietor
or anyone of its general or limited partners, officers, director or branch
managers is a "member" or "person
associated with a member."
Daybreak
Oil & Gas, Inc.
Subscription
Agreement
6
If
"Yes,"
please list any members of the NASD with whom you are associated or
affiliated.
NASD
Membership - Corporate Investor, If you are a Corporation, are any of your
officers, directors or 5% shareholders a member of the NASD, a person associated
with a member of the NASD, or an affiliate of a member?
Yes_____ No_____
If
"Yes,"
please list the name of the respective officer, director or 5% shareholder
and
any members of the NASD with whom they are associated or
affiliated.
12. Survival.
The representations and warranties of the Subscriber set forth herein shall
survive the
sale
of the Units pursuant to this Subscription Agreement.
13. Notices.
All notices or other communications hereunder shall be in writing and shall
be
deemed
to
have been duly given if delivered personally or mailed by certified or
registered mail, return receipt
requested, postage prepaid, as follows: if to the Subscriber, to the address
set
forth below; and if to the Company
to the address at the beginning of this letter, or to such other address
as the
Company or the Subscriber
shall have designated to the other by like notice.
14. (Applicable
to FLORIDA residents
only.) The Subscriber has been informed and recognizes that
(a)
the Units have not been registered under the Florida Securities Act, and
(b)
under Section 517.061 (12) of
the
Florida Securities Act, the Subscriber may void the sale of any Securities
within three (3) days after the tender
of
this Subscription Agreement and payment hereunder to the
Company.
15. 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
document.
IN
NO
EVENT WILL THE COMPANY, THE PLACEMENT AGENT, OR ANY OF THEIR
AFFILIATES OR THE PROFESSIONAL ADVISORS ENGAGED
BY THEM BE
LIABLE IF FOR ANY REASON RESULTS OF OPERATIONS OF THE COMPANY
ARE NOT AS PROJECTED IN THE DOCUMENTS. INVESTORS MUST LOOK
SOLELY TO, AND RELY ON, THEIR OWN ADVISORS WITH RESPECT TO THE
TAX CONSEQUENCES OF INVESTING IN THE
SECURITIES.
16. Title.
Manner in Which Title is To Be Held.
\
Place
an
"X" in one space below:
(a) Individual
Ownership
(b) Community
Property
(c) Joint
Tenant with Right of
Survivorship (both parties must sign)
(d) Partnership
(e) Tenants
in
Common
(f) Corporation
(g) Trust
(h) Other
(Describe):
Daybreak
Oil & Gas, Inc.
Subscription
Agreement
7
Please
print above the exact name(s) in which the Securities are to be
held.
17. State
of Residence. My state of residence and the state in which I
received the offer to invest and
made
the decision to invest in the Securities
is .
18. Date
of Birth. My date of birth
is:
SIGNATURE
PAGE ON NEXT PAGE
Daybreak
Oil & Gas, Inc.
Subscription
Agreement
8
SIGNATURES
The
Subscriber hereby represents he has read this entire Subscription Agreement
and
the Memorandum dated ,
2006.
Dated:
INDIVIDUAL
| Address to Which Correspondence Should be Directed | ||
| Signature (Individual) | City, State and Zip Code | |
| Signature (All record holders should sign) | Tax Identification or Social Security Number | |
| Name(s) Typed or Printed | Telephone Number | |
COPY
OF DRIVER'S LICENSE OR PASSAPORT REQUIRED IF NON-BCP
CUSTOMER
Daybreak
Oil & Gas, Inc.
Subscription
Agreement
9
CORPORATION,
PARTNERSHIP, TRUST, RETIREMENT ACCOUNT OR OTHER
ENTITY
| Name of Entity | Address to Which Correspondence Should be Directed | |
| By: | ||
| * Signature | City, State and Zip Code | |
| Its: | ||
| Title | Tax Identification or Social Security Number | |
| Name Typed or Printed | Telephone Number | |
*
If
Securities are being subscribed for by an entity, the Certificate of Signatory
must also be completed.
CERTIFICATE
OF SIGNATORY To be completed if Securities are being subscribed for by an
entity.
I,
, am
the
of
(the
"Entity").
I
certify
that I am empowered and duly authorized by the Entity to execute and carry
out
the terms of the Subscription Agreement and Letter of Investment Intent and
to
purchase and hold the Securities, and certify that the Subscription Agreement
and Letter of Investment Intent has been duly and validly executed on behalf
of
the Entity and constitutes a legal and binding obligation of the
Entity.
IN
WITNESS WHEREOF, I have hereto set may hand
this day
of ,
2006.
| Signature |
COPY
OF SIGNER'S DRIVER'S LICENSE OR PASSAPORT REQUIRED FOR NON-BCP
CUSTOMERS
Daybreak
Oil & Gas, Inc.
Subscription
Agreement
10
ACCEPTANCE
This
Subscription Agreement is accepted as of
,
2006.
| Daybreak Oil & Gas, Inc. | |||
|
|
By:
|
/s/ | |
| Authorized Officer | |||
|
Date:
______________________
|
|||
Daybreak
Oil & Gas, Inc.
Subscription
Agreement
11
