Exhibit 2.04
AGREEMENT AND PLAN OF EXCHANGE
THIS AGREEMENT AND PLAN OF EXCHANGE (the "Agreement"), is dated February 8, 2000
and entered into by and between Empire Energy Corporation, a Utah corporation
("Empire") and Omega International, Inc., a Nevada corporation ("Omega").
RECITALS
WHEREAS, Empire and Omega and their respective Boards of Directors deem it
advisable to exchange 560,000 shares of newly issued common stock of Empire for
all of the issued and outstanding shares of common stock of Omega, as herein
contemplated, pursuant to which exchange Omega will become a wholly-owned
subsidiary of Empire;
WHEREAS, the exchange provided for hereby (the "Exchange") shall be
consummated in accordance with the terms and conditions hereof and shall be
consummated as of the close of business on the latter of the day on which the
duly executed Certificate of Exchange has been duly filed with the Secretary of
State of Utah in accordance with Section 11.07 of the Utah Revised Business
Corporation Act or the day on which the duly executed Agreement pursuant to
Section 78.485 of the Nevada General Corporation Law has been duly filed with
the Secretary of State of Nevada (the "Effective Date"); it being understood
that the parties shall endeavor to cause the Effective Date to occur on the same
day as the date of the closing of this Agreement (the "Closing Date");
WHEREAS, Empire will issue and deliver to an exchange agent mutually
designated by Empire and Omega (the "Exchange Agent") the shares of common stock
of Empire necessary to effect the exchange of the issued and outstanding Omega
shares (the "Exchange Shares");
WHEREAS, Empire and Omega intend that the Exchange shall be recognized as a
tax-free reorganization under the provisions of the Internal Revenue Code of
1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the mutual benefits to be derived from this
Agreement and the provisions hereinafter contained, Empire and Omega agree as
follows:
ARTICLE I
EXCHANGE
Section 1.1. Agreement.
-----------------------
Empire and Omega agree to effect the Exchange, subject to the terms and
conditions hereof.
Section 1.2. Filing of the Agreement and Plan of Exchange.
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Subject to the conditions contained in Article V of this Agreement,
executed articles of exchange shall be delivered to the Secretary of State of
Utah and the Secretary of State of Nevada for filing as soon as practicable
following the time when the last of such conditions shall have been fulfilled
(or waived in writing in accordance with Section 7.2 hereof) or such earlier or
later date as may be mutually agreed to in writing by Empire and Omega.
Section 1.3. The Exchange.
--------------------------
Upon filing of the articles of exchange with the Secretary of State of Utah
and the Secretary of State of Nevada, each outstanding share of Omega shall be
deemed to be owned and held by Empire, and each holder of then outstanding Omega
share certificates shall be entitled to receive one share of Empire common stock
for each share of common stock of Omega previously held, subject to the
conditions contained herein
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Omega represents and warrants as follows:
Section 2.1. No Breaches of Statute or Contract; Required Consents.
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Neither the execution and delivery of this Agreement or the related
articles of exchange by Omega nor compliance by Omega with the terms and
provisions thereof and of the Plan will: (i) conflict with or result in a breach
of any of the provisions of the articles of incorporation, bylaws or other
governing instruments of Omega, or any judgment, order, decree, or ruling to
which Omega is a party, or any injunction to which it is subject of any court of
governmental authority or of any agreement, contract or commitment to which it
is a party and which is material to the financial condition of Omega considered
as a whole, or (ii) require the affirmative consent or approval of any
non-governmental third party (apart from stockholder approval referred to
elsewhere herein).
Section 2.2. Authorization of Agreement.
----------------------------------------
Omega has the corporate power to enter into this Agreement and to perform
its obligations hereunder; the execution, delivery and, subject to requisite
stockholder approval, the performance of this Agreement by Omega has been duly
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and validly authorized by the Board of Directors of Omega, and Omega has taken,
or will use its best efforts to take prior to the Effective Date, all action
required by law, its Articles of Incorporation and bylaws to authorize the
execution, delivery and performance of this Agreement, the Plan, and related
articles of exchange.
Section 2.3. Further Representations.
-------------------------------------
(a) Omega is duly organized, validly existing and in good standing as a
corporation under the laws of the State of Nevada; has full corporate power to
carry on its business as it is now being conducted, and to own and operate the
properties and assets it now owns or operates; and is duly qualified to do
business and is in good standing in each jurisdiction where the conduct of its
business or the ownership of its properties require such qualification.
(b) Pursuant to its Articles of Incorporation, Omega is authorized to issue
55,000,000 shares of common stock, $.001 par value, of which a total of 560,000
shares are each validly issued, fully paid and nonassessable. Omega has no other
class of stock or convertible securities outstanding. There are no existing
options, warrants, calls, commitments or rights of any character to purchase or
otherwise acquire from Omega shares of capital stock of any class, no
outstanding securities of Omega that are convertible into shares of capital
stock of Omega of any class, and no options, warrants or rights to purchase from
Omega any such convertible securities.
(c) Omega has heretofore delivered to Empire accurate and complete copies
of the balance sheet of Omega at December 31, 1999 (the "Omega 1999 Balance
Sheet") and the related statements of income, stockholders' equity and changes
in financial position of Omega from inception through December 31, 1999, in each
case accompanied by the report thereon of Xxxxxxx Xxxxxxxxx & Co. Such audited
balance sheet fairly presents the financial position of Omega at the date
thereof and all such audited statements of income, stockholders; equity and
changes in financial position present fairly the results of its operations,
changes in stockholders; equity and changes in financial position for the
periods indicated, in conformity with accounting principles generally accepted
in the United States and consistently applied.
(d) Omega has delivered to Empire the following documents, all of which
have been signed for identification by the President of Omega and are dated as
of the date hereof: (i) a list of all the liabilities and obligations of Omega
as of December 31, 1999 (Schedule "A") ; and (ii) a list of all property and all
other assets of Omega as of December 31, 1999 (Schedule "B"). Omega has good and
marketable title to all properties and assets, real and personal, described in
Schedule "B." All of the properties and assets listed on Schedule "B" are free
and clear of all mortgages, pledges, liens, charges, security interests or other
encumbrances of any nature whatsoever, except for mortgages, pledges, liens,
charges, security interests or other encumbrances as set forth in Schedule "B,"
liens for current taxes not yet due and payable, and imperfections of title,
easements and encumbrances, if any, that are not substantial in character,
amount or extent and do not materially detract from the value, or interfere with
the present or proposed use, of the property or assets subject thereto or
affected thereby, or otherwise materially impair business operations. All leases
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pursuant to which Omega leases any substantial amount of real or personal
property are in good standing, valid and effective in accordance with their
respective terms, and under none of these leases is there any existing default,
event of default or event that with notice or the lapse of time, or both, would
constitute a default and in respect to which Omega has not taken adequate steps
to prevent a default from occurring.
(e) Between December 31, 1999 and the date of this Agreement there has not
been any material adverse change in the financial condition or in the
operations, business or property of Omega.
(f) The structures, equipment, computers, and other physical assets of
Omega that are necessary to the operation of the business being conducted by it
are in good operating condition and repair, subject only to the ordinary wear
and tear of the business.
(g) Neither Omega nor, to the knowledge of its shareholders, any other
party have breached any material provision of, or defaulted in any material
respect of the terms of any contract or agreement to which Omega is a party
which would have a materially adverse effect upon the business or financial
condition of Omega.
(h) Omega will deliver such other lists, descriptions, information,
schedules, documents and reports as may reasonably be requested by Empire.
(i) To the best knowledge of its shareholders, there is no default or
claim, purported or alleged default, or statement of facts under which lack of
notice or the lapse of time, or both, would constitute a default on any
obligation to be performed by Omega under any material lease, contract, plan or
other arrangement.
(j) No suit, action or legal, administrative or arbitration proceeding,
which might materially and adversely affect the overall financial condition,
business or property of Omega is pending or, to the knowledge of its
shareholders, threatened.
(k) Its shareholders have no knowledge of any tax liability or claim by any
taxing authority for due but unpaid taxes, interest or penalties, nor has Omega
been advised of any request or demand for audit by any taxing authority.
(l) Omega owns or possesses, or reasonably believes it can acquire on
reasonable terms, adequate patent rights or other rights to use patent rights,
inventions, trademarks, service marks, trade names and copyrights necessary to
conduct the business now operated by it, and Omega has not received any notice
of infringement of or conflict with asserted rights of others with respect to
any patent, patent rights, inventions, trademarks, service marks, trade names or
copyrights which, individually or in the aggregate, if subject of an unfavorable
decision, ruling or finding, would have a material adverse effect upon the
business, operations, properties, assets or condition, financial or otherwise,
of Omega.
(m) The representations and warranties of its shareholders and Omega shall
be as of the date of this Agreement and as of the date of the Effective Date.
Any such representation made as of such dates shall survive the Closing Date.
All representations and warranties of Omega are based upon knowledge only of its
officers and directors and no one else.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF EMPIRE
Empire represents and warrants as follows:
Section 3.1. Accuracy of Information Statement and Exchange Act Filings.
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The information concerning Empire contained, or incorporated by reference,
in the Exchange Act filings of Empire which have been provided to Omega are
responsive in all material respects to the requirements of the appropriate forms
and related rules and regulations, and do not contain any untrue statement of a
material fact or omit to state a material fact necessary to make such
information not misleading.
Section 3.2. Status of Empire Shares.
-------------------------------------
The Exchange Shares to be issued to the Omega shareholders pursuant to this
Agreement and Plan, when so issued, will be duly and validly authorized and
issued, fully paid and nonassessable.
Section 3.3. No Breach of Contract; Required Consents.
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Neither the execution and delivery of this Agreement nor compliance by
Empire with the terms of provisions hereof and of the Plan will: (i) conflict
with or result in a breach of any of the provisions of the Articles of
Incorporation or bylaws or other governing instruments of Empire, or any
judgment, order, decree, or ruling to which Empire is a party, or any injunction
to which it is subject of any court or government authority, or of any
agreement, contract or commitment to which Empire is a party and which is
material to the financial condition or results of operations or conduct of the
business of Empire considered as a whole, or (ii) require the affirmative
consent or approval of any non-governmental third party.
Section 3.4. Authorization of Agreement.
----------------------------------------
Empire has the corporate power to enter into this Agreement and to perform
its obligations hereunder; the execution, delivery and performance of this
Agreement by Empire have been duly and validly authorized and approved by the
Board of Directors of Empire; and Empire has taken, or will use its best efforts
to take prior to the Effective Date, all action required by law, its Articles of
Incorporation or bylaws to authorize the execution, delivery and performance of
this Agreement and the Plan.
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ARTICLE IV
CONDUCT AND TRANSACTIONS PRIOR
TO EFFECTIVE DATE
Section 4.1. Access; Operation of Business between the date of this Agreement
and the Effective Date.
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(a) Access. Omega and Empire each agrees to furnish the other with such
financial and operating data and other information with respect to the business
and properties of it as the other shall from time to time reasonably request in
furtherance of consummating the Exchange; provided, however, that any such
investigation shall not affect any of the representations and warranties
hereunder. In the event of termination of this Agreement, Omega and Empire will
each return to the other all documents and other material obtained from the
other in connection with the transactions contemplated hereby, and each shall
maintain the confidentiality of such materials.
(b) Omega and Empire shall continue to conduct their business in conformity
with established industry practice in a diligent manner and will use their best
efforts to preserve intact their present business organizations and preserve
their relationships with persons having business dealings with them.
(c) No Mergers. Omega and Empire will not merge or consolidate with any
other corporation, or acquire any stock or, except in the ordinary course of
business, any business, property or assets of any other person, firm,
association, corporation or other business organization.
(d) No Securities Issuances. Omega and Empire will not issue any shares of
any class of their capital stock, or enter into any contract, or grant any
option, warrant or right, calling for the issuance of any such shares, and will
not create or issue any securities convertible into any such shares or
convertible into securities in turn so convertible or enter into any contract,
or grant any option, warrant or right, calling for the issuance of any such
convertible securities. Provided, however, that Empire may issue additional
shares of common stock to the extent currently issued and outstanding stock
option, conversion or similar rights to purchases common stock of Empire are
exercised by the holders thereof in accordance with the terms and conditions
contained therein.
Section 4.2. Preparation of Information Statement.
--------------------------------------------------
Both Omega and Empire acknowledge that they will participate in the
preparation of an information statement or similar document to be sent to the
shareholders of Omega relating to the disclosure of the Exchange and the
opportunity to exercise dissenter's rights.
Section 4.3 Stockholder Approval of Omega.
-------------------------------------------
Omega acknowledges and represents that the execution of consent minutes
which approve and ratify this Agreement shall constitute all necessary
shareholder approval of the transaction contemplated hereby as is necessary
under Nevada law. By executing such consent minutes, the shareholders of Omega
further acknowledge and represent that the shares of Empire he or his assigns
may acquire as a result of the Exchange contemplated herein are being acquired
for investment purposes only and not with a view toward their redistribution or
re-offering. All stock certificates representing shares of Empire issued to the
shareholders of Omega shall be endorsed with the following restrictive legend:
The shares represented by this certificate have not been
registered under the Securities Act of 1933. The shares have been
acquired for investment and may not be offered, sold, or otherwise
transferred in the absence of an effective registration statement for
the shares under the Securities Act of 1933, or a prior opinion of
counsel satisfactory to the issuer, that registration is not required
under the Act.
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ARTICLE V
CONDITIONS TO OBLIGATIONS OF EMPIRE AND OMEGA
Section 5.1. General Conditions.
---------------------------------
The obligations of the parties hereto to effect the Exchange shall be
subject to the following conditions:
(a) No Governmental Proceedings. No governmental action or proceeding shall
have been instituted or be threatened at the Closing Date by or before a court
or other governmental body, agency or authority to restrain or prohibit the
transactions contemplated by this Agreement.
(b) No Litigation. There shall be no litigation pending at the Closing Date
challenging the authority of either Empire or Omega or the officers or directors
of either to enter into this Agreement or seeking to restrain or prohibit the
transactions contemplated hereby, which the Board of Directors of either Empire
or Omega shall reasonably believe to present a substantial risk either of
restraining or prohibiting such transactions or of resulting in the award of
material damages or other relief.
(c) Statutory Requirements and Approvals. All statutory requirements for
the valid consummation by Omega and Empire of the transactions contemplated by
this Agreement and the Plan shall have been fulfilled; no approvals of the
transactions contemplated by this Agreement shall be required from any federal
or state governmental agency or authorities.
Section 5.2. Conditions of Obligation of Empire.
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The obligation of Empire to effect the Exchange shall be subject to the
following conditions:
(a) Representations and Warranties of Omega to be True. The representations
and warranties of Omega herein contained shall be true in all material respects
at the Closing Date with the same effect as though made at such time, except to
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the extent waived hereunder or affected by the transactions contemplated herein;
Omega shall have performed all obligations and complied with all covenants and
conditions required by this Agreement to be performed or complied with by it at
or prior to the Closing Date; and Omega shall have delivered to Empire a
certificate of Omega in form and substance satisfactory to Empire, dated the
Closing Date and signed by its President or Vice President to all such effects.
(b) Auditors Letters. Xxxxxxx Xxxxxxxxx & Co. shall have delivered to
Empire a letter dated the date of the Form 8-K report to be filed by Empire in
connection with the Exchange and the Closing Date, each to the effect that: (i)
he is an independent accountant within the meaning of the Securities Act of 1933
and the applicable published rules and regulations thereunder; (ii) in his
opinion, the financial statements of Omega examined by him and included in the
Form 8-K filed by Empire in connection with the Exchange comply as to form and
content with the applicable accounting requirements of Regulation SX promulgated
under the Securities Act of 1933; and (iii) on the basis of procedures (but not
an examination in accordance with generally accepted auditing standards)
consisting of:
(1) reading the minutes of meetings of the Board of Directors of Omega
since inception as set forth in the minute books through a specified date not
more than five business days prior to the delivery of such letter;
(2) making inquiries of certain officials of Omega who have
responsibility for financial and accounting matters regarding the specific items
for which representations are requested below.
(c) Exercise of Dissenter's Rights. Holders of no more than one percent of
the issued and outstanding shares of Omega shall have given notice of their
intention to receive payment in cash pursuant to their dissenter's rights. In
the event that more than one percent of the issued and outstanding shares give
such notice, Empire may waive the condition and proceed with the Exchange.
Section 5.3. Conditions of Obligation of Omega.
-----------------------------------------------
The obligations of Omega to effect the Exchange shall be subject to the
following conditions:
(a) Representations and Warranties of Empire to be True. The
representations and warranties of Empire herein contained shall be true in all
material respects at the Closing Date with the same effect as though made at
such time, except to the extent waived hereunder or affected by the transactions
contemplated herein; Empire shall have performed all obligations and complied
with all covenants and conditions required by this Agreement to be performed or
complied with by it prior to the Closing Date; and Empire shall have delivered
to Omega a certificate of Empire in form and substance satisfactory to Omega,
dated the Closing Date and signed by its President and its principal financial
officer, to all such effects.
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ARTICLE VI
INDEMNIFICATION
Section 6.1. Continuation of Representations and Warranties.
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Empire and Omega agree that the representations, warranties and covenants
of Empire and Omega contained herein or in any instrument or certificate
delivered hereunder shall survive the Effective Date of the Exchange, regardless
of any investigation or inquiry by or on behalf of Empire and Omega.
Section 6.2. Indemnification by Omega.
--------------------------------------
Omega agrees to indemnify and hold harmless Empire and each person, if any,
who controls Empire within the meaning of Section 15 of the 1933 Act against any
and all losses, liabilities, claims, damages and expenses (including interest,
expenses of litigation and attorney's fees) arising out of or as a result of any
inaccuracy or breach of any of the representations, warranties and covenants of
Omega contained in this Agreement and contained in any instrument, schedule or
certificate delivered to Empire pursuant to this Agreement, or the defense or
settlement of any claim asserted against Empire challenging any such
representation, warranty and covenant, or the failure or default of Omega to
perform or observe any covenant or condition under this Agreement.
Section 6.3. Indemnification by Empire.
---------------------------------------
Empire agrees to indemnify and hold harmless Omega and each person, if any,
who controls Omega against any and all losses, liabilities, claims, damages and
expenses (including interest, expenses of litigation and attorneys' fees)
arising out of or as a result of any inaccuracy or breach of any of the
representations, warranties and covenants of Empire contained in this Agreement
and contained in any instrument or certificate, delivered to Omega pursuant to
this Agreement, or the defense or settlement of any claim asserted against Omega
challenging any such representation, warranty and covenant, or the failure or
default of Empire to perform or observe any covenant or condition under this
Agreement.
Section 6.4. Notice.
--------------------
Each indemnified party shall give prompt notice to each indemnifying party
of any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve it
from any liability which it may have otherwise than on account of this
Agreement. An indemnifying party may participate at its own expense in the
defense of such action. In no event shall the indemnifying parties be liable for
the fees and expenses of more than one counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
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ARTICLE VII
MODIFICATION, WAIVERS AND ABANDONMENT
Section 7.1. Modification.
--------------------------
Omega and Empire may, by mutual consent of the respective Board of
Directors, amend, modify or supplement this Agreement in such manner as may be
mutually agreed upon in a writing executed by Omega and Empire at any time
before or after action thereon by the stockholders of Omega and Empire;
provided, however, that no such amendment, modification or supplement shall
affect the rights of the stockholders of Omega or Empire in a manner which is
materially adverse to such stockholders in the judgment of the Board of
Directors of Omega and Empire, respectively.
Section 7.2. Waivers.
---------------------
Each of Omega and Empire may, pursuant to action by its respective Board of
Directors, by an instrument in writing, extend the time for or waive the
performance of any of the obligations of the other or waive compliance by the
other with any of the covenants or conditions contained herein; provided,
however, that no such waiver or extension shall affect the rights of the
stockholders of Omega or Empire in a manner which would be materially adverse to
such stockholders.
Section 7.3. Abandonment.
-------------------------
The Exchange may be abandoned before the Closing Date of the Exchange
without liability on the part of any party hereto exercising such right of
abandonment or restriction on the future activities of either party hereto:
(a) Mutual Consent. By the mutual consent of the Boards of Directors of
Empire and Omega evidenced by a writing executed by Empire and Omega or;
(b) Lapse of Time. By the Board of Directors of Empire or Omega if the
Effective Date has not occurred on or prior to February 29, 2000; provided,
however, that such date shall be extended for up to twenty-five (25) days in the
event an order restraining or prohibiting the Exchange has been issued by any
public authority or court.
The power of abandonment provided for by this Section 7.3 may be exercised
by Empire or Omega only by their respective Boards of Directors and will be
effective only after written notice thereof, signed on behalf of the party for
which it is given by its Chairman of the Board or President, shall have been
given to the other. If the Exchange shall be abandoned, no articles of exchange
or certificates relating to the Exchange shall be filed by the officers of any
such party in the States of Nevada and Utah. Abandonment shall not affect any
rights theretofore accruing hereunder.
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ARTICLE VIII
ADDITIONAL MATTERS
Section 8.1. Management.
------------------------
The parties agree that Empire and Omega shall continue to have the same
management after the contemplated Exchange that Empire and Omega had prior to
the Exchange.
Section 8.2. Closing.
---------------------
The Closing of the Exchange contemplated by this Agreement shall take place
at such time and place as may be convenient to all the parties but in no event
later than February 29, 2000. At the Closing Omega and Empire shall deliver and
exchange the certificates specified in Sections 5.2(a) and 5.3(a) of this
Agreement.
Section 8.3. Notices.
---------------------
All notices, requests, demands and other communications which are required
of permitted hereunder shall be in writing and shall be deemed to have been duly
given when delivered personally or when mailed by registered or certified mail,
postage pre-paid, as follows:
If to Empire to:
c/o Xxxxxx X. Xxxxxxxx
00000 Xxxx Xxxxxx, Xxxxx 000X
Xxxxxxxx Xxxx, Xxxxxx 00000
If to Omega to:
c/o Xxxxx X. Xxxxx
0000 Xxxx Xxxxxxxx Xxxx
Xxxxxx, Xxxxxx 00000
Section 8.4. Governing Law.
---------------------------
This Agreement shall be governed by and construed in accordance with the
laws of the State of Utah.
Section 8.5. Entire Agreement.
------------------------------
This Agreement supersedes any and all oral or written agreements heretofore
made relating to the subject matter hereof and constitutes the entire agreement
of the parties relation to the subject matter hereof.
Section 8.6. No Implied Rights or Remedies.
-------------------------------------------
Except as otherwise expressly provided herein, nothing herein expressed or
implied is intended or shall be construed to confer upon or to give any person,
firm or corporation, other than Empire and Omega and their stockholders, any
rights or remedies under or by reason of this Agreement.
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Section 8.7. Headings.
----------------------
The headings in this Agreement are inserted for convenience of reference
only and shall not be part of, or control or affect the meaning of, this
Agreement.
Section 8.8. Counterparts.
--------------------------
This Agreement may be executed in several counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed on its behalf and attested by its officers there unto duly authorized,
all as of the day and year first above written. This Agreement is to be given
full force and effect from and after November 9, 1999.
Empire Energy Corporation Omega International, Inc.
a Utah corporation a Nevada corporation
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxx
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Xxxxxx X. Xxxxxxxx, President Xxxxx X. Xxxxx, President
