UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended December 31, 2001
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES ACT
OF 1934
FOR THE TRANSITION PERIOD FROM TO
Commission File Number: 0-9083
Enercorp, Inc.
Exact name of Registrant as specified in its Charter)
Colorado 84-0768802
-------------------------------- ------------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
32751 Middlebelt Road, Suite B
Farmington Hills, Michigan 48334
----------------------------------- ----------------------------
(Address of principal executive offices) (Zip Code)
(248) 851-5651
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Number of shares of common stock outstanding at September 30, 2002: 695,897
Enercorp, Inc.
Form 10-Q Filing for the Second Quarter Ended December 31, 2001
INDEX
Page Number
Item 1. Financial Statements 3
Statements of Assets and Liabilities
December 31, 2001 (Unaudited) and June 30, 2001 3
Schedule of Investments December 31, 2001 ( Unaudited)
And June 30, 2001 4-6
Statements of Operations (Unaudited) for the Three
and Six Months Ended December 31, 2001 and 2000 7
Statements of Cash Flows (Unaudited) for the Six
Months Ended December 31, 2001 and 2000 8
Notes to Financial Statements 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10-11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11-12
Item 6. Exhibits and Reports on Form 8-K 12
Signature Page 13
Enercorp, Inc.
PART I. FINANCIAL INFORMATION
---------------------
Item 1: Financial statements.
Enercorp, Inc.
Statements of Assets and Liabilities
December 31, June 30,
2001(Unaudited) 2001
--------------- ----------
ASSETS
Investments, at fair value, cost of $1,231,636
And $1,231,638 at December 31,
2001 and June 30,2001 $1,033,364 $ 984,214
Cash 2,461 342
Furniture and fixtures, net of accumulated
depreciation of $11,969.57 at December
31, 2001 and 11,503 at June 30, 2001
respectively 467 933
Other assets 0 0
----------- --------
$1,036,292 $ 985,489
============ =========
LIABILITIES AND NET ASSETS
Liabilities
Note payable - Related party $ 27,000 $ 0
Note payable Wen 30,000 0
Accounts payable and accrued liabilities 19,025 54,634
Deferred tax liability 0 0
------------ --------
76,025 54,634
------------ -------
Net assets
Common stock, no par value: 10,000,000
shares authorized, 695,897 shares issued
and outstanding at December 31, 2001 and
June 30, 2001 respectively 1,888,251 1,888,251
Preferred stock, no par value: 1,000,000
shares authorized, -0- issued and outstanding 0 0
Accumulated deficit (729,540) (709,802)
Unrealized net gain on investments, net of
deferred income taxes at December 31,
2001, and June 30, 2001 (198,444) (247,594)
---------- --------
960,267 930,855
---------- --------
$1,036,292 $985,489
=========== =========
See notes to financial statements
3
Enercorp, Inc.
Schedule of Investments
December 31, 2001( Unaudited)
Affiliated Description Expir. No. of Share Cost
Fair Mkt Net Fair
Companies of Business Date Restrictions Shares Price Equity
Value Discount Market Value
Common Stocks-Public Market Method of Valuation
-----------------------------------------------
CompuSonics Video
Corp Digital Video
Product & Web 1,751 0.035
61 61
Site Dev. 10,000,000 0.035 106,477
350,000 (100,000) 250,000
Ajay Sports, Golf & Casual 294,118 0.019 600,000
5,588 5,588
Furniture
Manufacturer 16,667 0.019 37,500
317 317
Preferred Stocks-Public Market Method of Valuation
--------------------------------------------------
Ajay Sports, Golf & Casual 2,000 0.019 20,000
38 38
Furniture Manufacturer
Common Stocks-Board Appraisal Method of Valuation
-------------------------------------------------
Pro Golf Franchisor of a & b 7,450 195,000
447,000 (44,700) 402,300
Intern'l Retail Golf Stores
ProGolf.com, Web Sales of a & b 300,000 2.5 252,000
750,000 (375,000) 375,000
Inc. Golf Equipment
Subtotal $1,210,977
1,553,004 (519,700) 1,033,304
Warrants and Stock Options-Board Appraisal Method of Valuation
==============================================================
CompuSonics Digital Video
Video Product
Corporation 300,000
Williams Manuf. Of Sensors &
Controls, Control Systems
Inc. 08/04/04 b 25,000
05/03/05 b 25,000
09/13/06 b 50,000
03/12/06 b 50,000
10/02/08 b 50,000
4
Unaffiliated Companies
Common Stocks-Public Market Method of Valuation
-----------------------------------------------
Vitrio Diagnostics 300 .20 1,500
60 60
Proconnextions, Inc.-Sports Memor'blia a 191,610 19,161
-
Total All Companies $1,231,638
$1,553,064 (519,700) $1,033,364
a No public market for this security
b Subject to Rule 144
See notes to financial statements
5
Enercorp, Inc.
Schedule of Investments
June 30, 2001
,
Affiliated Description No. of Share Cost Fair Mkt
Net Fair
Companies of Business Restrictions Shares Price Equity Value
Discount Market Value
Common Stocks-Public Market Method of Valuation
------------------------------------------------
CompuSonics Video
Corp Digital Video
Product & Web 1,751 28
28
10,000,000 $0.03 106,477 300,000
(100,000) 200,000
Ajay Sports, Golf & Casual 294,118 $0.02 600,000 5,882
5,882
Furniture
Manufacturer 16,667 $0.02 37,500 333
333
Preferred Stocks-Public Market Method of Valuation
==================================================
Ajay Sports, Golf & Casual 2,000 20,000 500
500
Common Stocks-Board Appraisal Method of Valuation
-------------------------------------------------
Pro Golf Franchisor of a & b 7,450 195,000 447,000
(44,700) 402,300
Intern'l Retail Golf Stores
ProGolf.com, Web Sales of b 300,000 2.5 252,000 750,000
(375,000) 375,000
Inc. Golf Equipment
Subtotal $1,210,977 1,503,744
(519,700) 984,044
Unaffiliated Companies
Common Stocks-Public Market Method of Valuation
-----------------------------------------------
Vitrio Diagnostics 300 1,500 170
170
Proconnextions, Inc.-Sports Memor'blia 191,610 19,161
Total All Companies $1,231,638 $1,503,914
$(519,700) $984,214
a No public market for this security
b Subject to Rule 144
See notes to financial statements
6
Enercorp, Inc.
Statements of Operations
(Unaudited)
For Three For Six
Months ended Months ended,
Dec. 31, Dec. 31,
2001 2000 2001 2000
------- -------- ------- ------
REVENUES
Interest income from related
Entities $ 0 $ 817 $ 0 $ 1,640
Net realized gain on sale of
Investments 0 0 0 8,464
Miscellaneous Income 1,700 0 3,875 0
------ ------ ------ -------
1,700 817 3,875 10,104
EXPENSES
Salaries - officer 0 0 0 0
Legal, accounting and other
Professional Fees 7,931 6,131 4,633 7,412
Management fees related-party 7,500 15,000
Interest expense - other 223 58,742 273 116,251
Bad debt expense 0 736 0 1,471
Other general and administrative
expenses 3,040 4,125 3,709 8,378
-------- ------- ------ -------
18,694 69,734 23,615 133,512
-------- ------- ------ -------
Net gain (loss) from operations
before taxes (16,994) (68,916) ( 19,740) (123,408)
Income taxes 0 0 0 0
-------- ------- ------- ---------
Net gain (loss) from operations
after taxes (16,994) (68,916) ( 19,740) (123,408)
------- ------- -------- ---------
Net unrealized gain (loss)
on investments before Taxes 146,841 (1,365,426) 49,150 1,807,656)
Income taxes 0 0 0 0
-------- --------- ------- ---------
Net unrealized gain (loss) on
investment after taxes 146,841 (1,365,426) 49,150 (1,807,656)
------- --------- ------- ----------
Increase (decrease) in net assets
resulting from operations $129,847 $(1,434,342) $29,410 $(1,931,064)
======== =========== ======== ==========
Increase (decrease) in net assets
per share $ 0.19 $ (2.06) $(0.04) $ (2.77)
========= ========== ===== =======
See notes to financial statements
7
Enercorp, Inc.
Statements of Cash Flow
(Unaudited)
For Six months ended December 31,
2001 2000
------------ -------------
Cash flows from operating activities
Increase (decrease in net assets $ 29,410 $ (1,931,064)
Adjustments to reconcile net income to net
Cash provided by operating activities:
Depreciation 467 935
Bad debt provision on notes receivable
and interest net of write offs 0 (163)
Gain on sale of investments 0 (8,464)
Unrealized (gain) loss on (49,150)
Investments 0 1,807,656
(Increase) Decrease in other assets 639
(Increase) in accounts receivable -
related party 0
(Increase) in interest receivable 0
(Increase) Decrease in other assets 0 639
Increase (Decrease) in accounts payable
and accrued expenses (35,609) (10,714)
Increase (Decrease) in deferred taxes 0 0
--------- ---------
Total adjustments (84,292) 1,789,889
--------- ---------
Net cash (used) by operating activities (54,882) (141,175)
-------- ----------
Cash flows from investing activities:
Purchase of investments 0 9,516
--------- -----------
Net cash provided (used) by investing
Activities 0 9,156
--------- ----------
Cash flows from financing activities:
Proceeds from notes payable 57,000 109,500
Net cash provided by investing
Activities 0 0
--------- ---------
Net cash provided (used) by investing
Activities 57,000 109,500
---------- ---------
Increase (Decrease) in cash 2,118 (22,159)
Cash, beginning of period 342 23,844
---------- --------
Cash, end of period $ 2,461 $ 1,685
=========== =========
Supplemental disclosures of cash flow information:
Interest paid $ 88 $ 112,199
=========== ==========
Taxes paid $ 0 $ 0
=========== ==========
See notes to financial statements
8
Notes to Financial Statements
Note1. Interim Financial Statements
----------------------------
The accompanying interim unaudited condensed financial statements have been
prepared in accordance with the instructions to Form 10-Q and do not include
all the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of the
management, all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation have been included, and the
disclosures are adequate to make the information presented not misleading.
Operating results for the six months ended December 31, 2001 are not
necessarily indicative of the results that may be expected for the year ending
June 30, 2002. These statements should be read in conjunction with the
financial statements and notes thereto included in the Annual 10-K Report
(filed with the Securities and Exchange Commission) for the year ended June
30, 2001.
Note 2: Investments
-----------
On March 7, 2001, the Registrant sold 1,077,800 shares of the common stock
it held in its largest investee, Williams Controls, Inc., and on March 12,
2001 the Registrant sold an additional 574,529 shares of Williams Controls,
Inc., for a total of 1,652,329 shares, representing all the shares of
Williams Controls, Inc. common stock owned by the Registrant at the time of
this filing. These shares were acquired by the Registrant in transactions
between April 1991 and August 1998. The shares were sold in open market
transactions through an unaffiliated broker. Upon settlement of the
trades, the Registrant received total net proceeds of approximately
$2,424,800. These proceeds were used to pay off the Company's demand loan
from a bank with a balance of $2,141,649 plus accrued interest, and make
payments of or toward other debt obligations and payables that the Company
had outstanding. The Registrant continues to hold its other principal
common stock investments in CompuSonics Video Corporation (10,001,751
shares), Ajay Sports, Inc. (310,785 common and 2,000 preferred shares),
ProGolf.com (300,000 common shares) and Pro Golf International, Inc. (7,450
shares), and continues to hold 200,000 warrants in Williams Controls, Inc.,
which are fully vested at the time of this filing.
Note 3: Capital Stock Transactions
--------------------------
On September 14, 2001, the Registrant entered into a Subscription Agreement
with Jack Wen, authorized agent for an investing group of qualified
individuals which included Jack Wen ("Wen Group"). Under this Subscription
Agreement, on September 26, 2001 upon the first payment, the Wen Group was to
purchase 240,000 shares of common stock of the Registrant, representing
approximately 26.4% of the Registrant's common stock issued and outstanding
following the transaction. These shares were to be purchased for $1.25 per
share, the book value at that time, with aggregate gross proceeds of $300,000
paid to the Registrant. Under the Subscription Agreement, the Wen Group was
committed to make additional equity investments in the Registrant of
$3,000,000 for the purchase of 2,000,000 shares at $1.50 per share, with
$1,000,000 being invested on or before November 5, 2001 as the second payment;
and, in the third payment, $2000,000,000 was to be invested at $1.50 per share
on or before February 5, 2002. Prior to this transaction, no single
shareholder or shareholder group owned more than 10% of the Registrant's
issued and outstanding common stock. However, this transaction was not
completed. The deal was rescinded, and the stock was never issued.
9
Note 4: Board of Director Changes Subsequently Rescinded.
------------------------------------------------
Upon the Registrant's receipt of $300,000 on September 26, 2001, the
following changes in the Board of Directors and officers of the Registrant
were effected. Under terms of the Subscription Agreement, in addition to
Directors Thomas W. Itin and H. Samuel Greenawalt, Jack Wen and George Burmann
of the Wen Group were elected to serve as Directors and, additionally, Jack
Wen was elected Chairman of the Board, Chief Executive Officer and President
and Don Johnson of the Wen Group was elected Treasurer and Chief Financial
Officer.
Upon receipt of the first payment of $300,000 from the Wen Group under the
Subscription Agreement, Jack Wen requested that $240,000 be invested in TIDE,
a PRC company headquartered in Shanghai. This investment was completed.
However, upon the recession the $ 240,000 investment was returned to the Wen
group, therefore the investment in Tide has not been and is not reflected in
financial statements.
Note 5: Footnote: Note payable related party.
------------------------------------
The Registrant has a $ 27,000 Note Payable to Dearborn Wheel Inc. The interest
on the note is 10% per annum. The note is due on March 06, 2002.
Note 6: Footnote: Note payable.
----------------------
The Registrant has a $ 30,000 Note Payable to Yueh Yun Chang with no
interest. The principal with no interest is due on Jun 12, 2002.
Item 2. Management's Discussion and Analysis of Financial Condition / Results
of Operations
---------------------------------------------------------------------
Material Changes in Financial Condition:
-----------------------------------------
The Registrant's liquidity is affected primarily by the business success,
securities prices and marketability of its investee companies and by the
amount and timing of new or incremental investments it makes, as well as the
availability of borrowing under the credit line.
The Registrant received $300,000 for the sale of 240,000 shares of the
Company's common stock, with commitments for future funding in November 2001
of $1,000,000 and in February of 2002 of $2,000,000, as a result of the
Subscription Agreement with the Wen Group. As a condition of the Subscription
Agreement, $240,000 of the $300,000 was invested at the request of the Wen
Group in a PRC company, TIDE, leaving the Registrant with a total of $60,000
cash on hand remaining from the Wen Group's initial investment.
10
There are no general terms as to how the $30,000 note will be paid or how the
Registrant intends to raise the funds for repayment or how to fund current
operations. The Registrant's current plan is to bring in other investors,
borrow against collateral or sell a portion of its holdings.
Material Changes in Results of Operations:
-----------------------------------------
The Registrant interest expenses were $ 223 and $ 58,742 for the quarter ended
Dec. 2001 and 2000 respectively. The change is due to the payment of Company's
demand loan to a bank, therefore, there was no interest expense paid for the
quarter ended Sep. 2001.
The Registrant recorded general and administrative expenses of $ 2,064 for
this quarter ended Dec. 2001 compare to general and administrative expenses of
$ 4,125 the quarter ended Dec. 2000. This change is due to the decrease in
company's activity related to such expenses. General and administrative
expenses include travel, telephone and other miscellaneous expenses.
The Registrant recorded an unrealized Gain on investments of $146,841 for the
second quarter ended Dec 31, 2001 compared to a loss of $1,365,426 for the
second quarter ended Dec 31, 2000. This is mainly due to the changes in
investment portfolio and fair market value of the Registrant's investment in
the publicly traded companies CompuSonics Video Corporation and Ajay Sports,
Inc.
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
-----------------
In early November of 2001, the Wen Group informed Registrant that the second
and third payments under the Subscription Agreement would not be forthcoming
and the Registrant accepted that conclusion. On November 26, 2001, a
Settlement Agreement was signed by the Registrant, Jack Wen, and the
investment group that Jack Wen represented to vacate the Subscription
Agreement signed on September 14, 2001. In a Settlement Agreement signed and
put into effect by Registrant and the Wen Group, funds paid in by the Wen
Group were returned less any expenses incurred by the Registrant and less the
$240,000 investment into the PRC company, TIDE. The common stock that was
part of the September 14, 2001 Subscription Agreement was not issued. The
September 14, 2001 Subscription Agreement was rescinded. A payment of $30,000
less expenses of $2,174.50 of the Registrant was returned to the Wen Group and
a note for the remaining $30,000 was executed by the Registrant subject to
certain conditions.
11
In a meeting of the Board of Directors of Registrant, it was resolved that the
Subscription Agreement of September 14, 2001 be declared null and void, and
that a request be submitted for resignations from the Wen Group officers and
directors. Resignations to be requested included Jack Wen as Chairman,
Director, President, CEO and COO, Don Johnson as CFO and Treasurer, George
Burmann as Director, and Paul Feng as Vice President of Marketing. Further,
during this meeting, Thomas W. Itin was elected to fill offices left vacant,
with the exception of Vice President of Marketing, due to resignations by
members of the Wen Group.
Item 6. Exhibits and Reports on Form 8-K
A) Exhibits
1. Settlement Agreement with Jack Wen and the investment
group.
2. Mutual General Release between Registrant and Jack Wen and
the investment group.
B) Form 8-K
None
12
Enercorp, Inc.
Form 10-QSB
For the Second Quarter Ended December 31, 2001
Signature Page
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Enercorp, Inc.
---------------
(Registrant)
By:/s/ Thomas W. Itin
------------------
Thomas W. Itin
President
Date: October 8, 2002
13
Exhibits: A. 1.
-------
November 26, 2001
Messrs. Jack Wen and Don Johnson
Re: Proposed Settlement Agreement - Enercorp, Inc. Interests
Dear Jack and Don:
Enercorp, Inc. ("Enercorp") and Jack Wen, individually and in behalf of, and
with authority to represent a group of qualified investors in Enercorp (Jack
Wen and said Investors, collectively the "Wen Group"), hereby confirm
settlement of all disputes between Enercorp and the Investors upon the terms
hereafter described, as agreed to verbally on November 23-24, 2001, by
authorized agents of the two groups, specifically Jack Wen and Thomas W. Itin,
and this Agreement is entered into in consideration of the mutual promises and
covenants contained herein.
Enercorp shall pay to the Investors a total of $60,000, $30,000 less out-of-
pocket expense in the amount of $2,174.50, which Enercorp has reimbursed to
the Investor and Johnson and Burmann upon acceptance and execution of this
Agreement in six months from execution and delivery of this Agreement, a
second check in amount of $30,000, which amount shall be incorporated in an
unsecured promissory note delivered coincident with payment of the first
$30,000.
Upon execution of this agreement by Enercorp and the Investors, and payment by
Enercorp to the Investors of the initial $30,000, and forwarding to the
Investors of a promissory note payable six months after execution of this
Agreement, date of completion of the last of these requirements being the
Effective Date of this Agreement Enercorp agrees to and is bound by the
following:
(1) to a rescission of the September 18, 2001 Agreement
(2) to complete the 10-Q and 8-K filings of Enercorp with the full
assistance of Wen and Johnson
(3) to issue a press release regarding Enercorp, but not referring to
reasons for rescission of the September 18, 2001 Agreement (except
as required by law).
(4) to sign a mutual release
(5) to assign and convey to the Investors all of Enercorp's rights and
interests in TIDE
The Investors agree and are bound to the following:
(a) to waive any claim for past, present and future salaries
(b) to return all Enercorp records held
(c) that no shares of Enercorp shall be allocated or issued to the
Investors
14
(d) to forward resignations effective immediately, of Jack Wen as
Chairman, CEO, COO, President, and Director and any other offices
he may have held; of Don Johnson as CFO and any other offices he
may have held; Paul Feng as Vice President of Marketing and any
other offices he may have held; and of George Burmann as Director
and any other offices he may have held.
(e) to execute a mutual release of all claims
(f) to terminate any existing lease and not enter into any additional
lease in name of Enercorp
(g) to close any bank accounts in California or elsewhere entered into
for Enercorp
(h) to terminate any lease and telephone account, at no cost to
Enercorp
(i) return the Enercorp offices to Michigan
Third Party Escrow, Enercorp agrees to establish a 3rd party to act as
escrow for this transaction, and agrees to sign the mutual release, forward a
certified or cashiers check for $30,000 less expenses of $2,174.50, and a
promissory note for $30,000 payable in six months. The acting escrow agent
for this transaction will be instructed to release the check, the promissory
note, and the signed mutual release to Jack Wen. The check and the promissory
note should be made out to Yueh Yun Chang.
The escrow agent to handle this transaction will be
Mary M. Maikoetter, Attorney at Law
609 East Speer Blvd, 3rd Floor
Denver, Colorado, 80203
15
Counterparts - this agreement may be executed in any number of counterparts,
each of which shall be termed an original.
Facsimile Execution - The signatures on this Agreement, as well as any other
documents under this Agreement, may be delivered by facsimile in lieu of an
original signature, and the parties agree to treat the facsimile signatures as
original signatures and agree to be bound by this provision.
Governing Law. This Agreement shall be governed and enforced in accordance
with laws of Colorado.
The parties have executed this Settlement Agreement on ______ day of
November.
WITNESSETH:
__________________________ By: /s/ Jack Wen
------------------------
Jack Wen, Individually
----------------------------- By: /s/ Jack Wen
----------------------
Jack Wen, Agent for Investor Group
ENERCORP, INC.
---------------------------------- By: /w/ Thomas W. Itin
---------------------------
Exhibit A. 2
------------
MUTUAL GENERAL RELEASE
----------------------
This Mutual General Release (the "Release") is made between Jack Wen,
together with a group of qualified investors in Enercorp, Inc. represented by
Jack Wen, who is fully qualified and duly authorized to represent said
investors, the said group, with Jack Wen, being collectively hereunder
identified as "the Wen Group," and Enercorp, Inc. and its directors, officers,
employees, agents, attorneys, representatives, predecessors, successors,
affiliates, parents, subsidiaries, and assigns (collectively herein referred
to as the "Enercorp"). This Release is executed and delivered by the parties
in implementation of the Settlement Agreement of November 26, 2001, between
and among the parties.
16
1. The Wen Group and Enercorp, in consideration of the Settlement Agreement
between and among them dated November 26, 2001, and by reason of the
consideration thereunder provided by the respective parties do hereby
fully and finally release, remise, acquit each of the other parties, and
said parties' heirs, executors, administrators, personal
representatives, affiliates, agents, successors and assigns from any and
all claims, debts, demands, assessments, actions or causes of action,
choses in action, obligations, liabilities and damages of every kind and
nature whatsoever in law or in equity, direct or indirect, asserted or
unasserted presently known or unknown, arising under the September 18,
2001 Subscription Agreement between the parties. The parties hereby
acknowledge that this release is intended as a full, final and complete
release, settlement and satisfaction of any and all claims arising from
or related to the September 18, 2001 Agreement between the parties.
2. Each party agrees not to denigrate, ridicule or make any derogatory,
disparaging or defamatory statement or opinions concerning each of the
other parties and said parties' heirs, executors, administrators,
personal representatives, affiliates, agents, successors and assigns.
3. This Release and all questions as to its validity, meaning, application,
binding effect or enforceability shall be governed by the laws of the
State of Colorado without regard to its conflicts of law provisions.
The parties acknowledge and agree that this Release shall not be
construed more favorably in favor of one party than the other based upon
which party drafted the Release, it being acknowledged that all parties
contributed substantially to the negotiation of this Release.
4. Each of the parties hereto declares that prior to the execution of this
Release he or it apprised himself or itself of sufficient relevant data
to intelligently exercise judgment in participating in the drafting or,
deciding the contents of, and determining whether to execute this
Release. Each party hereto declares that the decision to execute this
Release is not predicated on or influenced by any declarations,
warranties, or representations of the other party or any predecessors in
interest, successors, assigns, officers, directors, attorneys, employees
or agents of any of the other party hereto, except as expressly set
forth herein. Each party hereto states that the contents of this
Release have been explained to him or it by his or its respective
counsel and that this Release is entered into freely and voluntarily
upon the advice and with the approval of such counsel. It is further
understood and agreed that all of the terms of this Release are
contractual and not mere recitals, and each of the parties hereto
warrants that he or it understands the terms of this Release and that he
or it intends to be bound thereby.
5. This Release may be executed in as many counterparts as may be necessary
or convenient, and by the different parties hereto on different
counterparts, each of which once so executed shall be deemed an
original.
6. Each of the undersigned parties understands and agrees that this Release
shall not be changed or amended in any respect except by a writing
executed by all of the parties hereto or their authorized
representatives.
17
7. Any determination of invalidity, illegality, or unenforceability of any
provision of this Release, determined by a court of competent
jurisdiction shall not affect validity, legality, or enforceability of
any other provision.
8. Any dispute or claim arising under, out of, in connection with or in
relation to this Release, whether the remedy requested is in law or in
equity, shall be determined by the federal or state courts, in Colorado,
which courts the parties hereto agree shall have jurisdiction to decide
and enter final judgment, and which court the parties further agree is
proper venue to decide and enter final judgment.
9. Each party affirms it has the authority to enter into and execute this
Release.
IN WITNESS WHEREOF, the parties hereto have executed this Release the
_____ day of __________, 2001.
WITNESSETH: ENERCORP, INC.
/s/ Thomas W. Itin
--------------------------
Thomas W. Itin
Its: President
/s/ Jack Wen
--------------------------
Jack Wen, Individually
/s/ Jack Wen
----------------------------
Jack Wen as Agent of the Wen Group
18