-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NgDfPUxbJk8sOuWjdjQ68MEvn9IdKSFnj6bG7xa1b0PWBC2Aqr+RIcGsq5FYCnSV 4In97OF8gOvqaz2Q94PHXQ== 0001010549-03-000312.txt : 20030723 0001010549-03-000312.hdr.sgml : 20030723 20030610165332 ACCESSION NUMBER: 0001010549-03-000312 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20030610 EFFECTIVENESS DATE: 20030610 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NOVA INTERNATIONAL FILMS INC CENTRAL INDEX KEY: 0000773394 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 112717273 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-105996 FILM NUMBER: 03739391 BUSINESS ADDRESS: STREET 1: 6350 N.E. CAMPUS DRIVE CITY: VANCOUVER STATE: WA ZIP: 98661 BUSINESS PHONE: 3607377700 MAIL ADDRESS: STREET 1: 6350 N.E. CAMPUS DRIVE CITY: VANCOUVER STATE: WA ZIP: 98661 S-8 1 novas8060203.txt As filed with the Securities and Exchange Commission on June 10, 2003 Registration No. 333- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------------- NOVA INTERNATIONAL FILMS, INC. (Exact Name of Registrant as Specified in its Charter) Delaware 11-2717273 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification Number) 4841 (Primary Standard Industrial Classification Code Number) ------------------------ Suite 805, One Pacific Place, 88 Queensway, Hong Kong (Address of Principal Executive Offices) 2003 Stock Compensation Plan Director Compensation Agreements Consulting Agreements Suite 805, One Pacific Place, 88 Queensway, Hong Kong Tel: (852) 2891-3130 Attention: Raymond Ying-Wai Kwan, CEO (Name, Address, Telephone Number and Facsimile Number of Agent For Service of Process) Copies of all Communications to: David L. Ficksman, Esq. Loeb & Loeb LLP 10100 Santa Monica Boulevard, Suite 2200 Los Angeles, Delaware 90067-4164 Tel: (310) 282-2350 Fax: (310) 282-2200 CALCULATION OF REGISTRATION FEE
- ---------------------------------- --------------- -------------------- -------------------- ------------------ Title of Each Class of Securities Amount To Be Proposed Maximum Proposed Maximum Amount of To Be Registered Registered Offering Price Per Aggregate Offering Registration Fee Share (1) Price (2) - ---------------------------------- --------------- -------------------- -------------------- ------------------ Common Stock 11,500,000 $.70 $8,050,000 $652 - ---------------------------------- --------------- -------------------- -------------------- ------------------
(1) The number of stated above consists of 10,000,000 shares which may be sold upon the exercise of options which have been granted and/or may hereafter be granted under our 2003 Stock Compensation Plan (the "Plan") or upon the issuance of stock awards which have been granted and/or may hereafter be granted under the Plan and 1,500,000 issuable pursuant to certain consutling agreements. In addition, this Registration Statement covers the resale of 1,176,000 shares previously issued under the Plan (the "Resale Shares"). Further, pursuant to Rule 416 under the Securities Act of 1933, as amended (the "Securities Act"), this Registration Statement covers, in addition to the number of shares stated above, an indeterminate number of shares which may be subject to grant or otherwise issuable after the operation of any such anti-dilution and other provisions. (2) Estimated solely for the purpose of computing the registration fee in accordance with Rule 457(c) and (h) of the Securities Act of 1933 based upon the bid price of the Registrant's common stock as quoted on the Over-the-Counter Bulletin Board of $.70 on May 22, 2003. INTRODUCTORY STATEMENT We prepared this Registration Statement in accordance with the requirements of Form S-8 under the Securities Act of 1933, as amended, to register 11,500,000 shares of our common stock, $.00001 par value per share, issued or issuable pursuant 2003 Stock Compensation Plan (the "2003 Stock Compensation Plan"), certain Consulting Agreements ("the Consulting Agreements") and certain Director Compensation Agreements (the "Director Agreements"). PART I Pursuant to the requirements and Form S-8 and Rule 428, the information specified in Part I of Form S-8 will be sent to Plan participants as specified by Rule 428(b)(1). As permitted by General Instruction C for Form S-8, there is also included as part of Part I. of this Registration Statement a Reoffer Prospectus relating the resale of up to 1,176,000 shares of common stock being offered by the selling stockholders. ii REOFFER PROSPECTUS NOVA INTERNATIONAL FILMS, INC. 1,176,000 Shares of Common Stock This reoffer prospectus relates to the resale of up to 1,176,000, shares of common stock being offered by the selling stockholders listed on page 10. The shares of our common stock covered by this prospectus were issued or are issuable pursuant to the terms on our 2003 Stock Compensation Plan. The prices at which the selling stockholder may sell its shares will be determined by the prevailing market price for the shares or in privately negotiated transactions. Information regarding the selling stockholder and the times and manner in which it may offer and sell the shares under this prospectus is provided under "Selling stockholder" and "Plan of Distribution" in this prospectus. Nova will not receive any of the proceeds from the sale of the shares under this prospectus. Our common stock trades on the Over-the-Counter Bulletin Board, also called the OTCBB, under the trading symbol "NIFL". On May 22, 2003, the closing bid for our common stock as reported on the OTCBB was $.70 per share. As of May 31, 2003 there were 65,114,933 shares of common stock outstanding. THIS INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 5. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the securities or determined that this prospectus is complete or accurate. Any representation to the contrary is a criminal offense. The date of this Prospectus is June 10, 2003 TABLE OF CONTENTS Available Information..........................................................2 Incorporation by Reference.....................................................2 Corporate Information..........................................................2 Recent Developments............................................................3 Risk Factors...................................................................5 Cautionary Statement Regarding Forward-Looking Information.....................9 Use of Proceeds...............................................................10 Selling Security Holders......................................................10 Plan of Distribution..........................................................11 Indemnification of Directors and Officers.....................................13 Description of Securities.....................................................13 Experts.......................................................................14 Legal Matters.................................................................14 AVAILABLE INFORMATION We have filed a registration statement on Form S-8 with the Securities and Exchange Commission under the Securities Act of 1933, as amended. This Prospectus omits some information and exhibits included in the registration statement, copies of which may be obtained upon payment of a fee prescribed by the Commission or may be examined free of charge at the principal office of the Commission in Washington, D.C. We are subject to the informational requirements of the Exchange Act of 1934, as amended, and in accordance therewith file reports and other information with the Commission The reports and other information filed by us with the Commission can be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. In addition, copies may be obtained (at prescribed rates) at the regional offices of the Commission located at Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and 11th floor, 5670 Wilshire Boulevard, Los Angeles, California 90036. Copies of that material can also be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition, the Commission maintains a web site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the Commission at http://www.sec.gov. INCORPORATION BY REFERENCE The following documents previously filed by us with the Commission are incorporated in this Prospectus by reference: (1) Annual Report, Form 10K-SB as filed with the Commission on February 10, 2003; (2) Quarterly Report, Form 10-QSB for the quarterly period ended March 31, 2003 as filed with the Commission on May 15, 2003; (3) Current Report, Form 8-K as filed with the Commission on March 17, 2003 (4) Current Report, Form 8-K as filed with the Commission on May 15, 2003; and (5) Current Report, Form 8-K/A as filed with the Commission on May 19, 2003. All reports and other documents that we file pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-effective amendment which indicates that all securities offered hereunder have been sold or which deregisters all such securities then remaining unsold are incorporated by reference in this registration statement and to be a part hereof from the date of filing of such reports and documents. Copies of all documents which are incorporated by reference will be provided without charge to anyone to whom this Prospectus is delivered upon a written or oral request to Nova International Films, Inc. at Suite 805, One Pacific Place, 88 Queensway, Hong Kong. Our telephone number at that location is (852) 2891-3130. CORPORATE INFORMATION Our corporate office is located at Suite 805, One Pacific Place, 88 Queensway, Hong Kong. Our telephone number at that location is (852) 2891-3130. 2 RECENT DEVELOPMENTS Nova International Films, Inc. (the "Company") was incorporated in the State of Delaware on November 27, 1984. Prior to May 1993, the Company was principally engaged in the business of developing, financing and producing motion pictures for distribution. Since May 1993, however, the Company has had no current business operations and since then has been seeking another business opportunity. Pursuant to a Share Exchange Agreement dated as of November 1, 2002, as amended by the Amended Share Exchange Agreement on February 21, 2003, between the Company and Martin Rifkin and William Rifkin on the one hand; and Kingston Global Co. Ltd. ("Kingston") and Sino Concept Enterprises Limited (collectively the "Sellers"); and Solar Touch Limited ("Solar Touch"), on the other hand, on February 28, 2003 (the "Closing Date"), the Company acquired (the "Acquisition") from Kingston all of the issued and outstanding equity interests of Solar Touch (the "Solar Touch Shares"). As consideration for the Solar Touch Shares, the Company issued 49,567,002 shares of its common stock to the Sellers. In addition to the common stock issued to the Sellers, the Company issued 4,760,931 shares to the Seller's financial consultants. The consideration for the Acquisition was determined through arm length negotiations between the management of the Company and the Sellers. As a result of the Acquisition, the Company continued the operations of Solar Touch. Solar Touch was incorporated in the British Virgin Islands on May 26, 1999. Solar Touch owns 49% of the issued and outstanding shares of capital stock on a fully diluted basis of Baoding Pascali Broadcasting Cable TV Integrated Information Networking Co., Ltd. (the "Joint Venture"). The Joint Venture is a sino-foreign joint venture established in the People's Republic of China (the "PRC"), between Solar Touch and Baoding Pascali Multimedia Transmission Networking Co., Ltd. ("Baoding Multimedia") which is a subsidiary of Baoding Pascali Group Co., Ltd., a Chinese state-owned enterprise. The Joint Venture was formed on July 23, 1999, when Baoding Multimedia and Solar Touch signed a joint venture contact (the "JV Contract") and the articles of association of the Joint Venture (the "JV Articles"). The JV Contract and JV Articles provided that the total amount of investment of the Joint Venture was RMB122.425 million (or US$14.8 million); and that the registered capital was RMB70 million (or US$8.46 million). The JV Contract and JV Articles also provided that Baoding Multimedia's contribution to the Joint Venture was Baoding Multimedia's network and related facilities with a value of RMB21.7 million, plus intangible assets (including licenses, business goodwill) valued at RMB14 million which was equal to 51% of the registered capital of the Joint Venture and that Solar Touch's contribution was an investment of US$4.14 million (or RMB34.3 million) in cash which was equal to 49% of the registered capital. On July 28, 1999, the Management Commission of the Baoding Hi-Tech Industrial Development Area approved the JV Contract and JV Articles as well as the members of the board of directors of the Joint Venture. On August 5, 1999, a Certificate of Approval for Establishment of Enterprises with Foreign Investment in the PRC for the Joint Venture was issued and on August 16, 1999, the Business Licence for the Joint Venture was issued for the operation of the Joint Venture. On February 23, 2000, Baoding Multimedia and Solar Touch signed another agreement to increase the Joint Venture's registered capital from RMB70 million to RMB100 million, provided however, that the parties' respective percentage of equity interests in the Joint Venture shall remain the same. On February 24, 2000, the Management Commission of the Development Area approved the increase in the Joint Venture's registered capital from RMB70 million to RMB100 million. On September 6, 2000, a revised Business Licence to reflect the increase in the Joint Venture's registered capital was issued. The Joint Venture operates a cable TV network in the municipality of Baoding, near Beijing in the PRC. With over 190,000 subscribers in a market with a population of over 10 million, the Company strongly believes that the Joint Venture is at present the only sino-foreign joint venture company approved by the State Administration of Radio, Film and Television to be licensed as a cable TV network operator in the PRC. It is the first and only joint venture allowed the foreign investor to invest in and operate the cable TV network in the PRC. 3 As of May 23, 2003, the Joint Venture offered thirty-nine (39) channels within the Baoding city limits and eight (8) channels to outer areas in the Baoding metropolitan area. The Joint Venture transmits in both analog and digital over its fiber optic network and through twenty-two (22) substations. In addition to its cable TV transmission service, the Joint Venture also offers Internet access. The Joint Venture expects that it will be able to offer added value services such as broadband Internet access, virtual private network and bulk data transmission services by the end of 2003. The Joint Venture currently generates revenue by charging a one-off installation fee ranging from RMB340 (approximately $41) to RMB600 (approximately $73) and a monthly subscription fee of RMB13 (approximately $1.60) to household customers and enterprises. 4 RISK FACTORS You should carefully consider the risks described below before making an investment in Nova. The risks and uncertainties described below are not the only ones facing Nova, and there may be additional risks that we do not presently know of or that we consider immaterial. All of these risks may impair our business operations. If any of the following risks actually occurs, our business, financial condition or results of operations could be materially adversely affected. In such case, the trading price of our common stock could decline, and you may lose all or part of your investment. We have a limited operating history. We have a limited operating history and we are in our emerging stages. There can be no assurance that we will continue to develop or will be able to meet our objectives, or that our products will be accepted in the market, or that we will operate at a profit. There is a limited public market for shares of our common stock and the market price for our common stock may be subject to volatility There is a limited public market for shares of our common stock. We cannot guaranty that an active public market will develop or be sustained. Therefore, investors may not be able to find purchasers for their shares of our common stock. Should there develop a significant market for our shares, the market price for those shares may be significantly affected by such factors as our financial results and the overall investment atmosphere. As a holding company, we have significant limitations on access to cash flow from our investment in Baoding We are a holding company that has no significant business operations or assets other than our interest in Joint Venture. Accordingly, we must rely entirely upon distributions to generate the funds necessary to meet our obligations and other cash flow needs, including funds necessary for working capital. The Joint Venture is a separate and distinct legal entity that has no contingent or other obligation to make any funds available to us, whether by dividends, loans or other payments. Any failure to receive distributions from the Joint Venture would restrict our ability to pay dividends on our shares and could otherwise have an adverse effect on our operations. We may face problems with our joint venture partner that may affect the value of our investment. We do not have any control over the operations of the Joint Venture and to the extent that our Joint Venture partner has objectives that are different than ours, we may have difficulty executing our business plan. For example, our Joint Venture partner may: o have economic or business interests or goals that are inconsistent with our Company; o take actions contrary to our instructions or requests or contrary to our policies or objectives with respect to business development or investment; 5 o be unable or unwilling to fulfill their obligations under the joint venture agreement; or o experience financial difficulties. Although, to date, we have not experienced any significant problems with our Joint Venture partner, the occurrence of such a problem could have an adverse effect on the value of your investment. One stockholder has majority control over our Company, which will allow him to influence the outcome of matters submitted to stockholders for approval. As of May 31, 2003, Kingston owned approximately 75% of our Company's issued voting securities. Kingston is a wholly owned subsidiary of China Convergent Corporation Limited which in turn is approximately 50% owned through holdings by Mr. Daxiang Zhang. Mr. Zhang can exercise substantial influence over our affairs. It may be difficult to serve us with legal process or enforce judgments against us or our management. All or a substantial portion of our assets are located in China. In addition, three out of four directors and all officers are non-residents of the United States, and all or substantial portions of the assets of such non-residents are located outside the United States. As a result, it may not be possible to effect service of process within the United States upon such persons. Moreover, there is doubt as to whether the courts of China would enforce: o judgments of United States courts against us, our directors or our officers based on the civil liability provisions of the securities laws of the United States or any state; or o in original actions brought in China, liabilities against non-residents or us based upon the securities laws of the United States or any state. The Chinese government could change its policies toward private enterprise or even nationalize or expropriate it, which could result in the total loss of our investment in that country. Our business is subject to significant political and economic uncertainties and may be adversely affected by political, economic and social developments in China. Over the past several years, the Chinese government has pursued economic reform policies including the encouragement of private economic activity and greater economic decentralization. The Chinese government may not continue to pursue these policies or may significantly alter them to our detriment from time to time with little, if any, prior notice. Changes in policies, laws and regulations or in their interpretation or the imposition of confiscatory taxation, restrictions on currency conversion, restrictions or prohibitions on dividend payments to stockholders, devaluations of currency or the nationalization or other expropriation of private enterprises could have a material adverse effect on our business. Nationalization or expropriation could even result in the total loss of our investment in China and in the total loss of your investment. If relations between the United States and China worsen, our stock price may decrease and we may have difficulty accessing U.S. capital markets At various times during recent years, the United States and China have had significant disagreements over political and economic issues. Controversies may arise in the future between these two countries. Any political or trade controversies between the United States and China, whether or not directly related to our business, could adversely affect the market price of our common stock and our ability to access U.S. capital markets. 6 The PRC economic, political and social conditions as well as government policies could affect our business. All of our businesses, assets and operations are located in China. The economy of China differs from the economies of most developed countries in many respects, including: o government involvement; o level of development; o growth rate; o control of foreign exchange; and o allocation of resources. The economy of China has been transitioning from a planned economy to a more market-oriented economy. Although in recent years the PRC government has implemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets and the establishment of sound corporate governance in business enterprises, a substantial portion of productive assets in China is still owned by the PRC government. In addition, the PRC government continues to play a significant role in regulating industry by imposing industrial policies. It also exercises significant control over China's economic growth through the allocation of resources, controlling payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies. The economy of China has experienced significant growth in the past 20 years, but growth has been uneven both geographically and among various sectors of the economy. The PRC government has implemented various measures from time to time to control the rate of economic growth. Some of these measures benefit the overall economy of China, but may have a negative effect on us. For example, our operating results and financial condition may be adversely affected by: o changes in the rate or method of taxation; o imposition of additional restrictions on currency conversion and remittances abroad; o reduction in tariff or quota protection and other import restrictions; o changes in the usage and costs of state-controlled transportation services; and Government control of currency conversion and future movements in exchange rates may adversely affect our operations and financial results. We receive substantially all of our revenues in renminbi, the currency of the PRC. A portion of such revenues will be converted into other currencies to meet our foreign currency obligations. Foreign exchange transactions under our capital account, including principal payments in respect of foreign currency-denominated obligations, continue to be subject to significant foreign exchange controls and require the approval of the State Administration of Foreign Exchange. These limitations could affect our ability to obtain foreign exchange through debt or equity financing, or to obtain foreign exchange for capital expenditures. 7 Since 1994, the conversion of renminbi into foreign currencies, including U.S. dollars, has been based on rates set by the People's Bank of China, which are set daily based on the previous day's PRC interbank foreign exchange market rate and current exchange rates on the world financial markets. Since 1994, the official exchange rate for the conversion of renminbi to U.S. dollars has generally been stable. Our financial condition and results of operations may also be affected by changes in the value of certain currencies other than the renminbi in which our earnings and obligations are denominated. In particular, a devaluation of the renminbi is likely to increase the portion of our cash flow required to satisfy our foreign currency-denominated obligations. The PRC legal system is not fully developed and has inherent uncertainties that could limit the legal protections available to you. The PRC legal system is a system based on written statutes and their interpretation by the Supreme People's Court. Prior court decisions may be cited for reference but have limited precedential value. Since 1979, the PRC government has been developing a comprehensive system of commercial laws, and considerable progress has been made in introducing laws and regulations dealing with economic matters such as foreign investment, corporate organization and governance, commerce, taxation and trade. Two examples are the promulgation of the Contract Law of the PRC to unify the various economic contract laws into a single code, which went into effect on October 1, 1999, and the Securities Law of the PRC, which went into effect on July 1, 1999. However, because these laws and regulations are relatively new, and because of the limited volume of published cases and their non-binding nature, interpretation and enforcement of these laws and regulations involve uncertainties. In addition, as the PRC legal system develops, changes in such laws and regulations, their interpretation or their enforcement may have a material adverse effect on our business operations. It may be difficult to serve us with legal process or enforce judgments against us or our management. All of our assets are located in China. In addition, three of out of four directors and all our officers are non-residents of the United States, and all the assets of such non-residents are located outside the United States. As a result, it may not be possible to effect service of process within the United States upon such persons. Moreover, there is doubt as to whether the courts of China or the Special Administrative Region of Hong Kong would enforce: o judgments of United States courts against us, our directors or our officers based on the civil liability provisions of the securities laws of the United States or any state; or o in original actions brought in China, liabilities against non-residents or us based upon the securities laws of the United States or any state. Enforcement of regulations in China may be inconsistent. Although the Chinese government has introduced new laws and regulations to modernize its securities and tax systems on January 1, 1994, China does not yet possess a comprehensive body of business law. As a result, the enforcement, interpretation and implementation of regulations may prove to be inconsistent and it may be difficult to enforce contracts. 8 We may experience lengthy delays in resolution of legal disputes. As China has not developed a dispute resolution mechanism similar to the Western court system, dispute resolution over Chinese projects and joint ventures can be difficult and there is no assurance that any dispute involving our business in China can be resolved expeditiously and satisfactorily. Fluctuations of currency exchange rates between the United States dollar and the Renminbi could adversely affect our business. The Chinese government controls its foreign currency reserves through restrictions on imports and conversion of Renminbi into foreign currency. Although the Renminbi to United States dollar exchange rate has been stable since January 1, 1994 and the Chinese government has stated its intention to maintain the stability of the value of Renminbi, there can be no assurance that exchange rates will remain stable. The Renminbi could devalue against the United States dollar. Exchange rate fluctuations may adversely affect distributions from our investment in Baoding, which are denominated in Renminbi and the value of our investment in Joint Venture in China. Our Common Stock is a Penny Stock as defined in the Exchange Act and an investor may find it more difficult to dispose of or obtain accurate quotations as to the price of the shares of the Common Stock. Our Common Stock is classified as penny stock, which is traded in the over-the-counter market on the OTC Bulletin Board. As a result, an investor may find it more difficult to dispose of or obtain accurate quotations as to the price of the shares of the common stock being registered hereby. In addition, the "penny stock" rules adopted by the Commission under the Exchange Act subject the sale of the shares of the common stock to certain regulations which impose sales practice requirements on broker-dealers. For example, broker-dealers selling such securities must, prior to effecting the transaction, provide their customers with a document that discloses the risks of investing in such securities. Furthermore, if the person purchasing the securities is someone other than an accredited investor or an established customer of the broker-dealer, the broker-dealer must also approve the potential customer's account by obtaining information concerning the customer's financial situation, investment experience and investment objectives. The broker-dealer must also make a determination whether the transaction is suitable for the customer and whether the customer has sufficient knowledge and experience in financial matters to be reasonably expected to be capable of evaluating the risk of transactions in such securities. Accordingly, the Commission's rules may limit the number of potential purchasers of the shares of the common stock. There may be resale restrictions with respect to our common stock. Various state securities laws impose restrictions on transferring penny stocks and as a result, investors in the common stock may have their ability to sell their shares of the common stock impaired. For example, the Utah Securities Commission prohibits brokers from soliciting buyers for penny stocks, which makes selling them more difficult. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION Under the Private Securities Litigation Reform Act of 1995, companies are provided with a "safe harbor" for making forward-looking statements about the potential risks and rewards of their strategies. Forward-looking statements often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate" or similar expressions. In this prospectus supplement, forward-looking statements also include: 9 o statements about our business plans; o statements about the potential for the development, regulatory approval and public acceptance of new services; o estimates of future financial performance; o predictions of national or international economic, political or market conditions; o statements regarding other factors that could affect our future operations or financial position; and o other statements that are not a matter of historical fact. Our ability to achieve our goals depends on many known and unknown risks and uncertainties, including changes in general economic and business conditions. These factors could cause our actual performance and results to differ materially from those described or implied in forward-looking statements. Factors that could cause or contribute to such differences include, among others: These forward-looking statements speak only as of the date of this prospectus. We believe it is in the best interest of our investors to use forward-looking statements in discussing future events. However, we are not required to, and you should not rely on us to, revise or update these statements or any factors that may affect actual results, whether as a result of new information, future events or otherwise. USE OF PROCEEDS We will not receive any of the proceeds from the sale of the securities offered hereby, except that we will receive funds from the exercise of any options granted pursuant to the 2003 Stock Compensation Plan which funds will be used for working capital. SELLING STOCKHOLDERS The following table sets forth certain information concerning the resale of the shares of common stock by the selling stockholders. Unless otherwise described below, to our knowledge, no selling stockholder nor any of its affiliates has held any position or office with, been employed by or otherwise has had any material relationship with us or our affiliates during the three years prior to the date of this prospectus. Each selling stockholder has confirmed to us that it is not a broker-dealer or affiliate of a broker-dealer within the meaning of Rule 405 of the Securities Act, as amended. A selling stockholder may offer all or some portion of the shares of the common stock they hold. Accordingly, no estimate can be given as to the amount or percentage of our common stock that will be held by the selling stockholder upon termination of sales pursuant to this prospectus. In addition, the selling stockholder identified below may have sold, transferred or disposed of all or a portion of its shares since the date on which they provided the information regarding its holdings in transactions exempt from the registration requirements of the Securities Act. As of May 31, 2003, there were 65,114,933 shares of our common stock outstanding. In compliance with the SEC rules, for purposes of calculating the percentage of common stock outstanding, any securities not outstanding which are subject to options, Warrants or conversion privileges are deemed outstanding for the purposes of computing the percentage of outstanding securities owned by the selling stockholder. Beneficial ownership includes shares of outstanding common stock and shares of common stock that a person has the right to acquire within 60 days from May 31, 2003. Unless otherwise indicated, the selling stockholder has the sole power to direct the voting and investment over the shares owned by them. We will not receive any proceeds from the resale of the common stock by the selling stockholder. 10
Ownership of Common stock Prior to the Offering ----------------------------------------------------------------- Percentage of Number of Shares Offered Name of Selling Stockholder Number of Shares Ownership Hereby - --------------------------- -------------------- ---------------- ------------------------- Raymond Ying-wai Kwan(1) 288,000 0.4% 288,000 Yau-sing Tang (2) 720,000 1.2% 720,000 George Raney (3) 168,000 0.3% 168,000 Total 1,176,000 1.8% 1,176,000
- ------------- (1) Raymond Ying-wai Kwan is the CEO and a director of our company. The shares subject to this prospectus will be issued to Mr. Kwan pursuant to a Director's Compensation Agreement whereby so long as Mr. Kwan serves as a director, for the next two years he will receive 12,000 shares per month as compensation for serving in the capacity of a director of the company. (2) Yau-sing Tang is the CFO and the Chairman of the Board of Directors of our company. The shares subject to this prospectus will be issued to Mr. Tang pursuant to a Director's Compensation Agreement whereby so long as Mr. Tang serves as a director, for the next two years he will receive 30,000 shares per month as compensation for serving in the capacity of a director of the company. (3) George Raney is a director of our company. The shares subject to this prospectus will be issued to Mr. Raney pursuant to a Director's Compensation Agreement whereby so long as Mr. Raney serves as a director, for the next two years he will receive 7,000 shares per month as compensation for serving in the capacity of a director of the Company. PLAN OF DISTRIBUTION We are registering the shares of common stock on behalf of the selling stockholders. A selling stockholder and any of its pledges, assignees, and successors-in-interest may, from time to time, sell any or all of its shares of common stock on any stock exchange, market, or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated prices. There is no assurance that the selling stockholder will sell any or all of the common stock in this offering. The selling stockholder may use any one or more of the following methods when selling shares: Ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; Block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; Purchases by a broker-dealer as principal and resale by the broker-dealer for its own account; an exchange distribution following the rules of the applicable exchange; Privately negotiated transactions; short sales or sales of shares not previously owned by the seller; Broker-dealers may agree with the selling stockholder to sell a specified number of such shares at a stipulated price per share; A combination of any such methods of sale; or any other lawful method. Broker-dealers engaged by the selling stockholder might arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from selling stockholder in amounts to be negotiated. If any broker-dealer acts as agent for the purchaser of shares, the broker-dealer may receive commission from the purchaser in amounts to be negotiated. The selling stockholder does not expect these commissions and discounts to exceed what is customary in the types of transactions involved. 11 The Securities and Exchange Commission has rules that regulate broker-dealer practices in connection with transactions in "penny stocks". Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in that security is provided by the exchange or system). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document prepared by the Commission that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for our common stock. As a result of these rules, the selling security holder may find it difficult to sell its shares of common stock. Underwriter Status A selling stockholder and any broker-dealers or agents that are involved in selling the shares may be considered to be "underwriters" within the meaning of the Securities Act for such sales. An underwriter is a person who has purchased shares from an issuer with a view towards distributing the shares to the public. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be considered to be underwriting commissions or discounts under the Securities Act. Because the selling stockholder may be deemed to be an "underwriter" within the meaning of Section 2(11) of the Act of 1933, the selling stockholder will be subject to the prospectus delivery requirements of the Securities Act. We have informed the selling stockholder that the anti-manipulative provisions of Regulation M promulgated under the Securities Exchange Act of 1934 may apply to its sales in the market. We are required to pay all fees and expenses incident to the registration of the shares in this offering. However, we will not pay any commissions or any other fees in connection with the resale of the common stock in this offering. When the selling stockholder notifies us that a material arrangement has been entered into with a broker-dealer for the sale of shares through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if required, pursuant to Rule 424(b) under the Securities Act of 1933, disclosing: o the name of the selling stockholder and of the participating broker-dealers, o the number of shares involved, o the price at which the shares were sold, o the commissions paid or discounts or concessions allowed to the broker-dealers, where applicable, o that the broker-dealers did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and o other facts material to the transaction 12 A selling stockholder will be indemnified by us against certain claims, damages and liabilities, including liabilities under the Securities Act in connection with the resale of the shares, or will be entitled to contribution in connection therewith. We will be indemnified by the selling stockholder to a limited extent, against certain losses, claims, damages and liabilities, including liabilities under the Securities Act in connection with the resale of the shares, or will be entitled to contribution in connection therewith. INDEMNIFICATION OF DIRECTORS AND OFFICERS Indemnification of Directors and Officers. Our Articles of Incorporation include provisions, which limit the liability of our directors. As permitted by applicable provisions of the Delaware Law, directors will not be liable to Nova for monetary damages arising from a breach of their fiduciary duty as directors in certain circumstances. This limitation does not affect liability for any breach of a director's duty to Nova or our stockholders (i) with respect to approval by the director of any transaction from which he or she derives an improper personal benefit, (ii) with respect to acts or omissions involving an absence of good faith, that the director believes to be contrary to the best interests of Nova or our stockholders, that involve intentional misconduct or a knowing and culpable violation of law, that constitute an unexcused pattern or inattention that amounts to an abdication of his or her duty to Nova or our stockholders, or that show a reckless disregard for duty to Nova or our stockholders in circumstances in which he or she was, or should have been aware, in the ordinary course of performing his or her duties, of a risk of serious injury to Nova or our stockholders, or (iii) based on transactions between Nova and our directors or another corporation with interrelated directors or based on improper distributions, loans or guarantees under applicable sections of Delaware Law. This limitation of directors' liability also does not affect the availability of equitable remedies, such as injunctive relief or rescission. The Company has been advised that it is the position of the Commission that insofar as the provision in Nova's Articles of Incorporation, as amended, may be invoked for liabilities arising under the Securities Act, the provision is against public policy and is therefore unenforceable. DESCRIPTION OF SECURITIES As of the date of this prospectus, our authorized capital stock consists of 100,000,000 shares $.00001 par value, per share of common stock of which 65,114,933 shares are issued and outstanding. The following is a description of our securities taken from provisions of our Articles of Incorporation and by-laws, each as amended. The following description is a summary and is qualified in its entirety by the above referenced provisions of the Articles of Incorporation and by-laws as currently in effect. All shares of common stock have one vote and vote together as a single class. Voting rights are not cumulative, and, therefore, the holders of more than 50% of the common stock could, if they chose to do so, elect all of the Directors. Upon liquidation, dissolution or winding up, our assets, after the payment of our liabilities, will be distributed pro rata to the holders of the common stock. Holders of common stock are entitled to share equally in dividends when, as and if declared by our board of directors, out of funds legally available for the payment of dividends. We have not paid any cash dividends on the common stock, and it is unlikely that any dividends will be declared in the foreseeable future. 13 EXPERTS The financial statements incorporated herein by reference to the Form 10-KSB filed with the Commission on February 10, 2003 have been audited by Weinberg & Company, P.A. The financial statements incorporated herein by reference to the Form 8-K/A filed with the commission on May 19, 2003 have been audited by Thomas Leger & Co., L.L.P. Each of the foregoing are independent certified public accountants to the extent and for the periods set forth in their respective reports incorporated herein and are referenced in reliance upon such report given upon the authority of said firm as experts in auditing and accounting. LEGAL MATTERS Loeb & Loeb, LLP, Los Angeles, California has passed upon the validity of the securities being offered hereby for us. 14 NOVA INTERNATIONAL FILMS, INC. ------------------ Reoffer Prospectus ----------------- PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference. The following documents previously filed by us with the Commission are incorporated in this Prospectus by reference: (1) Annual Report, Form 10K-SB as filed with the Commission on February 10, 2003; (2) Quarterly Report, Form 10-QSB for the quarterly period ended March 31, 2003 as filed with the Commission on May 15, 2003; (3) Current Report, Form 8-K as filed with the Commission on March 17, 2003 (4) Current Report, Form 8-K as filed with the Commission on May 15, 2003; and (5) Current Report, Form 8-K/A as filed with the Commission on May 19, 2003. All reports and other documents that we file pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-effective amendment which indicates that all securities offered hereunder have been sold or which deregisters all such securities then remaining unsold are incorporated by reference in this registration statement and to be a part hereof from the date of filing of such reports and documents. Copies of all documents which are incorporated by reference will be provided without charge to anyone to whom this Prospectus is delivered upon a written or oral request to Nova International Films, Inc. at Suite 805, One Pacific Place, 88 Queensway, Hong Kong. Our telephone number at that location is (852) 2891-3130. Item 4. Description of Securities. As of the date of this prospectus, our authorized capital stock consists of 100,000,000 shares $.00001 par value, per share of common stock of which 65,114,933 shares are issued and outstanding. The following is a description of our securities taken from provisions of our Articles of Incorporation and by-laws, each as amended. The following description is a summary and is qualified in its entirety by the above referenced provisions of the Articles of Incorporation and by-laws as currently in effect. All shares of common stock have one vote and vote together as a single class. Voting rights are not cumulative, and, therefore, the holders of more than 50% of the common stock could, if they chose to do so, elect all of the Directors. Upon liquidation, dissolution or winding up, our assets, after the payment of our liabilities, will be distributed pro rata to the holders of the common stock. Holders of common stock are entitled to share equally in dividends when, as and if declared by our board of directors, out of funds legally available for the payment of dividends. We have not paid any cash dividends on the common stock, and it is unlikely that any dividends will be declared in the foreseeable future. Item 5. Interests of Named Experts and Counsel. Not Applicable. Item 6. Indemnification of Directors and Officers. Our Articles of Incorporation include provisions, which limit the liability of our directors. As permitted by applicable provisions of the Delaware Law, directors will not be liable to Nova for monetary damages arising from a breach of their fiduciary duty as directors in certain circumstances. This limitation does not affect liability for any breach of a director's duty to Nova or our stockholders (i) with respect to approval by the director of any transaction from which he or she derives an improper personal benefit, (ii) with respect to acts or omissions involving an absence of good faith, that the director believes to be contrary to the best interests of Nova or our stockholders, that involve intentional misconduct or a knowing and culpable violation of law, that constitute an unexcused pattern or inattention that amounts to an abdication of his or her duty to Nova or our stockholders, or that show a reckless disregard for duty to Nova or our stockholders in circumstances in which he or she was, or should have been aware, in the ordinary course of performing his or her duties, of a risk of serious injury to Nova or our stockholders, or (iii) based on transactions between Nova and our directors or another corporation with interrelated directors or based on improper distributions, loans or guarantees under applicable sections of Delaware Law. This limitation of directors' liability also does not affect the availability of equitable remedies, such as injunctive relief or rescission. The Company has been advised that it is the position of the Commission that insofar as the provision in Nova's Articles of Incorporation, as amended, may be invoked for liabilities arising under the Securities Act, the provision is against public policy and is therefore unenforceable. Item 7. Exemption from Registration Claimed. Not Applicable. Item 8. Exhibits Exhibit Number Description ------ ----------- 4.1 2003 Stock Compensation Plan 4.2 Form of Director's Compensation Agreement 4.3 Consulting Agreement 4.4 Consulting Agreement 5.1 Opinion and Consent of Loeb & Loeb LLP 23.1 Consent of Thomas Leger & Co., L.L.P. 23.2 Consent of Wienberg & Company ii Item 9. Undertakings. We hereby undertake to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (a) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (b) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act of 1933 if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (c) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that paragraphs (a) and (b) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Securities and Exchange Commission by us pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. In addition, we hereby undertake: (a) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and (b) To remove from registration by means of a post-effective amendment any of the securities being registered, which remain, unsold at the termination of the offering. We hereby undertake that, for purposes of determining any liability under the Securities Act of 1933, each filing of our annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers, and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission this indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid by a director, officer or controlling person of ours in the successful defense of any action, suit or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. iii SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. NOVA INTERNATIONAL FILMS, INC. By: /s/ Raymond Ying-Wai Kwan ---------------------------------- Name: Raymond Ying-Wai Kwan Dated: June 3, 2003 Title: Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, as amended, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. /s/ Raymond Ying-Wai Kwan Dated: June 3, 2003 - -------------------------------------------- Raymond Ying-Wai Kwan Chief Executive Officer and Director /s/ Yau-Sing Tang Dated: June 3, 2003 - -------------------------------------------- Yau-Sing Tang Chief Financial Officer and Chairman of the Board of Directors /s/ Jun-Tang Zhao Dated: June 3, 2003 - -------------------------------------------- Jun-Tang Zhao Director /s/ George Raney Dated: June 3, 2003 - -------------------------------------------- George Raney Director EX-4.1 3 novas8ex41060203.txt 2003 STOCK COMPENSATION PLAN EXHIBIT 4.1 NOVA INTERNATIONAL FILMS, INC. 2003 STOCK COMPENSATION PLAN Section 1. Purpose ------------------ The purpose of this 2003 Stock Compensation Plan (the "Plan") is to advance the interests of Nova International Films, Inc., a Delaware corporation ("Nova"), by enhancing its ability to attract, retain and provide incentives to directors, officers, employees and independent contractors who are crucial to the future growth and success of Nova and its subsidiaries and Affiliates (as hereinafter defined). Section 2. Definitions ---------------------- "Affiliate" when used in conjunction with Nova, shall include, but not be limited to, an entity or other person that directly or indirectly controls, or is controlled by, or is under common control with Nova. "Award" means any Option, Stock Appreciation Right, Performance Share or Restricted Stock awarded under the Plan. "Board" means the board of directors of Nova. "Code" means the Internal Revenue Code of 1986, as amended. "Committee" means a committee of not less than two members of the Board appointed by the Board to administer the Plan. "Common Stock" or "Stock" means the Common Stock of Nova. "Company" means Nova and, except where the content requires otherwise, all present and future subsidiaries and Affiliates of Nova. "Designated Beneficiary" means the beneficiary designated by a Participant, in a manner determined by the Board, to receive amounts due or exercise rights of the Participant in the event of the Participant's death or incapacity. In the absence of an effective designation by a Participant, Designated Beneficiary shall mean the Participant's estate, in the event of the Participant's death, and the Participant's legal guardian, in the event of the Participant's incapacity. "Fair Market Value" means with respect to Common Stock on any given date (i) if the Common Stock is listed for trading on one or more national securities exchanges, the mean of the high and low sales prices during regular trading hours on the principal exchange on which it is traded on the date in question, or, if the Common Stock shall not have been traded during regular trading hours on such principal exchange on such date, the mean of the high and low sales prices during regular trading hours on such principal exchange on the first day prior thereto on which the Common Stock was so traded; (ii) if Common Stock is not listed for trading on a national securities exchange but is traded on the over-the-counter market, the mean of the highest and lowest bid prices for the Common Stock during regular trading hours on the date in question, or, if there are no such bid prices for the Common Stock on such date, the mean of the highest and lowest bid prices during regular trading hours on the first day prior thereto on which such prices appear; and (iii) in all other events, such amount as may be determined by the Board in good faith by any fair and reasonable means. "Incentive Stock Option" or "ISO" means an option to purchase shares of Common Stock awarded to a Participant under Section 6 which is intended to meet the requirements of Code Section 422. "Nonstatutory Stock Option" or "NSO" means an option to purchase shares of Common Stock awarded to a Participant under Section 6 which is not intended to be an ISO. "Option" means an Incentive Stock Option or a Nonstatutory Stock Option. "Participant" means a person selected by the Board to receive an Award under the Plan. "Performance Shares" mean shares of Common Stock which may be earned by the achievement of performance goals awarded to a Participant under Section 8. "Reporting Person" means a person subject to Section 16 of the Securities Exchange Act of 1934 or any successor provision. "Restricted Period" means the period of time selected by the Board during which shares subject to a Restricted Stock Award may be repurchased by or forfeited to the Company. "Restricted Stock" means shares of Common Stock awarded to a Participant under Section 9. "Stock Appreciation Right" or "SAR" means a right to receive any excess in Fair Market Value of shares of Common Stock over the exercise price awarded to a Participant under Section 7. Section 3. Administration ------------------------- The Board shall have plenary authority in its discretion, to the maximum extent permissible by law, subject to and not inconsistent with the express provisions of the Plan, to administer the Plan. Without limiting the foregoing, the Board shall have authority to make Awards, to set administrative rules, guidelines and practices relating to the Plan as it shall deem advisable from time to time, and to interpret the provisions of the Plan. In determining the persons to whom Awards shall be made, the number of shares to be covered by each Award and the terms thereof (including the restriction, if any, which shall apply to the Common Stock subject to an Award), the Board shall take into account the duties of the respective persons, their present and potential contributions to the success of the Company and such other factors as the Board, in its discretion, shall deem relevant in connection with accomplishing the purposes of the Plan. The Board's decisions shall be final and binding. Except as otherwise required by law, no member of the Board shall be liable for any action or determination relating to the Plan made in good faith. The Board may appoint a Committee and delegate to the Committee some or all of its authority with respect to Plan administration. In the event the Board appoints a Committee, references in the Plan to the Board shall, as appropriate, be read as references to the Committee. Section 4. Eligibility ---------------------- Awards may be made to employees and independent contractors of the Company. For purposes hereof, independent contractors shall include consultants, advisors and directors of the Company. Section 5. Stock Available for Awards ------------------------------------- (a) Subject to adjustment under Section 10 below, Awards may be made under the Plan for up to 10,000,000 (ten million) shares of Common Stock. If any Award in respect of shares of Common Stock expires or is terminated unexercised or is forfeited for any reason or settled in a manner that results in fewer shares outstanding than were initially awarded, the shares subject to such Award or so surrendered, as the case may be, to the extent of such expiration, termination, forfeiture or decrease, shall again be available for award under the Plan, subject, however, in the case of Incentive Stock Options, to any limitation required under the Code. Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares. (b) The Board may grant Awards under the Plan in substitution for stock and stock based awards held by employees of another corporation who become employees of the Company as a result of a merger or consolidation of the employing corporation with the Company or the acquisition by the Company of property or stock of the employing corporation. The substitute Awards shall be granted on such terms and conditions as the Board considers appropriate in the circumstances. The shares which may be delivered under such substitute Awards shall be in addition to the maximum number of shares provided for in Section 5(a). Section 6. Stock Options ------------------------ (a) General. -------- (i) Subject to the provisions of the Plan, the Board may award Incentive Stock Options and Nonstatutory Stock Options, and determine the number of shares to be covered by each Option, the option price therefor, the conditions and limitations applicable to the exercise of the Option and the restrictions, if any, applicable to the shares of Common Stock issuable thereunder. (ii) The Board shall establish the exercise price at the time each Option is awarded. (iii) Subject to Section 10(a), each Option shall be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable Award. The Board may impose such conditions with respect to the exercise of Options, including conditions relating to applicable federal or state securities laws, as it considers necessary or advisable. (iv) Options granted under the Plan shall provide for the payment of the exercise price by delivery of cash or check in an amount equal to the exercise price of such Options or by delivery of shares of Common Stock of the Company owned by the optionee for at least six months (valued at Fair Market Value) and, to the extent permitted by the Board at or after the award of the Option, may provide for payment by (A) delivery of other property acceptable to the Board (valued at fair market value), (B) delivery of a promissory note of the optionee to the Company on terms determined by the Board, (C) delivery of an irrevocable undertaking by a broker to deliver promptly to the Company sufficient funds to pay the exercise price or delivery of irrevocable instructions to a broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price, (D) payment of such other lawful consideration as the Board may determine, or (E) any combination of the foregoing. (v) The Board may provide for the automatic award of an Option upon the delivery of shares to the Company in payment of the exercise price of an Option for up to the number of shares so delivered. (vi) The Board may at any time accelerate the time at which all or any part of an Option may be exercised. (b) Incentive Stock Options. ---------------------------- Options granted under the Plan which are intended to be ISOs shall be subject to the following additional terms and conditions: (i) All ISOs granted under the Plan shall, at the time of grant, be specifically designated as such in the option agreement covering such Award. All Options designated as ISOs shall be interpreted in a manner consistent with the requirements of Code Section 422. (ii) While the Company shall take reasonable measures to assure that an Option intended to be an ISO shall be so treated for federal income tax purposes, it makes no assurances to anyone that any Option intended to be an ISO shall be taxed as an ISO. Without limiting the foregoing, Options intended to be ISOs which are exercised after the period permitted by Code Section 422 shall not be taxed as ISOs. (iii) ISOs may only be awarded to employees of Nova or a corporation which, with respect to Nova, is a "parent corporation" or "subsidiary corporation" within the meaning of Code Sections 424(e) and (f). Furthermore, except as otherwise provided in Code Section 422, if a Participant is no longer employed by Nova or a parent corporation or subsidiary corporation of Nova, the Participant's Option shall cease to be treated as an ISO. (iv) Subject to clause (v), the Option exercise price per share of Common Stock covered by an ISO shall be no less than the Fair Market Value of a share of Common Stock on the date of grant of the Option. (v) In the case of an individual who at the time the Option is granted owns stock possessing more than 10% of the total combined voting power of all classes of the stock of Nova or of a parent or subsidiary corporation of Nova (a "10% Holder"), (1) the Option exercise price of the Common Stock covered by any ISO granted to such person shall in no event be less than 110% of the Fair Market Value of the Common Stock on the date the ISO is granted and (2) the term of an ISO granted to such person may not exceed five years from the date of grant. (vi) The aggregate Fair Market Value (determined at the time an ISO is granted) of the Common Stock covered by ISOs exercisable for the first time by an employee during any calendar year (under all plans of the Company) may not exceed $100,000. Section 7. Stock Appreciation Rights ------------------------------------ (a) The Board may grant Stock Appreciation Rights entitling recipients on exercise of the SAR to receive an amount, in cash or Stock or a combination thereof (such form to be determined by the Board), determined in whole or in part by reference to appreciation in the Fair Market Value of the Stock between the date of the Award and the exercise of the Award. A Stock Appreciation Right shall entitle the Participant to receive, with respect to each share of Stock as to which the SAR is exercised, the excess of the share's Fair Market Value on the date of exercise over its Fair Market Value on the date the SAR was granted. (b) Stock Appreciation Rights may be granted in tandem with, or independently of, Options granted under the Plan. A Stock Appreciation Right granted in tandem with an Option which is not an Incentive Stock Option may be granted either at or after the time the Option is granted. A Stock Appreciation Right granted in tandem with an Incentive Stock Option may be granted only at the time the Option is granted. (c) When Stock Appreciation Rights are granted in tandem with Options, the following provisions shall apply: (i) The Stock Appreciation Right shall be exercisable only at such time or times, and to the extent, that the related Option is exercisable and shall be exercisable in accordance with the procedure required for exercise of the related Option. (ii) The Stock Appreciation Right shall terminate and no longer be exercisable upon the termination or exercise of the related Option, except that a Stock Appreciation Right granted with respect to less than the full number of shares covered by an Option shall not be reduced until the number of shares as to which the related Option has been exercised or has terminated exceeds the number of shares not covered by the Stock Appreciation Right. (iii) The Option shall terminate and no longer be exercisable upon the exercise of the related Stock Appreciation Right. (iv) The Stock Appreciation Right shall be transferable only with the related Option. (v) A Stock Appreciation Right granted in tandem with an Incentive Stock Option may be exercised only when the market price of the Stock subject to the Option exceeds the exercise price of such Option. (d) A Stock Appreciation Right not granted in tandem with an Option shall become exercisable at such time or times, and on such conditions, as the Board may specify. (e) The Board may at any time accelerate the time at which all or any part of the SAR may be exercised. Section 8. Performance Shares ----------------------------- (a) The Board may make Performance Share Awards entitling recipients to acquire shares of Stock upon the attainment of specified performance goals. The Board may make Performance Share Awards independent of or in connection with the granting of any other Award under the Plan. The Board in its sole discretion shall determine the performance goals applicable under each such Award, the periods during which performance is to be measured, and all other limitations and conditions applicable to the awarded Performance Shares. (b) A Participant receiving a Performance Share Award shall have the rights of a stockholder only as to shares actually received by the Participant under the Plan and not with respect to shares subject to an Award but not actually received by the Participant. A Participant shall be entitled to receive a stock certificate evidencing the acquisition of shares of Stock under a Performance Share Award only upon satisfaction of all conditions specified in the Agreement evidencing the Performance Share Award. (c) The Board may at any time accelerate or waive any or all of the goals, restrictions or conditions imposed under any Performance Share Award. Section 9. Restricted Stock --------------------------- (a) The Board may grant Restricted Stock Awards entitling recipients to acquire shares of Stock, subject to the right of the Company to repurchase all or part of such shares at their purchase price (or to require forfeiture of such shares if purchased at no cost) from the recipient in the event that conditions specified by the Board in the applicable Award are not satisfied prior to the end of the applicable Restricted Period or Restricted Periods established by the Board for such Award. Conditions for repurchase (or forfeiture) may be based on continuing employment or service or achievement of pre-established performance or other goals and objectives. (b) Shares of Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered, except as permitted by the Board during the applicable Restricted Period. Shares of Restricted Stock shall be evidenced in such manner as the Board may determine. Any certificates issued in respect of shares of Restricted Stock shall be registered in the name of the Participant and, unless otherwise determined by the Board, deposited by the Participant, together with a stock power endorsed in blank, with the Company (or its designee). At the expiration of the Restricted Period, the Company (or such designee) shall deliver such certificates to the Participant or if the Participant has died, to the Participants' Designated Beneficiary. (c) The purchase price for each share of Restricted Stock shall be determined by the Board. Such purchase price may be paid in cash or such other lawful consideration as is determined by the Board. (e) The Board may at any time accelerate the expiration of the Restricted Period applicable to all, or any particular, outstanding shares of Restricted Stock. (f) Notwithstanding the foregoing, the Board may award to Participants Restricted Stock for services rendered or to be rendered by such Participant pursuant to the terms of any agreement between the Company and such Participant, which award is not requested to contain any repurchase rights or forfeiture provisions. Section 10. General Provisions Applicable to Awards --------------------------------------------------- (a) Maximum Term. No Award shall have a term exceeding ten years, measured from the date of the Award grant. (b) Documentation. Each Award under the Plan shall be evidenced by an instrument delivered to the Participant specifying the terms and conditions thereof and containing such other terms and conditions not inconsistent with the provisions of the Plan as the Board considers necessary or advisable. Such instruments may be in the form of agreements to be executed by both the Company and the Participant, or certificates, letters or similar documents, acceptance of which shall evidence agreement to the terms thereof and of this Plan. (c) Board Discretion. Each type of Award may be made alone, in addition to or in relation to any other type of Award. The terms of each type of Award need not be identical and the Board need not treat Participants uniformly. Except as otherwise provided by the Plan or a particular Award, any determination with respect to an Award may be made by the Board at the time of the Award grant or at any time thereafter. (d) Termination of Status. The Board shall determine and specify in the Award documentation the effect on an Award of the disability, death, retirement, authorized leave of absence or other termination of employment or other status of a Participant and the extent to which, and the period during which, the Participant's legal representative, guardian or Designated Beneficiary may exercise rights under such Award. (e) Dilutions and Other Adjustments. In the event of any stock dividend or split, issuance or repurchase of stock or securities convertible into or exchangeable for shares of stock, grants of options, warrants or rights to purchase stock, recapitalization, combination, exchange or similar change affecting the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company, the Board in its sole discretion may equitably adjust any or all of (i) the number and kind of shares in respect of which Awards may be made under the Plan, (ii) the number and kind of shares subject to outstanding Awards, and (iii) the award, exercise or conversion price with respect to any of the foregoing, and may make any other equitable adjustments or take such other equitable action as the Board, in its discretion, shall deem appropriate, including, if considered appropriate by the Board, making provision for a cash payment with respect to an outstanding Award. Such adjustments or actions shall be conclusive and binding for all purposes. In the event of a change in the Common Stock which is limited to a change in the designation thereof to "Capital Stock" or other similar designation, or to a change in the par value thereof, or from no par value to par value (or vice versa), without increase or decrease in the number of issued shares, the shares resulting from any such change shall be deemed to be Common Stock within the meaning of the Plan. For purposes hereof, the conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration." In the event that the Company or the division, subsidiary or other affiliated entity for which a Participant performs services is sold, merged, consolidated, reorganized or liquidated, the Board may take any one or more of the following actions as to outstanding Awards: (i) provide that such Awards shall be assumed, or substantially equivalent Awards shall be substituted, by the acquiring or succeeding corporation (or an affiliate thereof) on such terms as the Board determines to be appropriate, (ii) upon written notice to Participants, provide that all unexercised Options or SARs shall terminate immediately prior to the consummation of such transaction unless exercised by the Participant within a specified period following the date of such notice, (iii) in the event of a sale or similar transaction under the terms of which holders of the Common Stock of the Company receive a payment for each share surrendered in the transaction (the "Sales Price"), make or provide for a payment to each Option and/or SAR holder equal to the amount by which (A) the Sales Price times the number of shares of Common Stock subject to Participant's outstanding, vested Options or SARs exceeds (B) the aggregate exercise price of all such outstanding, vested Options or SARs, in exchange for the termination of such Options or SARs, (iv) or make such other adjustments, if any, as the Board determines to be necessary or advisable to provide each Participant with a benefit substantially similar to that to which the Participant would have been entitled had such event not occurred. (h) Withholding. The Participant shall pay to the Company, or make provision satisfactory to the Board for payment of, any taxes required by law to be withheld in respect of Awards under the Plan no later than the date of the event creating the tax liability. In the Board's discretion, and subject to such conditions as the Board may establish, such tax obligations may be paid in whole or in part in shares of Common Stock, including shares retained from the Award creating the tax obligation, valued at their Fair Market Value. The Company may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the Participant. (i) Foreign Nationals. Awards may be made to Participants who are foreign nationals or employed outside the United States on such terms and conditions different from those specified in the Plan as the Board considers necessary or advisable to achieve the purposes of the Plan and comply with applicable laws and/or achieve favorable tax results under foreign tax laws. (j) Amendment of Award. The Board may amend, modify or terminate any outstanding Award, including substituting therefor another Award of the same or a different type, changing the date of exercise or realization and converting an Incentive Stock Option to a Nonstatutory Stock Option, provided that the Participant's consent to such action shall be required unless the Board determines that the action, taking into account any related action, would not materially and adversely affect the Participant. (k) Conditions on Delivery of Stock. The Company shall not be obligated to deliver any shares of Stock pursuant to the Plan or to remove restrictions from shares previously delivered under the Plan (i) until all conditions of the Award have been satisfied or removed, (ii) until, in the opinion of the Company's counsel, all applicable federal and state laws and regulations have been complied with, and (iii) if the outstanding Stock is at the time listed on any stock exchange, until the shares to be delivered have been listed or authorized to be listed on such exchange upon official notice of issuance. If the sale of Stock has not been registered under the Securities Act of 1933, as amended, the Company may require, as a condition to exercise of the Award, such representations or agreements as the Company may consider appropriate to avoid violation of such Act and may require that the certificates evidencing such Stock bear an appropriate legend restricting transfer. Except to the extent as may be specified in the documentation with respect to a particular Award grant, the Company shall be under no obligation to register or qualify any shares of Common Stock subject to Awards under any federal or state securities law or on any exchange. Section 11. Miscellaneous ------------------------- (a) No Right To Employment or Other Status. No person shall have any claim or right to be granted an Award, and the grant of an Award shall not be construed as giving a Participant the right to continued employment by or the right to continue to provide services to the Company. The Company expressly reserves the right at any time to dismiss a Participant free from any liability or claim under the Plan, except as may be expressly provided in the applicable Award. (b) No Rights As Stockholder. Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any shares of Common Stock to be distributed under the Plan until he or she becomes the record holder thereof. (c) No Restriction on the Right of the Company to Effect Corporate Changes. The Plan and the Options granted hereunder shall not affect in any way the right or power of Nova or its stockholders to make or authorize any or all adjustments, recapitalization, reorganizations or other changes in Nova's or the Company's capital structure or its business, or any merger or consolidation of Nova or the Company, or any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common Stock or the rights of holders thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of Nova or the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. (d) Exclusion from Benefit Computations. Except as expressly specified in the applicable plan or program, no amount or shares of Common Stock payable upon exercise of an Award granted under the Plan shall be considered salary, wages or compensation for purposes of determining the amount or nature of benefits that a Participant is entitled to receive under any Company benefit plan or program. (e) Effective Date and Term. Subject to the approval of the stockholders of the Company, the Plan is effective as of May 15, 2003, the date as of when it was adopted by the Board. Prior to such stockholder approval, Awards incorporating provisions authorized by the Plan may be made under the Plan, but shall be expressly subject to such approval. No Award may be made under the Plan after the tenth anniversary of the Plan's effective date, but Awards granted before such date may extend beyond that date. (f) Amendment of Plan. The Board may amend, suspend or terminate the Plan or any portion thereof at any time; provided, however, that no amendment shall be made without stockholder approval if such approval is necessary to comply with any applicable tax or regulatory requirement. Prior to any such approval, Awards may be made under the Plan expressly subject to such approval. (g) Governing Law. The provisions of the Plan shall be governed by and interpreted in accordance with the laws of the state of Delaware. EX-4.2 4 novas8ex42060203.txt DIRECTOR COMPENSATION AGREEMENT EXHIBIT 4.2 DIRECTOR COMPENSATION AGREEMENT This Director Compensation Agreement (the "Agreement") is made and entered into as of February 28, 2003 by and between Nova International Films, Inc. (the "Company"), a Delaware corporation, and Yau-sing Tang ("Tang") with reference to the following: A. Tang has been duly appointed as a director of the Company. B. The parties hereto desire to set forth the terms of the compensation for Tang acting in the capacity as director of the Company. NOW, THEREFORE, in consideration of the mutual promises and covenants set forth in this Agreement, the receipt and sufficiency are hereby acknowledged, the parties hereto agree as follows: 1. Issuance of Shares. For the period commencing on the date hereof and terminating on the earlier to occur of (a) the second anniversary of the date hereof, or (b) the date when Tang ceases to act as a director of the Company, either by reason of resignation, removal or otherwise (the "Term"), the Company shall issue to Tang the following shares (the "Shares") for each month (or portion thereof) in which Tang is acting as a director: 30,000 Shares. It is expressly agreed that the compensation set forth herein shall be the sole and exclusive compensation payable to Tang for acting in the capacity as a director. Notwithstanding the foregoing, nothing herein shall preclude the Company and Tang from agreeing to additional compensation for services to be rendered by Tang in a capacity other than acting as a director. 2. Registration Rights. As soon as practicable after the date hereof, the Company shall file a Registration Statement on Form S-8 covering the resale of the Shares. Pending effectiveness of the Registration Statement, Tang acknowledges that the Shares shall be restricted shares as such term is defined in Rule 144 under the Securities Act of 1933, as amended. Tang further acknowledges that the certificate(s) evidencing the Shares which are restricted shares shall bear a customary Rule 144 legend. 3. No Commitment. In entering into this Agreement, the Company is not committing to having Tang serve as director for any particular period of time, and the Company shall have no liability to Tang hereunder in the event that the Company or the board of directors removes Tang as a director or does not agree to name Tang to the management slate in connection with the election of directors. 4. Miscellaneous. (a) This Agreement shall be governed and construed in accordance with the laws of the State of Delaware, without giving regard to the conflict of laws provisions thereof. (b) This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and supercedes all prior agreements and understandings of the parties, oral and written, with respect to such subject matter. (c) This Agreement may be executed in counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same instrument. Each party hereto may receive by delivery or facsimile transmission or other electronic means a duplicate original of the Agreement executed by the other party, and each party agrees that the delivery of the Agreement by facsimile transmission or other electronic means will be deemed to be an original of the Agreement so transmitted. IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written. Nova International Films, Inc., a Delaware corporation By: ---------------------------- ------------------------------- Yau-sing Tang EX-4.3 5 novas8ex43060203.txt CONSULTING AGREEMENT EXHIBIT 4.3 CONFIDENTIAL CONSULTING AGREEMENT THIS CONSULTING AGREEMENT (the "Agreement") is made and entered into as of the 30th day of May 2003, by and between Nova International Films, Inc. and its affiliates, an OTC-Bulletin Board Company (the "Company") and Rong-song Ni (the "Consultant"). WHEREAS, the Consultant is in the business of providing marketing, strategic planning, management consulting and advisory services in the People's Republic of China (the "PRC"); and WHEREAS, the Company deems it to be in its best interest to retain the Consultant to provide marketing, strategic planning and consulting services to and for it and the Consultant desires to so provide such services. NOW, WHEREFORE, in consideration of the mutual promises and covenants set forth in this Agreement, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: - 1. For a period of 12 months, beginning on 30th May, 2003 (the "Consulting Period"), the Consultant shall serve as an independent consultant and advisor to the Company on matters relating to the strategic planning of the Company and its subsidiaries; the identification and assistance with the location of potential business partners in China; the identification and negotiation of agreements with prospective joint venture and strategic alliance partners in China; the preparation and implementation of new business plans in China. 2. During the Consulting period, the Company shall be entitled to the Consultant's services for reasonable times when and to the extent reasonably requested by, and subject to the reasonable direction of, the Company's Chairman, Chief Executive Officer and the Board of Directors. It is understood that the Consultant's services are not exclusive to the Company and the Consultant shall be free to perform services for other persons or entities. However, the Consultant will notify the Company of its performance of consulting services for any other person or entity that could conflict with its obligations under this Agreement. Upon receiving such notice, the Company may terminate this Agreement or consent to the Consultant's outside consulting activities; failure to terminate this Agreement, within seven (7) days of receipt of written notice of conflict, shall constitute the Client's ongoing consent to the Consultant's outside consulting services. 3. The Consultant's services shall be rendered from his office or home, or, at the Company's request, from the Company's executive offices. Reasonable travel and living and other expenses necessarily incurred by the Consultant to render services at locations other than his office or home or from the Company's offices, shall be reimbursed by the Company promptly upon receipt of proper invoices and statements with regard to the nature and amount of those expenses. 4. The Consultant shall have no authority to bind the Company by or obtain any obligation, agreement, promise, or representation without first obtaining the written approval of the Chief Executive Officer of the Company. The Consultant shall not incur any liability on behalf of the Company or in any way represent or bind the Company in any manner or thing whatsoever and nothing herein shall be deemed to constitute either party the agent or representative of the other. The Company shall indemnify and hold the Consultant harmless from and against any liability resulting from the performance of the consulting services hereunder. 5. In consideration of Consultant's entering into this Agreement, The Company has agreed to issue to Consultant on or before 15th June, 2003: A. A lump sum of 1,000,000 shares of the Company's common stock (the "Shares"); B. Five year warrants (the "Warrants") of purchasing 1,000,000 shares of the Company's common stock (the "Warrant Shares"), with an exercise price equal to $0.45. The Warrants shall be exercisable and registered for sales immediately after the date of issuance, and shall expire 5 years after the date of issuance, unless otherwise extended by the Company. The Warrants shall include customary cashless exercise provision and will be non-redeemable and provide for automatic exercise upon expiration. The Warrants shall be transferable, subject only to the securities laws, by the holders thereof. 6. The Company agrees to file an S-8 Registration Statement on or before 15th June, 2003 to register the Shares and the Warrants Shares for sales, at the Company's sole expense. If the S-8 filing is not effective, the Company will, within 7 days, file an appropriate registration statement in lieu thereof, at the Company's expense. The Company will provide any legal opinions required to effectuate the registration of the Shares and the Warrant Shares. The Company agrees to deliver the Shares free via DTC to a brokerage account established in the name of the Consultant or deliver to the Consultant a certificate for the proper number of Shares without a restrictive legend, as requested by the Consultant. In addition, if the S-8 filing is deemed non-effective for any reasons, the Company shall pay to Consultant $40,000 per month, with each such payment due on the first day of each month throughout the term of this Agreement. Any such payments received by the Consultant will reduce pro rata the number of Shares due to the Consultant at such time as the S-8 filing or any subsequent fillings shall be approved. 7. The Consultant understands and agrees that he is an independent contractor rather than an employee or agent of the Company. Nothing contained herein shall be considered to create the relationship of employer-employee between the parties to this Agreement. The Consultant shall be responsible for withholding; paying and reporting any and all required federal, state or local income, employment and other taxes and charges. The Consultant understands and agrees that the Company will make no deduction from payments to the Consultant for federal or state tax withholdings, social security, unemployment, worker's compensation or disability insurance. 8. It is acknowledged and agreed by the Company that the Consultant is not rendering legal advice or performing accounting services, nor acting as an investment advisor or broker-dealer within the meaning of applicable state and federal securities laws. It is further acknowledged and agreed by the Company that the Consultant cannot guarantee the results or effectiveness of any of the services rendered or to be rendered by the Consultant hereunder. Rather, the Consultant shall use its best efforts to conduct its services and affairs in a professional manner and in accordance with good industry. 9. The Consultant agrees that he will not, without the Company's prior consent, disclose to anyone, any trade secrets of the Company or any confidential, non-public information relating to the Company's business, operations or prospects. 10. It is understood and agreed that the services of the Consultant are unique and confidential in nature and neither the Consultant nor the Company shall delegate or assign all or any portion of his or its required performance to any other individual, firm or entity, without the other's written consent. 11. No waiver, amendment or modification of any provision of this Agreement shall be effective unless in writing and signed by both parties. This Agreement shall be binding upon and inure to the benefit of the heirs, successors, permitted assigns and legal representatives of the parties. This Agreement constitutes the entire agreement between the parties concerning the subject matter hereof and supersedes all prior negotiations, discussions and other agreements with respect to the subject matter hereof. 12. This Agreement shall be governed by and interpreted in accordance with the laws of the Hong Kong Special Administrative Region. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Execution and delivery of this Agreement by exchange of facsimile copies bearing the facsimile signature of a party hereto shall constitute a valid and binding execution and delivery of this Agreement by such party. Such facsimile copies shall constitute enforceable original documents. The undersigned signatory signing for the Company has full authority to execute this Agreement on behalf of the Company and thus to legally bind the Company to all of the terms hereof. IN WITNESS WHEROF, this Agreement has been executed as of the 30th day of May 2003. CONSULTANT: COMPANY: Rong-song Ni Nova International Films, Inc. By:__________________________ By:_____________________________ Name: Raymond Ying-Mai Kwan Title: Chief Executive Officer EX-4.4 6 novas8ex44060203.txt CONSULTING AGREEMENT EXHIBIT 4.4 CONFIDENTIAL CONSULTING AGREEMENT THIS CONSULTING AGREEMENT (the "Agreement") is made and entered into as of the 3rd day of May 2003, by and between Nova International Films, Inc. and its affiliates, an OTC-Bulletin Board Company (the "Company") and Patrick J. Ko (the "Consultant"). WHEREAS, Consultant is in the business of providing management consulting and advisory services; and WHEREAS, The Company deems it to be in its best interest to retain Consultant to provide consulting services to and for it and Consultant desires to so provide such services; NOW, WHEREFORE, in consideration of the mutual promises and covenants set forth in this Agreement, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. For a period of 12 months, beginning on May 3rd, 2003 (the "Consulting Period"), Consultant shall serve as an independent consultant and advisor to the Company on matters relating to the structure, management, and operation of the Company and its subsidiaries; the identification and assistance with the location of potential business partners; the establishment of offices and operations outside of China; the business dealings with non-Chinese entities, particularly with U.S. companies; the identification and negotiation of agreements with prospective joint venture and strategic alliance partners, both foreign and domestic; the preparation and implementation of new business plans; the identification and securing of agreements with prospective officers, directors, consultants, and employees. 2. During the Consulting period, the Company shall be entitled to Consultant's services for reasonable times when and to the extent reasonably requested by, and subject to the reasonable direction of, the Company's Chairman, Chief Executive Officer and the Board of Directors. It is understood that the Consultant's services are not exclusive to the Company and Consultant shall be free to perform services for other persons or entities. However, the Consultant will notify the Company of its performance of consulting services for any other person or entity that could conflict with its obligations under this Agreement. Upon receiving such notice, the Company may terminate this Agreement or consent to the Consultant's outside consulting activities; failure to terminate this Agreement, within seven (7) days of receipt of written notice of conflict, shall constitute the Client's ongoing consent to the Consultant's outside consulting services. 3. Consultant's services shall be rendered from his office or home, or, at the Company's request, from the Company's executive offices. Reasonable travel and living and other expenses necessarily incurred by Consultant to render services at locations other than his office or home or from the Company's offices, shall be reimbursed by the Company promptly upon receipt of proper invoices and statements with regard to the nature and amount of those expenses. 4. Consultant shall have no authority to bind the Company by or obtain any obligation, agreement, promise, or representation without first obtaining the written approval of the Chief Executive Officer of the Company. Consultant shall not incur any liability on behalf of the Company or in any way represent or bind the Company in any manner or thing whatsoever and nothing herein shall be deemed to constitute either party the agent or representative of the other. The Company shall indemnify and hold Consultant harmless from and against any liability resulting from the performance of the consulting services hereunder. 5. In consideration of Consultant's entering into this Agreement, The Company has agreed to issue to Consultant on or before May 8 2003: A. $15,000 cash retainer per month, or lump sum of 500,000 shares of The Company's Common Stock (the "Shares"); B. Five year warrants (the "Warrants") to purchase 250,000 shares of The Company's Common Stock (the "Warrant Shares"), with an exercise price equal to $0.45. The Warrants shall be exercisable and registered for sale immediately after the date of issuance, and shall expire 5 years after the date of issuance, unless otherwise extended by the Company. The Warrants shall include customary cashless exercise provision and will be non-redeemable and provide for automatic exercise upon expiration. The Warrants shall be transferable, subject only to the securities laws, by the holders thereof. 6. The Company agrees to file an S-8 Registration Statement on or before May 8th, 2003 to register the Shares and the Warrants Shares for sale, at the Company's sole expense. If the S-8 filing is not effective, the Company will, within 7 days, file an appropriate registration statement in lieu thereof, at the Company's expense. The Company will provide any legal opinions required to effectuate the registration of the Shares and the Warrant Shares. The Company agrees to deliver the Shares free via DTC to a brokerage account established in the name of Consultant by the Consultant or deliver to Consultant a certificate for the proper number of Shares without a restrictive legend, as requested by Consultant. In addition, if the S-8 filing is deemed non-effective for any reason, the Company shall pay to Consultant $15,000 per month, with each such payment due on the first day of each month throughout the term of this Agreement. Any such payments received by Consultant will reduce pro rata the number of Shares due to Consultant at such time as the S-8 filing or any subsequent fillings shall be approved. 7. Consultant understands and agrees that he is an independent contractor rather than an employee or agent of The Company. Nothing contained herein shall be considered to create the relationship of employer-employee between the parties to this Agreement. Consultant shall be responsible for withholding, paying and reporting any and all required federal, state or local income, employment and other taxes and charges. Consultant understands and agrees that the Company will make no deduction from payments to Consultant for federal or state tax withholdings, social security, unemployment, worker's compensation or disability insurance. 8. It is acknowledged and agreed by the Company that Consultant is not rendering legal advice or performing accounting services, nor acting as an investment advisor or broker-dealer within the meaning of applicable state and federal securities laws. It is further acknowledged and agreed by the Company that that Consultant cannot guarantee the results or effectiveness of any of the services rendered or to be rendered by Consultant hereunder. Rather, Consultant shall use its best efforts to conduct its services and affairs in a professional manner and in accordance with good industry. 9. Consultant agrees that he will not, without the Company's prior consent, disclose to anyone, any trade secrets of the Company or any confidential, non-public information relating to the Company's business, operations or prospects. 10. It is understood and agreed that the services of Consultant are unique and confidential in nature and neither Consultant nor the Company shall delegate or assign all or any portion of his or its required performance to any other individual, firm or entity, without the other's written consent. 11. No waiver, amendment or modification of any provision of this Agreement shall be effective unless in writing and signed by both parties. This Agreement shall be binding upon and inure to the benefit of the heirs, successors, permitted assigns and legal representatives of the parties. This Agreement constitutes the entire agreement between the parties concerning the subject matter hereof and supersedes all prior negotiations, discussions and other agreements with respect to the subject matter hereof. 12. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Georgia. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Execution and delivery of this Agreement by exchange of facsimile copies bearing the facsimile signature of a party hereto shall constitute a valid and binding execution and delivery of this Agreement by such party. Such facsimile copies shall constitute enforceable original documents. The undersigned signatories signing for The Company have full authority to execute this Agreement on behalf of The Company and thus to legally bind The Company to all of the terms hereof. IN WITNESS WHEROF, this Agreement has been executed as of the 3rd day of May 2003. CONSULTANT: COMPANY: Patrick J. Ko Nova International Films, Inc. By:__________________________ By:_____________________________ Name: Raymond Ying-Wai Kwan Title: Chief Executive Officer EX-5.1 7 novas8ex51060203.txt OPINION AND CONSENT OF LOEB & LOEB LLP EXHIBIT 5.1 LOEB & LOEB LLP 10100 Santa Monica Boulevard, Suite 2200 Los Angeles, California, 90067 Direct Dial: 310-282-2350 e-mail: dficksman@loeb.com -------------- June 3, 2003 Nova International Films, Inc. Board of Directors Suite 805, One Pacific Place Queensway, Hong Kong Ladies and Gentlemen: We have acted as counsel to Nova International Films, Inc., a Delaware company (the "Company"), in connection with the preparation and filing with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Act"), of a Registration Statement on Form S-8 (the "Registration Statement"), pursuant to which the Company is registering a total of 11,500,000 shares of its common stock, $.00001 par value per share (the "Common Stock") of which 10,000,000 are issuable pursuant to the Company's 2003 Stock Compensation Plan and 1,500,000 are issuable pursuant to certain consulting agreements. The Registration Statement also covers the resale of 1,176,000 shares of Common Stock which will be sold by certain Selling Stockholders of the Company pursuant to a reoffer prospectus. In so acting, we have examined and relied upon the originals or copies, certified or otherwise identified to our satisfaction, of such Company records, documents, certificates and other instruments as in our judgment are necessary or appropriate to enable us to render the opinions expressed below. Based upon the foregoing and such examination of law as we have deemed necessary, we are of the opinion that the Common Stock to be offered by the Selling stockholder, when sold under the circumstances contemplated in the Registration Statement, will be legally issued, fully paid and non-assessable. The opinions we express herein are limited to matters involving the Delaware corporate law and the federal laws of the United States and are further expressly limited to the matters set forth above and we render no opinion, whether by implication or otherwise as to any other matters relating to the Company or the Common Stock. We consent to the use of this letter as an Exhibit to the Registration Statement and to the use of our name under the heading "Legal Matters" included in the Prospectus forming a part of the Registration Statement. Sincerely, /s/ David L. Ficksman --------------------- David L. Ficksman a Partner of the Firm EX-23.1 8 novas8ex231060203.txt CONSENT OF THOMAS LEGER & CO., L.L.P. EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT We hereby consent to the incorporation by reference in this Registrations Statement of our report dated April 15, 2003 on the financial statements of Solar Touch Limited included in the Form 8-K/A, filed by Nova International Films, Inc. on May 19, 2003. /s/ Thomas Leger & Co., L.L.P. Thomas Leger & Co. L.L.P. Houston, Texas June 4, 2003 EX-23.2 9 novas8ex232060903.txt CONSENT OF WEINBERG & COMPANY, P.A. EXHIBIT 23.2 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT We hereby consent to the incorporation by reference in the foregoing Registration Statement on Form S-8 of our report dated January 24, 2003, relating to the financial statements of Nova International Films, Inc. appearing in the Nova International Films, Inc. Annual Report on Form 10-KSB for the year ended October 31, 2002, filed with the Securities and Exchange Commission on February 10, 2003 and to the reference to our firm as "Experts". /s/ Weinberg & Comopany, P.A. WEINBERG &COMPANY, P.A. Certified Public Accountants Los Angeles, California June 6, 2003 -----END PRIVACY-ENHANCED MESSAGE-----