Exhibit 4.2
AMENDMENT
TO
SHARE EXCHANGE AGREEMENT
This Amendment to Share Exchange Agreement is dated as of February 21,
2003 (the Amendment") by and among Nova International Films, Inc., a Delaware
corporation (the "Company"), and Martin Rifkin and William Rifkin (the
"Shareholders"), on the one hand; and Sino Concept Enterprises, Limited, a
British Virgin Islands corporation, ("Sino") and Kingston Global Co. Limited, a
British Virgin Islands corporation ("Kingston") (collectively, the "Sellers"),
and Solar Touch Limited, a British Virgin Islands company ("Solar Touch"), on
the other hand.
WHEREAS, the parties hereto have executed that certain Share Exchange
Agreement dated as of the 1st day of November 2002 (the "Share Exchange
Agreement"). Defined terms not defined herein shall have the same meaning as
ascribed to them in the Share Exchange Agreement.
WHEREAS, the parties desire to amend the Share Exchange Agreement on
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties and agreements set forth herein, the parties hereto
agree to amend the Share Exchange Agreement as follows:
1. Section 1.1 shall be amended by adding a subparagraph (c) to
read as follows:
(c) All the Company Shares issued pursuant to the Share
Exchange Agreement and issued to the Financial Consultants
shall be held by Loeb & Loeb LLP until the earlier to occur of
(a) the date that the Shareholders or the Company has
delivered the Rescission Notice referred to in Paragraph 6
below, in which case all such Shares shall be returned to
Company for cancellation, or (b) prior to receipt of the
Rescission Notice, the date that the financial statements
referred to in Paragraph 3 below which comply with such
Paragraph and Paragraph 6 below have been delivered to the
Company (the "Financial Statements Delivery Date"), in which
case all such Shares shall be delivered to the parties
entitled thereto.
2. Section 1.2 shall be amended by replacing on November 22, 2002
with February 27, 2003:
3. Section 3.4 of the Share Exchange Agreement shall be replaced
in its entirety by the following:
3.4 Financial Statements.
(a) Solar Touch has delivered to the Company a copy of the
audited consolidated balance sheets of Solar Touch at December 31, 2000 and 2001
and the related statements of operations, stockholders' equity and cash flows
for the years then ended including the notes thereto (all such statements being
the "Solar Touch International Financial Statements"). The Solar Touch
International Financial Statements together with the notes thereto, have been
prepared in accordance with generally accepted International accounting
standards applied on a basis consistent throughout all the years presented. Such
Statements present fairly the financial position of Solar Touch as of the dates
and for the years indicated. The books of account and other financial records of
Solar Touch have been maintained in accordance with good business practices;
(b) Solar Touch shall use its best efforts to cause the
delivery as soon as practicable of the following financial statements which
shall have been audited by an independent certified public accounting firm which
shall be presented in accordance with United States generally accepted
accounting principals applied on a basis consistent throughout all the years
presented: Balance Sheet as of December 31, 2002 and Statements of Income,
Statements of Cash Flows and Changes in Stockholders' Equity for the years ended
December 31, 2001 and 2002, and the notes relating thereto (the "Solar Touch
Financial Statements"). By delivery of the Solar Touch Financial Statements,
Sino, Kingston and Solar Touch represent and warrant that the Solar Touch
Financial Statements will be complete and accurate and present fairly the
financial position of Solar Touch and the results of its operations and changes
in its financial positions as of the dates and for the periods indicated as
being covered thereby.
4. Section 6.2(e) shall be amended by providing that the
Optionees' right to purchase the Shares referred therein shall occur within two
business days of the Financial Statements Delivery Date which Solar Touch
Financial Statements comply with Paragraph 3 and Paragraph 6 hereof.
5. Section 6.3 shall be amended by deleting subparagraphs (a) and
(e) thereof.
6. There shall be added a new Section 8.15 which shall read as
follows:
Section 8.15 Right to Rescind. Notwithstanding anything herein
to the contrary, the Shareholders and the Company shall have a
right to rescind the Exchange by sending to Kingston a notice
(the "Rescission Notice") if at any time after April 30, 2003
and prior to the delivery of the Solar Touch Financial
Statements which comply with Paragraph 3 above and this
Section, the Company has not received the Solar Touch
Financial Statements which shall show (a) a positive net
income for the fiscal year ended December 31, 2002, (b)
stockholders equity of at least US$6,000,000 and (c) the
elimination of the shareholders' loan in the principal amount
US$5,875,793 and the capitalization of such amount on the
books and records as reflected on the Solar Touch Financial
Statements. In the event that the Shareholders or the Company
elect to send the Notice of Rescission, the Company shall
return to Kingston the Solar Touch Shares, (ii) all of the
Company Shares issued hereunder and issued to the Financial
Consultants shall be returned to the Company for cancellation,
(iii) the Company's current directors shall appoint the
designees of Martin Rifkin to the Board of Directors, (iv) all
of the current directors and officers of the Company shall
submit their resignations to be effective after the
appointments described in (iii) above, and (v) the parties
shall deliver to one another such other documents as each
shall reasonably request in order to effectuate and complete
the rescission. Rescission shall be without liability to any
party hereto. In connection with this Paragraph, the parties
designate and authorize Martin Rifkin to act on behalf of the
Company. Notwithstanding anything herein to the contrary, the
representations set forth in Section 3.4(a) shall be
superceded by Section 3.4(b) upon the delivery of the Solar
Touch Financial Statements.
7. In all other respects, the Share Exchange Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Amendment to the Share Exchange Agreement as the date first set forth above.
NOVA INTERNATIONAL FILMS, INC.
By:_______________________________
Martin Rifkin, President
SINO CONCEPTS ENTERPRISES, LIMITED
By:_______________________________
Anita So, Director
KINGSTON GLOBAL CO. LIMITED
By:_______________________________
SOLAR TOUCH LIMITED
By:_______________________________
__________________________________
Martin Rifkin
__________________________________
William Rifkin