THE WESTWIND GROUP, INC./
CTC COSMETICS HOLDING (BVI) CO., LTD.
COMMON STOCK PURCHASE WARRANT
To Purchase Fifty Thousand (50,000) Shares
Warrant No. 1997-1
FOR CONSIDERATION, the sufficiency and receipt of which is hereby
acknowledged by The Westwind Group, Inc./CTC Cosmetics (BVI) Co., Ltd., a
Delaware corporation (the "Company"), _________________________., a
___________ corporation (the "Holder"), is hereby granted a warrant (the
"Warrant") to purchase, at any time from the date hereof until 5:00 p.m.,
Los Angeles time, on March 31, 1999 (the "Expiration Date"), the number of
shares of fully paid and non-assessable shares (the "Shares") of common
stock of the Company set forth above.
The Shares shall be available for purchase at a price per Share equal
to 50% of the closing bid price on the date of exercise (the "Purchase
Price"). The Purchase Price shall be payable in cash, by certified or
official bank check or postal or express money order, in U.S. Dollars,
subject to adjustment as provided for herein. Upon surrender of this
Warrant with the Subscription Form attached to this Warrant duly executed,
together with payment of the Purchase Price times the number of Shares
purchased, at the Company's offices, the Holder shall be entitled to receive
certificates for the number of the Shares purchased.
The purchase rights represented by this Warrant are exercisable at the
option of the Holder, in whole at any time, or in part from time to time
(but not as to a fractional Share), from the date hereof but not later than
5:00 p.m., Los Angeles time on the Expiration Date. This Warrant shall
automatically terminate, without any further action by the Company, after
such time on the Expiration Date. In the case of the purchase of less than
all of the Shares purchasable hereunder upon surrender of this Warrant for
cancellation, together with the duly executed subscription form and funds
sufficient to pay any transfer tax, the Company shall cause to be delivered
to the Holder without charge a new Warrant of like tenor to this Warrant
evidencing the right of the Holder to purchase the number of Shares
purchasable hereunder as to which this Warrant has not been exercised. The
issuance of certificates for the Shares upon the exercise of this Warrant
shall be made without charge to the Holder for such certificates or for any
tax in respect of the issuance of such certificates, and such certificates
shall (subject to the provisions of the following paragraph of this Warrant)
be issued in the name of, or in such names as may be directed by, the
Holder; provided, however that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the issuance
of any such certificate in a name other than that of the registered Holder,
and the Company shall not be required to issue or deliver such certificates
unless or until the person or persons requesting the issuance thereof shall
have paid to the Company the amount of such tax or shall have established to
the satisfaction of the Company that such tax has been paid.
1
The Holder, by acceptance hereof, represents, warrants, covenants and
agrees that: (i) the Holder has knowledge of the business and affairs of the
Company; (ii) the Holder has received information regarding the Company that
he or she considers necessary or appropriate for his or her investment
decision; and (iii) this Warrant and the Shares issuable upon the exercise
of this Warrant are being acquired pursuant to an exemption from
registration provided by Regulation S promulgated under the Securities Act
of 1933. THIS WARRANT AND THE SHARES RECEIVABLE UPON EXERCISE THEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (AACT@) AND
THIS WARRANT CANNOT BE EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON UNLESS
THE SHARES HAVE BEEN REGISTERED UNDER THE ACT OR AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE. EACH PERSON EXERCISING THIS WARRANT IS EITHER
REQUIRED TO GIVE A WRITTEN CERTIFICATION, AS SET FORTH ON THE SUBSCRIPTION
FORM, THAT HE IS NOT A U.S. PERSON AND THAT THE WARRANT IS NOT BEING
EXERCISED ON BEHALF OF A U.S. PERSON, OR TO TAKE THE SHARES AS "RESTRICTED
SECURITIES" AS SUCH TERM IS DEFINED UNDER RULE 144 PROMULGATED UNDER THE
ACT. Subject to the terms hereof, this Warrant and all rights hereunder are
transferable, in whole or in part, on the books of the Company maintained
for such purpose at its principal office referred to above by the Holder in
person or by duly authorized attorney, upon surrender of this Warrant
properly endorsed and upon payment of any necessary transfer tax or other
governmental charge imposed upon such transfer. Upon any partial transfer,
the Company will issue and deliver to the Holder a new warrant or warrants
of like tenor with respect to the Shares not so transferred. Each Holder,
by taking or holding this Warrant, consents and agrees that the Holder may
be treated by the Company and all other persons dealing with this Warrant,
as the absolute owner hereof for any purpose and as the person entitled to
exercise the rights represented hereby, or to the transfer hereof on the
books of the Company, any notice to the contrary notwithstanding; but until
such transfer on such books, Company may treat the Holder as the owner for
all purposes.
In case the Company shall at any time subdivide or combine the
outstanding shares of common stock, the Purchase Price shall forthwith be
proportionately decreased in the case of subdivision or increased in the
case of combination. Upon each adjustment of the Purchase Price pursuant to
the provisions of this paragraph, the number of Shares issuable upon the
exercise of each Warrant shall be adjusted to the nearest full Share by
multiplying the Purchase Price in effect immediately prior to such
adjustment by the number of Shares issuable upon exercise of the Warrant
immediately prior to such adjustment and dividing the product so obtained by
the adjusted Purchase Price. In cash of any reclassification of common
stock (other than a change in par value or as a result of a subdivision or
combination), or in the case of any consolidation of the Company with, or
merger of the Company into, another corporation (other than a consolidation
or merger in which the Company is the surviving corporation and which does
not result in any reclassification or change of the outstanding shares of
common stock, except a change as a result of a subdivision or combination of
such shares or a change in par value, as aforesaid), or in the case of a
sale or conveyance to another corporation of the property of the Company as
an entirety, the Holder of this Warrant shall thereafter have the right to
purchase the kind and number of Shares and other securities and property
receivable upon such reclassification, change, consolidation, merger, sale
or conveyance by a Holder of the number of Shares which the Holder of such
Warrant would have had the right to purchase immediately prior to the record
date for such reclassification, change, consolidation, merger, sale or
conveyance, at a price equal to the product of (Y) the number of Shares
issuable upon exercise of this Warrant, and (Z) the Purchase Price in effect
immediately prior to the record date for such reclassification, change,
consolidation, merger, sale or conveyance. No adjustment of the Purchase
Price or number of Shares shall be made upon the issuance or sale of shares
of common stock, options, rights or warrants, conversion or exchange of con-
vertible or exchangeable securities or the occurrence of any event other
than as set forth in this paragraph.
2
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant, and, in case
of such loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable
expenses incidental thereto, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will make and deliver a new warrant of
like tenor, in lieu of this Warrant. The Company shall not be required to
issue certificates representing fractions of Shares, nor shall it be
required to issue scrip or pay cash in lieu of fractional interests, it
being the intent of the parties that all fractional interests shall be
eliminated. The Company shall at all times reserve and keep available out
of its authorized common stock, solely for the purpose of issuance upon the
exercise of the Warrant, such number of shares of common stock as shall be
issuable upon the exercise hereof. The Company covenants and agrees that,
upon exercise of this Warrant and payment of the Purchase Price therefor,
all shares of common stock issuable upon such exercise shall be duly and
validly issued, fully paid and non-assessable.
Nothing contained in this Warrant shall be construed as conferring upon
the Holder the right to vote or consent to or receive notice as a
shareholder in respect of any meetings of shareholders for the election of
directors or any other matter, or as having any rights whatsoever as a
shareholder of the Company. If, however, at any time prior to the
expiration of the Warrant or its exercise, any of the following events shall
occur: (a) the Company shall take a record of the holders of its common
stock for the purpose of entitling the Holders to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or distribu-
tion payable otherwise than out of current or retained earnings, as
indicated by the accounting treatment of such dividend or distribution on
the books of the Company; or (b) the Company shall offer to all the holders
of its common stock any additional shares of stock of the Company or
securities convertible into or exchangeable for shares of common stock of
the Company, or any option, right or warrant to subscribe therefore; or (c)
a dissolution, liquidation or winding-up of the Company (other than in
connection with a consolidation or merger) or a sale of all or substantially
all of its property, assets and business as an entirety shall be proposed;
then, in any one or more of said events, the Company shall give written
notice of such events at least ten (10) days prior to the date fixed as a
record date or the date of closing the transfer books for the determination
of the shareholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, or entitled to vote on such
proposed dissolution, liquidation, winding-up or sale. Such notice shall
specify such record date or the date of closing the transfer books, as the
case may be. Failure to give such notice or any defect therein shall not
affect the validity of any action taken in connection with the declaration
of payment of any such dividend, or the issuance of any convertible or
exchangeable securities, or subscription rights, options or warrants, or any
proposed dissolution, liquidation, winding-up or sale.
3
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly made when
delivered, or three (3) days after posting if mailed by registered or
certified mail, return receipt requested if to the registered Holder, to the
address of such Holder as shown on the books of the Company; or if to the
Company, to its executive office, or to such other address as may be
specified by the Holder or the Company in accordance with the foregoing
provisions. All the covenants, agreements, representations and warranties
contained in this Warrant shall bind the parties hereto and their respective
heirs, executors, administrators, distributees, successors and assigns.
This Warrant shall be construed and enforced in accordance with, and
governed by, the laws of the State of California.
THE WESTWIND GROUP, INC./
CTC COSMETICS HOLDING (BVI) CO., LTD.
Dated: March __, 1997 By:
Its: ________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED,
hereby sells, assigns, and transfers unto:
Name _____________________________________
(Please type or print in block letters)
Address: _________________________________
_________________________________
the right to purchase the Shares represented by this Warrant to the extent
of ____________ Shares as to which such right is exercisable and does
hereby irrevocably constitute and appoint ________________________________
__________________________________________________________________________
attorney, to transfer the same on the books of the Company with full power
of substitution in the premises.
Dated: ____________________
Signature: ________________________
4
SUBSCRIPTION FORM
(To be Executed by the Registered Holder
in order to Exercise the Warrant)
The undersigned hereby irrevocably elects to exercise the right to
purchase _________________ Shares covered by this Warrant No. _____________
___________________ according to the conditions hereof and herewith makes
payment of the Purchase Price of such Shares in full.
The undersigned represents that he is not a U.S. Person as defined
below and is not exercising this Warrant on behalf of any U. S. Person.
______________________________
Signature
______________________________
Name
Address:
______________________________
______________________________
Date: __________________
A U.S. Person is any of the following:
(a) Any natural person resident in the United States;
(b) Any partnership or corporation organized or incorporated under the
laws of the United States;
(c) Any estate of which any executor or administrator is a U.S. person;
(d) Any trust of which any trustee is a U.S. person;
(e) Any agency or branch of a foreign entity located in the United
States;
(f) Any non-discretionary account or similar account (other than an
estate or trust) held by a dealer or other fiduciary for the benefit or
account of a U.S. person;
(g) Any discretionary account or similar account (other than an estate
or trust) held by a dealer or other fiduciary organized, incorporated, or
(if an individual) resident in the United States; and
(h) Any partnership or corporation if (A) organized or incorporated
under the laws of any foreign jurisdiction; and (B) formed by a U.S. person
principally for the purpose of investing in securities not registered under
the Securities Act of 1933, unless it is organized or incorporated, and
owned, by accredited investors (as defined in Rule 501(a) of Regulation D)
who are not natural persons, estates or trusts.
Notwithstanding the above, the following are not "U.S. Persons:
(i) Any discretionary account or similar account (other than an estate or
trust) held for the benefit or account of a non-U.S. person by a dealer or
other professional fiduciary organized, incorporated, or (if an individual)
resident in the United States;
(j) Any estate of which any professional fiduciary acting as executor or
administrator is a U.S. person if an executor or administrator of the estate
who is not a U.S. person has sole or shared investment discretion with
respect to the assets of the estate, and the estate is governed by foreign
law;
(k) Any trust of which any professional fiduciary acting as trustee is a
U.S. person, if another of the trustees is a non-U.S. person with sole or
shared investment discretion with respect to the trust assets, and no
beneficiary of the trust (and no settlor if the trust is revocable) is a
U.S. person;
(l) An employee benefit plan established and administered in accordance
with the law of a country other than the United States and customary
practices and documentation of such country;
(m) Any agency or branch of a U.S. person located outside the United
States if the agency or branch operates for valid business reasons; and the
agency or branch is engaged in the business of insurance or banking and is
subject to substantive insurance or banking regulation, respectively, in the
jurisdiction where located.
(n) The International Monetary Fund, the International Bank for
Reconstruction and Development, the Inter-American Development Bank, the
Asian Development Bank, the African Development Bank, the United Nations,
and their agencies, affiliates and pension plans, and any other similar
international organizations, their agencies, affiliates and pension plans;
"United States" means the United States of America, its territories and
possessions, any State of the United States, and the District of Columbia.
5
