OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER (THE "1933 ACT"), AND MAY NOT BE OFFERED
OR SOLD WITHIN THE UNITED STATES (AS DEFINED IN REGULATION S OF THE 1933
ACT) OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS (AS DEFINED IN
REGULATION S OF THE 1933 ACT) EXCEPT PURSUANT TO REGISTRATION UNDER OR AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT.
INVESTMENT IN THESE SECURITIES INVOLVES A HIGH DEGREE OF RISK. IN MAKING AN
INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE
COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND THE RISKS
INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR
STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE
FOREGOING AUTHORITIES HAVE NOT CONFIRMED OR DETERMINED THE ACCURACY OR
ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THIS OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT dated as of March___,
1997 (the "Agreement"), is executed in reliance upon the exemption from
registration afforded by Regulation S ("Regulation S") as promulgated by the
Securities and Exchange Commission ("SEC"), under the Securities Act of
1933, as amended. Capitalized terms used herein and not defined shall have
the meanings given to them in Regulation S.
CTC Cosmetics Holding (BVI) Co., Ltd. ("CTC"), a British Virgin
Islands corporation and The Westwind Group, Inc., a Delaware corporation
("WGI"), have executed a Agreement and Plan of Reorganization as of March__,
1997, pursuant to which all of the common stock of CTC shall be acquired by
WGI in exchange for common stock of WGI (the "Acquisition") subject to
fulfillment of certain conditions. All references to the Seller or the
Company in this Agreement refer to the combined entity of CTC and WGI as if
the Acquisition had taken place. Simultaneous with the closing of the
Acquisition, WGI shall undertake a reverse split of the WGI issued and
outstanding common stock, whereby 1 share of common stock will be issued in
exchange for every ___ shares of common stock then issued and outstanding.
CTC is engaged in the business of developing, manufacturing,
distributing and marketing of skin and hair care products, cosmetics and
cosmetic related chemical ingredients in the People's Republic of China.
This Agreement has been executed by the undersigned "Buyer" in
connection with the private placement of 8% Convertible Debentures due March
31, 1998. Buyer hereby represents and warrants to, and agrees with Seller:
1. AGREEMENT TO SUBSCRIBE; PURCHASE PRICE.
(a) Subscription. The undersigned Buyer hereby subscribes
for and agrees to purchase the Seller's 8% Convertible Debentures due March
31, 1998 substantially in the form of the Debentures attached as Exhibit A
hereto and incorporated herein by reference, and having an aggregate
original principal amount of up to U.S. $1,000,000 (singularly, a
"Debenture," and plurally, the "Debentures"), at an aggregate purchase price
as set forth in subsection (b) herein.
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(b) Payment. The Purchase Price for the Buyer's portion of
the Debentures shall be Five Hundred Thousand United States Dollars (U.S.
$500,000) (the "Purchase Price"), which shall be payable at the Closing, as
defined below, pursuant to paragraph (C) herein by delivering immediately
available funds in United States Dollars by wire transfer to Xxxxx X. Xxxxx,
Esq., attorney trust account as Escrow Agent ("Escrow Agent") for closing
by delivery of securities versus payment.
(c) Closing. (i) The closing of the purchase and sale of
the Debentures pursuant to paragraph (a) hereof shall take place subject to
the satisfaction of the conditions set forth in Sections 7 and 8 hereof, on
or before March __, 1996 (the "Closing Date") after the Company has
delivered to the offices of the Escrow Agent, $_______ of Debentures in
denominations of not less than $50,000 and registered in the names provided
by the Buyer.
(ii) The Company and the Buyer agree that they shall
instruct the Escrow Agent as follows:
A. On the Closing Date, for each Debenture subscribed
for and delivered to the Escrow Agent pursuant to the paragraph (b) above,
the Escrow Agent shall has wired payment of the Purchase Price for the
Debentures (less any fees Company has authorized Escrow Agent to deduct) in
immediately available funds to the Company's account as provided in the
escrow instructions to the Escrow Agent and release the Debentures described
in paragraph (a) above to the Buyer.
B. The Escrow Agent will make delivery of the number of
Debentures set forth in clause (a) above in accordance with the instructions
of the Buyer subject to customary settlement procedures upon confirmation of
the wiring of funds to the Company as described in clause (b) above, except
that all such Debentures shall be delivered to a location outside the United
States and none of the Debentures shall be delivered to a U.S. Person (as
defined in Regulation S).
2. BUYER REPRESENTATIONS AND COVENANTS; ACCESS TO INFORMATION.
Offshore Transaction. In connection with the purchase and sale of
the Debentures, Buyer represents and warrants to, and covenants and agrees
with Seller as follows:
(i) Buyer is not a natural person and is not organized
under the laws of any jurisdiction within the United States, was not formed
by a U.S. Person (as defined in Section 902(o) of Regulation S) for the
purpose of investing in Regulation S securities and is not otherwise a U.S.
Person. Buyer is not, and on the Closing Date will not be, an affiliate of
Seller. To enable the Company to avoid withholding interest paid, the Buyer
certifies under penalty of perjury that it is neither a citizen nor a
resident of the United States and that its address set forth in the Escrow
Agreement is correct;
(ii) At the time the buy order was originated, Buyer was
outside the United States and is outside of the United States as of the date
of the execution and delivery of this Agreement and will be outside the
United States on the Closing Date;
(iii) No offer to purchase the Debentures or the common
stock of Seller issuable upon conversion of the Debentures (collectively,
the "Securities"), was made while Buyer was present in the United States;
(iv) Buyer is purchasing the Securities for its own
account and not (i) with a view to or for sale in connection with, any
distribution thereof or (ii) for the account or on behalf of any U.S.
Person, and Buyer is qualified to purchase the Securities under the laws of
its jurisdiction of residence, and the offer and sale of the Securities will
not violate the securities or other laws of such jurisdiction;
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(v) All offers and sales of any of the Securities by
Buyer prior to the end of the Restricted Period (as hereinafter defined)
shall be made in compliance with any applicable securities laws of any
applicable jurisdiction and in accordance with Rule 903 and 904, as
applicable, of Regulation S or pursuant to registration of securities under
the 1933 Act or pursuant to an exemption from registration. In any case,
none of the Securities have been and will be offered or sold by Buyer to,
or for the account or benefit of, a U.S. Person or within the United States
until after the end of the forty (40) day period commencing on the date of
closing of the offering of the Securities (the "Restricted Period"), as
certified by Buyer to Seller, and thereafter only pursuant to a Registration
Statement or an applicable exemption therefrom;
(vi) The transactions contemplated by this Agreement (a)
have not been and will not be pre-arranged by Buyer with a purchaser located
in the United States or a purchaser which is a U.S. Person, and (b) are not
and will not be part of a plan or scheme by Buyer, to evade the registration
provisions of the 1933 Act;
(vii) Buyer understands that the Securities are not
registered under the 1933 Act and are being offered and sold to it in
reliance on specific exclusions from the registration requirements of
Federal and State securities laws, and that Seller is relying upon the truth
and accuracy of the representations, warranties, agreements, acknowledgments
and understandings of Buyer set forth herein in order to determine the
applicability of such exclusions and the suitability of Buyer and any
purchaser from Buyer to acquire the Securities;
(viii) The Buyer has agreed, and to the best knowledge of
the Buyer, each distributor, if any, participating in the offering of the
Securities, has agreed that all offers and sales of the Securities prior to
the expiration of a period commencing on the closing of the offering of the
Debentures and ending forty days thereafter shall not be made to U.S.
persons or for the account or benefit of U.S. persons and shall otherwise be
made in compliance with the provisions of Regulation S. Buyer is not a
distributor or dealer. Buyer and its controlling persons agree to indemnify
the Company for any misrepresentation of Buyer contained herein;
(ix) Buyer has not conducted and shall not conduct any
"directed selling efforts" as that term is defined in Rule 902(b) of
Regulation S; nor has Buyer conducted any general solicitation relating to
the offer and sale of any of the Securities in the United States or
elsewhere;
(x) This Agreement has been duly authorized, validly
executed and delivered on behalf of Buyer and is a valid and binding
agreement in accordance with its terms, subject to general principals of
equity and to bankruptcy or other laws affecting the enforcement of
creditors' rights generally;
(xi) The execution and delivery of this Agreement and the
consummation of the purchase of the Securities, and the transactions
contemplated by this Agreement do not and will not conflict with or result
in a breach by Buyer of any of the terms or provisions of, or constitute a
default under, the articles of incorporation or by-laws (or similar
constitutive documents) of Buyer or any indenture, mortgage, deed of trust,
or other material agreement or instrument to which Buyer is a party or by
which it or any of its properties or assets are bound, or any existing
applicable law, rule or regulation of the United States or any State thereof
or any applicable decree, judgment or order of any Federal or State court,
Federal or State regulatory body, administrative agency or other United
States governmental body having jurisdiction over Buyer or any of its
properties or assets;
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(xii) All invitations, offers and sales of or in respect
of, any of the Securities, by Buyer and any distribution by Buyer of any
documents relating to any offer by it of any of the Securities will be in
compliance with applicable laws and regulations and will be made in such a
manner that no prospectus need be filed and no other filing need be made by
Seller with any regulatory authority or stock exchange in any country or any
political sub-division of any country;
(xiii) Buyer will not make any offer or sale of the
Securities by any means which would not comply with the laws and regulations
of the territory in which such offer or sale takes place or to which such
offer or sale is subject or which would in connection with any such offer or
sale impose upon Seller any obligation to satisfy any public filing or
registration requirement or provide or publish any information of any kind
whatsoever or otherwise undertake or become obligated to do any act; and
(xiv) Neither the Buyer nor any of its affiliates has
entered, has the intention of entering, or will during the Restricted Period
enter into any put option, short position or other similar instrument or
position with respect to any of the Securities or securities of the same
class as the Securities.
(xv) the Buyer (or others for whom it is contracting
hereunder) has been advised to consult its own legal and tax advisors with
respect to applicable resale restrictions and applicable tax considerations
and it (or others for whom it is contracting hereunder) is solely
responsible (and the Seller is not in any way responsible) for compliance
with applicable resale restrictions and applicable tax legislation.
(xvi) No Government Recommendation or Approval. Buyer
understands that no Federal or State or foreign government agency has passed
on or made any recommendation or endorsement of the Securities.
(xvii) Current Public Information. Buyer has received
and carefully reviewed the accompanying Disclosure Documents, as defined
herein. Buyer, in electing to subscribe for the Securities hereunder, has
relied upon an independent investigation made by it and its representatives
and advisors, if any, and has, prior to the date hereof, been given access
to and the opportunity to examine all books and records of the Company, and
all material contracts and documents of the Company. Buyer has been given
no oral or written representations or assurances from the Company or any
representation of the Company other than as set forth in this Agreement or
in a document executed by a duly authorized representative of the Company
making reference to this Agreement. The Buyer has such experience in
business and financial matters that it is capable of evaluating the risk of
its investment and determining the suitability of its investment. Buyer
understands that all financial information set forth in the Disclosure
Documents is subject to the qualifications set forth therein.
(xviii) No Legal Advice from Company. Buyer acknowledges
that Buyer has had the opportunity to review this Agreement and the
transactions contemplated herein with Buyer's own legal counsel. Buyer is
relying solely on such counsel and not on any statements or representations
of the Company for legal advice with respect to this investment, except for
the representations, warranties and covenants set forth herein.
(xix) No Public Solicitation. Buyer knows of no public
solicitation or advertisement of an offer in connection with the proposed
issuance and sale of the Securities.
(xx) Buyer's Sophistication. Buyer acknowledges that the
purchase of the Securities involves a high degree of risk, including the
total loss of Buyer's investment. Buyer has such knowledge and experience
in financial and business matters that it is capable of evaluating the
merits and risks of purchasing the Securities.
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(xxi) Tax Status. Buyer is not a "10-percent
Shareholder" (as defined in Section 871(h)(3)(B) of the U.S. Internal
Revenue Code) of Seller.
3. SELLER REPRESENTATIONS AND COVENANTS.
(a) Reporting Company Status. Seller is a "Reporting Issuer"
as defined by Rule 902 of Regulation S. Seller is required to file reports
pursuant to Section 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and its Common Stock, $0.004 par value per share (the
"Common Stock") is listed and trades on Bulletin Board. Seller has filed
all material required to be filed pursuant to all reporting obligations
under either Section 13(a) or 15(d) of the Exchange Act for a period of at
least twelve (12) months immediately preceding the offer or sale of the
Securities (or for such shorter period that Seller has been required to file
such material).
(b) Current Public Information. The Company has provided the
Buyer with true and correct copies of the Business Plan of CTC, audited
financial statements of CTC for the fiscal years ending September 30, 1994,
September 30, 1995 and September 30, 1996, report on Form 10-KSB for fiscal
year ending August 31, 1996 of WGI, the most recent report on Form 10-QSB
of WGI for the period ending November 30, 1996, and such other publicly
available documents as requested by Buyer (collectively, the "Disclosure
Documents").
(c) Offshore Transaction. Seller has not offered any of the
Securities to any person in the United States, any identifiable groups of
U.S. citizens abroad, or to any U.S. Person, as such terms are used in
Regulation S.
(i) Based upon the truth and accuracy of representations
and warranties of Buyer, at the time the buy order was originated, Seller
and/or its agents reasonably believe the Buyer was outside of the United
States and was not a U.S. person.
(ii) Based upon the truth and accuracy of representations
and warranties of Buyer, Seller and/or its agents reasonably believe that
the transaction has not been pre-arranged with a buyer in the United States.
(iii) No offer to buy or sell the Securities was or will
be made by Seller to any person in the United States.
(iv) The sale of the Securities by Seller pursuant to
this Agreement will (based in part upon the representations and warranties
of the Buyer contained herein) be made in accordance with the provisions and
requirements of Regulation S provided that the representations and
warranties of Buyer in Section 2(a) hereof are true and correct.
(v) The transactions contemplated by this Agreement (a)
have not been and will not be pre-arranged by Seller with a purchaser
located in the United States or a purchaser which is a U.S. Person, and (b)
are not and will not be part of a plan or scheme by Seller to evade the
registration provisions of the 1933 Act.
(d) No Directed Selling Efforts. In regard to this
transaction, to the best knowledge of the Seller, Seller has not conducted
any "directed selling efforts" as that term is defined in Rule 902 of
Regulation S nor has Seller conducted any general solicitation relating to
the offer and sale of any of the Securities in the United States or
elsewhere.
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(e) Concerning the Securities. The issuance, sale and
delivery of the Debentures have been duly authorized by all required
corporate action on the part of Seller, and when issued, sold and delivered
in accordance with the terms hereof and thereof for the consideration
expressed herein and therein, will be duly and validly issued, fully paid
and non-assessable. The Common Stock issuable upon conversion of the
Debenture has been duly and validly reserved for issuance and, upon issuance
in accordance with the terms of the Debentures, shall be duly and validly
issued, fully paid, and non-assessable and will not subject the holders
thereof, if such persons are non-U.S. persons, to personal liability by
reason of being such holders. There are no pre-emptive rights of any
shareholder of Seller.
(f) Subscription Agreement. This Agreement has been duly
authorized, validly executed and delivered on behalf of Seller and is a
valid and binding agreement in accordance with its terms, subject to general
principals of equity and to bankruptcy or other laws affecting the
enforcement of creditors' rights generally.
(g) Non-contravention. The execution and delivery of this
Agreement and the consummation of the issuance of the Securities and the
transactions contemplated by this Agreement do not and will not conflict
with or result in a breach by Seller of any of the terms or provisions of,
or constitute a default under, the articles of incorporation or by-laws of
Seller, or any indenture, mortgage, deed of trust, or other material
agreement or instrument to which Seller is a party or by which it or any of
its properties or assets are bound, or any existing applicable law, rule or
regulation of the United States or any State thereof or any applicable
decree, judgment or order of any Federal or State court, Federal or State
regulatory body, administrative agency or other United States governmental
body having jurisdiction over Seller or any of its properties or assets.
(h) Approvals. Seller is not aware of any authorization,
approval or consent of any governmental body which is legally required for
the issuance and sale of the Debentures and the Common Stock issuable upon
conversion thereof to persons who are non-U.S. Persons, as contemplated
by this Agreement.
4. EXEMPTION; RELIANCE ON REPRESENTATIONS. Buyer understands that
the offer and sale of the Securities are not being registered under the 1933
Act. Seller and Buyer are relying on the rules governing offers and sales
made outside the United States pursuant to Regulation S.
5. TRANSFER AGENT INSTRUCTIONS.
(a) Debentures. The certificates representing the Securities
and the Shares issued during the Restricted Period, shall bear the following
legend (the "Legend"):
"The securities represented hereby have been issued pursuant to
Regulation S promulgated under the Securities Act of 1933, as amended (the
"1933 Act"), and have not been registered under the 1933 Act. Such
securities may not be transferred, offered or sold prior to the end of the
forty (40) day period (the "Restricted Period") commencing on March __, 1997
unless such transfer, offer or sale is made in an "offshore transaction" and
not to or for the account of or benefit of a "U.S. Person" (as such terms
are defined in Regulation S) and is otherwise in accordance with the
requirements of Regulation S. Following expiration of the Restricted
Period, the securities represented hereby may not be offered, sold or
otherwise transferred in the United States or to a U.S. Person unless the
securities are registered under the 1933 Act and applicable state securities
laws, or such offers, sales and transfers are made pursuant to an available
exemption from the registration requirements of those laws."
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Upon the conversion of the Debentures, the holder thereof shall submit such
Debenture with a notice of conversion to the Seller and the Seller shall
instruct Seller's transfer agent to issue one or more Certificates
representing that number of shares of Common Stock into which the Debenture
or Debentures are convertible in accordance with the provisions regarding
conversion set forth in the Form of Debenture attached hereto as Exhibit A.
The Seller or its designees shall act as Debenture Registrar and shall
maintain an appropriate ledger containing the necessary information with
respect to each Debenture.
(b) Common Stock to be Issued Without Restrictive Legend.
Upon the conversion of any Debenture by a person who is a non-U.S. Person,
Seller shall instruct Seller's transfer agent to issue Stock Certificates
without restrictive legend in the name of Buyer (or its nominee (being a
non-U.S. Person) or such non-U.S. Persons as may be designated by Buyer
prior to the closing) and in such denominations to be specified at
conversion representing the number of shares of Common Stock issuable upon
such conversion, as applicable, if the Buyer holding such Securities or any
other person in whose name such certificates have been or are to be issued
shall have delivered a certificate (a "Removed Certificate") to the Company
to the following effect.
"The undersigned acknowledges that the securities to which this
certificate relates have not been registered under Securities Act of 1933,
as amended (the "1933 Act") and that offers, sales or other transfer of such
securities must be made in compliance with Regulation S promulgated under
the 1933 Act, pursuant to an effective registration statement under the 1933
Act or pursuant to an available exemption from registration, and the
undersigned certifies that the undersigned has not made, nor will the
undersigned make or cause to be made, any offer, sale or other transfer of
such securities, in violation of the 1933 Act, other applicable securities
laws or the rules and regulations of the Securities and Exchange
Commission."
Seller warrants that no instructions other than these instructions and
instructions to impose a "stop transfer" instruction with respect to the
certificates until the end of the Restricted Period have been given or will
be given to the transfer agent and that the Common Stock shall otherwise be
freely transferable on the books and records of Seller. Nothing in this
Section 5, however, shall affect in any way Buyer's or such nominee's
obligations and agreements to comply with all applicable securities laws
upon resale of the Securities. Notwithstanding the provisions of this
section 5(c), if with respect to the Company's receipt of a Removal
Certificate from any person, prior to any removal of the Legend, there shall
have been after the date hereof any amendment to the 1933 Act or Regulation
S or any no action letter, interpretative release or other advice from the
Securities and Exchange Commission after the date hereof which disallows the
removal of the Legend under the circumstances in which the request that it
be removed is being made, then the Company shall have no obligation to
remove or to instruct its transfer agent to remove the Legend, unless the
Company shall have received from the person requesting such removal a
written letter of counsel to such person reasonably acceptable to the
Company and its counsel confirming that the Legend may be so removed or
share certificates may be so issued without the Legend without violation of
the 1933 Act. If the person requesting a removal of the Legend is unable to
supply the legal opinion referred to above then the Company shall, upon
demand of such person, be obligated to register the Common Stock for resale
pursuant to section 6 herein.
6. REGISTRATION.
(a) Conditions to Registration Requirement. The Company's
obligation hereunder to register the shares of common stock issuable upon
conversion of the Debentures ("Underlying Shares") shall arise in the event
that Company receives a written opinion of counsel for the Buyer (which
counsel shall be of a law firm experienced in United States securities
matters) indicating that there has been an amendment or change to the
Securities Act or Regulation S after the date hereof, or the promulgation by
the Commission of an interpretative release or other statement after the
date hereof, which prohibits or restricts Buyer from reselling Underlying
Shares without registration under the Securities Act (a "Registration
Trigger Event"). Notwithstanding the foregoing, it will not be deemed a
"Registration Trigger Event" to the extent that Buyer desires to engage in a
distribution of the Underlying Shares which otherwise requires registration
under the Securities Act or in activity which otherwise deems Buyer to be a
statutory underwriter under Section 5 of the Securities Act. In the event
that a Registration Trigger Event has occurred, then Buyer shall be entitled
to require the Company to register all of Buyer's Underlying Shares in
accordance with this Section 6.
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(b) Request for Registration. Upon the occurrence of a
Registration Trigger Event, if the Company shall receive from a Buyer a
written request that the Company effect any registration with respect to any
Underlying Shares, the Company shall use its commercially reasonable efforts
to effect, at its expense, such registration (including, without
limitation, the execution of an undertaking to file post-effective
amendments, appropriate qualification under applicable blue sky or other
state securities laws and appropriate compliance with applicable regulations
issued under the Securities Act) as may be so requested and as would permit
or facilitate the sale and distribution of all or such portion of such
Underlying Shares as are specified in such request in the states specified
in such request. Notwithstanding the foregoing, the Company shall not be
obligated hereunder to effect such registration unless the proposed public
offering price of the securities to be included in such registration (i)
shall be at least $500,000 (before deducting underwriting discounts and
commissions) and (ii) such notice requesting that the Company effect a
registration pursuant to this Section 6 shall have been received by the
Company after the Company has filed its Annual Report on Form 10-K for the
fiscal year ending August 31, 1996 containing three-year audited financial
statements. The Company and the Buyer shall cooperate in good faith in
connection with the furnishing of information required for such registration
and the taking of such other actions as may be legally or commercially
necessary in order to effect such registration. The Company shall file a
registration statement within 45 days of Buyer's demand therefor and shall
use its commercially reasonable efforts to cause such registration statement
to become effective as soon as practicable thereafter. Such best efforts
shall include, but not be limited to, promptly responding to all comments
received from the staff of the Securities and Exchange Commission, providing
Buyer's counsel with a contemporaneous copy of all written communications
from and to the staff of the Securities and Exchange Commission with respect
to such registration statement and promptly preparing and filing amendments
to such registration statement which are responsive to the comments received
from the staff of the Securities and Exchange Commission. Once declared
effective by the Securities and Exchange Commission, the Company shall cause
such registration statement to remain effective until the earlier of (i) the
sale by the Buyer of all Underlying Shares registered or (ii) 120 days after
the effective date of such registration statement. The foregoing shall not
in any way limit Buyer's rights in connection with the Common Stock pursuant
to Regulation S.
7. DELIVERY INSTRUCTIONS. The Debentures being purchased
hereunder shall be delivered to the Buyer at such time and place as shall be
mutually agreed by Seller and Buyer.
8. CONDITIONS TO SELLER'S OBLIGATION TO SELL. Seller's obligation
to sell the Debentures is conditioned upon:
(a) The receipt and acceptance by Buyer of this Agreement as
evidenced by execution of this Agreement by Buyer.
(b) Delivery into the closing depository of good funds by
Buyer as payment in full of the purchase price of the Debentures.
9. CONDITIONS TO BUYER'S OBLIGATION TO PURCHASE. Buyer's
obligation to purchase the Debentures is conditioned upon:
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(a) The receipt and acceptance by Seller of this Agreement as
evidenced by execution of this Agreement by the duly authorized officer of
Seller.
(b) Delivery of the Debentures as described herein.
10. OFFERING MATERIALS. All offering materials and documents used
in connection with offers and sales of the Securities prior to the
expiration of the Restricted Period referred to in Section 2(v) hereof shall
include statements to the effect that the Securities have not been
registered under the 1933 Act or applicable state securities laws, and that
neither Buyer, nor any direct or indirect purchaser of the Securities from
Buyer, may directly or indirectly offer or sell the Securities in the United
States or to U.S. Persons (other than distributors) unless that Securities
are registered under the 1933 Act any applicable state securities laws, or
any exemption from the registration requirements of the 1933 Act or such
state securities laws is available. Such statements shall appear (1) on the
cover of any prospectus or offering circular used in connection with the
offer or sale of the Securities, (2) in the underwriting section of any
prospectus or offering circular used in connection with the offer or sale of
the Securities, and (3) in any advertisement made or issued by Seller,
Buyer, any other distributor, any of their respective affiliates, or any
person acting on behalf of any of the foregoing.
11. NO SHAREHOLDER APPROVAL. Seller hereby agrees that from the
Closing Date until the issuance of Common Stock upon the conversion of the
Debentures, Seller will not take any action which would require Seller to
seek shareholder approval of such issuance unless such shareholder approval
is required by law or regulatory body (including but not limited to the
NASDAQ Stock Market, Inc.) as a result of the issuance of the Securities
hereunder.
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12. MISCELLANEOUS.
(a) Except as specifically referenced herein, this Agreement
constitutes the entire contract between the parties, and neither party shall
be liable or bound to the other in any manner by any warranties,
representations or covenants except as specifically set forth herein. Any
previous agreement among the parties related to the transactions described
herein is superseded hereby. This Agreement shall inure to the benefit of
and be binding upon the parties hereto, their respective successors, and no
other person shall have any right or obligation hereunder. This Agreement
shall not be assignable by either party without the prior written consent of
the other, and any assignment in violation hereof shall be void.
Notwithstanding the foregoing, the Buyer may assign its rights in this
Agreement to, and the provisions of this Agreement shall inure to the
benefit of, and be enforceable by, any transferee of any of the Securities
or Shares. This Agreement together with the Form of Debenture constitutes
the entire agreement of the parties with respect to the subject matter
hereof. Nothing in this Agreement, express or impled, is intended to confer
upon any party, other than the parties hereto, and their respective
successors and assigns, any rights, remedies, obligations or liabilities
under or by reason of this Agreement, except as expressly provided herein.
(b) Buyer is an independent contractor, and is not the agent
of Seller. Buyer is not authorized to bind Seller, or to make any
representations or warranties on behalf of Seller.
(c) Seller makes no additional representations or warranty
with respect to Seller, its finances, assets, business prospects or
otherwise, except as disclosed in the Disclosure Documents incorporated
herein by reference. Buyer will advise each purchaser, if any, and
potential purchaser of the Securities, of the foregoing sentence, and that
such purchaser is relying on its own investigation with respect to all such
matters, and that such purchaser will be given access to any and all
documents, including without limitations the Disclosure Documents which have
been provided to the Buyer and his advisors, and Seller personnel as it may
reasonably request for such investigation.
(d) All representations and warranties contained in this
Agreement by Seller and Buyer shall survive the closing of the transactions
contemplated by this Agreement.
(e) This Agreement shall be construed in accordance with the
laws of California and shall be binding upon the successors and assigns of
each party hereto. This Agreement may be executed in counterparts, and the
facsimile transmission of an executed counterpart to this Agreement shall be
effective as an original.
(f) Buyer agrees to indemnify and hold Seller harmless from
any and all claims, damages and liabilities arising from Buyer's breach of
its representations and/or covenants set forth herein.
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The undersigned hereby subscribes for ___________________ in
principal amount of Debentures and pays herewith funds in the amount of
____________________ Dollars ($_______ U.S.) (Sales of Debentures are made
only in $50,000 increments).
The undersigned acknowledges that this subscription shall not be
effective unless accepted by the Company as indicated below.
Dated this ___ day of March, 1997.
_______________________________________
(Name) (Please Print)
_______________________________________
(Signature)
_______________________________________
(Mailing Address)
_______________________________________
(Country of Execution)
_______________________________________
(Registration instructions)
THIS SUBSCRIPTION IS ACCEPTED BY THE COMPANY ON THE _____ DAY OF
________ 1997.
THE WESTWIND GROUP, INC./
CTC COSMETICS HOLDING (BVI) CO., LTD.
By: _____________________________________
Its: ___________________________
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PURCHASER REPRESENTATIONS LETTER
The undersigned,_________________, a ___________ corporation has acquired
on March___, 1997, $500,000 Convertible Debentures Due March 31, 1998 (the
"Debentures") of THE WESTWIND GROUP, INC./ CTC COSMETICS HOLDING (BVI) CO.,
LTD. (the "Company") pursuant to that certain Offshore Securities
Subscription Agreement ("Agreement") dated March___, 1997. As the forty
(40) day transaction restriction period has expired, the undersigned hereby
requests to convert certain portion of the Debentures into shares of common
stock (the "Shares") without the restrictive legend on the certificates
representing the Shares.
The undersigned represents and warrants as follows:
1.The offer to purchase the Securities was made to it outside of the United
States, and the undersigned was, at the time the Agreement was executed and
delivered, and is now outside the United States;
2. It is not a U.S. Person (as such term is defined in Section 902(a) of
Regulation S ("Regulation S") promulgated under the United States Securities
Act of 1933 (the "Securities Act"), and it has acquired the Securities for
its own account and not for the account or benefit of any U.S. person, and
it has not made any pre-arrangements to transfer the Securities to a U.S.
person or to return the Securities to the U.S. securities markets;
3. All offers and sales by the undersigned of the Securities acquired
pursuant to the Agreement shall be made pursuant to an effective
registration statement under the Securities Act or pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of
the Securities Act;
4. It is familiar with and understands the terms and conditions, and
requirements contained in Regulation S and definitions of U.S. persons
contained in Regulation S;
5. The undersigned has not engaged in any "directed selling efforts" (as
such term is defined Regulation S) with respect to the Securities;
6. The undersigned acquired the Securities with investment intent and not
with an intent of "distributing" the Securities on behalf of the Company or
a "distributor", or any of their affiliates, in the U.S. or to any U.S.
persons, and presently has no interest to sell, dispose of or otherwise
transfer the Securities.
7. The undersigned is not a director, officer or other affiliate of the
Company; and
8. The undersigned does not have any short positions in any securities of
the Company.
Dated this _____ day of _______________, 1997.
By:_______________________________________
Official Signatory of Purchaser
Title:______________________________
Country of Execution:_______________
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