CTC COSMETICS HOLDINGS CO INC
8-K, 1997-04-04
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                        ------------------------------
 
                     SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                        ------------------------------

                                   FORM 8-K

                               CURRENT REPORT

                   Pursuant to Section 13 or 15(d) of
                 the Securities Exchange Act of 1934
                                                      

Date of Report (Date of earliest event reported) March 21, 1997
                                                 --------------

                CTC Cosmetics Holdings Company, Inc.
- ----------------------------------------------------------------------------
        (Exact name of registrant as specified in its charter)


                                   Delaware
- ----------------------------------------------------------------------------
               (State or other jurisdiction of incorporation)

                         
         033-23884-LA                                   87-0415594          
 -------------------                              ------------------
(Commission File Number)                   (IRS Employer Identification No.)


No. 80 Liu Tuang Road Pudong, Shanghai, China       
- ----------------------------------------------------------------------------
(Address of principal executive offices)                       (Zip Code)


Registrant's telephone number, including area code:  (852) 2882-5699
- --------------------------------------------------------------------
      Exhibit Index is on page 2 of the manually executed copy.




                              Page 1 of 3 pages

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Item 9.     Sales of Equity Securities Pursuant to Regulation S.
- -------     ----------------------------------------------------

     On March 21, 1997, CTC Cosmetics Holdings Company, Inc., (the 
"Registrant") closed an offshore private placement of $500,000 of 8% 
Convertible Debentures Due March 31, 1998 ( the "Closing Date").  The 
Debentures were sold to a certain offshore accredited investor.  The 
offshore placement was made pursuant to Regulation S and Section 4(2) of 
the securities Act of 1933, as amended. 

     The principal amount of the Debentures may be converted, at the option 
of the holder thereof, at any time after 45 days commencing from the Closing 
Date, at a conversion price equal to the lower of 50% of the average closing 
bid price of common stock for 5 business days immediately preceding the 
conversion date or $2.50 per share.
 
     In addition to the Debentures, the offshore investors  received   
warrants  to purchase 100,000 shares of common stock of the Registrant at an 
exercise price equal to 50% of the closing bid price of common stock at the 
date of exercise.  The warrant can be exercised at any time, subject to the 
restrictive period imposed by Regulation S.      
 
Item 7.     Financial Statements, Pro Forma Financial Information and 
- ------      Exhibits.

           (c)     Exhibits

            10.     Material Contracts

                    10.1     Form of Offshore Securities S Subscription 
                             Agreement.
                    10.2     Form of Convertible Debenture
                    10.3     Form of Warrant

                                      2


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                                 SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, 
the Registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.

Dated:     April 5, 1997           CTC Cosmetics Holdings Company, Inc.



                                   By: /s/ Mark K.W. Lee      
                                       ---------------------------------
                                           Mark K.W. Lee
                                           President


                                      3







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                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.


                                      1

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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 Iwona J. Alami, 
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;


                                      2

<PAGE>


               (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;


                                      3

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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.


                                      4

<PAGE>

               (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.


                                      5

<PAGE>

          (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."


                                      6

<PAGE>


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.

                                    7

<PAGE>

          (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:


                                      8

<PAGE>

          (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.


                                      9

<PAGE>

     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.



                                      10

<PAGE>

          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:  ___________________________



                                      11

<PAGE>

      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:_______________


                                  12


<PAGE>

                            FORM OF DEBENTURE

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE 
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY 
NOT BE OFFERED OR SOLD IN THE UNITED STATES (AS DEFINED IN REGULATION S 
UNDER THE ACT) OR TO, OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS (AS 
DEFINED IN REGULATION S UNDER THE ACT) EXCEPT PURSUANT TO REGISTRATION 
UNDER THE ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 
ACT AND APPLICABLE STATE SECURITIES LAWS.

No. 1-1997                                                    US $50,000

         THE WESTWIND GROUP, INC./CTC COSMETICS HOLDING (BVI) CO., LTD.

                8% CONVERTIBLE DEBENTURE DUE MARCH 31, 1998

     THIS DEBENTURE is one of a duly authorized issue of Debentures of The 
Westwind Group, Inc. / CTC Cosmetics Holding (BVI) Co., Ltd., a corporation 
duly organized and existing under the laws of Delaware (the "Company") 
designated as its 8% Convertible Debenture Due March 31, 1998, in an 
aggregate principal amount not exceeding One Million Dollars (U.S. 
$1,000,000).

     FOR VALUE RECEIVED, the Company promises to pay to ___________________, 
a __________________ corporation, the registered holder hereof and its 
successors and assigns (the "Holder"), the principal sum of 
____________________ Dollars (US $__________) on March 31, 1998 (the 
"Maturity Date"), and to pay interest on the principal sum outstanding, at 
the rate of 8% per annum commencing from the date of issuance due and 
payable semi-annually in arrears on the first day of each March and 
September (the "Interest Payment Dates").  Accrual of interest shall 
commence on the date hereof and shall continue until payment in full of the 
outstanding principal sum has been made or duly provided for.  The interest 
so payable will be paid at the option of the Company, either in cash or in 
shares of common stock at the then applicable conversion price (computed as 
described in paragraph 4 below) will be paid to the person in whose name 
this Debenture (or one or more predecessor Debentures) is registered on the 
records of the Company regarding registration and transfers of the 
Debentures (the "Debenture Register"); provided, however, that the Company's 
obligation to a transferee of this Debenture arises only if such transfer, 
sale or other disposition is made in accordance with the terms and 
conditions of the Offshore Securities Subscription Agreement dated as of 
March__, 1997  between the Company and the Holder  (the "Subscription 
Agreement").  The principal of, and interest on, this Debenture are payable 
in such coin or currency of the United States of America as at the time of 
payment is legal tender for payment of public and private debts, at the 
address last appearing on the Debenture Register of the Company as 
designated in writing by the Holder hereof from time to time.  The Company 
will pay the outstanding principal of and all accrued and unpaid interest 
due upon this Debenture on the Maturity Date, less any amounts required by 
law to be deducted or withheld, to the record Holder of this Debenture as of 
the tenth (10th) day prior to the Maturity Date and addressed to such record 
Holder at the last address appearing on the Debenture Register.  The 
forwarding of such check shall constitute a payment of outstanding principal 
and interest hereunder and shall satisfy and discharge the liability for 
principal and interest on this Debenture to the extent of the sum 
represented by such check plus any amounts so deducted.

     This Debenture is subject to the following additional provisions:

     1.      The Debentures are issuable in denominations of Fifty Thousand 
Dollars (US$50,000) and integral multiples thereof.  The Debentures are 
exchangeable for an equal aggregate principal amount of Debentures of 
different authorized denominations, as requested by the Holders surrendering 
the same but not less than U.S. $50,000.  No service charge will be made for 
such registration or transfer or exchange.

                                      1

<PAGE>

     2.      The Company shall be entitled to withhold from all payments of 
principal of, and interest on, this Debenture any amounts required to be 
withheld under the applicable provisions of the United States income tax or 
other applicable laws at the time of such payments.  Holder agrees to 
provide Company a Form W-8, a Certification under penalty of perjury, or a 
certificate from a financial institution described in Section 871(h)(4)(B) 
of the Internal Revenue Code of 1986 demonstrating that the Holder is not a 
United States person.

     3.      This Debenture has been issued subject to investment 
representations of the original purchaser hereof and may be transferred or 
exchanged in the U.S. only in compliance with the Securities Act of 1933, as 
amended (the "Act") and applicable state securities laws.  Prior to due 
presentment for transfer of this Debenture, the Company and any agent of the 
Company may treat the person in whose name this Debenture is duly registered 
on the Company's Debenture Register as the owner hereof for the purpose of 
receiving payment as herein provided and for all other purposes, whether or 
not this Debenture be overdue, and neither the Company nor any such agent 
shall be affected or bound by notice to the contrary.  Any holder of this 
Debenture, electing to exercise the right of conversion set forth in Section 
4(a) hereof, in addition to the requirements set forth in Section 4(a), is 
also required to give the Company (i) written confirmation that it is not a 
U.S. Person and the Debenture is not being converted on behalf of a U.S. 
Person ("Notice of Conversion") or (ii) an opinion of U.S. counsel to the 
effect that the Debenture and shares of common stock issuable upon 
conversion thereof have been registered under the 1933 Act or are exempt 
from such registration.  In the event a Notice of Conversion or opinion of 
counsel is not provided the Holder hereof will not be entitled to exercise 
the right to convert the Debentures pursuant to Section 4(a) herein.

     4.      The Holder of this Debenture is entitled, at its option, at any 
time commencing 45 days after issue hereof to convert  any or all of the 
original principal amount of this Debenture into shares of common stock, 
$0.004 par value per share, of the Company (the "Common Stock"), at a 
conversion price for each share or Common Stock equal to the lower of (a) 
50% of the average closing bid price of the Common Stock for the five (5) 
business days immediately preceding the conversion date or (b) $2.50 per 
share of Common Stock, as reported by the National Association of Securities 
Dealers Automated Quotation System ("NASDAQ") (the "Conversion Price").  For 
purposes of this Section, the closing bid price of the common stock shall be 
the closing bid price as reported by NASDAQ Small Cap Market, or the closing 
bid price in the over-the-counter market or, in the event the common stock 
is listed on a stock exchange, the closing bid price on such exchange as 
reported in the Wall Street Journal.  Such conversion shall be effectuated 
by surrendering the Debentures to be converted to the Company, with the form 
of conversion notice attached to the Debenture as Exhibit A, executed by the 
Holder of the Debenture evidencing such Holder's intention to convert this 
Debenture, and accompanied, if required by the Company, by proper assignment 
in blank.  Interest accrued or accruing from the date of issuance to the 
date of conversion on the amount so converted shall be paid in cash or at 
Company's option, in shares of common stock of the Company, calculated at 
the same conversion price (as determined above), as would apply on the 
conversion date of the principal amount being converted but using the 
discount percentage applicable as of such date and shall constitute payment 
in full of any such interest on the same terms as would otherwise apply to 
the conversion of the principal amount hereof, except that the Holder hereof 
waives its right to any  interest accrued, if the Holder converts this 
Debenture within six months from the date of its issuance.  No fractional 
shares no scrip representing fractions of Shares will be issued on 
conversion, but the number of Shares issuable shall be rounded up to the 
nearest whole share.  The date on which notice of conversion is given 
("Conversion Date") shall be deemed to be the date on which the Holder has 
delivered this Debenture, with the Conversion Notice, as defined below, duly 
executed, to the Company or, if earlier, the date set forth in such 
Conversion Notice if the Debenture is received by the Company within five(5) 
business days thereafter.  Any unconverted principal amount and accrued 
interest thereon shall at maturity date be paid, at the option of the 
Holder, in either (a) cash or (b) shares of common stock valued at a price 
equal to the average closing bid price for the five trading days immediately 
preceding the maturity date.   

                                      2


<PAGE>

     5.      No provision of this Debenture shall alter or impair the 
obligation of the Company, which is absolute and unconditional, to pay the 
principal of, and interest on, this Debenture at the time, place, and rate, 
and in the coin currency, herein prescribed.

     6.      The Company hereby expressly waives demand and presentment for 
payment, notice of nonpayment, protest, notice of protest, notice of 
dishonor, notice of acceleration or intent to accelerate, bringing of suit 
and diligence in taking any action to collect amounts called for hereunder 
and shall be directly and primarily liable for the payment of all sums owing 
and to be owing hereon, regardless of and without any notice, diligence, act 
or omission as or with respect to the collection of any amount called for 
hereunder.

     7.     If one or more of the "Events of Default" as described in 
paragraph 8 shall occur, the Company agrees to pay all costs and expenses, 
including reasonable attorneys' fees, which may be incurred by Holder in 
collecting any amount due under the Debenture.

     8.     If one or more of the following described "Events of Default" 
shall occur:

          (a)      The Company shall default in the payment of principal or 
interest on this Debenture; or

          (b)     Any of the representations or warranties made by the 
Company herein, in the Subscription Agreement, or in any certificate or 
financial or other written statements heretofore or hereafter furnished by 
or on behalf of the Company in connection with the execution and delivery of 
this Debenture or the Subscription Agreement shall be false or misleading in 
any material respect at the time made; or

          (c)     The Company shall fail to perform or observe, in any 
material respect, any other covenant, term, provision, condition, agreement 
or obligation of the Company under this Debenture and such failure shall 
continue uncured for a period of thirty (30) days after notice from the 
Holder of such failure; or 

          (d)     The Company shall (1) become insolvent; (2) admit in 
writing its liability to pay its debts generally as they mature; (3) make an 
assignment for the benefit of creditors or commence proceedings for its 
dissolution; or (4) apply for or consent to the appointment of a trustee, 
liquidator or receiver for its or for a substantial part of its property or 
business; or

          (e)       A trustee, liquidator or receiver shall be appointed for 
the Company or for a substantial part of its property or business without 
its consent and shall not be discharged within sixty (60) days after such 
appointment; or

          (f)     Any governmental agency or any court of competent 
jurisdiction at the instance of any governmental agency shall assume custody 
or control of the whole or any substantial portion of the properties or 
assets of the Company and shall not be dismissed within sixty (60) days 
thereafter; or 

          (g)     Any money judgment, writ or warrant of attachment, or 
similar process in excess of Three Hundred Thousand ($300,000) Dollars in 
the aggregate shall be entered or filed against the Company or any of its 
properties or other assets and shall remain unpaid, unvacated, unbonded or 
unstayed for a period of thirty (30) days or in any event later than five 
(5) days prior to the date of any proposed sale thereunder; or

          (h)     Bankruptcy, reorganization, insolvency or liquidation 
proceedings or other proceedings for relief under any bankruptcy law or any 
law for the relief of debtors shall be instituted by or against the Company 
and, if instituted against the Company, shall not be dismissed within sixty 
(60) days after such instruction of the Company shall by any action or 
answer approve of, consent to, or acquiesce in any such proceedings or admit 
the material allegations of, or default in answering a petition filed in any 
such proceeding; or

          (i)     The Company shall have its Common Stock delisted from an 
exchange or over-the-counter market.

                                      3



<PAGE>

Then, or at any time thereafter, and in each and every such case, as long as 
such Event of Default is continuing unless such Event of Default shall have 
been waived in writing by the Holder (which waiver shall not be deemed to be 
a waiver of any subsequent default) at the option of the Holder and in the 
Holder's sole discretion, the Holder may consider this Debenture immediately 
due and payable, without presentment, demand, protest or notice of any 
kinds, all of which are hereby expressly waived, anything herein or in any 
note or other instruments contained to the contrary notwithstanding, and the 
Holder may immediately, and without expiration of any period of grace, 
enforce any and all of the Holder's rights and remedies provided herein or 
any other rights or remedies afforded by law.

     9.     This Debenture represents a general unsecured obligation of the 
Company.  No recourse shall be had for the payment of the principal of, or 
the interest on, this Debenture, or for any claim based hereon, or otherwise 
in respect hereof, against any incorporator, shareholder, officer or 
director, as such, past, present or future, of the Company or any successor 
corporation, whether by virtue of any constitution, statute or rule of law, 
or by the enforcement of any assessment or penalty or otherwise, all such 
liability being, by the acceptance hereof and as part of the consideration 
for the issue hereof, expressly waived and released.

     10.     The Holder of this Debenture, by acceptance hereof, agrees that 
this Debenture is being acquired for investment and that such Holder will 
not offer, sell or otherwise dispose of this Debenture or the Shares of 
Common Stock issuable upon exercise thereof except under circumstances which 
will not result in a violation of the Act or any applicable state Blue Sky 
law or similar laws relating to the sale of securities.

     11.     In case any provision of this Debenture is held by a court of 
competent jurisdiction to be excessive in scope or otherwise invalid or 
unenforceable, such provision shall be adjusted rather than voided, if 
possible, so that it is enforceable to the maximum extent possible, and the 
validity and enforceability of the remaining provisions of this Debenture 
will not in any way be affected or impaired thereby.

     12.     This Debenture and the agreements referred to in this Debenture 
constitute the full and entire understanding and agreement between the 
Company and the Holder with respect to the subject hereof.  Neither this 
Debenture nor any term hereof may be amended, waived, discharged or 
terminated other than by a written instrument signed by the Company and the 
Holder.

     13.     This Debenture shall be governed by and construed in accordance 
with the laws of California.

     14.     As set forth herein, the Company shall use all reasonable 
efforts to issue and deliver, within five business days after the Holder has 
fulfilled all conditions and submitted all necessary documents duly executed 
and in proper form required for conversion, to the Holder or any party 
receiving a Debenture by transfer from the Holder (together, a "Holder"), at 
the address of the Holder on the books of the Company, a certificate or 
certificates for the number of Shares of Common Stock to which the Holder 
shall be entitled. 

     The Holder may, subject to compliance with the Offshore Securities 
Subscription Agreement and the provisions of Regulation S, without notice, 
transfer or assign this Debenture or any interest herein in integral 
multiples of $50,000 or the entire outstanding balance (other than to a U.S. 
Person or on behalf of a U.S. Person) and may mortgage, encumber or transfer 
any of its rights or interest in and to this Debenture or any part hereof 
and, without limitation, each assignee, transferee and mortgagee (which may 
include any affiliate of the Holder) shall have the right to transfer or 
assign its interest.  Each such assignee, transferee and mortgagee shall 
have all of the rights of the Holder under this Debenture.  The Company may 
condition registrations of transfers on the receipt of an IRS Form W-8 or an 
equivalent certification under penalty of perjury in compliance with Section 
871(h)(4)(B) of the Internal Revenue Code of 1986.



                                      4


<PAGE>

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly 
executed by an officer thereunto duly authorized.


Dated:                                       

                         THE WESTWIND GROUP, INC./
                         CTC COSMETICS HOLDING (BVI) CO., LTD.


                         By:                                                    
                         Title:                                        






     Buyer certifies under the penalty of perjury that Buyer is neither a 
citizen nor a resident of the United States and that Buyer's full name and 
address are set out below.

______________________________________

______________________________________

                                      5


<PAGE>

                                 EXHIBIT I

                          NOTICE OF CONVERSION

(To be Executed by the Registered Holder in order to Convert the Debenture)



     The undersigned hereby irrevocably elects to convert $______________ of 
the above Debenture No. ___ into Shares of Common Stock of The Westwind 
Group, Inc./ CTC Cosmetics Holding (BVI) Co., Ltd. (the "Company") according 
to the conditions set forth in such Debenture, as of the date written below.

     The undersigned represents and warrants that (i) it is not a U.S. 
Person as defined in Regulation S promulgated under the Securities Act of 
1933, as amended, and is not converting the Debenture on behalf of any U.S. 
Person and the representations contained in the Subscription Agreement are 
true, (ii) all of the requirements of Regulation S promulgated under the 
Securities Act of 1933, as amended (the "Act") applicable to the undersigned 
have been complied with by the undersigned, and (iii) the undersigned has 
not engaged in any transaction or series of transactions that is a part of 
or a plan or scheme to evade the registration requirements of the Act.   

Date of Conversion*                                                   

Applicable Conversion Price                                

[Specify discount if more than one discount percentage is available].

Signature                                                         
                    [Name]

Address:                                                            

                                                                 








* This original Debenture and Notice of Conversion must be received by the 
Company by the fifth business date following the Date of Conversion.


                                      6


<PAGE>

                          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

<PAGE>

     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

<PAGE>

     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

<PAGE>

     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

<PAGE>

                                                   

                               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







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