EQUITY-FOR-DEBT EXCHANGE AGREEMENT

 

        This Equity-For-Debt Exchange Agreement (the "Agreement") is made and
entered into as of this 27th day of August 2003, by and between Naturol Holdings
Ltd., a Delaware corporation (the "Company") and 3GC Ltd., a Nevada corporation
("3GC") which is a party hereto (the "Noteholder").

 

RECITALS

 

        WHEREAS, The Noteholder and the Company have agreed to exchange
$255,605.14 of current notes of the Company payable to the Noteholder (the
"Notes") for 2,556,052 shares of common stock of the Company, on the terms and
conditions contained in this Agreement.

 

AGREEMENT

 

        NOW THEREFORE, in consideration of the Recitals and the mutual
covenants, conditions, representations and warranties hereinafter set forth, the
parties agree as follows:

 1. Exchange.

On August 29, 2003 (or within 2 business days thereof if the transaction cannot
be consummated on the 29th), (i) Noteholder will deliver or cause to be
delivered the Notes together with appropriate transfer documents executed in
blank to the Company or deliver or cause to be delivered the Notes to an account
of the trustee, if any, for the Notes for the benefit of the Company as
requested by the Company, and (ii) the Company will cause to be issued to the
Noteholder 2,556,052 shares of common stock of the Company (the "Shares") in the
name of the Noteholder or in the name of a custodian or nominee of the
Noteholder as requested by the Noteholder in exchange for the Notes plus all
claims arising out of or relating to the Notes, including, but not limited to,
any accrued but unpaid interest thereon.

Securities Law Compliance.

This Agreement, the offer, issue, exchange and delivery of the Common Stock
under the circumstances contemplated by this Agreement constitutes or will
constitute, as the case may be, an exempted transaction under the Securities Act
of 1933, as amended and now in effect (the "Act"), and registration of the
Common Stock under the Act is not required. The Company shall make such filings
as may be necessary to comply with the Federal securities laws and the Blue Sky
laws of any state, which filings will be made in a timely manner prior to the
exchange of the Common Stock.

Investment Representations.

3GC represents and agrees that it is acquiring the Common Stock for its own
account, not as a nominee or agent, for investment and not with a view to or for
resale in connection with, any distribution or public offering thereof within
the meaning of the Act, except pursuant to an effective registration statement
under the Act.

Access to Information.

3GC represents that it has been given full and complete access to the Company
for the purpose of obtaining such information as 3GC or its qualified
representative has reasonably requested in connection with the decision to
exchange the Common Stock. 3GC represents that it has been afforded the
opportunity to ask questions of the officers of the Company regarding its
business prospects and the Common Stock, all as 3GC or 3GC's qualified
representative have found necessary to make an informed investment decision to
exchange the Notes for the Common Stock.

 

 

 5. Accredited Investor.

3GC is an "accredited investor" as defined in Rule 501(a) under the Act, and
comes within at least one category as set forth in said Rule. 3GC agrees to
furnish any additional information which the Company deems necessary in order to
verify that 3GC is an accredited investor.

Restrictive Legends.

It is understood that each certificate representing the Common Stock and any
other securities issued in respect of the Common Stock upon any stock split,
stock dividend, conversion, recapitalization, merger or similar event (unless no
longer required in the opinion of counsel for the Company) shall be stamped or
otherwise imprinted with legends substantially in the following form (in
addition to any legend that may now or hereafter be required by applicable state
law):

> > "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
> > UNDER THE SECURITIES ACT OF 1933 (THE "ACT"). THE SECURITIES HAVE BEEN
> > ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
> > OTHERWISE DISPOSED OF IN THE ABSENCE OF A CURRENT AND EFFECTIVE REGISTRATION
> > STATEMENT UNDER THE ACT WITH RESPECT TO SUCH SHARES, OR AN OPINION
> > SATISFACTORY TO THE ISSUER AND ITS COUNSEL TO THE EFFECT THAT REGISTRATION
> > IS NOT REQUIRED UNDER THE ACT."

 7. Closing.

The Closing under this Agreement shall be held on or about August 29, 2003 at
the offices of The Company or at such other time or place as the parties shall
designate. At the Closing, (a) 3GC will deliver the Notes and (b) the Company
will deliver a certificate for 2,556,052 shares of restricted common stock to
3GC.

Entire Agreement; Modification.

This Agreement constitutes the entire, final and complete agreement between 3GC
and the Company and supersedes and replaces all prior or existing written and
oral agreements between 3GC and the Company and may only be modified in writing
by the agreement of all parties.

Applicable Law; Dispute Resolution.

This Agreement shall be governed by and construed in accordance with the law of
the State of Nevada without regard to the conflicts of law provisions thereof.
Any dispute arising under this Agreement shall be settled by binding arbitration
before a single arbitrator under the Commercial Arbitration Rules of the
American Arbitration Association. The arbitrator shall award the prevailing
party its costs and expenses, together with reasonable attorneys' fees
(including the allocable share, if any, of in-house counsel fees) and,
accountants' and expert witness fees, if any. The award of the arbitrator may be
entered in and enforced by any court of competent jurisdiction.

Notice.

Each notice, instruction or other certificate required or permitted by the terms
hereof shall be in writing and shall be communicated by personal delivery, fax
or registered or certified mail, return receipt requested, to the parties hereto
at their respective addresses, or at such other address as any of them may
designate by notice to each of the others.

 

 

        IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above mentioned.

 

 

3GC Ltd.                                                             Naturol
Holdings Ltd.

 

/S/Gary Grieco                                                   /S/William E.
Prince           

Gary Grieco, President                                       William E. Prince,
President