THE SHARES BEING SUBSCRIBED FOR HEREIN HAVE NOT
BEEN REGISTERED WITH THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED, (THE "1933 ACT") OR THE
SECURITIES COMMISSION OF ANY STATE UNDER ANY
STATE SECURITIES LAW. THEY ARE BEING OFFERED PURSUANT TO AN EXEMPTION
FROM
REGISTRATION PURSUANT TO SECTION 4(2) OF THE 1933 ACT. THE SHARES MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS THE SHARES ARE REGISTERED
UNDER
THE 1933 ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL
IS
OBTAINED WHICH IS REASONABLY SATISFACTORY
TO THE COMPANY THAT SUCH OFFERS, SALES
AND TRANSFERS MAY BE MADE PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THOSE
LAWS.
STOCK PURCHASE AGREEMENT
THIS STOCK
PURCHASE AGREEMENT (the "Agreement") is made as of
September 1, 2004, by and between
Bionutrics,
Inc., a Nevada
corporation (the
"Company"), and Asia Pacific Investment Holdings Limited, a British Virgin
Islands company (the "Investor").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1.
Purchase and Sale of Stock.
1.1 Sale and Issuance of Stock. On the basis of the
representations,
warranties and agreements contained herein and subject to the terms and
conditions herein set forth, the Company agrees to issue and sell Two
Hundred
Thousand (200,000) shares of its Common
Stock, $.001 par value, (the "Shares"),
and the Investor hereby subscribes for and agrees to purchase the
Shares upon
acceptance of this Agreement by the
Company.
1.2 Payment. Investor
is delivering with
this Agreement all rights
of ownership to its pro-rata share of certain assets received via an Asset
Distribution Agreement by and between the Company and the Investor, dated
September 1, 2004, that include niacin-tocotrienol technology for dietary
supplements and other functional
nutrition products
together with approximately
80 barrels of rice bran oil tocol
concentrate
(the "Assets"), and certain
assumed obligations per a Letter of Intent
Regarding a
Tocotrienol and Niacin
CDT Dietary Supplement" with James Belcher (the "Belcher LOI"), as
consideration, subject to its terms and conditions, for the Shares as a
condition for the Closing of the offering.
The Company
agrees to hold
Investor
safe and harmless from any obligations
arising from the Belcher LOI.
1.3 Closing. The
closing of the
transaction
contemplated by
this
Agreement (the "Closing") shall be deemed to have occurred
when this Agreement
has been executed by both the Investor
and the Company and
payment shall have
been made as set forth in 1.2 above in
consideration for the Company's delivery
into the escrow account of certificates
representing the
Shares subscribed for.
If at the Closing any of the conditions
specified in Section 6
hereof shall not
have been fulfilled to the reasonable
satisfaction
of Investor,
then Investor
shall, at its election, be relieved of all of its obligations under this
Agreement, without thereby waiving any other rights it may have by reason
of
such failure or unfulfillment. If at the
Closing any of the conditions specified
in Section 5 hereof shall not have been
fulfilled to the reasonable satisfaction
of the Company, the Company shall, at its election, be relieved of all of its
obligations under this Agreement, without thereby waiving any other
rights it
may have by reason of such failure or
unfulfillment.
<PAGE>
2.
Representation
and Warranties of the Company. The Company hereby
represents and warrants to the Investor as
follows:
2.1 Organization, Good Standing and Qualification. The Company is a
corporation validly existing and in good
standing under the laws of the State of
Nevada and has all requisite power and
authority to own or lease and operate its
properties and assets and to carry on its
business as now conducted. The Company
is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure to so qualify
would have a material
adverse
effect on its business, operations, prospects, condition (financial or
other),
or properties.
2.2
Capitalization.
The authorized capital
of the Company consists
of:
(i) Common Stock.
45,000,000 shares of
common stock ("Common
Stock"), par value $.001, of which
15,803,000 shares are issued and outstanding
as of October 31, 2003.
(ii) Preferred
Stock. 5,000,000 shares of preferred stock
("Preferred Stock"), par value $.001, 591,685 shares of which are
outstanding
and convertible into 118,370 of common stock at
the election of the Company or
shareholder. Further Preferred Stock may be issued from
time to time in one or
more series and the Board of Directors is
authorized to fix the rights and terms
relating to dividends, conversion, voting, redemption,
liquidation
preferences
and any other rights, preferences, privileges and restrictions applicable to
each such series.
(iii) Warrants,
Options and Other Rights. There are no
preemptive rights or rights of first
refusal for the
purchase or
acquisition
from the Company of any shares of its
capital stock. As of October 31, 2003,
there were outstanding warrants to purchase up to 659,000 shares of Common
Stock. Additionally, as of October 31, 2003,
options in the amount
of 250,000
shares were outstanding and held by current or
former employees,
officers and
directors pursuant to the Company's Stock
Option Plan.
2.3 Valid Issuance of Shares. All of the outstanding
shares of the
Company's stock have been duly and validly
authorized and issued, are fully paid
and nonassessable, and no further approval or
authority of the stockholders or
the directors of the Company will be
required by the Company for the issuance of
the Shares. The Shares when issued and paid
for in accordance with the terms of
this Agreement will be duly and validly
issued, fully paid and nonassessable and
will be free of restrictions on transfer other than
restrictions
on transfer
under applicable state and federal
securities laws.
2.4 Financial Statements. The Company has delivered to Investor
true
and correct copies of (i) its Form 10-K for
the year ended October
31, 2001,
(ii) the unaudited consolidated balance sheets of the Company and its
subsidiaries for the years ended October 31, 2002 and October 31,
2003 and the
six-month period ended March 31, 2004 and (iii) the related unaudited
consolidated statements of
2
<PAGE>
income, stockholders' equity and cash flows
of the Company and its subsidiary as
of October 31, 2002, October 31, 2003 and March 31, 2004, respectively
(collectively, the "Balance Sheets"). Except as otherwise stated in the
notes
thereto, the Balance Sheets have been
prepared in conformity with United States
generally accepted accounting principles (and except that the
unaudited Balance
Sheets may not contain all notes) applied, except as stated therein, on a
consistent basis. The Balance Sheets are
true and correct and fairly present the
financial position, result of operations
and cash flows and changes in financial
position of the Company as of the dates and
for the periods
indicated.
If and
when filed by the Company with the
Securities and Exchange Commission the "SEC")
the financial statements in the annual reports
on Form 10-K for the years ended
October 31, 2002 and 2003 including Form 10-Q for each three-month period
subsequent to the year ended October 31, 2001 will not be
materially
different
to the Balance Sheets for the respective periods and only be subject to
non-material year-end adjustments in case of any Balance Sheets for a
three-month period subsequent to the year ended October 31, 2003. Except as
reflected in such financial statements and
the notes thereto, the Company has no
liabilities, absolute or contingent, material to the operations, business,
prospects, assets, properties or condition
(financial or other) of the Company,
other than (i) ordinary course liabilities
incurred since the
last date of such
financial statements in connection with the conduct of the business of the
Company, and (ii) obligations under contracts and commitments
incurred in the
ordinary course of business and not
required under United States generally
accepted accounting principles to be reflected in the
financial statements,
which, in both cases, individually or in the aggregate,
are not material to the
financial condition or operating results of
the Company.
2.5 No Conflict
with Other
Instruments.
Neither the sale of the
Shares nor the consummation of the
transactions herein
contemplated, will:
(i)
conflict with or constitute a breach of,
permit the termination of, constitute a
default under, or violation of (A) the
Articles of Incorporation, as amended, or
bylaws of the Company, (B) any material
agreement, indenture,
mortgage, deed of
trust or other material instrument or agreement or undertaking by which the
Company is bound or to which any of its
properties
is subject,
or, (C) to the
knowledge of the Company, a violation of
any law, administrative regulation, or
court decree to which the properties or assets of the Company is
subject; or
(ii) result in the creation or imposition of any material lien, charge or
encumbrance upon the property or assets of
the Company.
2.6 Authorization. The Company has the corporate power and
authority
to enter into this Agreement and to perform all of
its obligations
hereunder.
The execution, delivery and performance of this Agreement by
the Company have
been duly authorized by all necessary
corporate actions, and this Agreement
constitutes a legal, valid, binding and enforceable
obligation of the
Company.
No consent, approval, authorization or
order of any court or governmental agency
or board or any other third party, or
registration,
qualification,
designation
or filing with any Federal, state or local authority is required to
consummate
the transactions contemplated by this
Agreement.
3. Representations and Warranties of Investor. By executing this
Agreement, Investor hereby represents and warrants to and covenants with
the
Company as follows:
3.1 Authorization.
Investor has the power and authority to enter
into this Agreement and to perform all of its
obligations
hereunder and this
Agreement constitutes a valid, binding and
enforceable obligation of Investor.
3
<PAGE>
3.2 Legal Investment
and Compliance with
Laws. The purchase of the
Shares by Investor is legally permitted by all laws and regulations to which
Investor is subject and all consents, approvals, authorizations of or
designations, declarations, or filings in connection
with the valid
execution
and delivery of this Agreement by Investor or the purchase of the Shares by
Investor has been obtained, or will be
obtained. Investor hereby represents that
it has satisfied itself as to the full observance of the laws of its
jurisdiction in connection with any invitation to subscribe for the
Shares or
any use of this Agreement, including (i) any foreign exchange restrictions
applicable to such purchase, and (ii) the
income tax and other tax consequences,
if any, which may be relevant to the
purchase, holding,
redemption,
sale, or
transfer of the Shares. Such Investor's subscription and
