<PAGE> 1
Exhibit 10.39
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
the 25th day of October, 2000, by and between Bionutrics, Inc., a Nevada
corporation (the "Company"), and Tamarack International Limited (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
500,000 (five hundred thousand) shares of its Common Stock, $.001 par value, at
$1.00 per share (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 the
full amount of the purchase price of the Shares in the amount of $500,000 in
U.S. funds by wire transfer as directed by the Company to the Company's
designated escrow account. Such funds deposited into the escrow account on
behalf of the Investor shall be held until the conditions for the Closing of the
offering have been met.
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
<PAGE> 2
obligations under this Agreement, without thereby waiving any other rights it
may have by reason of such failure or unfulfillment.
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 20,936,252 shares are issued and
outstanding as of August 31, 2000.
(ii) Preferred Stock. 5,000,000 shares of preferred
stock ("Preferred Stock"), par value $.001, none of which is outstanding. The
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 August 31, 2000,
there were outstanding warrants to purchase up to 1,180,000 shares of Common
Stock. As of August 31, 2000, options in the amount of 2,121,144 shares were
outstanding and held by current or former employees, officers and directors
pursuant to the Company's Stock Option Plan and 386,667 were outstanding and
held by others.
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. Except as otherwise stated in the
notes thereto, the audited financial statements contained in the Form 10-K for
the year ended October 31, 1999 and the unaudited financial statements contained
in the Forms 10-Q filed subsequent thereto have been prepared in conformity with
United States generally accepted accounting principles applied, except as stated
therein, on a consistent basis. The financial statements fairly present the
financial position and result of operations and changes in financial position of
the Company as of the dates and for the periods indicated.
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
2
<PAGE> 3
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.
3.2 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 payment for, and its
continued beneficial ownership of the Shares, will not violate any applicable
securities or other laws of its jurisdiction.
3
<PAGE> 4
3.3 Access to Information. Investor acknowledges that it has
received the Company's Form 10-K for the period ended October 31, 1999 and the
Forms 10-Q filed subsequent thereto (the "Offering Documents"), and is familiar
with and understands the operations of the Company.
(a) Investor understands and acknowledges that the
Offering Documents provided in connection with this investment have been
prepared by the Company. Accordingly, Investor understands and acknowledges that
no independent investment banking firm or legal counsel have passed upon or
assumed any responsibility for the accuracy, completeness or fairness of the
information contained in the Offering Documents.
(b) Investor understands and acknowledges that any
financial projections provided in connection with this investment and have not
been prepared by independent accountants and are based on numerous assumptions
regarding sales, revenues and expenses and other factors which may not be
realized in the future.
(c) Investor acknowledges that it has been encouraged
to rely upon the advice of its legal counsel and accountants or other financial
advisers with respect to the financial, tax and other considerations relating to
the purchase of the Shares and has been offered, during the course of
discussions concerning the purchase of the Shares, the opportunity to ask such
questions and inspect such documents concerning the Company and its business and
affairs as Investor has requested so as to understand more fully the nature of
the investment and to verify the accuracy of the information supplied.
(d) Investor represents and warrants that, in
determining to purchase the Shares, it has relied solely upon the documents
provided and the advice of its advisors with respect to the tax, foreign and
U.S., and other consequences involved in purchasing the Shares.
3.4 Acquisition for Investment and Unregistered Nature of the
Shares.
(a) Investor represents and warrants that the Shares
being acquired are being acquired for its own account without a view to public
distribution or resale and that Investor has no contract, understanding,
agreement or arrangement to sell or otherwise transfer or dispose of the Shares
or any portion thereof to any other person.
(b) Investor represents and warrants that it (i) is
experienced in evaluating and investing in securities of companies in the
developmental stage and acknowledges that it can fend for itself, (ii) can bear
the economic risk of the purchase of the Shares including the total loss of its
investment, and (iii) has such knowledge and experience in business and
financial matters as to be capable of evaluating the merits and risks of an
investment in the Shares.
(c) Investor understands that the Shares have not
been registered under the 1933 Act, or the securities laws of any state and are
subject to substantial restrictions on resale or transfer.
(d) Investor agrees that it will not sell or
otherwise transfer or dispose of the Shares or any portion thereof unless such
Shares are registered under the 1933 Act and any applicable state securities
laws, or unless Investor obtains an opinion of counsel which is reasonably
satisfactory to the Company that such Shares may be sold in reliance on an
exemption from such registration requirements.
4
<PAGE> 5
(e) Investor understands that (i) the Company may
place a legend on any certificates representing the Shares indicating that the
Shares may not be transferred except in accordance with an exemption from the
1933 Act; (ii) the Company will not register a transfer not made in accordance
with an exemption from the 1933 Act; and (iii) Investor therefore may be
precluded from selling or otherwise transferring or disposing of any of the
Shares or any portion thereof for an indefinite period of time or at any
particular time.
3.5 Further Representations and Understandings.
(a) Investor understands that no federal or state
agency including the Securities and Exchange Commission, the Arizona Corporation
Commission or the securities commission or authorities of any other state has
approved or disapproved the Shares, passed upon or endorsed the merits of the
offering or the accuracy or adequacy of the documents, or made any finding or
determination as to the fairness of the Shares for public investment and any
representation to the contrary is a criminal offense.
(b) Investor understands that the Shares are being
offered and sold in reliance on specific exemptions or exclusions from the
registration requirements of federal and state laws and that the Company is
relying upon the truth and accuracy of the representations, warranties,
agreements, acknowledgments and understandings set forth herein in order to
determine the suitability of Investor to acquire the Shares.
(c) Investor represents and warrants that the
information set forth herein concerning Investor is true and correct.
4. Registration Rights.
4.1 Registration Statement. At any time during which Investor
is subject to the time, volume restrictions, or manner of sale limitations under
Rule 144 under the 1933 Act ("Rule 144"), or any successor rule or regulation,
the Company will (i) prepare and file a Registration Statement under the 1933
Act covering the Shares or will include the Shares in any other Registration
Statement it is obligated to file subsequent to the date hereof, (ii) use its
best efforts to have such Registration Statement rendered effective under the
1933 Act as soon as practicable thereafter, and (iii) take such action as may be
necessary to have such Registration Statement remain effective under the 1933
Act, free of material misstatements or omissions, for the period required to
sell such Shares in compliance therewith. The Company shall bear all fees,
disbursements and out-of-pocket expenses incurred in connection with the
preparation and filing of such Registration Statement, including any amendment
or supplement thereto necessary to cause the same to remain free of material
misstatements or omissions during the period the Registration Statement remains
effective under the 1933 Act, except as provided in Section 4.5 hereof.
4.2 Cooperation with Company. Investor will cooperate with the
Company in all respects in connection with this Section, including timely
supplying all information reasonably requested by the Company (which shall
include all information regarding the Investor and proposed manner of sale of
the Shares required to be disclosed in the Registration Statement) and executing
and returning all documents reasonably requested in connection with the
registration and sale of the Shares and entering into and performing its
obligations under any underwriting agreement, if the offering is an underwritten
offering, in usual and customary form, with the managing underwriter or
underwriters of such underwritten offering
5
<PAGE> 6
4.3 Termination of Registration Rights. The Company's
obligation under this Section 4 to register the Shares held by Investor shall
terminate upon the earlier of (i) the date that all of the Shares have been sold
pursuant to the Registration Statement, (ii) the date the Investor receives an
opinion of counsel to the Company, which opinion shall be reasonably acceptable
to the Investor, that the Shares may be sold under the provisions of Rule 144
without limitation as to volume, (iii) the date when all Shares have been
otherwise transferred to persons who may trade such Shares without restriction
under the 1933 Act, and the Company has delivered a new certificate or other
evidence of ownership for such securities not bearing a restrictive legend, or
(iv) the date when all Shares may be sold without any time, volume or manner
limitations pursuant to Rule 144(k) or any similar provision then in effect
under the 1933 Act in the opinion of counsel to the Company, which counsel shall
be reasonably acceptable to the Investor.
4.4 Indemnification. The Company agrees to indemnify and hold
harmless the Investor against any and all losses, claims, damages, liabilities
and expenses, which Investor may suffer arising out of any untrue statement of a
material fact in a Registration Statement filed in connection with the
registration rights granted by this Section 4, or arising out of any omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the Company will not
be liable to the extent that such losses, claims, damages, liabilities or
expenses arise out of any untrue statement or omission which has been made
therein or omitted therefrom in reliance upon information relating to the
Investor furnished in writing to the Company by the Investor for use in
connection therewith.
4.5 Fees and Commissions. All underwriting and/or brokerage
discounts, fees and commissions in respect of the registration of the Shares
under this Section 4 and applicable transfer taxes payable upon sale of the
Shares, and any counsel fees or disbursements for counsel for Investor and
out-of-pocket expenses of Investor in connection with the registration of Shares
under this Section 4 shall be paid and borne by Investor.
5. Conditions to Obligations of the Company. The obligations of
the Company under this Agreement are subject to satisfaction of the following
conditions at or prior to the Closing, any of which may be waived by the
Company:
5.1 Representations and Warranties Correct. All of the
representations and warranties of Investor contained in this Agreement shall be
true and correct in all material respects as of the Closing with the same effect
as if made on the date of Closing.
5.2 Performance of Covenants and Agreements. All of the
covenants and agreements of Investor contained in this Agreement and required to
be performed on or before the date of Closing shall have been performed in all
material respects to the reasonable satisfaction of the Company.
5.3 Legal Action.
(a) There shall not have been instituted any material
legal proceeding seeking to prohibit the consummation of the transactions
contemplated by this Agreement.
(b) None of the parties hereto shall be prohibited in
any order, writ, injunction or decree of any governmental body of competent
jurisdiction from consummating the
6
<PAGE> 7
transactions contemplated by this Agreement, and no material action or
proceeding shall then be pending which questions the validity of this Agreement,
any of the transactions contemplated hereby or any action which has been taken
by any of the parties in connection herewith or in connection with any of the
transactions contemplated hereby.
6. Conditions to Obligations of Investor. The obligations of
Investor under this Agreement are subject to satisfaction of the following
conditions at or prior to the Closing, any of which may be waived by Investor.
6.1 Representations and Warranties Correct. All of the
representations and warranties of the Company contained in this Agreement shall
be true and correct in all material respects as of the Closing with the same
effect as if made on the date of Closing.
6.2 Legal Action.
(a) There shall not have been instituted or
threatened any legal proceedings seeking to prohibit the consummation of the
transactions contemplated by this Agreement, or to obtain damages from Investor
with respect thereto.
(b) None of the parties hereto shall be prohibited by
any order, writ, injunction or decree of any governmental body of competent
jurisdiction from consummating the transactions contemplated by this Agreement,
and no action or proceeding shall then be pending which questions the validity
of this Agreement, any of the transactions contemplated hereby or any action
which has been taken by any of the parties in connection herewith or in
connection with any of the transactions contemplated hereby.
7. Legends. The certificates evidencing any of the Shares shall
be endorsed with the legend set forth below, and Investor covenants that
Investor shall not transfer the shares represented by any such certificate
without complying with the restrictions on transfer described in the legend
endorsed on such certificate:
THE SHARES REPRESENTED HEREBY 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 WERE 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.
8. Miscellaneous.
7
<PAGE> 8
8.1 Notices. All notices or other communications given or
made hereunder shall be in writing and shall be deemed delivered personally to
the party being given notice or by facsimile, overnight courier service or by
registered or certified mail, return receipt requested, postage prepaid if to
Investor at its address set forth herein or if to the Company at 2425 East
Camelback Road, Suite 650, Phoenix, Arizona 85016 or at such other address as
may have been furnished by the Company to Investor.
8.2 Construction. Notwithstanding the place where this
Agreement may be executed by any of the parties hereto, the parties expressly
agree that all terms and provisions hereof shall be construed in accordance with
and governed by the laws of the State of Arizona without giving effect to
principles of conflicts of law.
8.3 Entire Agreement; Amendments and Waiver. This Agreement
sets forth the entire understanding of the parties with respect to the
transactions contemplated hereby, and neither party shall be bound by nor deemed
to have made any representations and/or warranties except those contained herein
or incorporated herein by reference. The provisions of this Agreement may be
amended and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, only if the Company has
obtained the written consent of Investor.
8.4 Successors and Assigns. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective heirs, estate, successors and assigns of the
parties. Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.
8.5 Headings. The terms used in this Agreement shall be
deemed to include the masculine and the feminine in the singular and the plural
as the context requires. The headings in this Agreement are for reference
purposes only and shall not be deemed to have any substantive effect.
8.6 Survival of Representations and Warranties. All
representations and warranties contained herein will survive the execution and
delivery of this Agreement and delivery of and payment for the Shares regardless
of any investigation made by or on behalf of the parties.
8.7 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.8 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
IN WITNESS WHEREOF, the parties hereby have executed this
Agreement as of the date indicated above.
8
<PAGE> 9
TAMARACK INTERNATIONAL LIMITED
/s/ Terrence A. Jehan 23A Craven Terrace
----------------------------------------
By: Terrence A. Jehan Lancaster Gate
Its: Managing Director London, W2 3QH
BIONUTRICS, INC.
/s/ Ronald H. Lane 2425 East Camelback Road
----------------------------------------
By: Ronald H. Lane Suite #650
Its: President Phoenix, Arizona 85016
9
