Document:

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                                                                   EXHIBIT 10.31

                          REGISTRATION RIGHTS AGREEMENT

         THIS REGISTRATION RIGHTS AGREEMENT, dated as of September 7, 2000
between Justicia Holdings Limited ("Purchaser") and Bionutrics, Inc. (the
"Company").

         WHEREAS, simultaneously with the execution and delivery of this
Agreement, pursuant to a Common Stock Purchase Agreement dated the date hereof
(the "Purchase Agreement") the Purchaser has committed to purchase up to
4,000,000 shares of the Company's Common Stock (terms not defined herein shall
have the meanings ascribed to them in the Purchase Agreement) and Warrants; and

         WHEREAS, the Company desires to grant to the Purchaser the registration
rights set forth herein with respect to the Shares, including the Shares
issuable upon exercise of the Warrants from time to time, and 25,000 shares of
Common Stock issued to the Purchaser pursuant to Section 9.1 of the Purchase
Agreement (collectively, the "Securities").

         NOW, THEREFORE, the parties hereto mutually agree as follows:

         Section 1. Registrable Securities. As used herein the term "Registrable
Security" means the Securities until (i) all Securities have been disposed of
pursuant to the Registration Statement, (ii) all Securities have been sold under
circumstances under which all of the applicable conditions of Rule 144 (or any
similar provision then in force) under the Securities Act ("Rule 144") are met,
(iii) all Securities have been otherwise transferred to persons who may trade
such Securities without restriction under the Securities Act, and the Company
has delivered a new certificate or other evidence of ownership for such
Securities not bearing a restrictive legend or (iv) such time as, in the opinion
of counsel to the Company, all Securities may be sold without any time, volume
or manner limitations pursuant to Rule 144(k) (or any similar provision then in
effect) under the Securities Act. The term "Registrable Securities" means any
and/or all of the securities falling within the foregoing definition of a
"Registrable Security." In the event of any merger, reorganization,
consolidation, recapitalization or other change in corporate structure affecting
the Common Stock, such adjustment shall be deemed to be made in the definition
of "Registrable Security" as is appropriate in order to prevent any dilution or
enlargement of the rights granted pursuant to this Agreement.

         Section 2. Restrictions on Transfer. The Purchaser acknowledges and
understands that in the absence of an effective Registration Statement
authorizing the resale of the Securities as provided herein, the Securities are
"restricted securities" as defined in Rule 144. The Purchaser understands that
no disposition or transfer of the Securities may be made by Purchaser in the
absence of (i) an opinion of counsel to the Purchaser, in form and substance
reasonably satisfactory to the Company, that such transfer may be made without
registration under the Securities Act or (ii) such registration.
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         With a view to making available to the Purchaser the benefits of Rule
144, the Company agrees to:

                  (a) comply with the provisions of paragraph (c)(1) of Rule
144; and

                  (b) file with the Commission in a timely manner all reports
and other documents required to be filed by the Company pursuant to Section 13
or 15(d) under the Exchange Act; and, if at any time it is not required to file
such reports but in the past had been required to or did file such reports, it
will, upon the request of the Purchaser, make available other information as
required by, and so long as necessary to permit sales of, its Registrable
Securities pursuant to Rule 144.

         Section 3. Registration Rights With Respect to the Securities.

                  (a) The Company agrees that it will prepare and file with the
Securities and Exchange Commission ("Commission"), within forty-five (45) days
after the date hereof, a registration statement (on Form S-3 and/or S-1, or
other appropriate form of registration statement) under the Securities Act (the
"Registration Statement"), at the sole expense of the Company (except as
provided in Section 3(c) hereof), in respect of Purchaser, so as to permit a
public offering and resale of the Securities under the Securities Act by
Purchaser.

         The Company shall use its best efforts to cause the Registration
Statement to become effective within ninety (90) days of the date hereof or five
(5) days of SEC clearance and will within said five (5) days request
acceleration of effectiveness. The Company will notify Purchaser of the
effectiveness of the Registration Statement within one Trading Day of such
event.

                  (b) The Company will maintain the Registration Statement or
post-effective amendment filed under this Section 3 hereof effective under the
Securities Act until the earliest of (i) the date that all of the Securities
have been sold pursuant to the Registration Statement, (iii) the date the
holders thereof receive an opinion of counsel to the Company, which opinion
shall be reasonably acceptable to the Purchaser, that the Securities may be sold
under the provisions of Rule 144 without limitation as to volume, (iii) the date
when all Securities have been otherwise transferred to persons who may trade
such shares without restriction under the Securities 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 Securities may be
sold without any time, volume or manner limitations pursuant to Rule 144(k) or
any similar provision then in effect under the Securities Act in the opinion of
counsel to the Company, which counsel shall be reasonably acceptable to the
Purchaser (the "Effectiveness Period").

                  (c) All fees, disbursements and out-of-pocket expenses and
costs incurred by the Company in connection with the preparation and filing of
the Registration Statement under subparagraph 3(a) and in complying with
applicable securities and Blue Sky laws (including, without limitation, all
attorneys' fees of the Company) shall be borne by the Company. The Purchaser
shall bear the cost of underwriting and/or brokerage discounts, fees and
commissions, if any, applicable to the Securities being registered and the fees
and expenses of its counsel. The

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Purchaser and its counsel shall have a reasonable period, not to exceed ten (10)
Trading Days, to review the proposed Registration Statement or any amendment
thereto, prior to filing with the Commission, and the Company shall provide the
Purchaser with copies of any comment letters received from the Commission with
respect thereto within two (2) Trading Days of receipt thereof. The Company
shall make reasonably available for inspection by Purchaser, any underwriter
participating in any disposition pursuant to the Registration Statement, and any
attorney, accountant or other agent retained by the Purchaser or any such
underwriter all relevant financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries, and cause the
Company's officers, directors and employees to supply all information reasonably
requested by the Purchaser or any such underwriter, attorney, accountant or
agent in connection with the Registration Statement, in each case, as is
customary for similar due diligence examinations; provided, however, that all
records, information and documents that are designated in writing by the
Company, in good faith, as confidential, proprietary or containing any material
non-public information shall be kept confidential by the Purchaser and any such
underwriter, attorney, accountant or agent (pursuant to an appropriate
confidentiality agreement in the case of the Purchaser, underwriter, attorney,
accountant or agent), unless such disclosure is made pursuant to judicial
process in a court proceeding (after first giving the Company an opportunity
promptly to seek a protective order or otherwise limit the scope of the
information sought to be disclosed) or is required by law, or such records,
information or documents become available to the public generally or through a
third party not in violation of an accompanying obligation of confidentiality;
and provided further that, if the foregoing inspection and information gathering
would otherwise disrupt the Company's conduct of its business, such inspection
and information gathering shall, to the maximum extent possible, be coordinated
on behalf of the Purchaser and the other parties entitled thereto by one firm of
counsel designed by and on behalf of the majority in interest of Purchaser and
other parties. The Company shall qualify any of the securities for sale in such
states as the Purchaser reasonably designates and shall furnish indemnification
in the manner provided in Section 6 hereof. However, the Company shall not be
required to qualify in any state which will require an escrow or other
restriction relating to the Company and/or the sellers, or which will require
the Company to qualify to do business in such state or require the Company to
file therein any general consent to service of process. The Company at its
expense will supply the Purchaser with copies of the Registration Statement and
the prospectus included therein and other related documents in such quantities
as may be reasonably requested by the Purchaser.

                  (d) The Company shall not be required by this Section 3 to
include a Purchaser's Securities in any Registration Statement which is to be
filed if, in the opinion of counsel for both the Purchaser and the Company (or,
should they not agree, in the opinion of another counsel experienced in
securities law matters acceptable to counsel for the Purchaser and the Company)
the proposed offering or other transfer as to which such registration is
requested is exempt from applicable federal and state securities laws and would
result in all purchasers or transferees obtaining securities which are not
"restricted securities", as defined in Rule 144.

                  (e) If at any time or from time to time after the effective
date of the Registration Statement, the Company notifies the Purchaser in
writing of the existence of a Potential Material Event (as defined in Section
3(f) below), the Purchaser shall not offer or sell any Securities or engage in
any other transaction involving or relating to Securities, from the time

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of the giving of notice with respect to a Potential Material Event until the
Purchaser receives written notice from the Company that such Potential Material
Event either has been disclosed to the public or no longer constitutes a
Potential Material Event (the "Suspension Period"); provided, however, that if
the Company so suspends the right to such holders of Securities for more than
twenty (20) Trading Days in the aggregate during any twelve month period (the
"Grace Period") during the periods the Registration Statement is required to be
in effect, then the Company must compensate the Purchaser for any net decline in
market value of the Securities held by Purchaser at the beginning of any portion
of a Suspension Period that exceeds the Grace Period through the end of any such
Suspension Period and any Suspension Periods thereafter during such twelve month
period. Net decline shall be calculated as the difference between the highest
VWAP during the applicable Suspension Period and the VWAP at the end of such
Suspension Period. If a Potential Material Event shall occur prior to the date
the Registration Statement is filed, then the Company's obligation to file the
Registration Statement shall be delayed without penalty for not more than thirty
(30) calendar days. The Company must give Purchaser notice in writing at least
two (2) Trading Days prior to the first day of the blackout period, if lawful to
do so.

                  (f) "Potential Material Event" means any of the following: (a)
the possession by the Company of material information that is not ripe for
disclosure in a registration statement, as determined in good faith by the Chief
Executive Officer or the Board of Directors of the Company or that disclosure of
such information in the Registration Statement would be detrimental to the
business and affairs of the Company; or (b) any material engagement or activity
by the Company which would, in the good faith determination of the Chief
Executive Officer or the Board of Directors of the Company, be adversely
affected by disclosure in a registration statement at such time, which
determination shall be accompanied by a good faith determination by the Chief
Executive Officer or the Board of Directors of the Company that the Registration
Statement would be materially misleading absent the inclusion of such
information.

         Section 4. Cooperation with Company. Purchaser will cooperate with the
Company in all respects in connection with this Agreement, including timely
supplying all information reasonably requested by the Company (which shall
include all information regarding the Purchaser and proposed manner of sale of
the Registrable Securities 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 Registrable Securities 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. The
Purchaser shall consent to be named as an underwriter in the Registration
Statement. Purchaser acknowledges that in accordance with current Commission
policy, the Purchaser will be named as the underwriter of the Securities in the
Registration Statement.

         Section 5. Registration Procedures. If and whenever the Company is
required by any of the provisions of this Agreement to effect the registration
of any of the Registrable Securities under the Securities Act, the Company shall
(except as otherwise provided in this Agreement), as expeditiously as possible,
subject to the Purchaser's assistance and cooperation as reasonably required:

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                  (a) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the sale or
other disposition of all securities covered by such registration statement
whenever the Purchaser of such Registrable Securities shall desire to sell or
otherwise dispose of the same (including prospectus supplements with respect to
the sales of securities from time to time in connection with a registration
statement pursuant to Rule 415 promulgated under the Securities Act) and (ii)
take all lawful action such that each of (A) the Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(B) the prospectus forming part of the Registration Statement, and any amendment
or supplement thereto, does not at any time during the Registration Period
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.

                  (b) prior to the filing with the Commission of any
Registration Statement (including any amendments thereto) and the distribution
or delivery of any prospectus (including any supplements thereto), provide draft
copies thereof to the Purchaser and reflect in such documents all such comments
as the Purchaser (and its counsel) reasonably may propose and (ii) furnish to
the Purchaser such numbers of copies of a prospectus including a preliminary
prospectus or any amendment or supplement to any prospectus, as applicable, in
conformity with the requirements of the Securities Act, and such other
documents, as the Purchaser may reasonably request in order to facilitate the
public sale or other disposition of the securities owned by the Purchaser;

                  (c) register and qualify the Registrable Securities covered by
the Registration Statement under New York blue sky laws (subject to the
limitations set forth in Section 3(c) above), and do any and all other acts and
things which may be reasonably necessary or advisable to enable the Purchaser to
consummate the public sale or other disposition in such jurisdiction of the
securities owned by the Purchaser, except that the Company shall not for any
such purpose be required to qualify to do business as a foreign corporation in
any jurisdiction wherein it is not so qualified or to file therein any general
consent to service of process;

                  (d) list such Registrable Securities on the Principal Market,
and any other exchange on which the Common Stock of the Company is then listed,
if the listing of such Registrable Securities is then permitted under the rules
of such exchange or the Nasdaq Stock Market;

                  (e) notify the Purchaser at any time when a prospectus
relating thereto covered by the Registration Statement is required to be
delivered under the Securities Act, of the happening of any event of which it
has knowledge as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing, and the Company shall prepare and file a curative amendment under
Section 5(a) as quickly as commercially possible;

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                  (f) as promptly as practicable after becoming aware of such
event, notify the Purchaser who holds Registrable Securities being sold (or, in
the event of an underwritten offering, the managing underwriters) of the
issuance by the Commission or any state authority of any stop order or other
suspension of the effectiveness of the Registration Statement at the earliest
possible time and take all lawful action to effect the withdrawal, rescission or
removal of such stop order or other suspension;

                  (g) cooperate with the Purchaser to facilitate the timely
preparation and delivery of certificates for the Registrable Securities to be
offered pursuant to the Registration Statement and enable such certificates for
the Registrable Securities to be in such denominations or amounts, as the case
may be, as the Purchaser reasonably may request and registered in such names as
the Purchaser may request; and, within three (3) Trading Days after a
Registration Statement which includes Registrable Securities is declared
effective by the Commission, deliver and cause legal counsel selected by the
Company to deliver to the transfer agent for the Registrable Securities (with
copies to the Purchaser whose Registrable Securities are included in such
Registration Statement) an appropriate instruction and, to the extent necessary,
an opinion of such counsel;

                  (h) take all such other lawful actions reasonably necessary to
expedite and facilitate the disposition by the Purchaser of their Registrable
Securities in accordance with the intended methods therefor provided in the
prospectus which are customary for issuers to perform under the circumstances;

                  (i) in the event of an underwritten offering, promptly include
or incorporate in a prospectus supplement or post-effective amendment to the
Registration Statement such information as the managing underwriters reasonably
agree should be included therein and to which the Company does not reasonably
object and make all required filings of such prospectus supplement or
post-effective amendment as soon as practicable after it is notified of the
matters to be included or incorporated in such prospectus supplement or
post-effective amendment; and

                  (j) maintain a transfer agent for its Common Stock.

         Section 6. Indemnification.

                  (a) The Company agrees to indemnify and hold harmless the
Purchaser and each person, if any, who controls the Purchaser within the meaning
of the Securities Act ("Distributing Purchaser") against any losses, claims,
damages or liabilities, joint or several (which shall, for all purposes of this
Agreement, include, but not be limited to, all reasonable costs of defense and
investigation and all reasonable attorneys' fees), to which the Distributing
Purchaser may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, or any related
preliminary prospectus, final prospectus or amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading;

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provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, preliminary prospectus, final
prospectus or amendment or supplement thereto in reliance upon, and in
conformity with, written information furnished to the Company by the
Distributing Purchaser specifically for use in the preparation thereof. This
Section 6(a) shall not inure to the benefit of any Distributing Purchaser with
respect to any person asserting such loss, claim, damage or liability who
purchased the Registrable Securities which are the subject thereof if the
Distributing Purchaser failed to send or give (in violation of the Securities
Act or the rules and regulations promulgated thereunder) a copy of the
prospectus contained in such Registration Statement to such person at or prior
to the written confirmation to such person of the sale of such Registrable
Securities, where the Distributing Purchaser was obligated to do so under the
Securities Act or the rules and regulations promulgated thereunder. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.

                  (b) Each Distributing Purchaser agrees that it will indemnify
and hold harmless the Company, and each officer, director of the Company or
person, if any, who controls the Company within the meaning of the Securities
Act, against any losses, claims, damages or liabilities (which shall, for all
purposes of this Agreement, include, but not be limited to, all reasonable costs
of defense and investigation and all reasonable attorneys' fees) to which the
Company or any such officer, director or controlling person may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, or any related preliminary prospectus, final
prospectus or amendment or supplement thereto, or arise out of or are based upon
the omission or the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
but in each case only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, preliminary prospectus, final prospectus or amendment or supplement
thereto in reliance upon, and in conformity with, written information furnished
to the Company by such Distributing Purchaser specifically for use in the
preparation thereof. This indemnity agreement will be in addition to any
liability which the Distributing Purchaser may otherwise have. Notwithstanding
anything to the contrary herein, the Distributing Purchaser shall not be liable
under this Section 6(b) for any amount in excess of the net proceeds to such
Distributing Purchaser as a result of the sale of Registrable Securities
pursuant to the Registration Statement.

                  (c) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 6, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve the
indemnifying party from any liability which it may have to any indemnified party
except to the extent of actual prejudice demonstrated by the indemnifying party.
In case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate in, and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, assume the defense

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thereof, subject to the provisions herein stated and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section 6 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation, unless the indemnifying party shall not
pursue the action to its final conclusion. The indemnified party shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall not be at the
expense of the indemnifying party if the indemnifying party has assumed the
defense of the action with counsel reasonably satisfactory to the indemnified
party; provided that if the indemnified party is the Distributing Purchaser, the
fees and expenses of such counsel shall be at the expense of the indemnifying
party if (i) the employment of such counsel has been specifically authorized in
writing by the indemnifying party, or (ii) the named parties to any such action
(including any impleaded parties) include both the Distributing Purchaser and
the indemnifying party and the Distributing Purchaser shall have been advised by
such counsel that there may be one or more legal defenses available to the
indemnifying party different from or in conflict with any legal defenses which
may be available to the Distributing Purchaser (in which case the indemnifying
party shall not have the right to assume the defense of such action on behalf of
the Distributing Purchaser, it being understood, however, that the indemnifying
party shall, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable only for the reasonable
fees and expenses of one separate firm of attorneys for the Distributing
Purchaser, which firm shall be designated in writing by the Distributing
Purchaser and be approved by the indemnifying party). No settlement of any
action against an indemnified party shall be made without the prior written
consent of the indemnified party, which consent shall not be unreasonably
withheld.

         All fees and expenses of the indemnified party (including reasonable
costs of defense and investigation in a manner not inconsistent with this
Section and all reasonable attorneys' fees and expenses) shall be paid to the
indemnified party, as incurred, within ten (10) Trading Days of written notice
thereof to the indemnifying party (regardless of whether it is ultimately
determined that an indemnified party is not entitled to indemnification
hereunder; provided, that the indemnifying party may require such indemnified
party to undertake to reimburse all such fees and expenses to the extent it is
finally judicially determined that such indemnified party is not entitled to
indemnification hereunder).

         Section 7. Contribution. In order to provide for just and equitable
contribution under the Securities Act in any case in which (i) the indemnified
party makes a claim for indemnification pursuant to Section 6 hereof but is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that the express provisions of Section 6 hereof provide
for indemnification in such case, or (ii) contribution under the Securities Act
may be required on the part of any indemnified party, then the Company and the
applicable Distributing Purchaser shall contribute to the aggregate losses,
claims, damages or liabilities to which they may be subject (which shall, for
all purposes of this Agreement, include, but not be limited to, all reasonable
costs of defense and investigation and all reasonable attorneys' fees), in
either such case (after

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contribution from others) on the basis of relative fault as well as any other
relevant equitable considerations. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the applicable
Distributing Purchaser on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Distributing Purchaser agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in this
Section 7. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof) referred
to above in this Section 7 shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

         Notwithstanding any other provision of this Section 7, in no event
shall any (i) Purchaser be required to undertake liability to any person under
this Section 7 for any amounts in excess of the dollar amount of the net
proceeds to be received by the Purchaser from the sale of the Purchaser's
Registrable Securities (after deducting any fees, discounts and commissions
applicable thereto) pursuant to any Registration Statement under which such
Registrable Securities are to be registered under the Securities Act and (ii)
underwriter be required to undertake liability to any person hereunder for any
amounts in excess of the aggregate discount, commission or other compensation
payable to such underwriter with respect to the Registrable Securities
underwritten by it and distributed pursuant to the Registration Statement.

         Section 8. Notices. All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be delivered as set forth
in the Purchase Agreement.

         Section 9. Assignment. Neither this Agreement nor any rights of the
Purchaser or the Company hereunder may be assigned by either party to any other
person. Notwithstanding the foregoing, (a) the provisions of this Agreement
shall inure to the benefit of, and be enforceable by, any transferee of any of
the Common Stock purchased by the Purchaser pursuant to the Purchase Agreement
other than through open-market sales, and (b) upon the prior written consent of
the Company, which consent shall not be unreasonably withheld or delayed in the
case of an assignment to an affiliate of the Purchaser, the Purchaser's interest
in this Agreement may be assigned at any time, in whole or in part, to any other
person or entity (including any affiliate of the Purchaser) who agrees to be
bound hereby.

         Section 10. Counterparts/Facsimile. This Agreement may be executed in
two or more counterparts, each of which shall constitute an original, but all of
which when together shall constitute but one and the same instrument, and shall
become effective when one or more counterparts have been signed by each party
hereto and delivered to the other party. In lieu of the

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original, a facsimile transmission or copy of the original shall be as effective
and enforceable as the original.

         Section 11. Remedies. The remedies provided in this Agreement are
cumulative and not exclusive of any remedies provided by law. If any term,
provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their best efforts to find and
employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction. It is
hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid, illegal,
void or unenforceable.

         Section 12. Conflicting Agreements. The Company shall not enter into
any agreement with respect to its securities that is inconsistent with the
rights granted to the holders of Registrable Securities in this Agreement or
otherwise prevents the Company from complying with all of its obligations
hereunder.

         Section 13. Headings. The headings in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.

         Section 14. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made in New York by persons domiciled in New York City and without
regard to its principles of conflicts of laws. Any action may be brought as set
forth in the Purchase Agreement. Any party shall have the right to seek
injunctive relief from any court of competent jurisdiction in any case where
such relief is available. Any dispute under this Agreement shall be submitted to
arbitration under the American Arbitration Association (the "AAA") in New York
City, New York, and shall be finally and conclusively determined by the decision
of a board of arbitration consisting of three (3) members (hereinafter referred
to as the "Board of Arbitration") selected as according to the rules governing
the AAA. The Board of Arbitration shall meet on consecutive business days in New
York City, New York, and shall reach and render a decision in writing (concurred
in by a majority of the members of the Board of Arbitration) with respect to the
amount, if any, which the losing party is required to pay to the other party in
respect of a claim filed. In connection with rendering its decisions, the Board
of Arbitration shall adopt and follow the laws of the State of New York. To the
extent practical, decisions of the Board of Arbitration shall be rendered no
more than thirty (30) calendar days following commencement of proceedings with
respect thereto. The Board of Arbitration shall cause its written decision to be
delivered to all parties involved in the dispute. The Board of Arbitration shall
be authorized and is directed to enter a default judgment against any party
refusing to participate in the arbitration proceeding within thirty days of any
deadline for such participation. Any decision made by the Board of Arbitration
(either prior to or after the expiration of such thirty (30) calendar day
period) shall be final, binding and conclusive on the parties to the dispute,
and entitled to be enforced to the fullest extent permitted by law and entered
in any court of competent jurisdiction. The prevailing party shall be awarded
its costs, including attorneys' fees, from the non-prevailing party as part of
the arbitration award. Any party shall have the right to seek injunctive relief
from any court of competent

                                       10

<PAGE>   11
jurisdiction in any case where such relief is available. The prevailing party in
such injunctive action shall be awarded its costs, including attorney's fees,
from the non-prevailing party.

         Section 15. Severability. If any provision of this Agreement shall for
any reason be held invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provision hereof and this Agreement shall be
construed as if such invalid or unenforceable provision had never been contained
herein. Terms not otherwise defined herein shall be defined in accordance with
the Purchase Agreement.

                                       11
<PAGE>   12
         IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed, on this 7th day of September, 2000

                                     BIONUTRICS, INC.

                                     By:   /s/Ronald Lane
                                           -----------------------------------
                                           Ronald Lane, Ph.D., President & CEO

                                     JUSTICIA HOLDINGS LIMITED

                                     By:   /s/Iwan Ackermann
                                           -----------------------------------
                                           Iwan Ackermann, Authorized Signatory

                                       12<PAGE>   1

                                                                   EXHIBIT 10.32

                                ESCROW AGREEMENT

                  THIS ESCROW AGREEMENT (this "Agreement") is made as of
September 7, 2000, by and among Bionutrics, Inc., a corporation incorporated
under the laws of Nevada (the "Company"), Justicia Holdings Limited
("Purchaser"), and Epstein Becker & Green, P.C., having an address at 250 Park
Avenue, New York, NY 10177 (the "Escrow Agent"). Capitalized terms used but not
defined herein shall have the meanings set forth in the Common Stock Purchase
Agreement referred to in the first recital.

                  WHEREAS, the Purchaser will from time to time as requested by
the Company, purchase shares of the Company's Common Stock from the Company as
set forth in that certain Common Stock Purchase Agreement (the "Purchase
Agreement") dated the date hereof between the Purchaser and the Company, which
will be issued as per the terms and conditions contained herein and in the
Purchase Agreement; and

                  WHEREAS, the Company and the Purchaser have requested that the
Escrow Agent hold in escrow and then distribute the initial documents and
certain funds which are conditions precedent to the effectiveness of the
Purchase Agreement, and have further requested that upon each exercise of a Draw
Down, the Escrow Agent hold the relevant documents and the applicable purchase
price pending receipt by Purchaser of certificates representing the securities
issuable upon such Draw Down;

                  NOW, THEREFORE, in consideration of the covenants and mutual
promises contained herein and other good and valuable consideration, the receipt
and legal sufficiency of which are hereby acknowledged and intending to be
legally bound hereby, the parties agree as follows:

                                   ARTICLE I

                   TERMS OF THE ESCROW FOR THE INITIAL CLOSING

                  1.1.     The parties hereby agree to establish an escrow
account with the Escrow Agent whereby the Escrow Agent shall hold the funds and
documents which are referenced in Section 5.2 of the Purchase Agreement.

                  1.2.     At the Initial Closing, the Company shall deliver to
the Escrow Agent:

                           (i)      the original executed Registration Rights
                                    Agreement in the form of Exhibit A to the
                                    Purchase Agreement;

                           (ii)     the original executed opinion of Greenburg
                                    Traurig, LLP in the form of Exhibit C to the
                                    Purchase Agreement;

<PAGE>   2
                           (iii)    the 25,000 shares of Common Stock for the
                                    fees and expenses of the Purchaser. The
                                    Company shall register such Common Stock in
                                    the Registration Statement;

                           (iv)     the original executed Company counterpart of
                                    this Escrow Agreement;

                           (v)      the original executed Company counterpart of
                                    the Purchase Agreement; and

                           (vi)     the original executed Initial Warrant in the
                                    form of Exhibit E to the Purchase Agreement.

                  1.3.     Upon receipt of the foregoing, and receipt of
executed counterparts from Purchaser of the Purchase Agreement, the Registration
Rights Agreement and this Escrow Agreement, the Escrow Agent shall calculate and
enter the exercise price, the issuance date and termination date on the face of
the Initial Warrant and immediately transfer the sum of Twenty-Five Thousand
Dollars ($25,000) to Epstein Becker & Green, P.C. ("EB&G"), 250 Park Avenue, New
York, New York 10177 for the Purchaser's legal, administrative and escrow costs
and the Escrow Agent shall then arrange to have the Purchase Agreement, this
Escrow Agreement, the Registration Rights Agreement, the Initial Warrant and the
opinion of counsel delivered to the appropriate parties.

                  1.4      Wire transfers to the Escrow Agent shall be made as
follows:

                                    Epstein Becker  Green, P.C.
                                    Master Escrow Account
                                    Chase Manhattan Bank
                                    1411 Broadway - Fifth Floor
                                    New York, New York 10018
                                    ABA No. 021000021
                                    Account No. 035 1 346036
                                    Attention: L. Borneo

                                   ARTICLE II

                     TERMS OF THE ESCROW FOR EACH DRAW DOWN

                  2.1.     Each time the Company shall send a Draw Down Notice
to the Purchaser as provided in the Purchase Agreement, it shall send a copy, by
facsimile, to the Escrow Agent.

                  2.2.     Each time the Purchaser shall purchase Shares
pursuant to a Draw Down, the Purchaser shall send the applicable Purchase Price
of the Draw Down Shares to the Escrow Agent, which shall advise the Company in
writing that it has received the Purchase Price for such Draw Down Shares. The
Company shall promptly, but no later than three (3) Trading Days after receipt
of such funding notice from the Escrow Agent, cause its transfer agent to issue
the Draw

                                       2

<PAGE>   3
Down Shares to the Purchaser via DTC deposit to the account specified by the
Purchaser from time to time, deliver the Purchaser Warrants, deliver the
original executed opinion of Greenburg Traurig, LLP, in the form of Exhibit C
and deliver a Form 424(b) supplemental prospectus to the Escrow Agent. Upon
receipt of written confirmation from the transfer agent or from the Purchaser
that such Draw Down Shares have been so deposited and the Purchase Warrants, the
opinion and the supplemental prospectus have been so delivered, the Escrow Agent
shall, within one (1) Trading Day, calculate and enter the number, the exercise
price, the initial issuance date and the termination date on the face of the
Purchaser Warrants and wire the Purchase Price of the Draw Down per the written
instructions of the Company, net of $1,500 as escrow expenses to the Escrow
Agent, and deliver the Purchaser Warrants, the opinion and the supplemental
prospectus to the Purchaser.

                                  ARTICLE III

                                  MISCELLANEOUS

                  3.1.     No waiver or any breach of any covenant or provision
herein contained shall be deemed a waiver of any preceding or succeeding breach
thereof, or of any other covenant or provision herein contained. No extension of
time for performance of any obligation or act shall be deemed an extension of
the time for performance of any other obligation or act.

                  3.2.     All notices or other communications required or
permitted hereunder shall be in writing, and shall be sent by fax, overnight
courier, registered or certified mail, postage prepaid, return receipt
requested, and shall be deemed received upon receipt thereof, as set forth in
the Purchase Agreement.

                  3.3.     This Escrow Agreement shall be binding upon and shall
inure to the benefit of the permitted successors and permitted assigns of the
parties hereto.

                  3.4.     This Escrow Agreement is the final expression of, and
contains the entire agreement between, the parties with respect to the subject
matter hereof and supersedes all prior understandings with respect thereto. This
Escrow Agreement may not be modified, changed, supplemented or terminated, nor
may any obligations hereunder be waived, except by written instrument signed by
the parties to be charged or by their respective agents duly authorized in
writing or as otherwise expressly permitted herein.

                  3.5.     Whenever required by the context of this Escrow
Agreement, the singular shall include the plural and masculine shall include the
feminine. This Escrow Agreement shall not be construed as if it had been
prepared by one of the parties, but rather as if both parties had prepared the
same. Unless otherwise indicated, all references to Articles are to this Escrow
Agreement.

                  3.6.     The parties hereto expressly agree that this Escrow
Agreement shall be governed by, interpreted under and construed and enforced in
accordance with the laws of the State of New York. Except as expressly set forth
herein, any action to enforce, arising out of, or

                                       3

<PAGE>   4
relating in any way to, any provisions of this Escrow Agreement shall be brought
in the Federal or state courts of New York, New York as is more fully set forth
in the Purchase Agreement.

                  3.7.     The Escrow Agent's duties hereunder may be altered,
amended, modified or revoked only by a writing signed by the Company, Purchaser
and the Escrow Agent.

                  3.8.     The Escrow Agent shall be obligated only for the
performance of such duties as are specifically set forth herein and may rely and
shall be protected in relying or refraining from acting on any instrument
reasonably believed by the Escrow Agent to be genuine and to have been signed or
presented by the proper party or parties. The Escrow Agent shall not be
personally liable for any act the Escrow Agent may do or omit to do hereunder as
the Escrow Agent while acting in good faith, excepting only its own gross
negligence or willful misconduct, and any act done or omitted by the Escrow
Agent pursuant to the advice of the Escrow Agent's attorneys-at-law (other than
Escrow Agent itself) shall be conclusive evidence of such good faith.

                  3.9.     The Escrow Agent is hereby expressly authorized to
disregard any and all warnings given by any of the parties hereto or by any
other person or corporation, excepting only orders or process of courts of law
and is hereby expressly authorized to comply with and obey orders, judgments or
decrees of any court. In case the Escrow Agent obeys or complies with any such
order, judgment or decree, the Escrow Agent shall not be liable to any of the
parties hereto or to any other person, firm or corporation by reason of such
decree being subsequently reversed, modified, annulled, set aside, vacated or
found to have been entered without jurisdiction.

                  3.10.    The Escrow Agent shall not be liable in any respect
on account of the identity, authorization or rights of the parties executing or
delivering or purporting to execute or deliver the Purchase Agreement or any
documents or papers deposited or called for thereunder or hereunder.

                  3.11.    The Escrow Agent shall be entitled to employ such
legal counsel and other experts as the Escrow Agent may deem necessary properly
to advise the Escrow Agent in connection with the Escrow Agent's duties
hereunder, may rely upon the advice of such counsel, and may pay such counsel
reasonable compensation therefor. THE ESCROW AGENT HAS ACTED AS LEGAL COUNSEL
FOR THE PURCHASER, AND MAY CONTINUE TO ACT AS LEGAL COUNSEL FOR THE PURCHASER,
FROM TIME TO TIME, NOTWITHSTANDING ITS DUTIES AS THE ESCROW AGENT HEREUNDER. THE
COMPANY CONSENTS TO THE ESCROW AGENT IN SUCH CAPACITY AS LEGAL COUNSEL FOR THE
PURCHASER AND WAIVES ANY CLAIM THAT SUCH REPRESENTATION REPRESENTS A CONFLICT OF
INTEREST ON THE PART OF THE ESCROW AGENT. THE COMPANY UNDERSTANDS THAT THE
PURCHASER AND THE ESCROW AGENT ARE RELYING EXPLICITLY ON THE FOREGOING PROVISION
IN ENTERING INTO THIS ESCROW AGREEMENT.

                  3.12.    The Escrow Agent's responsibilities as escrow agent
hereunder shall terminate if the Escrow Agent shall resign by written notice to
the Company and the Purchaser. In the event of any such resignation, the
Purchaser and the Company shall appoint a successor Escrow Agent.

                                       4

<PAGE>   5
                  3.13.    If the Escrow Agent reasonably requires other or
further instruments in connection with this Escrow Agreement or obligations in
respect hereto, the necessary parties hereto shall join in furnishing such
instruments.

                  3.14.    It is understood and agreed that should any dispute
arise with respect to the delivery and/or ownership or right of possession of
the documents or the escrow funds held by the Escrow Agent hereunder, the Escrow
Agent is authorized and directed in the Escrow Agent's sole discretion (1) to
retain in the Escrow Agent's possession without liability to anyone all or any
part of said documents or the escrow funds until such disputes shall have been
settled either by mutual written agreement of the parties concerned by a final
order, decree or judgment of a court of competent jurisdiction after the time
for appeal has expired and no appeal has been perfected, but the Escrow Agent
shall be under no duty whatsoever to institute or defend any such proceedings or
(2) to deliver the escrow funds and any other property and documents held by the
Escrow Agent hereunder to a state or Federal court having competent subject
matter jurisdiction and located in the State and City of New York in accordance
with the applicable procedure therefor.

                  3.15.    The Company and the Purchaser agree jointly and
severally to indemnify and hold harmless the Escrow Agent and its partners,
employees, agents and representatives from any and all claims, liabilities,
costs or expenses in any way arising from or relating to the duties or
performance of the Escrow Agent hereunder or the transactions contemplated
hereby or by the Purchase Agreement other than any such claim, liability, cost
or expense to the extent the same shall have been determined by final,
unappealable judgment of a court of competent jurisdiction to have resulted from
the gross negligence or willful misconduct of the Escrow Agent.

                                       5

<PAGE>   6
                  IN WITNESS WHEREOF, the parties hereto have executed this
Escrow Agreement as of this 7th day of September, 2000.

                                  BIONUTRICS, INC.

                                  By: /s/Ronald Lane
                                      ---------------------------------------
                                      Ronald Lane, Ph.D., President & CEO

                                  JUSTICIA HOLDINGS LIMITED

                                  By: /s/Iwan Ackermann
                                      ---------------------------------------
                                      Iwan Ackermann, Authorized Signatory

                                  ESCROW AGENT:

                                  EPSTEIN BECKER & GREEN, P.C.

                                  By: /s/Robert F. Charron
                                      ---------------------------------------
                                      Robert F. Charron, Authorized Signatory

                                       6

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