BIONOVA U S INC, S-4, 1996-08-12

BIONOVA U S INC
S-4, 1996-08-12

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 12, 1996.

REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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BIONOVA U.S. INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 0723 75-2632242
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NUMBER)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)

6701 SAN PABLO AVENUE
OAKLAND, CALIFORNIA 94608
(510) 547-2395
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
CARLOS HERRERA
6701 SAN PABLO AVENUE
OAKLAND, CALIFORNIA 94608
(510) 547-2395
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

COPIES TO:

JOE A. RUDBERG, ESQ. ARNOLD S. JACOBS, ESQ.
C. NEEL LEMON III, ESQ. HENRY O. SMITH III, ESQ.
MICHAEL C. TITENS, ESQ. PROSKAUER ROSE GOETZ & MENDELSOHN LLP
THOMPSON & KNIGHT, P.C. 1585 BROADWAY
1700 PACIFIC AVENUE, SUITE 3300 NEW YORK, NEW YORK 10036
DALLAS, TEXAS 75201

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this Registration
Statement.

If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]

CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT(2) PRICE(2) REGISTRATION FEE(3)
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<S> <C> <C> <C> <C>
Common Stock, par value
$.01 per share........ 5,511,192 shares $4.96 $27,335,513 $9,426
</TABLE>
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(1) Consists of (a) 4,567,617 shares of Bionova Common Stock issuable upon the
conversion pursuant to the Merger of currently outstanding shares of DNAP
Common Stock, (b) 943,575 shares of Bionova Common Stock issuable upon the
conversion pursuant to the Merger of currently outstanding shares of DNAP
Convertible Exchangeable Preferred Stock, and (c) such indeterminate
number of shares of Bionova Common Stock issuable (i) upon the conversion
pursuant to the Merger of shares of DNAP Common Stock that may be issued
from time to time prior to the consummation of the Merger as a result of
the exercise of currently outstanding options and warrants to purchase
DNAP Common Stock, and (ii) upon the conversion pursuant to the Merger of
shares of DNAP Common Stock that may be issued from time to time prior to
the consummation of the Merger as a result of the conversion of currently
outstanding shares of DNAP Convertible Exchangeable Preferred Stock.
(2) Estimated solely for purposes of calculating the registration fee and
based, pursuant to Rule 457(f) of the Securities Act of 1933, on the
average of the high and low prices on the Nasdaq National Market of the
DNAP Common Stock and the DNAP Convertible Exchangeable Preferred Stock to
be cancelled pursuant to the Merger.
(3) Such fee has already been paid in connection with the related preliminary
proxy materials previously filed with the Securities and Exchange
Commission.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.

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DNA PLANT TECHNOLOGY CORPORATION

August 13, 1996

To the Stockholders of DNA Plant Technology Corporation:

You are cordially invited to attend a special meeting of the stockholders of
DNA Plant Technology Corporation ("DNAP") to be held at 10:00 a.m., local
time, on September 26, 1996, at the Marriott Hotel, 200 Marina Boulevard,
Berkeley, California (the "Special Meeting").

The purpose of the Special Meeting is to consider and vote upon a proposal
to adopt an Agreement and Plan of Merger (as amended to date, the "Merger
Agreement") providing for the Merger (the "Merger") of DNAP with Bionova
Acquisition, Inc., a newly-formed Delaware corporation ("Merger Sub") that is
wholly-owned by Bionova U.S. Inc. ("Bionova"). Under the terms of the Merger
Agreement, upon consummation of the Merger (i) DNAP will become a wholly-owned
subsidiary of Bionova; (ii) each share of DNAP's common stock, par value $.01
per share (the "DNAP Common Stock"), outstanding at the effective time of the
Merger (other than any shares held in the treasury of DNAP or by any
subsidiary of DNAP) will be converted into and represent the right to receive
0.10 shares of common stock, par value $.01 per share, of Bionova ("Bionova
Common Stock"); (iii) each share of DNAP's $2.25 Convertible Exchangeable
Preferred Stock, par value $.01 per share ("DNAP Convertible Exchangeable
Preferred Stock"), outstanding at the effective time of the Merger (other than
any shares held in the treasury of DNAP or by any subsidiary of DNAP) will be
converted into and represent the right to receive 0.68375 shares of Bionova
Common Stock; (iv) stock options and warrants to acquire shares of DNAP Common
Stock outstanding at the effective time of the Merger will be assumed by
Bionova and become corresponding rights (adjusted in accordance with the
exchange ratio set forth above) to acquire shares of Bionova Common Stock; and
(v) cash payments will be made to holders of DNAP Common Stock and DNAP
Convertible Exchangeable Preferred Stock in lieu of issuing fractional shares
of Bionova Common Stock. After the Merger, Bionova will be known as DNAP
Holding Corporation.

Holders of record of DNAP Common Stock at the close of business on August 5,
1996, are entitled to notice of, and to vote at, the Special Meeting. Holders
of record of DNAP Convertible Exchangeable Preferred Stock at the close of
business on August 5, 1996, are entitled to notice of, but not to vote at, the
Special Meeting.

The Merger Agreement and the Merger are more fully described in the enclosed
Proxy Statement/Prospectus. A copy of the Merger Agreement is attached as
Annex I to the Proxy Statement/Prospectus. Please review the Proxy
Statement/Prospectus carefully.

The Board of Directors of DNAP has retained the investment banking firm of
Piper Jaffray Inc. to advise it with respect to the fairness of the
consideration to be received in the Merger. Piper Jaffray Inc. has advised the
Board that, in its opinion, the proposed aggregate consideration to be offered
in the Merger is fair from a financial point of view to the common and
preferred stockholders of DNAP as a group. A copy of the opinion of Piper
Jaffray Inc. is included as Annex III to the enclosed Proxy
Statement/Prospectus.

The Board of Directors of DNAP believes that the Merger is fair to and in
the best interest of the stockholders of DNAP, and unanimously recommends that
the holders of DNAP Common Stock vote for the adoption of the Merger
Agreement. The directors and executive officers of DNAP who own shares of DNAP
Common Stock have indicated to DNAP that they will vote in favor of the
adoption of the Merger Agreement.

THE VOTE OF DNAP COMMON STOCKHOLDERS IS IMPORTANT. THE AFFIRMATIVE VOTE OF
THE HOLDERS OF THE MAJORITY OF THE OUTSTANDING SHARES OF DNAP COMMON STOCK IS
REQUIRED TO ADOPT THE MERGER AGREEMENT, SO THE FAILURE TO VOTE WILL HAVE THE
SAME EFFECT AS A VOTE TO REJECT THE MERGER AGREEMENT. ACCORDINGLY, WE URGE
HOLDERS OF DNAP COMMON STOCK TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND
RETURN IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING. IF YOU DO ATTEND THE MEETING, YOU MAY WITHDRAW YOUR PROXY
AND VOTE IN PERSON IF YOU WISH TO DO SO.

Very truly yours,

Robert Serenbetz
Chief Executive Officer
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION
6701 SAN PABLO AVENUE
OAKLAND, CALIFORNIA 94608

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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

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A special meeting of stockholders of DNA Plant Technology Corporation, a
Delaware corporation ("DNAP"), will be held at 10:00 a.m., local time, on
September 26, 1996, at the Marriott Hotel, 200 Marina Boulevard, Berkeley,
California (the "Special Meeting"), for the following purposes:

1. To consider and vote upon a proposal to adopt the Agreement and Plan
of Merger, dated as of January 26, 1996, as amended to date, among DNAP,
Empresas La Moderna, S.A. de C.V., a corporation organized under the laws
of the United Mexican States, Bionova, S.A. de C.V., a corporation
organized under the laws of the United Mexican States, Bionova U.S. Inc., a
Delaware corporation ("Bionova"), and Bionova Acquisition, Inc., a Delaware
corporation ("Merger Sub"), pursuant to which, among other things: (i)
Merger Sub will be merged with and into DNAP (the "Merger") and DNAP will
become a wholly-owned subsidiary of Bionova; (ii) each share of DNAP's
common stock, par value $.01 per share (the "DNAP Common Stock"),
outstanding at the effective time of the Merger (other than any shares held
in the treasury of DNAP or by any subsidiary of DNAP) will be converted
into and represent the right to receive 0.10 shares of the common stock,
par value $.01 per share, of Bionova ("Bionova Common Stock"); (iii) each
share of DNAP's $2.25 Convertible Exchangeable Preferred Stock, par value
$.01 per share ("DNAP Convertible Exchangeable Preferred Stock"),
outstanding at the effective time of the Merger (other than any shares held
in the treasury of DNAP or by any subsidiary of DNAP) will be converted
into and represent the right to receive 0.68375 shares of Bionova Common
Stock; (iv) stock options and warrants to acquire shares of DNAP Common
Stock outstanding at the effective time of the Merger will be assumed by
Bionova and become corresponding rights (adjusted in accordance with the
exchange ratio set forth above) to acquire shares of Bionova Common Stock;
and (v) cash payments will be made to holders of DNAP Common Stock and DNAP
Convertible Exchangeable Preferred Stock in lieu of issuing fractional
shares of Bionova Common Stock; and

2. To transact any such other business as may properly come before the
meeting or any adjournment or adjournments thereof.

A proxy and return envelope are enclosed for your convenience.

By Order of the Board of Directors,

Robert Serenbetz
Chairman of the Board and
Chief Executive Officer

August 13, 1996

YOUR VOTE IS IMPORTANT

THE HOLDERS OF DNAP COMMON STOCK SHOULD PLEASE MARK, SIGN, AND DATE THE
ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED SELF-ADDRESSED,
STAMPED ENVELOPE.

PLEASE DO NOT SURRENDER YOUR DNAP STOCK CERTIFICATES FOR EXCHANGE AT THIS
TIME.

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DNA PLANT TECHNOLOGY CORPORATION

PROXY STATEMENT

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BIONOVA U.S. INC

PROSPECTUS

This Proxy Statement/Prospectus is being furnished to the stockholders of
DNA Plant Technology Corporation, a Delaware corporation ("DNAP"), in
connection with the solicitation of proxies by the Board of Directors of DNAP
for use at the special meeting of stockholders of DNAP to be held on September
26, 1996 (the "Special Meeting") and any adjournment or adjournments thereof.
At the Special Meeting, the holders of DNAP's common stock, par value $.01 per
share (the "DNAP Common Stock"), will be asked to consider and vote upon a
proposal to adopt the Agreement and Plan of Merger, dated as of January 26,
1996, as amended (the "Merger Agreement"), providing, among other things, for
the merger of DNAP with Bionova Acquisition, Inc., a newly-formed Delaware
corporation ("Merger Sub") and a wholly-owned subsidiary of Bionova U.S. Inc.,
a Delaware corporation ("Bionova"), on the terms described in this Proxy
Statement/Prospectus (the "Merger"). See "The Merger and Related
Transactions."

This Proxy Statement/Prospectus also constitutes a prospectus of Bionova
covering the shares of the common stock, par value $.01 per share, of Bionova
(the "Bionova Common Stock") to be issued in connection with the Merger in
exchange for outstanding shares of DNAP Common Stock and DNAP's $2.25
Convertible Exchangeable Preferred Stock, par value $.01 per share (the "DNAP
Convertible Exchangeable Preferred Stock"), except for any shares of DNAP
Common Stock and DNAP Convertible Exchangeable Preferred Stock (collectively,
"DNAP Stock") held in the treasury of DNAP or held by any subsidiary of DNAP,
which shares of DNAP Stock will be cancelled. The shares of Bionova Common
Stock to be issued in the Merger to holders of DNAP Stock will represent 30%
of the aggregate shares of Bionova Common Stock outstanding immediately after
the consummation of the Merger. The remaining outstanding shares of Bionova
Common Stock will be owned of record by Bionova International, Inc., a
Delaware corporation ("Bionova International"), which is an indirect wholly-
owned subsidiary of Empresas La Moderna, S.A. de C.V., a corporation organized
under the laws of the United Mexican States ("ELM").

The information contained herein with respect to Bionova and its affiliates
has been provided by Bionova, and the information contained herein with
respect to DNAP and its affiliates has been provided by DNAP.

THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. DNAP
STOCKHOLDERS SHOULD CAREFULLY CONSIDER THE FACTORS SET
FORTH UNDER "RISK FACTORS" COMMENCING ON PAGE 20.

THE BIONOVA COMMON STOCK OFFERED HEREBY HAS NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF THIS
TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION
CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

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This Proxy Statement/Prospectus and the accompanying form of proxy are first
being mailed to stockholders of DNAP on or about August 13, 1996.

The date of this Proxy Statement/Prospectus is August 13, 1996.
<PAGE>

AVAILABLE INFORMATION

DNAP is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith,
files with the Securities and Exchange Commission (the "Commission") periodic
reports, proxy statements and other information, which may be inspected and
copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549;
Seven World Trade Center, Suite 1300, New York, New York 10048; and Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and
copies of such material can be obtained from the Public Reference Section of
the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549 upon payment of the prescribed rates. DNAP Common Stock and DNAP
Convertible Exchangeable Preferred Stock are traded on the Nasdaq National
Market.

Bionova has filed with the Commission a Registration Statement on Form S-4
(together with all amendments, supplements and exhibits thereto, the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the securities to which this Proxy
Statement/Prospectus relates. This Proxy Statement/Prospectus does not contain
all the information set forth in the Registration Statement and the exhibits
thereto, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. Such additional information can be inspected at
the public reference section of the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 and copies of such material can be
obtained as described above. For further information, reference is made to the
Registration Statement and to the exhibits thereto. Statements contained
herein concerning any document filed as an exhibit to the Registration
Statement are not necessarily complete and, in each instance, reference is
made to the copy of such document filed as an exhibit to the Registration
Statement. Each such statement is qualified in its entirety by such reference.

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INFORMATION CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS, INCLUDING WITHOUT
LIMITATION INFORMATION CONTAINED IN THE SECTIONS TITLED "THE MERGER AND
RELATED TRANSACTIONS--OPINION OF DNAP'S FINANCIAL ADVISOR," "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF
THE BIONOVA SUBSIDIARIES" AND "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF DNAP," INCLUDES "FORWARD-
LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995 WHICH CAN BE IDENTIFIED BY USE OF FORWARD-LOOKING
TERMINOLOGY SUCH AS "MAY," "WILL," "EXPECT," "PLANS," "ANTICIPATE,"
"ESTIMATE," "POTENTIAL" OR "CONTINUE" OR THE NEGATIVE THEREOF, OR OTHER
VARIATIONS THEREON OR COMPARABLE TERMINOLOGY, OR BY REFERENCE TO FINANCIAL
DATA FOR FUTURE PERIODS. SUCH STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND
UNCERTAINTIES. THE "RISK FACTORS" COMMENCING ON PAGE 20 OF THIS PROXY
STATEMENT/PROSPECTUS CONSTITUTE CAUTIONARY STATEMENTS IDENTIFYING IMPORTANT
FACTORS WITH RESPECT TO SUCH FORWARD-LOOKING STATEMENTS THAT COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE ANTICIPATED IN SUCH FORWARD-
LOOKING STATEMENTS.

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NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROXY
STATEMENT/PROSPECTUS, IN CONNECTION WITH THE OFFERING AND SOLICITATION MADE
HEREBY AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS SHOULD NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROXY STATEMENT/PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE
SECURITIES TO WHICH IT RELATES, OR THE SOLICITATION OF A PROXY, IN ANY
JURISDICTION IN WHICH, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION OF AN OFFER OR PROXY SOLICITATION IN SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROXY STATEMENT/PROSPECTUS NOR ANY DISTRIBUTION
OF THE SECURITIES OFFERED PURSUANT TO THIS PROXY STATEMENT/PROSPECTUS SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE
IN THE INFORMATION CONTAINED HEREIN OR IN THE AFFAIRS OF DNAP OR BIONOVA SINCE
THE DATE OF THIS PROXY STATEMENT/PROSPECTUS.

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FreshWorld Farms (R), VegiSnax (R), Endless Summer (R) and Transwitch (R)
are registered trademarks of DNAP or its subsidiaries. Master's Touch (R) is a
registered trademark of certain subsidiaries of Bionova. Premier Seleccion (R)
is a registered trademark that has been licensed to certain subsidiaries of
Bionova by an affiliate.

2
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TABLE OF CONTENTS

<TABLE>
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PAGE
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AVAILABLE INFORMATION..................................................... 2
SUMMARY................................................................... 6
The Companies........................................................... 6
The Special Meeting..................................................... 6
The Merger and Related Transactions..................................... 7
Recommendation of DNAP's Board of Directors and Related Matters......... 11
Risk Factors............................................................ 13
Other Information....................................................... 13
Summary Historical Financial Data....................................... 15
Summary Unaudited Pro Forma Condensed Combined Financial Data........... 17
Comparative Per Share Data.............................................. 18
Preliminary Second Quarter Results...................................... 19
RISK FACTORS.............................................................. 20
Risks Relating to Rejection of the Merger; DNAP's Lack of Liquidity;
Possible Delisting of DNAP Shares; Possible Loss of DNAP's Patent
Rights................................................................. 20
Lack of Adequate Management Information Systems and Controls............ 20
Historical Losses and Accumulated Deficits.............................. 20
Possible Need for Additional Financing.................................. 21
Threatened Litigation Concerning DNAP Convertible Exchangeable Preferred
Stock; Potential Issuances of Additional Bionova Common Stock.......... 21
Governmental and Economic Risks Associated with Foreign Operations...... 21
Agribusiness Risks...................................................... 22
Conflicts of Interest among Bionova and its Affiliates.................. 23
Limitations on Actions that Are Not Acceptable to the Controlling
Stockholder............................................................ 24
Risks Associated with Marketing of Premium Quality Produce.............. 24
Possible Loss of Short Term Research Contracts.......................... 24
No Assurance of Commercial Success of Products Being Developed and
Marketed............................................................... 24
No Assurance of Public Acceptance of Genetically Engineered Products.... 24
Possible Development of Superior Technology by Competitors.............. 25
Dependence on One Supplier.............................................. 25
No Assurance of Proprietary Protection.................................. 25
Numerous Competitors.................................................... 25
Compliance with Extensive Governmental Regulation....................... 26
Possible Product Liability Claims....................................... 26
Dilution................................................................ 26
No Adjustments to Reflect Changes in Stock Prices....................... 26
Bionova Common Stock Price Volatility................................... 26
Possible Decline in Stock Price Resulting from Future Sales of Bionova
Common Stock........................................................... 27
No Dividends............................................................ 27
THE SPECIAL MEETING....................................................... 27
General................................................................. 27
Matter to be Considered at the Special Meeting.......................... 27
Voting and Proxies...................................................... 27
Proxy Voting, Revocations and Abstentions............................... 28
Solicitation............................................................ 28
THE MERGER AND RELATED TRANSACTIONS....................................... 29
General................................................................. 29
ELM's Reasons for the Merger............................................ 30
Background of the Merger and DNAP's Reasons for the Merger.............. 30
Recommendation of DNAP's Board of Directors............................. 35
</TABLE>

3
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<TABLE>
<CAPTION>
PAGE
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<S> <C>
Opinion of DNAP's Financial Advisor.................................... 35
Regulatory Approval.................................................... 42
Market for Bionova Common Stock........................................ 42
DNAP's Nasdaq Listing.................................................. 42
Conflicts of Interest.................................................. 42
Resales of Bionova Common Stock Issued Pursuant to the Merger.......... 44
Appraisal Rights....................................................... 44
Certain Federal Income Tax Consequences................................ 44
Accounting Consequences of the Merger and Related Transactions......... 46
THE MERGER AGREEMENT AND RELATED AGREEMENTS.............................. 46
The Merger Agreement................................................... 46
The Loan Agreement..................................................... 51
The Sole License Agreement and the Non-Exclusive License Agreement..... 51
The Long Term Funded Research Agreement................................ 52
The Governance Agreement............................................... 52
BUSINESS OF BIONOVA...................................................... 55
Overview............................................................... 55
Background............................................................. 56
Production............................................................. 56
Marketing and Distribution............................................. 57
Competition............................................................ 58
Potential Acquisition.................................................. 58
Intellectual Property.................................................. 58
Properties............................................................. 58
Employees.............................................................. 59
Potential Trade Restraints on Tomatoes and other Fresh Vegetables...... 59
Legal Proceedings...................................................... 60
SELECTED COMBINED HISTORICAL FINANCIAL DATA OF THE BIONOVA SUBSIDIARIES.. 61
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS OF THE BIONOVA SUBSIDIARIES............................... 62
Business Overview...................................................... 62
Business Environment and Risks......................................... 62
Results of Operations.................................................. 63
Capital Expenditures................................................... 66
Acquisition............................................................ 66
Liquidity and Capital Resources........................................ 66
BUSINESS OF DNAP......................................................... 67
Summary................................................................ 67
Products............................................................... 68
Research and Technology................................................ 69
Advanced Biotechnological Breeding..................................... 70
Plant Genetic Engineering.............................................. 70
Proprietary Protection................................................. 72
Governmental Regulation................................................ 73
Production, Marketing and Distribution................................. 74
Competition............................................................ 75
Employees and Consultants.............................................. 75
Properties............................................................. 75
Legal Proceedings...................................................... 76
MARKET PRICES OF DNAP COMMON STOCK AND RELATED MATTERS................... 77
</TABLE>

4
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<TABLE>
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<S> <C>
BENEFICIAL OWNERSHIP OF DNAP COMMON STOCK BY CERTAIN STOCKHOLDERS AND
MANAGEMENT.............................................................. 78
Principal Stockholders................................................. 78
Beneficial Ownership by Directors and Management of DNAP............... 79
SELECTED CONSOLIDATED FINANCIAL DATA OF DNAP............................. 80
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS OF DNAP................................................... 83
General................................................................ 83
Results of Operations.................................................. 83
Liquidity and Capital Resources........................................ 86
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION OF BIONOVA.. 88
BIONOVA.................................................................. 94
Corporate Organization................................................. 94
Description of Capital Stock........................................... 94
COMPARISON OF CERTIFICATES OF INCORPORATION AND BYLAWS................... 94
General................................................................ 94
Authorized Capital Stock............................................... 95
Directors.............................................................. 95
Special Meetings of Stockholders....................................... 95
Action by Written Consent of Stockholders.............................. 95
Amendment of Bylaws.................................................... 95
Liability of Directors and Officers.................................... 96
Delaware Anti-Takeover Law............................................. 96
PRINCIPAL STOCKHOLDERS AND MANAGEMENT OF BIONOVA......................... 96
Principal Stockholders................................................. 96
Directors and Executive Officers....................................... 96
Executive Compensation................................................. 99
Certain Relationships and Related Transactions......................... 100
EXPERTS.................................................................. 101
LEGAL OPINION............................................................ 101
STOCKHOLDER PROPOSALS.................................................... 101
INDEX TO FINANCIAL STATEMENTS............................................ F-1
</TABLE>

ANNEX I--Agreement and Plan of Merger and amendments thereto
ANNEX II--Form of Governance Agreement
ANNEX III--Opinion of Piper Jaffray Inc.

5
<PAGE>

SUMMARY

The following summary is intended only to highlight certain information
contained in this Proxy Statement/Prospectus. Reference is made to, and this
summary is qualified in its entirety by, the more detailed information
contained elsewhere in this Proxy Statement/Prospectus and the Annexes hereto.
Holders of DNAP Stock should carefully consider the factors set forth in "Risk
Factors."

THE COMPANIES

DNAP...................... DNAP is an agribusiness biotechnology company
focused on the development and application of
genetic engineering and transformation
technologies in plants, as well as development
and marketing of premium, differentiated, fresh
and processed, branded fruits and vegetables.
DNAP uses advanced breeding, genetic engineering
and other biotechniques to achieve improvements
in taste, texture, product form, color and shelf
life of produce and to improve production
characteristics, such as disease resistance and
production or processing yields. See "Business of
DNAP." DNAP's principal executive offices are
located at 6701 San Pablo Ave., Oakland,
California 94608. The phone number is
(510) 547-2395.

Bionova................... Bionova is a holding company that owns a
controlling interest in the Bionova Subsidiaries.
The "Bionova Subsidiaries" are Agricola Batiz,
S.A. de C.V., a corporation organized under the
laws of the United Mexican States ("ABSA"),
International Produce Holding Company, a Delaware
corporation ("IPHC"), and their respective
subsidiaries. ABSA and its subsidiaries engage in
the business of growing, marketing and
distributing fresh produce in Mexico and
exporting fresh produce to the United States and
other markets. IPHC and its subsidiaries engage
in the business of marketing and distributing
fresh produce in the United States and Canada. In
1995, the Bionova Subsidiaries generated nearly
$198 million in combined total revenues. See
"Business of Bionova." Bionova's principal
executive offices are located at 6701 San Pablo
Ave., Oakland, California 94608. The phone number
is (510) 547-2395. At or prior to the Closing
Date, Bionova's corporate name will be changed to
DNAP Holding Corporation.

THE SPECIAL MEETING

Date, Time and Place of
Special Meeting.......... The Special Meeting will be held at 10:00 a.m.
(local time) on September 26, 1996, at the
Marriott Hotel, 200 Marina Boulevard, Berkeley,
California.

Purpose of the Special
Meeting.................. The purpose of the Special Meeting is to consider
and vote upon a proposal to adopt the Merger
Agreement. A copy of the Merger Agreement is
attached to this Proxy Statement/Prospectus as
Annex I.

6
<PAGE>

Stockholders Entitled to
Vote..................... Holders of record of shares of DNAP Common Stock
at the close of business on August 5, 1996, are
entitled to notice of and to vote at the Special
Meeting. At such date, there were 45,676,168
shares of DNAP Common Stock outstanding, each of
which will be entitled to one vote on each matter
to be acted upon at the Special Meeting. Holders
of record at the close of business on August 5,
1996, of DNAP Convertible Exchangeable Preferred
Stock are entitled to notice of, but not to vote
at, the Special Meeting. At such date there were
outstanding 1,380,000 shares of DNAP Convertible
Exchangeable Preferred Stock.

Required Vote............. The affirmative vote of the holders of a majority
of the shares of DNAP Common Stock outstanding on
the record date is required to adopt the Merger
Agreement. As of March 31, 1996, the directors
and executive officers of DNAP and their
affiliates owned an aggregate of 334,813 shares
of DNAP Common Stock (less than one percent of
the outstanding shares of DNAP Common Stock).
DNAP has been advised that all of such shares
will be voted in favor of the adoption of the
Merger Agreement. See "The Special Meeting--
Voting and Proxies" and "Beneficial Ownership of
DNAP Common Stock by Certain Stockholders and
Management."

THE MERGER AND RELATED TRANSACTIONS

Effective Time............ The Merger will become effective upon the filing
of a certificate of merger with the Secretary of
State of Delaware. The filing is expected to
occur as promptly as practicable following the
adoption of the Merger Agreement by holders of
DNAP Common Stock and the satisfaction or waiver,
where permissible, of the other conditions to the
consummation of the Merger. The date on which the
Merger becomes effective is referred to herein as
the "Closing Date" and the time at which the
Merger becomes effective is referred to herein as
the "Effective Time."

The Merger................ At the Effective Time: (i) Merger Sub will be
merged with and into DNAP; (ii) DNAP will become
a wholly-owned subsidiary of Bionova; (iii) each
share of DNAP Common Stock issued and outstanding
at the Effective Time will be converted into and
represent the right to receive 0.10 shares of
Bionova Common Stock, each share of DNAP
Convertible Exchangeable Preferred Stock issued
and outstanding at the Effective Time will be
converted into and represent the right to receive
0.68375 shares of Bionova Common Stock, except
for any shares of DNAP Stock held in the treasury
of DNAP or held by any subsidiary of DNAP, which
shares will be cancelled; (iv) each option and
warrant to purchase shares of DNAP Common Stock
outstanding at the Effective Time will be assumed
by Bionova and become a corresponding right
(adjusted in accordance with the exchange ratio
set forth above) to purchase shares of Bionova
Common Stock; and (v) cash payments will be made
to holders of DNAP Stock in lieu of issuing
fractional shares

7
<PAGE>

of Bionova Common Stock. See "The Merger
Agreement and Related Agreements--The Merger
Agreement."

Loan Agreement............ In connection with the Merger Agreement, Bionova
and DNAP entered into a Loan Agreement, dated
January 26, 1996 (the "Loan Agreement"). Pursuant
to the Loan Agreement, Bionova loaned $5 million
to DNAP on January 26, 1996 and an additional $5
million to DNAP on July 1, 1996 (collectively,
the "Loan"). The outstanding principal balance of
the Loan bears interest at the rate of 10.25% per
annum and, together with all accrued interest
thereon, will become due and payable on the
earlier of (i) January 26, 1999 or (ii) the date
on which DNAP consummates an Alternative
Transaction (as defined in the Merger Agreement).
The Loan may be accelerated by Bionova at any
time during the continuance of certain events of
default specified in the Loan Agreement and may
be prepaid by DNAP at any time without premium or
penalty. A percentage of certain royalty fees to
be received by DNAP must be used to satisfy
DNAP's obligations under the Loan Agreement. The
Loan is secured by the assignment to Bionova of
DNAP's right, title and interest in the patents
relating to DNAP's Transwitch gene suppression
technology (the "Transwitch Patents"), and
Bionova may require additional security under
certain circumstances. Prior to DNAP repaying the
Loan in full, DNAP may not pay any dividends on,
or make other distributions in respect of, any
class of its capital stock, or take certain other
actions, without the written consent of Bionova.
See "The Merger Agreement and Related
Agreements--The Loan Agreement."

Capital Contribution to
Bionova.................. In order to provide Bionova with the funds
necessary to carry out its obligations under the
Loan Agreement and pursuant to the Merger
Agreement, an affiliate of Bionova, Bionova S.A.
de C.V., a corporation organized under the laws
of the United Mexican States ("Bionova Mexico"),
provided $10 million in loans and capital to
Bionova from sources other than the Bionova
Subsidiaries. If the Merger is consummated, ELM,
or an affiliate thereof, will contribute an
amount equal to the then outstanding balance of
such loans, if any, to the capital of Bionova. On
or before the consummation of the Merger, ELM has
also agreed to make, or cause to be made, an
additional capital contribution of $8 million in
cash to Bionova.

Patent Licenses........... As noted above, DNAP has assigned to Bionova all
of its right, title and interest in and to the
Transwitch Patents as security for the Loan.
Bionova and DNAP have entered into the Sole
Patent License Agreement, dated as of January 26,
1996 (the "Sole License Agreement"), pursuant to
which Bionova granted back to DNAP an exclusive,
royalty-free license to use the Transwitch
Patents to develop and market products using the
products or processes covered by such patents and
to satisfy DNAP's obligations under existing
licenses of the Transwitch Patents. Under the
Loan Agreement, Bionova is obligated to assign
the Transwitch Patents

8
<PAGE>

back to DNAP upon DNAP's full repayment of the
Loan. If Bionova accelerates the maturity of the
Loan as a result of an event of default under the
Loan Agreement, DNAP's right to have the
Transwitch Patents reassigned to it will
terminate and the license to use the Transwitch
Patents granted by Bionova to DNAP under the Sole
License Agreement will convert to a non-
exclusive, royalty-free license to use the
Transwitch Patents. If the Merger is not
consummated, any such termination of DNAP's right
to reacquire the Transwitch Patents and loss of
the exclusive rights to use the Transwitch
Patents would have a material adverse effect on
DNAP's business and prospects.

The Sole License Agreement provides that Bionova
may not make any use of the Transwitch Patents on
its own behalf prior to the termination of DNAP's
rights to have the Transwitch Patents reassigned
to it, except to the extent Bionova has such
rights under the Non-Exclusive License Agreement
described below. DNAP may enter into sublicenses
of the Transwitch Patents only to entities which
fund at least $350,000 of research by DNAP in any
three-year period, and only if the sublicense is
non-exclusive, relates solely to the development
and commercialization of products or processes
resulting from the funded research, bears
commercially reasonable royalties and 50% of the
royalties received by DNAP are paid by it to
Bionova to reduce its outstanding obligations
under the Loan Agreement. DNAP may also enter
into sublicenses of the Transwitch Patents with
other entities with the approval of Bionova,
which approval has been obtained in certain
cases. DNAP and Bionova have also entered into a
non-exclusive patent license agreement (the "Non-
Exclusive License Agreement") under which Bionova
was granted a license to use the Transwitch
Patents except in certain specified areas. See
"The Merger Agreement and Related Agreements--The
Sole License Agreement and the Non-Exclusive
License Agreement."

Guarantee of Certain DNAP
Indebtedness............. Pursuant to the Merger Agreement, for three years
following the Closing Date, ELM has agreed to
provide when requested by Bionova a guarantee of
Bionova's indebtedness to a financial institution
under a loan or line of credit provided that: (i)
ELM's maximum exposure under such guarantee is
limited to $20 million and (ii) the documents
evidencing such loan or line of credit provide
that the aggregate amount loaned to Bionova
thereunder will not exceed at any time the sum of
(x) 80% of the accounts receivable of Bionova and
its consolidated subsidiaries and (y) 50% of the
inventories of Bionova and its consolidated
subsidiaries and such loan is secured by such
accounts receivable and inventories. See "The
Merger Agreement and Related Agreements--The
Merger Agreement."

9
<PAGE>

Long Term Funded Research
Agreement................ On the Closing Date, ELM and DNAP will enter into
a Long Term Funded Research Agreement (the "Long
Term Funded Research Agreement") pursuant to
which they will use their best efforts to agree
on research projects to be conducted by DNAP for
ELM or its affiliates. The Long Term Funded
Research Agreement provides that DNAP will be
paid $30 million over a 10-year period, with
minimum funding (subject to carryforwards) of $9
million in any three-year period and at least
$625,000 due each quarter until such $30 million
has been paid. Intellectual property developed by
DNAP in connection with a project will belong to
ELM and/or its affiliates, and such entities will
retain the exclusive rights to commercialization
of such intellectual property in the project's
intended market. DNAP will have a perpetual,
royalty-free (i) non-exclusive license to use
such intellectual property for research purposes
in the project's intended market and (ii) sole
license to use and commercialize such
intellectual property in all other markets. See
"The Merger Agreement and Related Agreements--The
Long Term Funded Research Agreement."

Governance Agreement...... On the Closing Date, ELM and Bionova will enter
into a Governance Agreement (the "Governance
Agreement") which, among other things, will
provide for certain arrangements with respect to
the composition of Bionova's Board of Directors
prior to the 1999 annual meeting of stockholders
of Bionova and will restrict the ability of ELM
and its affiliates to acquire or dispose of
shares of Bionova Common Stock prior to the third
anniversary of the Closing Date. In addition,
under the Governance Agreement, the approval of a
majority of the DNAP Independent Directors (as
defined in the Governance Agreement) will be
required to approve (i) certain transactions
between ELM and its affiliates, on one hand, and
Bionova, on the other, and (ii) certain
acquisitions of Bionova Common Stock by ELM or
its affiliates. A copy of the Governance
Agreement is attached to this Proxy
Statement/Prospectus as Annex II. See "The Merger
Agreement and Related Agreements--The Governance
Agreement."

Regulatory Approval....... The Merger is subject to certain Mexican laws
that require the Merger and related transactions
to be approved by both the Mexican Foreign
Investment Commission (the "MFIC") and the
Mexican Federal Competition Commission (the
"MFCC") prior to the Effective Time. The
requisite filings were made with the MFIC and the
MFCC on February 26, 1996, and May 3, 1996,
respectively. The approvals of the MFIC and the
MFCC were obtained on May 2, 1996 and May 24,
1996, respectively. See "The Merger and Related
Transactions--Regulatory Approval."

The Merger is also subject to the requirements of
the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), and DNAP and
Bionova received notice of

10
<PAGE>

termination of the applicable waiting period
under the HSR Act on March 15, 1996. See "The
Merger and Related Transactions--Regulatory
Approval."

Conditions to the Merger;
Waiver and Amendment..... The consummation of the Merger is subject to the
satisfaction of a number of conditions set forth
in the Merger Agreement. The Merger Agreement
provides that the parties may amend the Merger
Agreement by an instrument in writing signed on
behalf of all of the parties to the Merger
Agreement. Any condition to the Merger that
legally may be waived may be waived at any time
by the party or parties entitled to the benefit
thereof. See "The Merger Agreement and Related
Agreements--The Merger Agreement."

Termination............... The Merger Agreement may be terminated if not
adopted by the holders of DNAP Common Stock and
may also be terminated prior to the Effective
Time under certain circumstances, including by:
(i) mutual agreement of DNAP and Bionova; (ii)
either DNAP or Bionova if the Merger has not been
effected on or prior to October 31, 1996, unless
the failure to effect the Merger is due to a
breach of the Merger Agreement by the party
seeking to terminate it; (iii) either DNAP or
Bionova, if there has been a material
misrepresentation or material breach in the
representations, warranties or covenants of ELM,
Bionova Mexico, Bionova or Merger Sub, on the one
hand, or DNAP, on the other; or (iv) by either
DNAP or Bionova if the Board of Directors of DNAP
has approved and/or recommended an Alternative
Transaction to the stockholders of DNAP. See "The
Merger Agreement and Related Agreements--The
Merger Agreement."

Federal Income Tax
Consequences............. The Merger is intended to qualify as a
reorganization under Section 368 of the Internal
Revenue Code of 1986, as amended (the "Code").
Thompson & Knight, P.C. has delivered a legal
opinion to Bionova stating that the Merger will
constitute a non-taxable transaction for holders
of DNAP Stock, except to the extent of cash
received, if any, in lieu of fractional shares of
Bionova Common Stock. For a discussion of these
and other federal income tax considerations in
connection with the Merger, see "The Merger and
Related Transactions--Certain Federal Income Tax
Consequences."

RECOMMENDATION OF DNAP'S BOARD OF DIRECTORS AND RELATED MATTERS

Recommendation of DNAP's
Board of Directors....... The terms of the Merger, including the Merger
consideration, were determined as a result of
negotiations between the parties. See "The Merger
and Related Transactions--Background of the
Merger." DNAP'S BOARD OF DIRECTORS UNANIMOUSLY
APPROVED THE MERGER AGREEMENT AND RECOMMENDS THAT
THE HOLDERS OF DNAP COMMON STOCK ADOPT THE MERGER
AGREEMENT.

11
<PAGE>

The Board of Directors of DNAP determined that
the Merger is fair to its stockholders for the
following reasons: (i) the potential for business
growth and development arising from the
combination of DNAP's biotechnology research and
development capability with the fresh produce
production and distribution businesses of the
Bionova Subsidiaries; and (ii) the Merger and
related transactions are expected to provide DNAP
with the financial resources necessary to enable
it to continue the research, development and
marketing of its products.

In addition, the DNAP Board of Directors
determined that the Merger offers the best
available alternative for continuing the
operations of DNAP and the investment of DNAP's
stockholders therein. This determination was
based on (i) DNAP's continuing need to raise new
capital or enter into a strategic alliance or
transaction with a third party to remain viable,
(ii) the impracticality of attempting to raise
additional equity capital, (iii) the extensive
efforts by DNAP and its financial advisors to
expose DNAP to all available strategic partners
or transactions and to explore all available
strategic alternatives and (iv) the lack of
interest by any third party, other than ELM, in
pursuing a transaction with DNAP on terms that
would be acceptable to DNAP and its stockholders.
In addition, if the Merger is not consummated, it
is doubtful that the DNAP Stock will continue to
be listed on either the Nasdaq National Market or
the Nasdaq SmallCap Market. See "The Merger and
Related Transactions--DNAP's Nasdaq Listing."

The DNAP Board of Directors also considered the
opinion of DNAP's financial advisor discussed
below. See "The Merger and Related Transactions--
Recommendation of DNAP's Board of Directors."

Opinion of Financial
Advisor.................. Piper Jaffray Inc. ("Piper Jaffray") has acted as
financial advisor to DNAP in connection with the
Merger and delivered to the Board of Directors of
DNAP its written opinion, dated January 26, 1996,
to the effect that, as of such date, based upon
the considerations described therein, the
proposed aggregate consideration to be offered in
the Merger is fair from a financial point of view
to the holders of DNAP Stock as a group. Prior to
the approval of an amendment to the Merger
Agreement by DNAP's Board of Directors on July
30, 1996, Piper Jaffray issued its opinion dated
July 30, 1996, which reaffirmed as of such date
its earlier opinion. For information concerning
the procedures followed and other matters
considered by Piper Jaffray in reaching its
opinion, the fees received or to be received by
Piper Jaffray, Piper Jaffray's ownership of DNAP
Stock and certain other matters, see "The Merger
Agreement and Related Transactions--Opinion of
DNAP's Financial Advisor." Piper Jaffray's
opinion dated July 30, 1996 is attached to this
Proxy Statement/Prospectus as Annex III, and
holders of DNAP Stock are urged to read carefully
such opinion in its entirety.

12
<PAGE>

Conflicts of Interests.... Holders of DNAP Stock should be aware that (i) if
the Merger is consummated, Robert Serenbetz,
Chairman, Chief Executive Officer and President
of DNAP, will become a director of Bionova, as
will Gerald Laubach, Evelyn Berezin and Douglas
Luke, Jr., each of whom is currently a director
of DNAP; (ii) Robert Serenbetz, John Bedbrook,
David Evans and Stephen Prichard, each of whom is
an executive officer of DNAP, have surrendered
certain options to purchase a number of shares of
DNAP Common Stock and Bionova has agreed to grant
to each of them at the Effective Time options to
purchase the same number of shares of Bionova
Common Stock (adjusted in accordance with the
exchange ratio applicable to the Merger) on terms
substantially similar to those of the surrendered
options; (iii) DNAP has entered into severance
agreements with each of the four executive
officers of DNAP named above, as well as four
other members of senior management of DNAP; and
(iv) the Merger Agreement and the Governance
Agreement require DNAP and Bionova to provide to
their directors certain indemnification rights
and liability insurance. See "The Merger
Agreement and Related Agreements--Conflicts of
Interest" and "--Governance Agreement."

RISK FACTORS

The decision to vote for or against the adoption of the Merger Agreement
should be made only after careful consideration of the factors set forth under
"Risk Factors." The risk factors described in that section include risks
relating to rejection of the merger; DNAP's lack of liquidity; possible
delisting of DNAP shares; possible loss of DNAP's patent rights; lack of
adequate management information systems and controls; historical losses and
accumulated deficits; possible need for additional financing; threatened
litigation concerning DNAP Convertible Exchangeable Preferred Stock; potential
issuances of additional Bionova Common Stock; governmental and economic risks
associated with foreign operations; agribusiness risks; conflicts of interest
among Bionova and its affiliates; limitations on actions that are not
acceptable to the controlling stockholder; risks associated with marketing of
premium quality produce; possible loss of short term research contracts; no
assurance of commercial success of products being developed and marketed; no
assurance of public acceptance of genetically engineered products; possible
development of superior technology by competitors; dependence on one supplier;
no assurance of proprietary protection; numerous competitors; compliance with
extensive governmental regulation; possible product liability claims; dilution;
no adjustments to reflect changes in stock prices; Bionova Common Stock price
volatility; possible decline in stock price resulting from future sales of
Bionova Common Stock; and no dividends.

OTHER INFORMATION

Market Prices of DNAP
Stock.................... DNAP Common Stock and DNAP Convertible
Exchangeable Preferred Stock are listed for
trading on the Nasdaq National Market.

On January 26, 1996, the last trading day before
the joint public announcement by DNAP and Bionova
of the proposed Merger, the closing sale prices as
reported on the Nasdaq National Market for DNAP
Common Stock and DNAP Convertible Exchangeable
Preferred Stock were $0.875 and $6.625,
respectively. On August 8, 1996, the closing sale
prices as reported on the Nasdaq National Market
for DNAP Common Stock and DNAP Convertible

13
<PAGE>

Exchangeable Preferred Stock were $0.53 and
$3.25, respectively. Holders of DNAP Common Stock
and DNAP Convertible Exchangeable Preferred Stock
are urged to obtain current market quotations for
their shares. See "Market Prices of DNAP Common
Stock and Related Matters."

Market for Bionova Common
Stock.................... It is anticipated that the Bionova Common Stock
will be listed for trading on the Nasdaq National
Market.

Rights of Stockholders.... The Certificate of Incorporation and Bylaws of
Bionova give holders of Bionova Common Stock
substantially the same rights as those afforded
to holders of DNAP Common Stock under the
Certificate of Incorporation and Bylaws of DNAP,
except that stockholders of Bionova do not have
the power to call a special meeting of
stockholders. See "Comparison of Certificates of
Incorporation and Bylaws." However, due to their
minority position, holders of Bionova Common
Stock who were formerly holders of DNAP Stock
will have little influence over the election of
directors and decisions with respect to certain
corporate actions that require the approval of a
majority of the stockholders. See "Risk Factors--
Dilution" and "The Merger Agreement and Related
Agreements--The Governance Agreement."

No Dividends.............. Following the Merger, Bionova does not intend to
pay dividends on the Bionova Common Stock, but
instead will retain any amounts otherwise
available to pay such dividends to fund the
operations of Bionova and its subsidiaries. See
"Risk Factors--No Dividends."

Appraisal Rights.......... Under the General Corporation Law of the State of
Delaware (the "DGCL"), the holders of DNAP Common
Stock and DNAP Convertible Exchangeable Preferred
Stock are not entitled to appraisal rights with
respect to the Merger because the DNAP Common
Stock and the DNAP Convertible Exchangeable
Preferred Stock were quoted on the Nasdaq
National Market on the record date for the
Special Meeting and the Bionova Common Stock to
be issued pursuant to the Merger will be listed
on the Nasdaq National Market and held of record
by more than 2,000 holders as of the Effective
Time. See "The Merger and Related Transactions--
Appraisal Rights."
Surrender of
Certificates............. The Bank of New York will act as the exchange
agent (the "Exchange Agent") to exchange
certificates representing DNAP Stock for
certificates representing Bionova Common Stock in
accordance with the terms of the Merger
Agreement. Promptly after the Effective Time, the
Exchange Agent shall mail to each record holder
of DNAP Stock a letter of transmittal (the
"Letter of Transmittal") and instructions to
effect the exchange of certificates. CERTIFICATES
SHOULD NOT BE SURRENDERED UNTIL THE LETTER OF
TRANSMITTAL IS RECEIVED. See "The Merger
Agreement and Related Agreements--The Merger
Agreement--Exchange of DNAP Stock."

14
<PAGE>

SUMMARY HISTORICAL FINANCIAL DATA

The following tables set forth summary historical financial data for (i) DNAP
for each of the five fiscal years in the period ended December 31, 1995, and
for the three months ended March 31, 1996 and 1995, and (ii) the Bionova
Subsidiaries, for each of the three fiscal years in the period ended December
31, 1995 and for the three months ended March 31, 1996 and 1995. The data
presented below has been derived from and should be read in conjunction with
the consolidated financial statements of DNAP and the combined financial
statements of the Bionova Subsidiaries and the related notes thereto set forth
elsewhere in this Proxy Statement/Prospectus. Summary unaudited financial data
at March 31, 1996 and for the three months ended March 31, 1996 and 1995 for
DNAP and the Bionova Subsidiaries include all adjustments (consisting only of
normally recurring adjustments) that DNAP and the Bionova Subsidiaries each
consider necessary for a fair presentation of their respective consolidated or
combined operating results for such interim periods. Results for the interim
periods are not necessarily indicative of results for the full year. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations of the Bionova Subsidiaries" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations of DNAP" for a
discussion of matters that affect the comparability of the information
presented.

SUMMARY CONSOLIDATED HISTORICAL FINANCIAL DATA OF DNAP
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
---------------- ------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
------- ------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Total revenues......... $ 4,258 $ 4,890 $ 14,349 $ 16,331 $ 9,027 $ 10,503 $ 10,902
Loss from continuing
operations............ (2,711) (2,135) (14,046) (24,370) (31,448) (13,630) (13,669)
Net loss............... (2,647) (2,111) (14,046) (26,283) (33,942) (18,161) (14,941)
Preferred stock
dividends............. (776) (776) (2,343) (3,105) (3,105) (3,105) (776)
Net loss applicable to
common stockholders... (3,423) (2,887) (16,389) (29,388) (37,047) (21,266) (15,717)
Net loss per common
share from continuing
operations............ (.08) (.09) (.47) (1.02) (1.67) (.99) (.75)
Weighted average number
of common and common
equivalent shares
outstanding........... 42,847 30,793 34,823 28,868 22,156 21,572 20,818
</TABLE>

<TABLE>
<CAPTION>
AT AT DECEMBER 31,
MARCH 31, -----------------------------------------
1996 1995 1994 1993 1992 1991
--------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and temporary
investments.............. $ 3,629 $ 1,742 $ 4,489 $ 7,695 $ 27,364 $ 40,228
Accounts receivable, net.. 2,191 1,922 2,344 2,418 1,180 1,074
Inventories............... 287 380 1,168 -- -- -
Current assets............ 6,639 5,507 9,501 12,304 29,664 42,607
Total assets.............. 12,809 11,821 16,550 22,625 36,170 49,153
Short-term debt........... -- 204 -- -- -- --
Current liabilities....... 4,782 5,247 7,055 9,718 5,609 2,855
Long-term debt............ 6,331 709 -- -- -- --
Stockholders' equity...... 1,696 5,049 8,692 12,304 30,561 46,298
</TABLE>

15
<PAGE>

SUMMARY COMBINED HISTORICAL FINANCIAL DATA OF THE BIONOVA SUBSIDIARIES(1)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
-------------------- --------------------------------
1996 1995 1995 1994 1993
--------- --------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Total revenues........ $51,359 $52,873 $197,586 $ 64,112 $ 164
Operating income
(loss)............... 3,699 3,456 5,575 (11,561) (4,957)
Interest expense,
net.................. (1,148) (551) (4,940) (1,254) 404
Exchange loss, net.... (1,268) (1,034) (4,748) (1,473) (7)
Income (loss) before
income taxes......... 1,283 1,871 (4,113) (14,288) (4,560)
(Provision) benefit
for income taxes..... (1,093) (1,813) (2,320) 1,842 513
Minority interests.... (154) (213) 3,049 5,673 1,770
Combined net income
(loss)............... 36 (155) (3,384) (6,773) (2,277)
Loss per common share
(2)..................
Weighted average
number of common
shares
outstanding(2).......
</TABLE>

<TABLE>
<CAPTION>
AT AT DECEMBER 31,
MARCH 31, -----------------------
1996 1995 1994 1993
--------- ------- ------- -------
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents.................. $ 3,328 $ 1,580 $ 2,540 $ 4,079
Accounts and notes receivable, net......... 40,277 33,333 22,649 3,246
Inventories................................ 10,829 14,730 10,450 10,758
Total current assets....................... 54,541 49,785 35,761 18,661
Total assets............................... 93,380 89,126 71,682 45,428
Bank loans and current portion of long-term
debt...................................... 33,146 33,103 27,977 3,590
Total current liabilities.................. 58,634 54,823 40,922 7,371
Long-term debt and payables................ 10,618 10,515 2,223 1,485
Stockholder's equity....................... 15,221 15,185 17,839 22,083
</TABLE>
- --------
(1) The summary combined historical financial data of the Bionova Subsidiaries
include financial data for ABSA, IPHC, and Interfruver de Mexico, S.A. de
C.V. from their respective dates of acquisition. Financial data for the
predecessor companies prior to their acquisition by Bionova Mexico are not
included because management has concluded that the information is not
reliable.
(2) Comparative per share data is not presented because the information is not
meaningful.

16
<PAGE>

SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

Set forth below are certain unaudited pro forma condensed combined financial
statements of Bionova presenting the pro forma effects of the Merger, assuming
that such transaction had occurred at March 31, 1996 for the balance sheet and
at January 1, 1995 for the statement of operations. The Merger will be
accounted for as an acquisition of DNAP by Bionova using the purchase method of
accounting. The pro forma information is derived from and should be read in
conjunction with the financial statements of DNAP and Bionova. The pro forma
information is presented for illustrative purposes only and is not necessarily
indicative of the results of operations or financial position that would have
been achieved if the transactions included in the pro forma adjustments had
been consummated in accordance with the assumptions set forth below under
"Unaudited Pro Forma Condensed Combined Financial Information of Bionova," nor
is it necessarily indicative of future operating results or financial position.
The pro forma financial statements are based on preliminary estimates of value
and transaction costs. The actual recording of the Merger and related
transactions will be based on final appraisals, values and transactions costs.
Accordingly, the actual recording of the Merger and related transactions can be
expected to differ from these pro forma financial statements.

<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
MARCH 31, 1996 DECEMBER 31, 1995
-------------------- --------------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Total revenues.......... $ 56,292 $214,435
Gain (or Loss) from
operations............. 1,485 (8,175)
Foreign exchange loss... (1,268) (4,748)
Loss before income tax.. (867) (17,624)
Income taxes............ (1,093) (2,320)
Minority interests...... (154) 3,049
Net loss................ (2,114) (16,895)
Net loss per share...... (.12) (.92)
Average common shares
outstanding............ 18,371 18,371
<CAPTION>
AT MARCH 31, 1996
--------------------
<S> <C>
BALANCE SHEET DATA:
Cash and cash
equivalents............ $ 19,982
Accounts and notes
receivable, net........ 42,468
Inventories............. 11,116
Total current assets.... 74,205
Total assets............ 137,745
Bank loans and current
portion of long-term
debt................... 32,571
Total current
liabilities............ 61,178
Long-term debt and
payables............... 11,272
Total stockholders'
equity................. 53,312
</TABLE>

17
<PAGE>

COMPARATIVE PER SHARE DATA

The following table sets forth certain comparative per share information (i)
for DNAP on an historical basis, (ii) for DNAP and the Bionova Subsidiaries on
a pro forma basis assuming the Merger had been effective as of January 1, 1995
and (iii) for DNAP, on an equivalent pro forma basis, assuming the Merger had
been effective as of January 1, 1995. The pro forma per share data has been
prepared giving effect to the Merger as a purchase transaction assuming the
issuance in the Merger of 0.10 shares of Bionova Common Stock in exchange for
each share of DNAP Common Stock and 0.68375 shares of Bionova Common Stock in
exchange for each share of DNAP Convertible Exchangeable Preferred Stock. The
equivalent pro forma per share data has been calculated by multiplying the pro
forma results by the exchange ratio of 0.10 shares of Bionova Common Stock for
each share of DNAP Common Stock and 0.68375 shares of Bionova Common Stock in
exchange for each share of DNAP Convertible Exchangeable Preferred Stock.

<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
MARCH 31, 1996 DECEMBER 31, 1995
------------------ -----------------
<S> <C> <C>
DNAP:
Market value per share(1)............... $.813 $.719
Pro Forma Book value per share(2)....... .03 .09
Cash dividends per common share......... -- --
Net loss per share--continuing
operations............................. (.08) (.47)
BIONOVA SUBSIDIARIES:(3)
Book value per share.................... (3) (3)
Cash dividends per share................ -- --
Net income (loss) per share............. (3) (3)
PRO FORMA PER SHARE DATA:
Book value per share.................... $2.90
Cash dividends per share................ -- --
Net loss per share...................... (.12) (.92)
EQUIVALENT PRO FORMA PER SHARE DATA:(4)
Market value per share.................. N/A
Book value per share.................... .29
Cash dividends per share................ -- --
Net loss per share...................... (.01) (.09)
</TABLE>
- --------
(1) Closing sales price for DNAP Common Stock as reported on the Nasdaq
National Market at the end of each period.
(2) DNAP pro forma book value per share is based on historical book value and
pro forma common stock at the end of the period presented. Pro forma common
stock assumes DNAP Common Stock outstanding of 42,833,000 shares, 2,750,000
shares of DNAP Common Stock issued upon conversion of the DNAP Series A
Preferred Stock, 43,000 shares of DNAP Common Stock issued to DNAP's 401(K)
Plan in the second quarter of 1996, and the assumed conversion of DNAP
Convertible Exchangeable Preferred Stock (1,380,000 shares) into 9,440,000
shares of DNAP Common Stock.
(3) Comparative per share information for the Bionova Subsidiaries is not
presented because the information is not meaningful.
(4) The equivalent pro forma per share data has been calculated by multiplying
the pro forma results by the exchange ratio of 0.10 shares of Bionova
Common Stock for each share of DNAP Common Stock and 0.68375 shares of
Bionova Common Stock in exchange for each share of DNAP Convertible
Exchangeable Preferred Stock.

18
<PAGE>

PRELIMINARY SECOND QUARTER RESULTS

Preliminary information regarding financial results of the Bionova
Subsidiaries and DNAP for the quarter ended June 30, 1996 is presented under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations of the Bionova Subsidiaries--Liquidity and Capital Resources--
Preliminary Second Quarter Results" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations of DNAP--Liquidity and Capital
Resources--Preliminary Second Quarter Results."

19
<PAGE>

RISK FACTORS

Holders of DNAP Common Stock should carefully consider the following
factors, among others, in making a decision as to how to vote with respect to
the adoption of the Merger Agreement.

RISKS RELATING TO REJECTION OF THE MERGER; DNAP'S LACK OF LIQUIDITY; POSSIBLE
DELISTING OF DNAP SHARES; POSSIBLE LOSS OF DNAP'S PATENT RIGHTS

If the holders of DNAP Common Stock do not adopt the Merger Agreement by the
requisite vote required under applicable Delaware law, based upon the
historical cash needs of DNAP it will be necessary for DNAP to raise new
capital, to seek a new business combination transaction with a third party or
to consider other available strategic alternatives in early 1997 if not
sooner. Because of the anticipated financial condition of DNAP following its
use of the $10 million provided by Bionova under the Loan Agreement, there can
be no assurance that DNAP would be successful in its pursuit of new capital or
a new business combination transaction with a third party. As a result, it
then would be necessary for DNAP to consider other strategic alternatives,
which could have a material adverse effect on the continuing investment of
DNAP's stockholders therein. In addition, if the Merger is not consummated, it
is likely that the DNAP Stock would no longer be listed on either the Nasdaq
National Market or the Nasdaq SmallCap Market. See "The Merger and Related
Transactions--DNAP's Nasdaq Listing."

DNAP has assigned to Bionova all of its right, title and interest in and to
the Transwitch Patents as security for the Loan. Bionova and DNAP have entered
into the Sole License Agreement, pursuant to which Bionova granted back to
DNAP an exclusive, royalty-free license to use the Transwitch Patents to
develop and market products using the products or processes covered by such
patents and to satisfy DNAP's obligations under existing licenses of the
Transwitch Patents. Under the Loan Agreement, Bionova is obligated to assign
the Transwitch Patents back to DNAP upon the payment in full of all amounts
due and owing in respect of the Loan. If Bionova accelerates the maturity of
the Loan as a result of an event of default under the Loan Agreement, DNAP's
right to have the Transwitch Patents reassigned to it will terminate and the
license to use the Transwitch Patents granted by Bionova to DNAP under the
Sole License Agreement will convert to a non-exclusive, royalty-free license
to use the Transwitch Patents. If the Merger is not consummated, any such
termination of DNAP's right to reacquire the Transwitch Patents and loss of
the exclusive rights to use the Transwitch Patent would have a material
adverse effect on DNAP's business and prospects. See "The Merger Agreement and
Related Agreements--The Sole License Agreement."

LACK OF ADEQUATE MANAGEMENT INFORMATION SYSTEMS AND CONTROLS

Bionova's business is undergoing rapid growth. See "Background of the
Merger--ELM's Reasons for the Merger." As a result of this rapid growth,
significant strains have been placed on the management, operations and
financial resources of the Bionova Subsidiaries. The realization of the
business strategy for Bionova, the Bionova Subsidiaries and DNAP, as well as
the anticipated benefits of the Merger, will be dependent upon, among other
things, the ability of Bionova to improve management information systems and
controls and to hire, train and retain qualified employees to allow the
operations thereof to be effectively managed. The geographic separation of the
operations of the Bionova Subsidiaries and their traditionally decentralized,
family-based management teams exacerbate these issues. There is no assurance
that Bionova will be able to successfully deal with these issues.

HISTORICAL LOSSES AND ACCUMULATED DEFICITS

DNAP has sustained losses in each year since its incorporation in 1981. The
Bionova Subsidiaries have sustained losses in 1993, 1994 and 1995. There is no
assurance that some of the factors that caused these historical losses will
not be present in future periods or that Bionova will be profitable following
the Merger. See "Selected Consolidated Financial Data of the Bionova
Subsidiaries," "Management's Discussion and Analysis of Financial Condition
and Results of Operations of the Bionova Subsidiaries," "Business of Bionova,"
"Selected Consolidated Financial Data of DNAP," "Management's Discussion and
Analysis of Financial Condition and Results of Operations of DNAP" and
"Business of DNAP."

20
<PAGE>

POSSIBLE NEED FOR ADDITIONAL FINANCING

The projected cash flows from operations and existing capital resources of
Bionova, including existing credit lines, may not be sufficient to permit
Bionova to pursue proposed business strategies to achieve significant organic
growth or to acquire additional producers, distributors or marketers and
related businesses. Therefore, such significant organic growth and the ability
to pursue such acquisitions may be dependent upon Bionova's ability to obtain
additional capital, which could result in the incurrence of additional debt or
potentially dilutive issuances of additional equity securities. There can be
no assurance that Bionova will be successful in obtaining such capital and, as
a result, may be restricted in its pursuit of its future growth and
acquisition strategies.

THREATENED LITIGATION CONCERNING DNAP CONVERTIBLE EXCHANGEABLE PREFERRED
STOCK; POTENTIAL ISSUANCES OF ADDITIONAL BIONOVA COMMON STOCK

A holder of DNAP Convertible Exchangeable Preferred Stock has advised DNAP
that such holder believes that the Certificate of Designation for such
security provides that, upon an occurrence such as the Merger, each share of
DNAP Convertible Exchangeable Preferred Stock should be converted into
approximately 4.6 shares of Bionova Common Stock instead of .68375 shares of
Bionova Common Stock, as provided in the Merger Agreement. If this holder were
to institute litigation with respect to such issue and were to prevail therein
and if Bionova were thereupon required to issue additional shares of Bionova
Common Stock to the former holders of DNAP Convertible Exchangeable Preferred
Stock, such issuance of additional shares of Bionova Common Stock would
substantially dilute the interest of the other holders of Bionova Common
Stock. If such holder or another holder of DNAP Convertible Exchangeable
Preferred Stock were successful in such litigation, if any, a court could
require other remedies, including a cash judgment, which could materially
adversely affect Bionova.

In addition, Section 1.11(e) of the Merger Agreement provides that Bionova
"shall issue to Bionova Mexico or its designee, on or before the Closing Date,
such number of shares of [Bionova] Common Stock as shall represent (when added
to the shares of [Bionova] Common Stock outstanding as of the date of . . .
[the Merger] Agreement) . . . 70% of the issued and outstanding shares thereof
as of the Effective Time of the Merger." Section 2.3 of the Merger Agreement
provides that "[Bionova] Common Stock into which DNAP Stock shall be converted
pursuant to the Merger Agreement and the Merger shall be deemed to have been
issued at the Effective Time . . ." Accordingly, if Bionova is required to
issue additional shares of Bionova Common Stock to the former holders of DNAP
Convertible Exchangeable Preferred Stock, as described above, and if such
shares are deemed to have been issued at the Effective Time pursuant to
Section 2.3 of the Merger Agreement, Bionova may be obligated to issue
additional shares of Bionova Common Stock to Bionova Mexico or its designee
(including ELM), for no additional consideration, pursuant to Section 1.11(e)
of the Merger Agreement so that, after giving effect to the issuances to the
former holders of DNAP Convertible Exchangeable Preferred Stock and to Bionova
Mexico or its designee (including ELM), Bionova Mexico and its affiliates
(including ELM) will own 70% of the outstanding shares of Bionova Common
Stock. The foregoing issuances of additional shares of Bionova Common Stock
would substantially dilute the interest in Bionova of the holders of DNAP
Common Stock receiving shares of Bionova Common Stock in the Merger. See
"Business of DNAP--Legal Proceedings."

GOVERNMENTAL AND ECONOMIC RISKS ASSOCIATED WITH FOREIGN OPERATIONS

Nearly all of the growing and 25% of the distribution operations of the
Bionova Subsidiaries are located in Mexico. Foreign operations such as those
conducted by the Bionova Subsidiaries, especially in countries with volatile
economies, are subject to political and economic risks, including political
instability, currency controls, currency devaluations, exchange rate
fluctuations, increased credit risks, inflation, foreign tax laws, changes in
import/export or other regulations and tariff and freight rates. Political and
other factors beyond Bionova's control, including without limitation those
factors discussed below, could have a materially adverse effect on Bionova's
operations.

21
<PAGE>

Currency Fluctuations and Inflation. The currency exchange rates in Mexico
have historically been volatile. For example, in December 1994, the Mexican
government announced its intention to float the Mexican peso against the
United States dollar and, as a result, the peso devalued over 40% relative to
the dollar during that month. Such exchange rate fluctuations impact the
business of the Bionova Subsidiaries. If the value of the peso decreases
relative to the value of the dollar, then (i) imports of Chilean and other
produce into Mexico for distribution by ABSA's subsidiaries become more
expensive in peso terms and therefore more difficult to sell in the Mexican
market and (ii) inflation that generally accompanies reductions in the value
of the peso reduces the purchasing power of Mexican consumers, which reduces
the demand for all products including produce and, in particular, imported,
branded or other premium-quality produce. Conversely, if the value of the peso
increases relative to the value of the dollar, Mexican production costs
increase in dollar terms, which results in lower margins or higher prices with
respect to produce grown in Mexico and sold in the United States and Canada.

Trade Sanctions. Notwithstanding the enactment of the North American Free
Trade Agreement, Mexico and the United States from time to time are involved
in trade disputes. On occasion, the United States has imposed tariffs and
importation bans on products produced in Mexico. For example, competing U.S.
producers, mainly in the State of Florida, have complained to the Clinton
administration that imports of Mexican produce damage the U.S. winter
vegetable industry and therefore should be subject to higher tariffs. The U.S.
Trade Representative is considering these complaints. Also, U.S. producers
have brought a dumping action against Mexican tomato producers which, if
successful, could lead to countervailing duties being imposed, and Florida
congressmen have introduced legislation which, if passed, could lead to higher
tariffs being imposed on fresh produce imported from Mexico. If any of these
efforts are successful, Bionova could be subjected to an additional financial
burden, some or all of which may not be able to be passed on to consumers. See
"Business of Bionova--Potential Trade Restraints on Tomatoes and other Fresh
Vegetables."

Interest Rates. Historically, interest rates in Mexico have been volatile,
particularly in times of economic unrest and uncertainty. High interest rates
restrict the availability, and raise the cost, of capital for the Bionova
Subsidiaries that are Mexican companies (such as ABSA and its subsidiaries)
and for growers and other Mexican parties with whom they do business, both for
borrowings denominated in pesos and for borrowings denominated in dollars.
Costs of operations for these Mexican entities are higher as a result.

AGRIBUSINESS RISKS

A variety of risks are inherent in the agribusiness industry, including,
without limitation, the following:

Supply and Demand. The fresh produce business is particularly sensitive to
fluctuations in supply and demand. When the supply of produce in the market
exceeds the demand for such products, the market price for fresh produce may
be driven down significantly, in some instances below the cost of harvesting
and packing. In such situations it may be uneconomical to harvest a crop,
resulting in a total loss of the costs incurred in growing such crop. Even
when market prices are sufficient to permit recovery of direct harvesting and
packing costs, prices may not be high enough to permit recovery of growing
costs and/or overhead and other indirect costs. In addition, oversupply can
affect the prices obtained for premium quality produce. Oversupply can result
from, among other reasons, an increase in the number of growers, an increase
in the acreage allocated by growers to a particular crop, unusually favorable
growing conditions or increased supply from foreign competitors (which could
be caused by a variety of economic and climatic factors in such competitors'
home countries).

Limited Barriers to Entry. The relatively low capital requirements for
farming and produce distribution permit relatively easy entrance into the
fresh produce business, which in turn can result in oversupply.

Weather. Weather conditions greatly affect the amount of fresh produce that
is brought to market, and, accordingly, the prices received for such produce.
Storms, frosts, droughts, and particularly floods, can destroy a crop and less
severe weather conditions, such as excess precipitation, cold weather and
heat, can kill or damage significant portions of a crop, rendering much of it
unpackable and unsalable. Conversely, unusually favorable

22
<PAGE>

weather conditions can result in oversupply that drives down the prices
realized by producers such as the Bionova Subsidiaries.

Crop Disease and Pestilence. Crop disease and pestilence can be
unpredictable and can have a devastating effect on crops, rendering them
unsalable and resulting in the loss of all or a portion of the crop for that
harvest season. Even when only a portion of the crop is damaged, the profits a
grower could have made on the crop will be severely affected because the costs
to plant and cultivate the entire crop will have been incurred although only a
portion of it can be sold.

Labor Shortages and Union Activity. The production of fresh produce is
heavily dependent upon the availability of a large labor force to harvest
crops. The turnover rate among the labor force is high due to the strenuous
work, long hours, necessary relocation and relatively low pay. To the extent
it becomes necessary to pay more to attract labor to farm work, labor costs
can be expected to increase.

The Mexican farm work force retained by the Bionova Subsidiaries is
unionized. If the union attempted to disrupt production and were successful on
a large scale, labor costs would likely increase and there could be work
stoppages, which would be particularly damaging in an industry where
harvesting crops at peak times and getting them to market on a timely basis is
critical.

The majority of fresh produce is shipped by truck. In Mexico, truck
deliveries are sometimes less reliable than in the United States due to, among
other factors, the unreliability of some Mexican trucking companies and
drivers to make deliveries on schedule, poorer quality and maintenance of the
trucks used by Mexican trucking companies and poor road conditions in some
areas. In the United States and in Mexico, the trucking industry is largely
unionized and therefore susceptible to labor disturbances. Delivery delays
caused by labor disturbances in the trucking industry or any other reason
limit the ability to get fresh produce to market before it spoils.

Availability of Supply. To pursue its goal of providing year-round fresh
produce supply, ABSA diversified its growing operations to several regions of
Mexico, including regions where ABSA does not have significant land holdings.
Consequently, ABSA increasingly relies on agricultural land leased from others
and production associations with other growers. See "Business of Bionova--
Production." If the other parties to these leases and other arrangements were
to choose not to renew their agreements with ABSA, ABSA would be required to
locate alternate sources of supply and/or land or, in some cases, to pay
increased rents for land. In addition to increased rental rates, increases in
land costs could result from increases in water charges, property taxes and
related expenses. Furthermore, there is a finite number of growers with
suitable land, the capability to grow premium quality produce and the
resources to withstand a substandard crop and continue to honor their
financial and other commitments.

CONFLICTS OF INTEREST AMONG BIONOVA AND ITS AFFILIATES

As set forth under the caption "Principal Stockholders and Management of
Bionova," ELM, through affiliates, may be deemed to control Bionova. Bionova
and other entities that may be deemed to be controlled by or affiliated with
ELM sometimes engage in (i) intercorporate transactions such as guarantees,
management and expense sharing arrangements, shared fee arrangements, joint
ventures, partnerships, loans, options, advances of funds on open account and
sales, leases and exchanges of assets, including securities issued by both
related and unrelated parties and (ii) common investment and acquisition
strategies, business combinations, reorganizations, recapitalizations,
securities repurchases and purchases and sales (and other acquisitions and
dispositions) of subsidiaries, divisions or other business units, which
transactions have involved both related and unrelated parties. Bionova
continuously considers, reviews and evaluates and understands that ELM and
related entities consider, review and evaluate transactions of the type
described above. Depending upon the business, tax and other objectives then
relevant, it is possible that Bionova might be a party to one or more of such
transactions in the future. In connection with these activities Bionova might
consider issuing additional equity securities or incurring additional
indebtedness. Bionova's acquisition activities may in the future include
participation in the acquisition or restructuring activities conducted by
other companies that may be deemed to be controlled by ELM.

23
<PAGE>

Certain of the board members and executive officers of Bionova are also
currently serving as a board member or an executive officer of certain other
companies related to ELM and it is expected that each will continue to do so.
Such management interrelationships and intercorporate relationships may lead
to possible conflicts of interest. These possible conflicts may arise from the
duties of loyalty owed by persons acting as corporate fiduciaries to two or
more companies under circumstances in which such companies may have adverse
interests.

LIMITATIONS ON ACTIONS THAT ARE NOT ACCEPTABLE TO THE CONTROLLING STOCKHOLDER

Immediately after the Effective Time, 70% of the outstanding Bionova Common
Stock will be owned of record by Bionova International, an indirect wholly-
owned subsidiary of ELM, which will have the power, subject to the Governance
Agreement, to elect a majority of Bionova's Board of Directors and to
determine the outcome of any action requiring the approval of the holders of
Bionova Common Stock. As of June 30, 1996, Mr. Alfonso Romo Garza, the
Chairman of the Board of Directors and Chief Executive Officer of ELM,
controlled, directly or indirectly, approximately 50.3% of ELM's voting
securities and has the power to elect a majority of its directors and
determine the outcome of any action requiring approval of the holders of ELM's
voting securities. This ownership and management structure will inhibit the
taking of any action by Bionova which is not acceptable to the controlling
stockholder.

RISKS ASSOCIATED WITH MARKETING OF PREMIUM QUALITY PRODUCE

The Bionova Subsidiaries and DNAP are currently producing and distributing
premium quality fresh fruits and vegetables. The success of these and future
products depends on many variables, including the ability to produce and make
available to the market consistent, premium quality fruits and vegetables on a
year-round basis, consumers' willingness to pay higher prices for premium
quality fruits and vegetables, and retailers' willingness to carry such fruits
and vegetables.

POSSIBLE LOSS OF SHORT TERM RESEARCH CONTRACTS

A portion of DNAP's revenues are earned by conducting scientific research
projects for third parties. Some of those third parties may be less likely to
retain DNAP to conduct such research after the Effective Time when DNAP
becomes a part of a larger group of companies with interests in some of the
same fields as the third parties that typically retain DNAP to conduct such
research. Whether or not the Merger is consummated, there can be no assurance
that third parties will continue to retain DNAP to conduct scientific research
in the future.

NO ASSURANCE OF COMMERCIAL SUCCESS OF PRODUCTS BEING DEVELOPED AND MARKETED

Marketing of several products currently developed by DNAP is in the early
stages, and there can be no assurance that any of these products will be
successful or will produce significant revenues or profits. In addition, a
number of DNAP's product development projects are in the early stages, and
there can be no assurance that these projects will be successful or that any
resulting products will be commercially successful or profitable. In
particular, although DNAP has produced and sold a limited amount of its
products, there can be no assurance that it will be able to produce or market
such products on a larger scale. See "Business of DNAP--Products--Production,
Marketing, and Distribution."

NO ASSURANCE OF PUBLIC ACCEPTANCE OF GENETICALLY ENGINEERED PRODUCTS

DNAP's second generation products are being developed through the use of
genetic engineering. The commercial success of these products will depend in
part on public acceptance of the cultivation and consumption of genetically
engineered products. There can be no assurance that such products will gain
sufficient public acceptance to be profitable, even if such products obtain
the required regulatory approvals.

24
<PAGE>

POSSIBLE DEVELOPMENT OF SUPERIOR TECHNOLOGY BY COMPETITORS

The application of recombinant DNA and related technologies to plants is
complex and subject to rapid change. A number of companies are engaged in
research related to plant biotechnology, including companies that rely on the
use of recombinant DNA as a principal scientific strategy and companies that
rely on other technologies. Technological advances by others could render
Bionova's and DNAP's products less competitive. Some of these companies, as
well as competitors that supply non-genetically-engineered products, have
substantial resources.

DEPENDENCE ON ONE SUPPLIER

One grower in Baja California, Santa Cruz Empacadora, S. de R.L. de C.V.,
accounted in 1995 for approximately 10% of the combined sales of the Bionova
Subsidiaries. ABSA has entered into one-year production association agreements
with this grower for each of the past two years and expects to continue to do
so, but there can be no assurance that the grower will continue to be willing
to enter into such agreements with ABSA on terms satisfactory to ABSA.

NO ASSURANCE OF PROPRIETARY PROTECTION

Bionova's success will depend, in part, on its ability to obtain patents,
maintain trade secret protection, and conduct its business without infringing
the proprietary rights of others. There can be no assurance that others will
not develop competing technologies and market competing products or that DNAP
will be able to enforce the patents which it currently possesses or will be
able otherwise to obtain or enforce any patents for which it has filed an
application. DNAP also relies upon unpatented proprietary and trade secret
technology.

There can be no assurance that others have not developed or will not
independently develop similar proprietary technology or otherwise obtain
access to DNAP's and, subsequent to the Merger, Bionova's, proprietary
technology. The extent to which DNAP and, subsequent to the Merger, Bionova,
in the future may be required or may desire to obtain licenses with respect to
patents obtained by others and the availability and cost of any such licenses
are currently unknown. If DNAP and, subsequent to the Merger, Bionova, do not
obtain necessary licenses, the development, production, use or sale of their
products could be delayed or prevented. In addition, DNAP and, subsequent to
the Merger, Bionova, could incur substantial costs in defending any patent
infringement suits or in asserting any patent rights, including those granted
by third parties. Furthermore, the United States Patent and Trademark Office
has authorization to (i) institute interference proceedings in connection with
patents or patent applications, which proceedings could result in an adverse
decision as to priority of invention, and (ii) institute reexamination
proceedings, which proceedings could result in an adverse decision as to the
validity or scope of such patents. See "Business of DNAP--Proprietary
Protection."

NUMEROUS COMPETITORS

The fresh produce industry in general, and the tomato industry in
particular, are characterized by a large number of competitors at both the
production and distribution levels. Some of these competitors are seeking to
limit the importation of Mexican-grown tomatoes and peppers into the United
States. See "Business of Bionova--Competition" and "--Potential Trade
Restraints on Tomatoes and Other Fresh Vegetables."

DNAP is one of many companies engaged in research and product development
activities based on agricultural biotechnology. Competitors include
specialized biotechnology firms, as well as major pharmaceutical, food and
chemical companies, some of which have biotechnology divisions, and many of
such competitors have substantial financial, technical and marketing
resources. See "Business of DNAP--Competition" and "Business of Bionova--
Competition."

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COMPLIANCE WITH EXTENSIVE GOVERNMENTAL REGULATION

The U.S. activities of DNAP and of Bionova are subject to extensive
regulation by the Food and Drug Administration, the United States Department
of Agriculture, and other federal and state regulatory agencies in the United
States. Similarly, the Mexican activities of the Bionova Subsidiaries are
subject to extensive regulations by the Secretaria de Agricultura, Ganaderia y
Desarrollo Rural, the Secretaria de Salud, and other federal and state
regulatory agencies in Mexico.

Certain of DNAP's products may require regulatory approval or notification
in the United States or in other countries in which they are tested, used or
sold. The regulatory process may delay research, development, production, or
marketing and require more costly and time-consuming procedures, and there can
be no assurance that requisite regulatory approvals or registration of certain
of its current or future genetically engineered products will be granted on a
timely basis. Delays in obtaining, or the failure to obtain, any necessary
regulatory approvals could have a material adverse effect on Bionova's ability
to develop, produce, and sell such products. See "Business of DNAP--
Governmental Regulation."

POSSIBLE PRODUCT LIABILITY CLAIMS

Certain of the products being marketed and developed by Bionova and DNAP
entail a risk of product liability. While DNAP has taken and, after the
Merger, Bionova will take, what it believes are adequate precautions, there
can be no assurance that it will avoid significant product liability exposure.
After the Merger, Bionova will maintain product liability insurance. If
Bionova seeks to expand such coverage in the future, there can be no assurance
that adequate coverage would be available at acceptable costs. The obligation
to pay any product liability claim may have a material adverse effect on the
results of operations or financial condition of Bionova.

DILUTION

The Merger will result in substantial dilution of the interests of the
holders of DNAP Stock. Such holders, who currently own 100% of the capital
stock of DNAP, will own immediately after the Effective Time of the Merger
only 30% of the capital stock of Bionova. Further dilution could result if
options and warrants to purchase shares of Bionova Common Stock are exercised
or if Bionova issues additional shares of stock. If Bionova issues additional
shares of stock, under the Governance Agreement ELM has a right to purchase
from Bionova such amount of shares as may be required to maintain the level of
its and its affiliates' ownership interest in Bionova. See "The Merger
Agreement and Related Agreements--The Governance Agreement." Further dilution
to the holders of DNAP Common Stock could result if one or more holders of
DNAP Convertible Exchangeable Preferred Stock prevail in their argument that
they are entitled to convert their shares of DNAP Convertible Exchangeable
Preferred Stock into more shares of Bionova Common Stock than provided for in
the Merger Agreement. See "Business of DNAP--Legal Proceedings."

NO ADJUSTMENTS TO REFLECT CHANGES IN STOCK PRICES

The price of DNAP Common Stock and DNAP Convertible Exchangeable Preferred
Stock on the Nasdaq National Market at the Effective Time may vary
significantly from the price on the date of the execution of the Merger
Agreement, the date of the execution of the amendments to the Merger
Agreement, and the date hereof. Stockholders should be aware that the exchange
ratios in the Merger are fixed and will not be adjusted based on changes in
the prices of DNAP Common Stock or DNAP Convertible Exchangeable Preferred
Stock.

BIONOVA COMMON STOCK PRICE VOLATILITY

There has been significant volatility in the market prices for publicly
traded shares of biotechnology companies, including DNAP. Factors such as
announcements of technical or product developments by Bionova or its
competitors, patent or proprietary rights developments, regulatory
developments in the United States, Mexico or other countries, and fluctuations
in revenues and financial results may have a significant impact on the market
price of the Bionova Common Stock following the Merger.

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POSSIBLE DECLINE IN STOCK PRICE RESULTING FROM FUTURE SALES OF BIONOVA COMMON
STOCK

There will be outstanding immediately after the Effective Time options and
warrants to purchase approximately 934,229 shares of Bionova Common Stock. If
some or all of these options and warrants were exercised, the availability for
sale of the newly-issued shares could adversely affect the market price for
shares of Bionova Common Stock. Furthermore, Bionova International will own
approximately 12,859,000 shares of Bionova Common Stock after the Effective
Time. Sales of substantial amounts of Bionova Common Stock on the open market
or the availability of such shares for sale could adversely affect the market
price for shares of Bionova Common Stock following the Merger. See "The Merger
and Related Transactions--Resales of Bionova Common Stock," "The Merger
Agreement and Related Agreements--The Governance Agreement," and "Business of
DNAP--Legal Proceedings."

NO DIVIDENDS

Following the Merger, Bionova does not intend to pay dividends on the
Bionova Common Stock, but instead will retain any amounts otherwise available
to pay such dividends to fund the operations of Bionova and its subsidiaries.
See "Market Prices of DNAP Common Stock and Related Matters."

THE SPECIAL MEETING

GENERAL

This Proxy Statement/Prospectus is being furnished to the holders of DNAP
Stock in connection with the solicitation of proxies by the Board of Directors
of DNAP for use at the Special Meeting to be held on September 26, 1996 at
10:00 a.m., local time, at the Marriott Hotel, 200 Marina Boulevard, Berkeley,
California. This Proxy Statement/Prospectus, the attached Notice of Special
Meeting of Stockholders, and the enclosed proxy are first being mailed to
holders of DNAP Stock on or about August 13, 1996.

MATTER TO BE CONSIDERED AT THE SPECIAL MEETING

At the Special Meeting, holders of DNAP Common Stock will be asked to
consider and vote upon a proposal to adopt the Merger Agreement. Such adoption
has been unanimously recommended by the Board of Directors of DNAP. If the
requisite votes in favor of the proposal to adopt the Merger Agreement are
obtained and the Merger is consummated, pursuant to the terms of the Merger
Agreement: (i) Merger Sub will be merged with and into DNAP, with DNAP being
the surviving corporation; (ii) each share of DNAP Common Stock issued and
outstanding at the Effective Time will be converted into and represent the
right to receive 0.10 shares of Bionova Common Stock, and each share of DNAP
Convertible Exchangeable Preferred Stock issued and outstanding at the
Effective Time will be converted into and represent the right to receive
0.68375 shares of Bionova Common Stock, except for any shares of DNAP Stock
held in the treasury of DNAP or held by any subsidiary of DNAP, which will be
cancelled; (iii) each option and warrant to purchase shares of DNAP Common
Stock outstanding at the Effective Time will be assumed by Bionova and will
become a corresponding right (adjusted in accordance with the exchange ratio
set forth above) to purchase shares of Bionova Common Stock; and (iv) cash
payments will be made to holders of DNAP Stock in lieu of issuing fractional
shares of Bionova Common Stock. At or prior to the Effective Time, Bionova's
corporate name will be changed to DNAP Holding Corporation. As a result of the
Merger, DNAP will become a wholly-owned subsidiary of Bionova. See "The Merger
Agreement and Related Agreements--The Merger Agreement."

VOTING AND PROXIES

The Board of Directors of DNAP has fixed the close of business on August 5,
1996 as the record date for the determination of stockholders entitled to
notice of and to vote at the Special Meeting. Accordingly, only holders of
record of shares of DNAP Stock at the close of business on that date will be
entitled to notice of the Special Meeting or any adjournment thereof, and only
holders of record of shares of DNAP Common Stock at the close of business on
that date will be entitled to vote at the Special Meeting or any adjournment
thereof. At

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<PAGE>

the close of business on such date, there were outstanding 45,676,168 shares
of DNAP Common Stock and 1,380,000 shares of DNAP Convertible Exchangeable
Preferred Stock.

Each holder of record of shares of DNAP Common Stock on the record date is
entitled to cast one vote per share, in person or by properly executed proxy,
on any matter that may properly come before the Special Meeting. The presence,
in person or by properly executed proxy, of the holders of a majority of the
shares of DNAP Common Stock outstanding on the record date is necessary to
constitute a quorum at the Special Meeting. The affirmative vote of the
holders of a majority of the shares of DNAP Common Stock outstanding on the
record date is required to adopt the Merger Agreement.

PROXY VOTING, REVOCATIONS AND ABSTENTIONS

All proxies received pursuant to this solicitation by the Board of Directors
of DNAP will be voted as specified therein, except where authority to vote is
specifically withheld. If no instructions are given, the persons named in the
proxy intend to vote for the adoption of the Merger Agreement. Because the
affirmative vote of a majority of the outstanding shares of DNAP Common Stock
is required for the adoption of the Merger Agreement, abstentions and broker
non-votes will have the same effect as votes against the adoption of the
Merger Agreement. The Board of Directors of DNAP does not know of any other
matters that are expected to be presented for consideration at the Special
Meeting. If any other matters are properly presented at the Special Meeting,
the persons named in the proxy will have discretion to vote on such matters in
accordance with their best judgment.

Holders of DNAP Common Stock who execute proxies may revoke them by giving
written notice to the Secretary of DNAP at any time before such proxies are
voted. Attendance at the Special Meeting will not have the effect of revoking
a proxy unless the stockholder so attending, in writing, so notifies the
Secretary of the Special Meeting at any time prior to the voting of the proxy.

SOLICITATION

Proxies are being solicited pursuant to this Proxy Statement/Prospectus by
and on behalf of the Board of Directors of DNAP. DNAP will bear all of the
expenses of this solicitation, including the expenses of preparing and mailing
this Proxy Statement/Prospectus, except that half of certain filing and
printing expenses that also relate to the Registration Statement will be borne
by Bionova. In addition to solicitation by mail, directors, officers and
regular employees of DNAP (who will not specifically be compensated for such
services) may solicit proxies by telephone or otherwise. Arrangements will be
made with brokerage houses and other custodians, nominees and fiduciaries to
forward proxies and proxy material to their principals, and DNAP will
reimburse them for their expenses. In addition, Georgeson & Company, Inc. will
be paid a base amount of $7,500, a per call fee of $4.00, plus out-of-pocket
expenses, to solicit proxies on behalf of the Board of Directors of DNAP.

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THE MERGER AND RELATED TRANSACTIONS

GENERAL

Pursuant to the Merger Agreement, at the Effective Time, Merger Sub will be
merged with and into DNAP, with DNAP being the surviving corporation. DNAP
will become a wholly-owned subsidiary of Bionova, and the outstanding DNAP
Stock will be converted in the Merger into the right to receive Bionova Common
Stock representing in the aggregate 30% of the shares of Bionova Common Stock
outstanding immediately after the Effective Time. The remaining shares of
Bionova Common Stock will be owned of record by Bionova International, an
indirectly wholly-owned subsidiary of ELM. See "The Merger Agreement and
Related Agreements--The Merger Agreement."

In connection with the Merger Agreement, Bionova and DNAP entered into the
Loan Agreement. Pursuant to the Loan Agreement, Bionova loaned $5 million to
DNAP on January 26, 1996 and an additional $5 million to DNAP on July 1, 1996.
The Loan is secured by the assignment to Bionova of DNAP's right, title and
interest in and to the Transwitch Patents, and Bionova may require additional
security under certain circumstances. In order to provide Bionova with the
funds necessary to carry out its obligations under the Loan Agreement and
pursuant to the Merger Agreement, Bionova Mexico provided $10 million in loans
and capital to Bionova from sources other than the Bionova Subsidiaries. If
the Merger is consummated, ELM or an affiliate thereof will contribute an
amount equal to the then outstanding balance of such loans, if any, to the
capital of Bionova. See "The Merger Agreement and Related Agreements--The Loan
Agreement." On or before the Closing Date, ELM has also agreed to make, or
cause to be made, an additional capital contribution of $8 million in cash to
Bionova.

As noted above, DNAP has assigned to Bionova all of its right, title and
interest in and to the Transwitch Patents. Bionova and DNAP have entered into
the Sole License Agreement, pursuant to which Bionova granted back to DNAP an
exclusive, royalty-free license to use the Transwitch Patents to develop and
market products using the products or processes covered by such patents and to
satisfy DNAP's obligations under existing licenses of the Transwitch Patents.
DNAP and Bionova have also entered into the Non-Exclusive License Agreement
under which Bionova was granted a license to use the Transwitch Patents except
in certain specified areas. See "The Merger Agreement and Related
Transactions--The Sole License Agreement and the Non-Exclusive License
Agreement."

Pursuant to the Merger Agreement, during the three-year period immediately
following the Closing Date, ELM has agreed to provide when requested by
Bionova a guarantee of Bionova's indebtedness to a financial institution under
a loan or line of credit, provided that: (i) ELM's maximum exposure under such
guarantee is limited to $20 million and (ii) the documents evidencing such
loan or line of credit provide that the aggregate amount loaned to Bionova
thereunder will not exceed at any time the sum of (x) 80% of the accounts
receivable of Bionova and its consolidated subsidiaries and (y) 50% of the
inventories of Bionova and its consolidated subsidiaries and such loan is
secured by such accounts receivable and inventories. See "The Merger Agreement
and Related Agreements--The Merger Agreement."

On the Closing Date, ELM and DNAP will enter into the Long Term Funded
Research Agreement, pursuant to which they will use their best efforts to
agree on research projects to be conducted by DNAP for ELM or its affiliates
which will result in payments to DNAP of $30 million over a 10-year period,
with minimum funding (subject to carryforwards) of $9 million in any three-
year period and at least $625,000 due each quarter until $30 million has been
paid. See "The Merger Agreement and Related Agreements--The Long Term Funded
Research Agreement."

On the Closing Date, ELM and Bionova will enter into the Governance
Agreement which, among other things, will provide for certain arrangements
with respect to the composition of Bionova's Board of Directors prior to the
1999 annual meeting of stockholders of Bionova, and will restrict the ability
of ELM and its affiliates to acquire or dispose of shares of Bionova Common
Stock prior to the third anniversary of the Closing Date. See "The Merger
Agreement and Related Agreements--The Governance Agreement."

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<PAGE>

ELM'S REASONS FOR THE MERGER

Until 1990, ELM's business consisted primarily of the production and
distribution of cigarettes in Mexico. After deregulation of the Mexican
tobacco industry in 1990, ELM began to diversify its business activities. ELM
implemented a long-term plan to promote the growing and processing of tobacco
in Mexico, including financing for tobacco farmers and technical assistance to
ensure quality and improve yields. ELM also commenced research and development
of improved products for tobacco.

Based in part on ELM's early success in the tobacco industry, ELM formulated
a strategy to enter the fresh produce industry and become an important
developer, grower and marketer of premium quality produce developed through
advanced biotechniques. ELM's strategy focused on the acquisition of
businesses to create a vertically integrated agribusiness enterprise engaged
in research, seed production, and the production and distribution of fresh
produce, including premium branded produce, the successful development of
which would require application of genetic engineering technology.

To implement this strategy Bionova Mexico began to acquire interests in
companies in the agriculture industry, such as the Bionova Subsidiaries which
are engaged in the production, distribution and marketing of fresh produce.
See "Business of Bionova--Background." In late 1994 and 1995, ELM acquired
interests in Asgrow Seed Company, Petoseed Co. Inc., and Royal Sluis, B.V., to
become the leading vegetable seed company in the world. ELM's interests in
these companies are held through its interest in Seminis, Inc., an Illinois
corporation ("Seminis"), which serves as a holding company for ELM's seed
business.

Since entering the agribusiness industry, ELM and Bionova Mexico have
explored opportunities that would complement the development of the fresh
produce business including opportunities with companies having access to
genetic engineering technology. As a result of that process, ELM and Bionova
Mexico entered into the Merger Agreement with DNAP in January 1996 and, to
facilitate the Merger, Bionova Mexico agreed to transfer its interest in the
Bionova Subsidiaries to Bionova, which transfer was completed in July 1996.

Bionova believes the proposed Merger will benefit the Bionova Subsidiaries
for the following reasons, among others: (i) DNAP's Transwitch and other gene
transformation technologies could be of great value in developing higher
quality tomatoes, peppers and other fruits and vegetables for production and
distribution by the Bionova Subsidiaries and (ii) DNAP's fresh produce
distribution business, which is concentrated in the northeastern United
States, complements the distribution strength of the Bionova Subsidiaries in
the western and southern United States. In addition, the Merger will provide
ELM with access to DNAP's numerous patents and other intellectual property and
DNAP's scientific staff. ELM believes that DNAP's research capabilities have
the potential to provide synergies with other businesses of ELM, such as the
seed business and the tobacco business, including a reduction in the research
and development cycle in the seed business and the potential to develop new
technology and differentiated, genetically engineered products. The Long Term
Funded Research Agreement represents one way in which ELM and DNAP will
attempt to develop such synergies.

While Bionova was concerned about the past financial results and the
financial condition of DNAP, Bionova recognized through its due diligence of
DNAP that by combining Bionova's experience and capability in production and
distribution of fresh produce with DNAP's business, Bionova could reasonably
expect that the results of DNAP's operations might improve in a meaningful
way. Bionova also believed that, over time, operating efficiencies generated
by the combination of certain business operations could also have a positive
effect on DNAP's results of operations. Therefore, ELM and Bionova concluded
that DNAP could play an important role in the implementation of ELM's and
Bionova's respective business strategies.

BACKGROUND OF THE MERGER AND DNAP'S REASONS FOR THE MERGER

Over the past several years, and in particular after its acquisition of Du
Pont's interest in Fresh World Farms in January 1994 (see "Business of DNAP"),
DNAP has had communications with a number of participants in the agricultural
biotechnology and produce industries in an effort to raise additional capital,
gain access to new markets, and explore research contracts and licensing
arrangements, joint ventures and other potential business

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<PAGE>

combinations. Management believed that such transactions would permit DNAP to
capitalize on its technological strengths. During the course of such
communications, DNAP proposed a variety of possible joint ventures,
combinations and other transactions with various industry participants,
including companies both larger and smaller than DNAP.

In June 1994, DNAP initiated discussions with Fresh Choice, Inc. ("FCI"), a
marketer of a broad range of produce items complementary to Fresh World's line
of tomatoes, peppers and carrots. In September 1994, DNAP and FCI entered into
an agreement to co-distribute various produce items and participate in grower
arrangements. DNAP believed such an agreement would substantially broaden
DNAP's revenue base and access to recognized growers. The agreement was
terminated in December 31, 1994, however, as a result of FCI's difficulty in
securing approvals from its creditors.

In 1994, DNAP had losses from continuing operations of $24.4 million and
used an aggregate of $25.6 million in cash in funding operations and paid an
additional $3.1 million in dividends on the DNAP Convertible Exchangeable
Preferred Stock. At December 31, 1994, DNAP had cash and cash equivalents of
$4.5 million, down from $7.4 million at December 31, 1993, despite net
proceeds of $25.4 million from sales of stock in 1994. As a result of its
continuing losses and liquidity concerns, DNAP continued actively to seek out
potential strategic partners and investors in the first half of 1995. One of
such potential strategic partners contacted by DNAP was Petoseed Company
(prior to Petoseed Company becoming a part of the Seminis division of ELM),
with respect to a potential joint venture to develop seed products.

In March 1995, BioScience Securities Inc. ("BioScience"), an investment
research and banking firm specializing in the field of agricultural
biotechnology, initiated discussions with DNAP concerning potential candidates
for strategic relationships with DNAP. Except as described below with respect
to ELM, none of the discussions held with any other person advanced beyond the
exploratory stage.

In May 1995, BioScience initiated exploratory discussions with ELM relating
to the merits of a strategic relationship between DNAP and ELM. After
preliminary discussions, on July 12, 1995, DNAP entered into a confidentiality
agreement with ELM (the "Confidentiality Agreement") to permit the exchange of
confidential information between the companies. On July 13 and 14, 1995,
members of DNAP's management met with representatives of ELM at DNAP's offices
in Oakland, California, to discuss areas of common interest and possible
synergies between DNAP and ELM. At a subsequent meeting held in Monterrey,
Mexico on August 7, 1995, members of DNAP's management met with senior members
of ELM's management to discuss the possibility of a strategic alliance between
the companies. These early meetings were supplemented by telephonic
discussions between DNAP and ELM during July and August 1995, including
discussions concerning the products, technology, markets and business of each
company and operational issues that might impact a possible marketing alliance
or business combination.

Following these meetings, on August 8, 1995 DNAP engaged Dillon, Read & Co.,
Inc. ("Dillon, Read") to act as DNAP's principal financial advisor until
November 8, 1995. On August 8, 1995, DNAP also entered into an agreement with
BioScience to act as a financial advisor to DNAP.

On August 9, 1995, DNAP and ELM amended the Confidentiality Agreement to
provide, among other things, that ELM and DNAP would not enter into
discussions with third parties regarding strategic relationships which would
conflict with a possible business relationship between ELM and DNAP prior to
August 24, 1995 (the "Exclusive Negotiation Period"). The amendment also
provided for restrictions on the ability of the parties to acquire the
securities of the other party, solicit proxies with respect to the voting
securities of the other party, or take certain other described actions. On
August 24, 1995, the Exclusive Negotiation Period lapsed. On September 5,
1995, ELM and DNAP amended the Confidentiality Agreement to reinstate the
Exclusive Negotiation Period through September 15, 1995.

During this period, DNAP's management kept the Board of Directors informed
of material developments via telephonic conferences. Also in the late Summer
and early Fall of 1995, DNAP experienced poor market

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conditions for its tomato products resulting in worse than expected operating
results for the third quarter. The impact of low commodity prices on DNAP's
operating results and working capital were discussed at a series of telephonic
Board meetings in September and October. These discussions addressed, among
other things, the possibility of a resulting cash shortfall in 1996. During
these meetings, the Board reviewed with management and Dillon, Read a number
of strategic alternatives to a transaction with ELM, including restructuring
DNAP either as a produce company, by eliminating its research and development
operations, or as a pure research and development company, by eliminating its
growing and distribution arm and selling its subsidiary FreshWorld Farms, Inc.
("FreshWorld"). Dillon, Read also updated the Board on its continuing efforts
to initiate discussions with third parties with respect to a transaction with
DNAP, which efforts had not succeeded in eliciting serious interest from any
company.

At a special meeting of DNAP's Board of Directors held in New York City on
September 21, 1995, Mr. Serenbetz and representatives of Dillon, Read and
BioScience briefed the Board of Directors regarding the status of negotiations
with ELM and also reviewed with the Board DNAP's efforts to initiate
transactions with other companies and analyses of DNAP's strategic
alternatives. Counsel to DNAP also reviewed various legal issues relating to
the consideration of any potential transaction or strategic alternatives.
Following extended discussion, the Board authorized management both to
continue discussions with ELM and to continue to investigate DNAP's strategic
alternatives. At the telephonic meeting held October 6, 1995, the Board
determined to discontinue the dividend on the DNAP Convertible Exchangeable
Preferred Stock in order to conserve DNAP's cash.

On October 2, 1995, DNAP and Dillon, Read agreed that Dillon, Read's
retention as DNAP's financial advisor would terminate as a result of DNAP's
and Dillon, Read's failure to reach agreement on Dillon, Read's fees in
connection with the proposed extension of its engagement beyond November 8,
1995. At a telephonic meeting held on October 11, 1995, the DNAP Board of
Directors approved the engagement of Piper Jaffray as DNAP's financial
advisor. On November 28, 1995, DNAP and Dillon, Read entered into an agreement
pursuant to which Dillon, Read, which had received $50,000 in fees from DNAP
(which amount was to be credited against any other fees to which it might
subsequently become entitled), was reimbursed for all previously unreimbursed
expenses incurred by it in providing services to DNAP and waived any rights
that it might have to receive any additional fees in connection with the
consummation of a transaction.

Throughout the Fall of 1995, DNAP, ELM, and their respective advisors
continued to meet. Issues discussed included, among others, the structure of
any potential transaction, DNAP's interim financing needs, and potential
synergies between the companies. Special meetings of the Board of DNAP were
held regularly for the purposes, among others, of updating the Board on the
status of the negotiations as well as DNAP's financial condition and
continuing efforts to explore strategic alternatives.

Although DNAP was able to reduce its losses from continuing operations in
1995 to $14.0 million, its liquidity and capital resources condition continued
to worsen. Despite net proceeds of $10.8 million from the private sale of its
securities during 1995 and $1.3 million from the sale of a wholly-owned
subsidiary in 1995, DNAP had cash and cash equivalents of only $1.7 million at
December 31, 1995. The significant dilution that resulted from the 1995 sale
of securities contributed to a significant reduction in the price of the DNAP
Common Stock, creating unfavorable market conditions for the potential sale of
additional equity. In the view of DNAP's management, in the absence of
significant additional new capital, DNAP's capital resources at year-end would
have been inadequate to fund DNAP's existing operations during 1996.

DNAP continued to pursue a business combination with ELM. As it became more
likely that the transaction would involve the combination of Bionova and DNAP,
DNAP management heightened its review of Bionova and the potential value to
DNAP's stockholders of such a business combination. DNAP conducted on-site due
diligence and reviewed audited and unaudited financial results of the
subsidiaries of Bionova. Bionova furnished to DNAP complete audited financial
statements for the year ended December 31, 1995, but the audited financial
information for the two years ended December 31, 1993 and 1994 did not include
complete financial information relating to certain of Bionova's subsidiaries
for periods prior to their acquisition by Bionova Mexico. DNAP's analysis of
Bionova, however, also included interviews with key Bionova personnel and
financial projections,

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which were thought to be particularly relevant since many of Bionova's
subsidiaries were relatively recent acquisitions or start-up companies. In
addition, DNAP's management and Board of Directors considered the synergies
among Bionova's subsidiaries and the possible post-Merger synergies with DNAP
to be a potential source of value to DNAP's stockholders that was not fully-
reflected in any financial statements or projections. Based on these factors
and other factors explained elsewhere in this Proxy Statement/Prospectus, DNAP
concluded that it was in the best interests of the stockholders of DNAP to
proceed with the transaction despite the lack of some historical financial
data for some of the subsidiaries of Bionova. See "Recommendation of DNAP's
Board of Directors."

On January 15, 1996, a special meeting of DNAP's Board was held in New York
City for the purpose of reviewing the status of the transaction being
discussed with ELM. Counsel to DNAP reviewed for the Board the principal terms
of the draft Merger Agreement and Related Agreements (as defined below, see
"The Merger Agreement and Related Agreements"), copies of which had previously
been delivered to the members of the Board. In response to inquiries from the
Board, representatives of management stated that the proposed assignment and
licensing arrangements with respect to the Transwitch patents in connection
with the Loan Agreement were, in their opinion, equivalent to those which had
been discussed with third parties during DNAP's attempts to explore its
strategic alternatives to a transaction with ELM. Representatives of Piper
Jaffray discussed preliminarily their views regarding the fairness from a
financial point of view of the aggregate Merger consideration to the holders
of DNAP Stock as a group. Representatives of Piper Jaffray also participated
in a discussion with the Board and DNAP's counsel regarding the allocation
from a financial point of view of the Bionova Common Stock among the holders
of the different classes of DNAP Stock. DNAP management indicated to the Board
that negotiations with ELM were scheduled to continue throughout that week in
Dallas, Texas. The Board questioned management and DNAP's legal and financial
advisors at length, and an extended discussion ensued. The Board then created
a special committee of directors (the "Special Committee") consisting of
Gerald D. Laubach and James L. Ferguson to consider the allocation of the
Bionova Common Stock to be received in the proposed transaction among the
holders of DNAP's outstanding classes of capital stock, if the transaction
were approved by the Board of Directors. Dr. Laubach and Mr. Ferguson had
experience in evaluating business combinations and similar transactions in
their capacities as directors and executive officers of major public
corporations in the pharmaceutical and food products industries.

At the conclusion of the full Board meeting, a meeting of the Special
Committee was convened. The members of the Special Committee discussed with
DNAP's legal and financial advisors how to allocate the shares of Bionova
Common Stock to be received in the transaction under discussion among the
holders of DNAP Common Stock, DNAP Convertible Exchangeable Preferred Stock
and the DNAP Series A Convertible Preferred, par value $.01 per share (the
"DNAP Series A Preferred Stock"). The Special Committee did not, however, make
any determination with respect to such allocation at this meeting. (In May
1996, all of the outstanding shares of the DNAP Series A Preferred Stock were
converted into DNAP Common Stock in accordance with the conversion rights set
forth in the certificate of designation of such DNAP Series A Preferred
Stock.)

In meetings held in Dallas, Texas on January 26, 1996, DNAP and ELM agreed
upon the terms of the Merger Agreement and the Related Agreements, other than
the allocation of the shares of Bionova Common Stock to be received by the
holders of DNAP Stock in the proposed Merger. Upon the Board of Directors
being advised of this agreement, the Special Committee met with DNAP's legal
and financial advisors to review further the method of allocating shares of
Bionova Common Stock among DNAP's three classes of capital stock. After
careful consideration and discussion, the Special Committee unanimously
decided that, if the transaction were approved by the full Board of Directors,
it would propose (i) that each share of DNAP Series A Preferred Stock be
treated as if it had been converted into 1,000 shares of Bionova Common Stock
in accordance with its terms immediately prior to the Merger and (ii) that an
exchange ratio based on the relative market values of the DNAP Common Stock
and the DNAP Convertible Exchangeable Preferred Stock over the ten trading
days prior to the date of approval of the proposed transaction be used to
allocate the Bionova Common Stock between those classes. In reaching this
conclusion, the Special Committee took into account various factors, including
the terms

33
<PAGE>

of the DNAP Convertible Exchangeable Preferred Stock and the DNAP Series A
Preferred Stock (collectively, the "DNAP Preferred Stock"), the conversion
rates of the DNAP Preferred Stock, the liquidation and dividend preferences of
the DNAP Preferred Stock, the relative market values of the DNAP Convertible
Exchangeable Preferred Stock and the DNAP Common Stock, and the voting rights
of each class of stock.

Immediately following the conclusion of this Special Committee meeting, a
telephonic meeting of the full DNAP Board of Directors was held. At the full
Board meeting, DNAP's management and its financial and legal advisors reviewed
the proposed transaction and updated the results of further due diligence that
had been conducted since the last Board meeting. Piper Jaffray delivered its
opinion, subsequently confirmed in writing, as of January 26, 1996, that the
aggregate consideration proposed to be paid by ELM in the proposed transaction
to the holders of DNAP Stock as a group was fair, from a financial point of
view, to DNAP's stockholders as a group. At the meeting, the DNAP Board of
Directors unanimously approved the Merger Agreement (including exchange ratios
for the DNAP Common Stock, the DNAP Convertible Exchangeable Preferred Stock
and the DNAP Series A Preferred Stock based on the Special Committee's
recommendation) and the Related Agreements. In approving the Merger Agreement
and the Related Agreements, the DNAP Board of Directors took into account
DNAP's results of operations and financial condition, the difficulty DNAP had
experienced in obtaining a line of credit or raising additional capital, the
absence of alternative transactions despite extensive efforts by DNAP's
management and financial advisors to locate and interest other potential
partners or acquirors, the terms of the Merger Agreement and the Related
Agreements, the ability of DNAP to pursue any alternative transactions which
might arise after the announcement of the proposed Merger (subject to the
payment of certain expenses and fees to ELM), the management, financial,
grower network and distribution resources of the Bionova Subsidiaries and ELM
and the potential synergies to be achieved as a result of the proposed Merger.

On January 29, 1996, prior to commencement of market trading, the parties
issued a joint press release announcing the proposed Merger.

Following the execution of the Merger Agreement, the parties continued to
exchange information concerning their respective businesses. As part of such
exchange of information, Bionova disclosed to DNAP that the 1995 earnings
before interest and taxes of the Bionova Subsidiaries were below the target
set forth in the Merger Agreement. The principal reasons given for this
shortfall were adjustments necessitated by the presentation of the Bionova
Subsidiaries' financial statements on a U.S. GAAP basis, rather than a Mexican
GAAP basis, and the need to set up a significant reserve against receivables
balances. Additionally, during this period, Nasdaq advised Bionova that it was
likely that Bionova Common Stock would not qualify for listing on the Nasdaq
National Market, because the per share price thereof would probably not meet
the minimum requirements therefor. Thereafter, and as a result of these
developments, DNAP and Bionova engaged in a number of discussions concerning
the terms of the Merger. Pursuant to these discussions, DNAP and Bionova
negotiated an amendment to the the Merger Agreement providing, among other
things, for the contribution by ELM to Bionova prior to the Merger of
additional capital in the amount of $8.0 million and a revised Merger exchange
ratio for DNAP Common Stock and DNAP Convertible Exchangeable Preferred Stock.
With respect to the Merger exchange ratio, the Merger Agreement had previously
provided that each share of DNAP Common Stock outstanding at the Effective
Time would be converted into the right to receive one share of Bionova Common
Stock and each share of DNAP Convertible Exchangeable Preferred Stock
outstanding at the Effective Time would be converted into the right to receive
6.8375 shares of Bionova Common Stock. The amendment to the Merger Agreement
did not affect the proportion of Bionova Common Stock to be owned by the
former holders of DNAP Stock immediately following the Merger. Under the
Merger Agreement, prior to and after such amendment, the outstanding DNAP
Stock will be converted in the Merger into the right to receive Bionova Common
Stock representing in the aggregate 30% of the shares of Bionova Common Stock
outstanding immediately after the Effective Time. The remaining shares of
Bionova Common Stock will be held by an affiliate of ELM.

On July 30, 1996, a special meeting of DNAP's Board was held for the purpose
of considering such amendment to the Merger Agreement. At such meeting,
representatives of Piper Jaffray delivered its opinion as

34
<PAGE>

of July 30, 1996 that the aggregate consideration proposed to be paid by ELM
in the proposed transaction (taking into account the amendment to the Merger
Agreement) to the holders of DNAP Stock as a group, was fair from a financial
point of view to DNAP's stockholders as a group. Following such presentation
and a discussion thereof, DNAP's Board unanimously approved the amendment to
the Merger Agreement, which was executed by the parties thereto on July 30,
1996.

RECOMMENDATION OF DNAP'S BOARD OF DIRECTORS

DNAP's Board of Directors has determined that the Merger would be fair to
the holders of DNAP Stock for the following reasons:

(1) the potential for business growth and development arising from the
combination of DNAP's biotechnology research and development capability
with the fresh produce production and distribution businesses of the
Bionova Subsidiaries; and

(2) the Merger and related transactions are expected to provide DNAP with
the financial resources necessary to enable it to continue the research,
development and marketing of its products.

In addition, the DNAP Board of Directors determined that the Merger offers
the best available alternative for continuing the operations of DNAP and the
investment of DNAP's stockholders therein. This determination was based on (i)
DNAP's continuing need to raise new capital or enter into a strategic alliance
or transaction with a third party to remain viable, (ii) the impracticality of
attempting to raise additional equity capital, (iii) the extensive efforts by
DNAP and its financial advisors to expose DNAP to all available strategic
partners or transactions and to explore all available strategic alternatives
and (iv) the lack of interest by any third party, other than ELM, in pursuing
a transaction with DNAP on terms that would be acceptable to DNAP and its
stockholders.

Based on the foregoing reasons, the Board of Directors of DNAP unanimously
recommends that the holders of DNAP Common Stock vote FOR adoption of the
Merger Agreement.

OPINION OF DNAP'S FINANCIAL ADVISOR

Piper Jaffray was retained by DNAP as of October 15, 1995 to act as
financial advisor to DNAP in connection with a possible business combination,
strategic alliance or other extraordinary corporate transaction involving DNAP
and, if requested by DNAP, to render an opinion to the Board of Directors of
DNAP concerning the fairness, from a financial point of view, of the
consideration to be paid or received in the proposed transaction.

Piper Jaffray delivered to DNAP's directors on January 26, 1996, its oral
opinion, subsequently confirmed in writing, to the effect that, as of the date
of the opinion, based on and subject to the assumptions, factors and
limitations set forth in the opinion and as described below, the aggregate
consideration proposed to be paid to the holders of capital stock of DNAP as a
group in the Merger was fair, from a financial point of view, to such
stockholders as a group. Prior to the approval of an amendment to the Merger
Agreement by DNAP's Board of Directors on July 30, 1996, Piper Jaffray issued
its opinion, dated July 30, 1996, which reaffirmed as of such date its earlier
opinion. A copy of the opinion letter dated July 30, 1996 (the "Opinion"), is
attached to this Proxy Statement/Prospectus as Annex III and is incorporated
herein by reference. Holders of capital stock of DNAP are urged to read the
attached Opinion in its entirety.

Piper Jaffray provided financial advice to the management of DNAP in
connection with the structuring and negotiation of the Merger, but made no
recommendation to the Board of DNAP as to the form or amount of the
consideration to be received by the stockholders of DNAP in the Merger, which
was determined through negotiations between the parties to the Merger. The
Opinion is directed to the Board of DNAP only and does not constitute a
recommendation to any DNAP stockholder as to how such stockholder should vote
at the Special Meeting. The Opinion does not address (i) DNAP's underlying
business decision to proceed with or effect the

35
<PAGE>

Merger or (ii) whether the consideration proposed to be paid to the holders of
capital stock of DNAP is fair from a financial point of view to any particular
class of capital stock of DNAP as compared to any other class of capital stock
of DNAP.

In arriving at the Opinion, Piper Jaffray reviewed (i) the Merger Agreement,
the Non-Exclusive License Agreement, the Loan Agreement and the Assignment of
Patents, (ii) the forms of the Long Term Funded Research and Development
Agreement and Governance Agreement, (iii) certain publicly available
information relative to the business, financial condition and operations of
DNAP, (iv) certain internal financial planning information of DNAP furnished
by management of DNAP, (v) certain financial and securities data of DNAP and
companies deemed similar to DNAP or representative of the business sector in
which DNAP operates, (vi) to the extent publicly available, the financial
terms of certain acquisition transactions, (vii) certain information relative
to the business, financial condition and operations of Bionova Mexico and the
Bionova Subsidiaries (the "Bionova Group") and of ELM and certain other
financial and operating data of the Bionova Group prepared for financial
planning purposes and furnished by management of the Bionova Group, (viii)
certain financial and securities data of ELM and the Bionova Group and
companies deemed similar to the Bionova Group or representative of the
business sector in which the Bionova Group operates, and (ix) certain
financial and operating data furnished by management of DNAP, ELM and the
Bionova Group. In addition, Piper Jaffray engaged in discussions with members
of management of ELM, the Bionova Group and DNAP concerning the respective
financial condition, current operating results and business outlook of ELM and
the Bionova Group and DNAP and the plans and business outlook for Bionova.

In delivering the Opinion to the Board of Directors of DNAP on July 30,
1996, Piper Jaffray prepared and delivered to the Board certain written
materials containing various analyses and other information material to the
Opinion. The following is a summary of these materials.

Piper Jaffray reviewed separately various components of value that may inure
to the benefit of the holders of common stock of Bionova following the Merger
in order to arrive at an implied value for Bionova Common Stock following the
Merger. Piper Jaffray also performed analyses of Bionova as a whole,
integrating these components of implied value.

DNAP Stand-Alone Analyses. Piper Jaffray reviewed the stock trading history
of DNAP Common Stock on the Nasdaq National Market (at or for the period ended
on the date indicated below).

<TABLE>
<CAPTION>
1/26/96 7/24/96
----------- ----------
<S> <C> <C>
Closing price......................................... $ .88 .50
30 day average........................................ $ .84 .57
60 day average........................................ $ .85 .64
90 day average........................................ $ .95 .67
180 day average....................................... $ 1.38 .73
52 week period
low................................................. $ .63 .47
high................................................ $ 3.19 2.06
average daily volume................................ 215,600 204,680
Shares of DNAP Common Stock outstanding*.............. 54,392,000 55,015,000
Market capitalization*................................ $47,593,000 27,508,000
</TABLE>
- --------
* After giving effect to the conversion of outstanding DNAP Convertible
Exchangeable Preferred Stock and DNAP Series A Preferred Stock implied by
the exchange ratio contemplated by the Merger Agreement.

Piper Jaffray calculated the number of shares of DNAP Common Stock
outstanding prior to the Merger by giving effect to the conversion of the
outstanding shares of DNAP Convertible Exchangeable Preferred Stock implied by
the exchange ratio for the DNAP Convertible Exchangeable Preferred Stock
contemplated by the Merger Agreement. Using this conversion ratio, Piper
Jaffray calculated 9,440,000 shares of DNAP Common

36
<PAGE>

Stock would be issuable upon conversion of the DNAP Convertible Exchangeable
Preferred Stock. Giving effect to the exchange ratios set forth in the Merger
Agreement, Piper Jaffray also calculated an aggregate of 5,502,000 shares of
Bionova Common Stock would be issuable in the Merger to holders of capital
stock of DNAP, and 12,838,000 shares of Bionova Common Stock would be issued
to ELM, resulting in a total of 18,340,000 shares of Bionova Common Stock
proposed to be issued in the Merger.

Using internal financial planning data prepared by management of DNAP for
the years ending December 31, 1996 through 2000, Piper Jaffray estimated the
present value of future cash flows of DNAP to arrive at an estimated present
value for the equity of DNAP (with effect given to conversion of the DNAP
Convertible Exchangeable Preferred Stock implied by the Merger). This analysis
gave effect to management's present plans, in the absence of the Merger, to
cease DNAP's produce operations as currently constituted and to maintain
primarily a core research and intellectual property staff. Operations would be
funded through technology sales and contract research. Future proprietary
produce product introductions would be made by others and would be expected to
result in royalties to DNAP. Piper Jaffray estimated year 2000 perpetual
growth rates in royalty revenue of 4% to 6% and a range of discount rates of
20% to 30% to calculate DNAP's terminal value in the year 2000. In estimating
the net present value of DNAP's equity, Piper Jaffray employed discount rates
of 20% to 30% for the year 2000 terminal value and 1996 through 2000 cash
flows. This analysis yielded a range of estimated present values of DNAP
equity of approximately $12,108,000 to $29,574,000, with a midpoint of
$17,990,000 (the "DNAP DCF Value") or $.22 to $.54 per share of DNAP Common
Stock, with a midpoint of $.33 per share.

Piper Jaffray compared selected valuation ratios for DNAP with those of
selected publicly-traded companies deemed comparable to DNAP, the Bionova
Group and Bionova. Such comparable companies (the "Comparable Companies")
included DeKalb Genetics Corporation, Mycogen Corporation, Pioneer Hi-Bred
International, Inc., Calgene, Inc., Dole Food Company, Inc. and Chiquita
Brands International. This analysis produced multiples of enterprise value
(market capitalization adjusted for debt and cash) to latest 12 months ("LTM")
revenue (the only multiple for which potentially meaningful comparisons could
be made) as follows for the Comparable Companies: minimum 0.8x, mean 2.1x,
median 2.1x and maximum 4.1x, and for DNAP of 3.0x.

Piper Jaffray made a similar comparison of DNAP valuation multiples to
multiples paid in recent acquisitions of companies deemed comparable to DNAP,
the Bionova Group and Bionova and the Merger. These comparable transactions
(the "Comparable Transactions") for which information is publicly available
included Mallinckrodt Veterinary Inc.'s acquisition of Syntro Corp, Sandoz
AG's acquisition of Genetic Therapy Inc., Watson Pharmaceuticals Inc.'s
acquisition of Circa Pharmaceuticals Inc., Chiron Corp.'s acquisition of
Viagene, Inc., Hoechst AG's acquisition of Marion Merrell Dow Inc., Ligand
Pharmaceutical Inc.'s acquisition of Glycomed Inc., biosys, inc.'s acquisition
of Crop Genetics International, NeXagen Inc.'s acquisition of Vestar, Inc.,
IVAX Corp.'s acquisition of Zenith Laboratories Inc., Monsanto Co.'s
acquisition of Calgene Inc., biosys inc's acquisition of Agridyne
Technologies, Inc. and Dow Elanco's acquisition of Lubrizol's interest in
Mycogen Corporation. This analysis produced multiples of enterprise value to
LTM revenues (the only multiple for which potentially meaningful comparisons
could be made) as follows for the Comparable Transactions: minimum 2.4x, mean
5.9x, median 5.6x and maximum 13.9x, and for DNAP of 3.0x.

ELM and Bionova Group Stand-Alone Analyses. Piper Jaffray reviewed the stock
trading history of American Depository Receipts of ELM on The New York Stock
Exchange (at or for the period ended July 24, 1996).

<TABLE>
<S> <C>
Closing price............................................... $ 17.00
30-day average.............................................. $ 17.59
52-week period
low....................................................... $ 11.75
high...................................................... $ 19.75
average daily volume...................................... 64,280
Market capitalization....................................... $1,999,115,000
</TABLE>

37
<PAGE>

Using discounted cash flow analysis, Piper Jaffray estimated the present
value of the ELM ownership interest in the Bionova Group to be acquired by
Bionova using internal financial planning data for the five-year period ending
December 31, 2000, prepared by management of ELM and the Bionova Group. Piper
Jaffray employed terminal value multiples of ending year 2000 operating income
("EBIT") of 7.0x to 9.0x and a range of discount rates of 20.0% to 25.0%. This
analysis yielded an aggregate estimated present value for the equity interest
in the Bionova Group to be acquired by Bionova at the midpoint of the terminal
value and discount rate ranges, of $45,162,000 (the "Bionova Group Acquired
DCF Value").

Piper Jaffray compared selected valuation ratios for the Bionova Group with
those of the Comparable Companies using the Bionova Group Acquired DCF Value,
adjusted for debt, cash and minority interests, as the enterprise value of the
Bionova Group. This analysis produced the following multiple comparisons:

<TABLE>
<CAPTION>
BIONOVA GROUP COMPARABLE COMPANIES
------------- ----------------------------
MINIMUM MEAN MEDIAN MAXIMUM
------- ----- ------ -------
<S> <C> <C> <C> <C> <C>
Enterprise value/LTM revenue....... 0.5x 0.8x 2.1x 2.1x 4.1x
Enterprise value/LTM EBIT.......... 9.5x 12.2x 14.6x 14.2x 17.7x
P/E ratio (LTM earnings per
share)............................ NM* 18.7x 23.1x 21.3x 29.4x
P/E ratio (calendar 1996 earnings
per share estimate)............... 21.7x 12.1x 20.8x 17.8x 32.1x
P/E ratio (fiscal 1997 earnings per
share estimate)................... 9.9x 9.0x 32.5x 17.9x 94.5x
</TABLE>
- --------
* Not meaningful

Piper Jaffray made a similar comparison of Bionova Group valuation multiples
to multiples paid in the Comparable Transactions. Piper Jaffray presented the
following data (using the Bionova Group Acquired DCF Value, adjusted for debt,
cash and minority interests, as the enterprise value of the Bionova Group):

Certain Bionova Analyses. Piper Jaffray estimated a range of net present
values for the equity of Bionova using discounted cash flow analysis
methodology and internal financial planning data for the five years ending
December 31, 2000 prepared by management of DNAP. This data gave effect to
management's expectations concerning the incremental benefits to be
experienced by Bionova of combining the operations of DNAP with those of the
Bionova Group. These anticipated benefits include access to seasonal
borrowings, a vertically integrated distribution system and a captive grower
network. This data also gave effect to the incremental benefits associated
with various ancillary arrangements and agreements to be entered into with ELM
in connection with the Merger, including the Long Term Funded Research
Agreement, the Loan Agreement and the limited guaranty of Bionova indebtedness
provided for in the Merger Agreement. Piper Jaffray employed a range of
terminal value multiples of year 2000 EBIT of 7.0x to 9.0x and a range of
discount rates of 25.0% to 30.0%. This analysis yielded a range of estimated
present values of $127,897,000 to $199,921,000 with a midpoint of
$161,376,000; or $.70 to $1.09, with a midpoint of $.88, on a per equivalent
DNAP common share basis.

Piper Jaffray compared selected valuation ratios for Bionova with those of
the Comparable Companies using as enterprise value for Bionova discounted cash
flow values calculated based on an 8.0x terminal value EBIT multiple and
25.0%, 27.5% and 30.0% discount rates (the "Bionova DCF Values"), adjusted for
debt and cash. This analysis produced multiples of enterprise value to LTM
revenue and price to fiscal 1997 estimated earnings (the only multiples for
which potentially meaningful comparisons could be made) as follows: enterprise
value to LTM revenue for the Comparable Companies: minimum 0.8x, mean 2.1x,
median 2.1x and maximum 4.1x, and for Bionova: 1.4x (30.0% discount rate),
1.6x (27.5% discount rate) and 1.7x (25.0% discount rate); and price/earnings
for the Comparable Companies: minimum 9.0x, mean 32.5x, median 17.9x and
maximum 94.5x, and for Bionova: 50.4x (30.0% discount rate), 55.6x (27.5%
discount rate) and 60.7x (25.0% discount rate).

38
<PAGE>

Piper Jaffray also compared selected valuation multiples for Bionova to
multiples paid in the Comparable Transactions. This analysis produced
multiples of enterprise value (using Bionova DCF Values adjusted for debt and
cash) to LTM revenue (the only multiple for which potentially meaningful
comparisons could be made) as follows for the Comparable Transactions: minimum
2.4x, mean 5.9x, median 5.6x and maximum 13.9x, and for Bionova: 1.4x (30%
discount rate), 1.6x (27.5% discount rate) and 1.7x (25% discount rate).

Piper Jaffray summarized the results of these various analyses and the
resulting sensitivity to implied incremental benefit to Bionova inferred from
Bionova DCF Values. The values in the following table are in thousands, except
for per share data.

<TABLE>
<CAPTION>
BIONOVA DCF VALUES
(AT INDICATED DISCOUNT RATE)
-------------------------------
30.0% 27.5% 25.0%
--------- --------- ---------
<S> <C> <C> <C>
Bionova DCF Value............................. $ 147,198 $ 161,376 $ 177,119
Components of Bionova DCF Value
DNAP DCF Value.............................. 17,990 17,990 17,990
Aggregate of other selected components of
Bionova value(1)........................... 75,882 75,882 75,882
--------- --------- ---------
Implied incremental benefit of Merger......... $ 53,326 $ 67,504 $ 83,247
Indicated Bionova DCF Value per equivalent
DNAP common share(2)......................... $ .80 $ .88 $ .97
DNAP DCF Value per share...................... $ .33 $ .33 $ .33
Closing price of DNAP Common Stock on July 24,
1996......................................... $ .50 $ .50 $ .50
Implied premium per share to DNAP Common Stock
on July 24, 1996............................. 60.5% 76.0% 93.2%
Closing price of DNAP Common Stock on January
26, 1996 (announcement date)................. $ .88 $ .88 $ .88
Implied one trading day before announcement
premium (discount) per share of DNAP Common
Stock........................................ (-8.3)% 0.6% 10.4%
Mean one trading day before announcement
premium for Comparable Transactions (3)...... 9.1% 9.1% 9.1%
Closing price of DNAP Common Stock 30 trading
days before announcement..................... $ .75 $ .75 $ .75
Implied 30 trading days before announcement
premium per share of DNAP Common Stock....... 6.7% 17.3% 29.3%
Mean 30 trading days before announcement
premium for Comparable Transactions.......... 11.9% 11.9% 11.9%
</TABLE>
- --------
(1) Includes $45,162,000 Bionova Group Acquired DCF Value, $18,000,000 in cash
to be contributed pursuant to the Merger Agreement, $12,289,000 calculated
present value of Long Term Funded Research Agreement, and $431,000
calculated present value of net operating loss carry forwards.
(2) Per share Bionova amounts set forth in the table are amounts derived from
application of discounted cash flow analysis and are not in any way a
projection or opinion by Piper Jaffray as to the price at which shares of
Bionova Common Stock may actually trade at any future time.
(3) One trading day prior to announcement premiums (discounts) for the
Comparable Transactions ranged from (-17.1%) to 43.3%, with a median of
4.2%. Five trading days prior to announcement premiums (discounts) for the
Comparable Transactions ranged from (-28.6%) to 52.9%, with a median of
4.2%. Thirty trading days prior to announcement premiums (discounts) for
the Comparable Transactions ranged from (-37.5%) to 50.0%, with a median
of 13.3%.

Piper Jaffray also analyzed the minimum level of anticipated incremental
benefit which would need to be realized in order for the Merger to not result
in an implied discount per share of DNAP Common Stock (based on the January
26, 1996 closing price), and estimated such amount to be approximately $66.6
million, or $.36 per equivalent DNAP common share.

39
<PAGE>

Piper Jaffray also presented certain additional analyses relating to
Bionova:

Dilution analysis. Piper Jaffray compared the potential effect on
anticipated earnings per share of DNAP without the Merger with the anticipated
earnings per share of Bionova, based in each case on the internal financial
planning data employed for purposes of discounted cash flow analysis. In the
year ending December 31, 1997, Piper Jaffray observed that the Merger was
expected to be slightly dilutive to stockholders of DNAP and in each of the
years ending December 31, 1998 to 2000, Piper Jaffray observed that the Merger
was expected to be increasingly accretive to stockholders of DNAP.

Contribution analysis. Piper Jaffray also analyzed the expected
contributions of each of DNAP and the Bionova Group to revenue, EBIT and net
income of Bionova for the years ending December 31, 1995 to 2000 based on each
company's financial planning data.

<TABLE>
<CAPTION>
1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Revenue
% DNAP Contribution..................... 14.7% 14.6% 8.0% 6.2% 6.8% 7.8%
Ratio of % DNAP Contribution to %
Ownership.............................. .49x .49x .27x .21x .23x .26x
EBIT
% DNAP Contribution..................... NM* NM 20.7% 16.3% 26.2% 32.7%
Ratio of % DNAP Contribution to %
Ownership.............................. NM NM .69x .54x .87x 1.09x
Net Income
% DNAP Contribution..................... NM NM 24.4% 19.0% 29.0% 34.8%
Ratio of % DNAP Contribution to %
Ownership.............................. NM NM .81x .63x .97x 1.16x
% Ownership of Bionova by DNAP
Stockholders............................. 30% 30% 30% 30% 30% 30%
</TABLE>
- --------
* Not meaningful

In addition to the foregoing quantitative analyses, Piper Jaffray considered
influential in connection with rendering its Opinion the following additional
factors: (i) the lengthy period during which DNAP had been marketed to
potential buyers without serious response, other than from ELM, (ii) the need
for and difficulty expected in accessing additional equity capital, (iii) the
current unavailability of seasonal borrowings, (iv) DNAP's inability to
develop internally profitable distribution, sales and growing operations, (v)
DNAP's inability to fund and conduct the level of operations which would
permit DNAP to fully exploit its technological base, (vi) the terms of the
Governance Agreement, (vii) the management, financial, grower network and
distribution resources of ELM and Bionova Group, (viii) the potential for
increased access to the germplasm of ELM's seed companies and (ix) the
anticipated removal of DNAP Common Stock from trading on the Nasdaq National
Market if the Merger is not consummated.

In reaching its conclusion as to the fairness of the aggregate consideration
to be received in the Merger and in its presentation to the DNAP Board of
Directors, Piper Jaffray did not rely on any single analysis or factor
described above, assign relative weights to the analyses or factors considered
by it, or make any conclusions as to how the results of any given analysis,
taken alone, supported its Opinion. The preparation of a fairness opinion is a
complete process and not necessarily susceptible to partial analyses or
summary description. Piper Jaffray believes that its analyses must be
considered as a whole and that selecting portions of its analyses and of the
factors considered by it, without considering all factors and analyses, would
create a misleading view of the processes underlying the Opinion. The analyses
of Piper Jaffray are not necessarily indicative of actual values or future
results, which may be significantly more or less favorable than suggested by
such analyses. Analyses relating to the value of companies do not purport to
be appraisals or valuations or necessarily reflect the price at which
companies may actually be sold. No company or transaction used in any
comparable analysis as a comparison is identical to the Bionova Group, DNAP,
Bionova or the Merger. Accordingly, an analysis of the results is not
mathematical; rather, it involves complex considerations and judgments
concerning differences in the various characteristics of the Comparable
Transactions to which the Merger was compared and in financial and operating
characteristics of the Comparable Companies and other factors that could
affect the public trading value of the Comparable Companies to which the
Bionova Group, DNAP and Bionova were compared.

40
<PAGE>

For purposes of the Opinion, Piper Jaffray relied upon and assumed the
accuracy, completeness and fairness of the financial and other information
made available to it and did not assume responsibility independently to verify
such information. Piper Jaffray relied upon the assurances of ELM, the Bionova
Group and DNAP managements that the information provided by ELM, the Bionova
Group and DNAP had a reasonable basis and, with respect to financial planning
data, products and technologies under development and other business outlook
information, reflected the best available estimates, and that they were not
aware of any information or fact that would make the information provided to
Piper Jaffray incomplete or misleading. Neither ELM nor DNAP publicly
discloses internal management planning data of the type provided Piper Jaffray
in connection with its review of the transactions contemplated by the Merger.
Such data was not prepared with a view toward public disclosure. Financial
planning data was prepared based on numerous variables and assumptions that
are inherently uncertain, including without limitation factors related to
general economic and competitive conditions. Accordingly, actual results could
vary significantly from those set forth in such financial planning data. See
"Risk Factors." Piper Jaffray has assumed no liability for such financial
planning data. Upon the advice of DNAP, ELM and Bionova Group and their legal
and accounting advisors, Piper Jaffray assumed (i) the Merger would be treated
as a purchase for accounting purposes and (ii) the Merger would qualify as a
reorganization within the meaning of Section 368(a) of the Code. Piper Jaffray
did not receive advice from legal counsel to DNAP or the Bionova Group
concerning the probable outcome of, or estimated damages which might arise
from, any pending or threatened litigation, possible unasserted claims or
other contingent liabilities, to which either DNAP or the Bionova Group or
their affiliates is a party or may be subject and Piper Jaffray undertook no
analysis thereof independently. Accordingly, at DNAP's direction and with its
consent, the Opinion makes no assumption concerning, and therefore does not
consider, the possible assertion of claims, outcomes or damages arising out of
any such matters.

In arriving at the Opinion, Piper Jaffray did not perform any appraisal or
valuation of specific assets or liabilities of the Bionova Group or DNAP and
expressed no opinion regarding the liquidation value of any entity. No
limitations were imposed by DNAP on the scope of Piper Jaffray's investigation
or the procedures to be followed in rendering its Opinion. Piper Jaffray
expressed no opinion as to the price at which shares of DNAP Common Stock have
traded and shares of Bionova Common Stock may trade at any future time. The
Opinion is based upon information available to Piper Jaffray and the facts and
circumstances as they existed and were subject to evaluation on the date of
the Opinion. Events occurring after such date could materially affect the
assumptions used in preparing the Opinion.

Piper Jaffray, as a customary part of its investment banking business, is
engaged in the evaluation of businesses and their securities in connection
with mergers and acquisitions, underwritings and other distributions of
securities, private placements and evaluations for estate, corporate and other
purposes. The DNAP Board selected Piper Jaffray because of its expertise,
reputation and familiarity with the ag-biotech industry in general and DNAP in
particular.

Piper Jaffray has provided financial advisory and investment banking
services to DNAP in the past for which it has received customary fees,
including 30,000 shares of DNAP Common Stock held by Piper Jaffray.

For rendering its services to the DNAP Board of Directors in connection with
the Merger, DNAP has paid Piper Jaffray fees of $100,000 upon its engagement,
$150,000 upon rendering its opinion dated January 26, 1996 and $175,000 upon
rendering the Opinion, and has agreed to pay an additional fee of $1,000,000
upon consummation of the Merger. If the Merger is not consummated on or before
September 30, 1996, DNAP has agreed to pay Piper Jaffray an additional
$250,000, which amount would be applied to the $1,000,000 due upon
consummation of the Merger if the Merger were subsequently consummated. The
contingent nature of a portion of these fees, as well as the relationships
referred to in the preceding paragraph, may have created a potential conflict
of interest in that DNAP would be unlikely to consummate the Merger unless it
had received the Opinion. Whether or not the Merger is consummated, DNAP has
agreed to pay the reasonable out-of-pocket expenses of Piper Jaffray and to
indemnify Piper Jaffray against certain liabilities incurred (including
liabilities under the federal securities laws) in connection with the
engagement of Piper Jaffray by DNAP.

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<PAGE>

REGULATORY APPROVAL

The Merger is subject to the requirements of the HSR Act and the rules and
regulations thereunder, which provide that certain transactions may not be
consummated until required information and material have been furnished to the
Antitrust Division of the Department of Justice (the "Antitrust Division") and
the Federal Trade Commission (the "FTC") and certain waiting periods have
expired or been terminated. DNAP and Bionova filed the required information
and material with the Antitrust Division and the FTC on March 5, 1996 and
received notice of termination of the applicable waiting periods on March 15,
1996.

The Merger is also subject to certain Mexican laws that require the Merger
and related transactions to be approved by both the MFIC and the MFCC prior to
the Effective Time. The requisite filings were made with the MFIC and the MFCC
on February 26, 1996, and May 3, 1996, respectively. The approvals of the MFIC
and the MFCC were obtained on May 2, 1996 and May 24, 1996, respectively.

MARKET FOR BIONOVA COMMON STOCK

After the Merger, DNAP Common Stock and DNAP Convertible Exchangeable
Preferred Stock will be removed from quotation on the Nasdaq National Market
and the registration of the DNAP Common Stock and the DNAP Convertible
Exchangeable Preferred Stock under the Exchange Act will be terminated.
Bionova has filed with the Commission a Registration Statement under the
Securities Act with respect to the Bionova Common Stock to be issued in
connection with the Merger to the holders of DNAP Stock. It is a condition to
the Merger that (i) the Registration Statement is declared effective under the
Securities Act and no stop order suspending the effectiveness of the
Registration Statement be in effect and no proceedings for such purpose be
pending before or threatened by the Commission and (ii) the shares of Bionova
Common Stock to be issued in connection with the Merger be authorized for
quotation on the Nasdaq National Market, subject to notice of such issuance.

DNAP'S NASDAQ LISTING

The DNAP Stock is currently listed on the Nasdaq National Market pursuant to
a temporary exception granted by Nasdaq to its net tangible assets and bid
price requirements for continued listing, which expires September 20, 1996.
Since the Effective Time will not have occurred by September 20, 1996, if no
extension to the exception is granted by Nasdaq, it is likely that the DNAP
Stock would be removed from listing on the Nasdaq National Market. If the DNAP
Stock is removed from listing on the Nasdaq National Market, DNAP would
request that the DNAP Stock be listed on the Nasdaq SmallCap Market pending
the consummation of the Merger. If that request were denied, or if the Merger
Agreement were terminated for any reason, it is likely that the DNAP Stock
would not be listed by Nasdaq and would trade only over the counter due to
DNAP's inability to meet the net tangible assets and bid price requirements
for continued listing by Nasdaq. The removal of the DNAP Stock from listing on
the Nasdaq National Market or from listing on the Nasdaq SmallCap Market could
adversely affect the value and liquidity of the outstanding shares of DNAP
Stock.

CONFLICTS OF INTEREST

In considering the recommendation of the DNAP Board of Directors with
respect to the Merger, stockholders of DNAP should be aware that certain
persons may have direct or indirect interests in the Merger separate from
those of the stockholders of DNAP generally, including those discussed below.

Representation on Board of Directors. Robert Serenbetz, DNAP's Chairman,
Chief Executive Officer and President, will become a director of Bionova, as
will Gerald Laubach, Evelyn Berezin and Douglas Luke, Jr., each of whom
currently serves as a director of DNAP. See "The Merger Agreement and Related
Agreements--The Governance Agreement."

Agreements Relating to Stock Options. To assist DNAP to satisfy certain
contractual obligations relating to the number of authorized shares of DNAP
Common Stock available for purchase upon the exercise of certain

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<PAGE>

warrants held by third parties, Robert Serenbetz; John Bedbrook, Executive
Vice President and Director of Science of DNAP; David Evans, Executive Vice
President, Business Development of DNAP; and Stephen Prichard, Vice President,
Human Resources and Administration of DNAP, have surrendered certain options
to purchase shares of DNAP Common Stock previously granted to them by DNAP as
follows: Mr. Serenbetz-- 945,000 options at exercise prices ranging from $2.47
to $5.63 and expiration dates ranging from November 2001 to March 2005; Mr.
Bedbrook--385,000 options at exercise prices ranging from $2.47 to $8.13 and
expiration dates ranging from November 1998 to March 2005; Mr. Evans--395,000
options at prices ranging from $2.47 to $12.75 and expiration dates ranging
from November 1996 to March 2005; and Mr. Prichard--215,000 options at prices
ranging from $2.47 to $8.13 and expiration dates ranging from November 1997 to
March 2005. Bionova has agreed to grant to each of such persons at or
immediately after the Effective Time options to purchase shares of Bionova
Common Stock. Such options shall be for the same number of shares (adjusted in
accordance with the exchange ratio applicable to the Merger), and shall be
exercisable on the same terms, as the surrendered options to purchase shares
of DNAP Common Stock. See "The Merger Agreement and Related Agreements--The
Merger Agreement--Options and Warrants."

Pursuant to the Merger Agreement, Bionova will assume each option and
warrant to purchase shares of DNAP Common Stock outstanding at the Effective
Time. Each such option or warrant will become an option or warrant to purchase
shares of Bionova Common Stock on the same terms as the options and warrants
being assumed (adjusted in accordance with the exchange ratio applicable to
the Merger). Several directors and officers of DNAP own options to purchase
shares of DNAP Common Stock that will be assumed by Bionova pursuant to the
Merger Agreement. See "The Merger Agreement and Related Agreement--The Merger
Agreement--DNAP Options and Warrants" and "Beneficial Ownership of DNAP Common
Stock by Certain Stockholders and Management."

Severance Agreements. DNAP has entered into severance agreements with Robert
Serenbetz, John Bedbrook, David Evans, Stephen Prichard and four other members
of senior management of DNAP. Each person's severance agreement provides,
subject to certain conditions, that such person will be paid a severance
payment equal to one year's total compensation (measured as current base
salary plus the average incentive compensation paid to such person during the
three year period from 1993 to 1995) in the event that prior to the first
anniversary of the Closing Date, (i) such person's employment by DNAP is
involuntarily terminated without cause or (ii) such person voluntarily
terminates his or her employment with DNAP for good reason (meaning a
reduction in such person's base compensation or, in the case of the officers
named above, a reduction in duties). The amount of the severance payment for
each of these persons would be the following: Robert Serenbetz--$310,534;
David Evans--$207,737; John Bedbrook--$210,704; Stephen Prichard--$135,405;
Pamela Dunsmuir--$106,967; Neal Gutterson--$105,233; Emanuel Lazopoulos--
$183,600; and Robert Whitaker--$121,600.

Indemnification. The Merger Agreement provides that all rights of the
present and former directors and officers of DNAP to indemnification existing
under DNAP's Certificate of Incorporation or Bylaws at the Effective Time
will, subject to any limits under applicable law, continue in full force and
effect with respect to acts and omissions of the directors and officers of
DNAP through and including the Effective Time. The Merger Agreement also
requires DNAP to maintain directors' and officers' liability insurance for the
three-year period following the Effective Time providing coverage with respect
to such acts and omissions no less favorable than that in existence at the
Effective Time and with aggregate limits not less than three times the limits
in effect at the Effective Time. The aggregate limits under DNAP's directors'
and officers' liability insurance is $5 million. During such three-year
period, Bionova will fund any deductible amounts applicable to claims made
under such policies to the extent, if any, that DNAP is otherwise permitted to
do so under applicable law but is unable to do so because of its financial
condition.

The Governance Agreement requires ELM to cause Bionova to indemnify, defend
and hold harmless the Independent Directors (as defined therein) to the
fullest extent permitted by law against all losses, claims, damages, costs,
expenses, liabilities, judgments or amounts paid in settlement based upon or
arising out of such

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<PAGE>

person's service as an Independent Director, the Governance Agreement or any
transaction contemplated by the Governance Agreement. The Governance Agreement
requires Bionova to use its best efforts to maintain directors' and officers'
liability insurance during the five-year period following the Closing Date on
terms and in amounts not less than that provided to directors of DNAP
immediately prior to the Effective Time.

RESALES OF BIONOVA COMMON STOCK ISSUED PURSUANT TO THE MERGER

The shares of Bionova Common Stock to be issued to the holders of DNAP Stock
pursuant to the Merger are being registered under the Securities Act pursuant
to the Registration Statement and may generally be resold freely without
further registration, except in the case of persons who are "affiliates" of
DNAP (as such term is defined under Rule 144 of the Securities Act). Such
affiliates will not be able to resell the Bionova Common Stock received by
them pursuant to the Merger unless such shares are registered for resale under
the Securities Act, are sold in compliance with an exemption from the
registration requirements of the Securities Act or are sold in compliance with
Rule 144 or Rule 145 under the Securities Act. Bionova will not be required to
maintain the effectiveness of the Registration Statement for the purpose of
such resales.

Pursuant to Rule 145 under the Securities Act, the sale of Bionova Common
Stock acquired by such affiliates pursuant to the Merger will be subject to
certain restrictions. Such persons may sell Bionova Common Stock under Rule
145 only if (i) Bionova has filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the preceding 12 months, (ii) the
Bionova Common Stock is sold in a "broker's transaction," as defined in Rule
144 under the Securities Act and (iii) such sale and all other sales made by
such person within the preceding three months do not collectively exceed the
greater of (x) one percent of the then outstanding shares of Bionova Common
Stock, and (y) the average weekly trading volume of Bionova Common Stock in
the Nasdaq National Market during the four-week period preceding the sale.

Persons who may be deemed to be affiliates of DNAP generally include
individuals or entities that control, are controlled by or are under common
control with, DNAP and may include certain officers and directors of DNAP as
well as principal stockholders of DNAP.

APPRAISAL RIGHTS

Holders of DNAP Common Stock and DNAP Convertible Exchangeable Preferred
Stock are not entitled to exercise appraisal rights under applicable
provisions of the DGCL because the DNAP Common Stock and the DNAP Convertible
Exchangeable Preferred Stock were quoted on the Nasdaq National Market on the
record date for the Special Meeting and the Bionova Common Stock to be issued
pursuant to the Merger will be listed on the Nasdaq National Market and held
of record by more than 2,000 holders as of the Effective Time.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

Set forth below is a summary of the written opinion of Bionova's legal
counsel, Thompson & Knight, P.C., with respect to the material federal income
tax consequences which are expected to result from the Merger (the "Tax
Opinion"). The Tax Opinion is subject to certain assumptions and based on
certain representations of Bionova and DNAP. Stockholders of DNAP should be
aware that the Tax Opinion will not be binding upon the IRS nor will the IRS
be precluded from adopting a contrary position.

It is impractical to comment on all aspects of federal, state, local and
foreign laws that may affect the tax consequences of the transactions
contemplated by the Merger Agreement as they relate to the particular
circumstances of each DNAP stockholder. The federal income tax consequences to
any particular DNAP stockholder may be affected by matters not discussed
below. For example, certain types of holders (including foreign persons, life
insurance companies, tax exempt organizations, taxpayers who may be subject to
the alternative minimum tax and taxpayers who are holders of options which
were not issued in connection with the performance of services and of
warrants) may be subject to special rules not addressed herein. Furthermore,
the discussions may not be applicable with respect to shares received pursuant
to the exercise of employee stock options or otherwise as compensation. Each
DNAP stockholder should consult his or her own tax advisor with respect to his
or her own particular circumstances.

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<PAGE>

This summary is based on the current provisions of the Code, existing and
proposed regulations thereunder and current administrative rulings and court
decisions, all of which are subject to changes that may or may not be
retroactively applied. Many of the provisions of the Code which have been
recently enacted or amended have not been interpreted by the courts or the
IRS.

No ruling has been requested from the IRS with respect to any of the matters
discussed herein, and thus no assurance can be provided that the opinions and
statements set forth herein (which do not bind the IRS or the courts) will not
be challenged by the IRS or would be sustained by a court if so challenged.

THE DISCUSSION SET FORTH BELOW ADDRESSES THE MATERIAL FEDERAL INCOME TAX
CONSEQUENCES OF GENERAL APPLICATION WHICH ARE EXPECTED TO RESULT FROM THE
MERGER. STOCKHOLDERS OF DNAP SHOULD CONSULT THEIR TAX ADVISORS TO DETERMINE
THE TAX CONSEQUENCES OF THE MERGER AND THE ACQUISITION, HOLDING AND
DISPOSITION OF THE BIONOVA COMMON STOCK TO BE ISSUED PURSUANT TO THE MERGER,
INCLUDING THE APPLICABILITY AND EFFECT OF FEDERAL, STATE, LOCAL AND FOREIGN
INCOME AND OTHER TAX LAWS WITH RESPECT TO THEIR OWN PARTICULAR CIRCUMSTANCES.

Merger. Based on certain factual representations by Bionova and DNAP and
certain factual assumptions set forth in the Tax Opinion, which is included as
an exhibit to the Registration Statement, the Tax Opinion concludes that the
Merger will constitute a reorganization within the meaning of Section 368(a)
of the Code, that no gain or loss will be recognized by stockholders of DNAP
upon the exchange of their shares of DNAP Stock for shares of Bionova Common
Stock pursuant to the terms of the Merger Agreement (except for gain on cash
received in lieu of fractional shares, as discussed below) and that no gain or
loss will be recognized by Bionova, Merger Sub or DNAP as a result of the
Merger. The aggregate basis of the shares of Bionova Common Stock received by
stockholders of DNAP pursuant to the Merger will be the same as the aggregate
basis of the shares of DNAP Stock exchanged therefor (less basis attributable
to fractional shares surrendered for cash), and the holding period of such
Bionova Common Stock will include the period during which such shares of DNAP
Stock exchanged therefor were held, provided such shares of DNAP Stock were
held as a capital asset at the time of the Merger.

Receipt of Cash in Lieu of Fractional Shares. DNAP Stockholders receiving
cash in lieu of fractional shares will be treated as if such fractional shares
had been received in the Merger and redeemed by Bionova for cash. Unless the
redemption is found to be essentially equivalent to a dividend, the
stockholder will recognize gain or loss measured by the difference between the
stockholder's basis in the fractional share surrendered and the amount of cash
received.

Tax Consequences to Holders of Certain Options to Acquire DNAP
Stock. Options to acquire DNAP Stock which were issued by DNAP in connection
with the performance of services will not be exchanged pursuant to the Merger
Agreement. Instead, Bionova will assume all such outstanding options so that
they become options to acquire Bionova Common Stock on the same terms and
conditions. The foregoing assumption of options and warrants to acquire
Bionova Common Stock should not cause the recognition of income, gain or loss
to the option holders.

Section 382 Limitation. If a corporation undergoes an "ownership change,"
Section 382 of the Code limits the corporation's ability to utilize its net
operating loss carryforwards (and certain other tax attributes) for all
periods subsequent to the ownership change for both regular tax and
alternative minimum tax purposes (the "Section 382 Limitation"). An ownership
change is a transaction or series of transactions resulting in an increase of
more than 50 percentage points in the percentage of ownership interests of
stockholders who, before or after such ownership change, own, directly or
indirectly, five percent or more of the stock of such corporation. The Merger
will result in an ownership change for DNAP and, therefore, the use of the net
operating loss carryforwards of DNAP after the Merger will be subject to the
Section 382 Limitation. The Section 382 Limitation is an annual limit on the
amount of income generated by DNAP which may be offset by the pre-ownership
change net operating loss carryforwards of DNAP and is an amount equal to the
fair market value of DNAP immediately before the Merger multiplied by the
long-term tax-exempt rate as determined under Section 382(f) of the Code.

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<PAGE>

Transfers of Capital Stock to Bionova. Section 1445 of the Code requires
that the transferee of a "United States real property interest" as such term
is defined in Section 897(c)(1) of the Code (a "USRPI") is required to deduct
and withhold a tax equal to ten percent of the amount realized on the
disposition of such USRPI by a foreign person. An interest (other than an
interest solely as a creditor) in a corporation is a USRPI if such corporation
is both a domestic corporation and a "United States real property holding
corporation" as such term is defined in Section 897(c)(2) of the Code. The
transfer of the capital stock of ABSA was not a transfer of a USRPI, because
ABSA is not a domestic corporation; consequently, Bionova will not be required
with respect to such transfer to deduct and withhold any tax pursuant to
Section 1445 of the Code. The transfer of the capital stock of IPHC, a
domestic corporation, was not a transfer of a USRPI, because IPHC is not a
United States real property holding corporation; consequently, provided that
IPHC, Bionova and the transferor of the capital stock of IPHC comply with the
requirements of Section 1445 of the Code and the regulations thereunder
regarding transfers of domestic corporations, Bionova will not be required
with respect to such transfer to deduct and withhold any tax pursuant to
Section 1445 of the Code.

ACCOUNTING CONSEQUENCES OF THE MERGER AND RELATED TRANSACTIONS

The Merger will be accounted for under the purchase method of accounting in
accordance with generally accepted accounting principles. The effect of
purchase accounting treatment is that the assets and liabilities of DNAP will
be recorded at their fair values at the Effective Time. See "Unaudited Pro
Forma Condensed Consolidated Financial Information of Bionova."

THE MERGER AGREEMENT AND RELATED AGREEMENTS

The descriptions of the Merger Agreement, and of the Loan Agreement, the
Assignment of Patents (as defined below), the Sole License Agreement, the Non-
Exclusive License Agreement, the Long Term Funded Research Agreement and the
Governance Agreement (collectively, the "Related Agreements"), contained in
this Proxy Statement/Prospectus are qualified in their entirety by reference
to the Merger Agreement (which is attached hereto as Annex I and incorporated
by reference herein) and the Related Agreements (which have been filed as
exhibits to the Registration Statement of which this Proxy
Statement/Prospectus is a part).

THE MERGER AGREEMENT

Pursuant to the Merger Agreement, at the Effective Time, Merger Sub will be
merged with and into DNAP, with DNAP being the surviving corporation. At the
Effective Time, each share of DNAP Common Stock then issued and outstanding
will be converted into and represent the right to receive 0.10 shares of
Bionova Common Stock and each share of DNAP Convertible Exchange Preferred
Stock then issued and outstanding will be converted into and represent the
right to receive 0.68375 shares of Bionova Common Stock, except for any DNAP
Stock held in the treasury of DNAP or held by any subsidiary of DNAP, which
shares will be cancelled. A cash payment, which is described in more detail
below, will be made to the holders of DNAP Stock in lieu of issuing fractional
shares of Bionova Common Stock. At the Effective Time, DNAP will become a
wholly-owned subsidiary of Bionova, which will change its corporate name to
DNAP Holding Corporation.

After the Merger, current holders of DNAP Stock will no longer possess any
interest in, or rights as stockholders of, DNAP. The shares of Bionova Common
Stock issued to holders of DNAP Stock in the Merger will constitute 30% of the
total shares of Bionova Common Stock issued and outstanding immediately after
the Effective Time. The remaining issued and outstanding shares of Bionova
Common Stock will be owned of record by Bionova International, an indirect
wholly-owned subsidiary of ELM.

The Effective Time. The Merger will become effective upon the filing of a
certificate of merger with the Secretary of State of Delaware. It is currently
anticipated that the filing of the certificate of merger will be made as
promptly as practicable following the adoption of the Merger Agreement by the
holders of DNAP Common Stock. Such filing will be made, however, only upon the
satisfaction or waiver, where permissible, of the other conditions to
consummation of the Merger.

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<PAGE>

Exchange of DNAP Stock. The Exchange Agent will exchange certificates
representing DNAP Stock for certificates representing Bionova Common Stock in
accordance with the terms of the Merger Agreement. Promptly after the
Effective Time, the Exchange Agent will mail to each holder of record of one
or more certificates that immediately prior to the Effective Time represented
outstanding DNAP Stock (the "Old Certificates") a Letter of Transmittal and
instructions to effect the surrender of the Old Certificates in exchange for
certificates representing shares of Bionova Common Stock.

HOLDERS OF DNAP STOCK ARE REQUESTED NOT TO SURRENDER THEIR OLD CERTIFICATES
FOR EXCHANGE UNTIL THEY RECEIVE THE LETTER OF TRANSMITTAL AND INSTRUCTIONS.

Upon surrender to the Exchange Agent of an Old Certificate, together with a
duly executed Letter of Transmittal and any other documents required by the
Letter of Transmittal, the holder of such Old Certificate will be entitled to
receive in exchange therefor certificates representing the number of shares of
Bionova Common Stock into which the DNAP Stock represented by such Old
Certificate were converted pursuant to the Merger Agreement, and the Old
Certificate so surrendered will forthwith be cancelled.

No holder of an Old Certificate will be entitled to receive dividends or
other distributions, if any, on Bionova Common Stock until surrender of such
holder's Old Certificate for one or more certificates representing shares of
Bionova Common Stock.

No fractional shares of Bionova Common Stock will be issued in respect of
DNAP Stock. In lieu of any fractional share, Bionova will pay (without
interest) an amount of cash (rounded down to the nearest cent) determined by
multiplying the fractional interest by the average closing price, as reported
on the Nasdaq National Market, of a share of Bionova Common Stock during the
10 trading days immediately following the fifth trading day after the Closing
Date.

If any certificate for shares of Bionova Common Stock is to be issued in a
name other than the name in which the Old Certificate surrendered in exchange
therefor was registered, the person requesting such issuance will be required
either to pay any transfer or other taxes required by reason thereof or to
establish to the satisfaction of Bionova that such taxes have been paid or are
not applicable. Neither Bionova nor DNAP will be liable to any former holder
of DNAP Stock with respect to shares of Bionova Common Stock (or dividends or
distributions, if any, with respect thereto) delivered to a public official
pursuant to any applicable abandoned property laws.

DNAP Options and Warrants. The Merger Agreement provides that, at the
Effective Time, Bionova will assume each outstanding option and warrant to
acquire shares of DNAP Common Stock and such assumed options and warrants will
thereafter constitute an option or warrant (as the case may be) to purchase
the number of whole shares of Bionova Common Stock as the holder of such
option or warrant would have been entitled to receive in the Merger had such
holder exercised the option or warrant in full immediately prior to the
Effective Time. The price per share of Bionova Common Stock at which any such
option or warrant will thereafter be exercisable will be an amount equal to
the aggregate exercise price of the shares of DNAP Common Stock for which such
option or warrant was formerly exercisable divided by the number of full
shares of Bionova Common Stock purchasable upon exercise of such option or
warrant immediately after the Effective Time. The other terms, conditions and
restrictions applicable to such options and warrants, including the vesting
schedule, will remain in effect.

At July 12, 1996, there were a total of 1,644,603 outstanding options to
purchase shares of DNAP Common Stock under five different stock option plans,
of which 993,103 were exercisable at such date. In connection with the Merger,
Bionova will assume DNAP's stock option plans so that following such
assumption such options thereafter represent corresponding rights to acquire
shares of Bionova Common Stock, with an adjustment in the exercise price and
the number of shares issuable under such plans to reflect the exchange ratio
applicable to the

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<PAGE>

Merger. The following table names DNAP's existing stock option plans and
summarizes the options outstanding thereunder:

<TABLE>
<CAPTION>
OPTIONS
PLAN OUTSTANDING EXERCISE PRICES EXPIRATION DATES
---- ----------- --------------- -----------------
<S> <C> <C> <C>
1982 Stock Option Plan.......... 42,500 $ 4.125-$ 5.500 11/05/96-11/21/01
1986 Stock Option Plan.......... 366,473 $ 2.94-$12.875 11/05/96-03/01/03
1994 Stock Option Plan.......... 924,170 $ .875-$5.375 01/23/03-11/08/05
Incentive Stock Option Plan..... 73,460 $ 4.125-$5.500 11/19/97-11/21/01
Non-employee Director Stock
Option Plan.................... 238,000 $ 2.0313-$6.525 05/09/00-05/18/05
</TABLE>

Prior to the Effective Time, Bionova will take all corporate action
necessary to reserve for issuance a sufficient number of shares of Bionova
Common Stock for delivery under the options being assumed by Bionova. If and
to the extent required under the Securities Act, Bionova will file
registration statements on Form S-8 (or other applicable form) with respect to
the shares of Bionova Common Stock subject to such options and will use its
best efforts to maintain the effectiveness of such registration statement (and
maintain the current status of any prospectus contained therein) for so long
as such options remain outstanding.

On June 21, 1996, certain officers of DNAP surrendered options to purchase
an aggregate of 1,940,000 shares of DNAP Common Stock which have exercise
prices ranging from $2.47 to $12.75, in order to assist DNAP to satisfy
certain contractual obligations relating to the number of authorized shares of
DNAP Common Stock available for purchase upon the exercise of certain warrants
held by third parties. If the Merger is consummated, Bionova has agreed to
issue to such officers options to purchase shares of Bionova Common Stock on
terms substantially similar to those of the surrendered options, with an
adjustment in the exercise price and the number of shares issuable in
connection with such options to reflect the exchange ratio applicable to the
Merger. See "The Merger and Related Transactions--Conflicts of Interest."

At July 12, 1996, DNAP had warrants outstanding that provide for the
purchase of 200,000 shares of DNAP Common Stock at $10.00 per share that
expire in November 1996; 400,000 shares of DNAP Common Stock at $6.65 per
share that expire in January 1999; 4,070,182 shares of DNAP Common Stock at
$2.50 per share that expire during the third and fourth quarters of 2000;
725,000 shares of common stock at $1.75 per share that expire in September
1997; and 362,500 shares of DNAP Common Stock at $1.75 per share that expire
in September 1997 (which date, under certain circumstances, may be extended to
September 1998). In connection with such assumption, Bionova will prepare such
documentation as shall be necessary so that following such assumption such
warrants thereafter represent corresponding rights to acquire shares of
Bionova Common Stock. In addition, prior to the Effective Time, Bionova will
take all corporate action necessary to reserve for issuance a sufficient
number of shares of Bionova Common Stock for delivery under the warrants being
assumed by Bionova, with an adjustment in the exercise price and the number of
shares issuable in connection with such warrants to reflect the exchange ratio
applicable to the Merger.

Transfer of the Bionova Subsidiaries and Capital Contribution to
Bionova. Pursuant to the Merger Agreement, Bionova Mexico will transfer to
Bionova all of its direct or indirect interests in each of the Bionova
Subsidiaries at or prior to the Effective Time. Also, in order to provide
Bionova with the funds necessary to carry out its obligations under the Loan
Agreement and pursuant to the Merger Agreement, Bionova Mexico provided $10
million in loans and capital to Bionova from sources other than the Bionova
Subsidiaries. If the Merger is consummated, ELM or an affiliate thereof will
contribute an amount equal to the then outstanding balance of such loans, if
any, to the capital of Bionova. See "The Loan Agreement" below in this
section. On or before the Closing Date, ELM has also agreed to make, or cause
to be made, an additional capital contribution of $8 million in cash to
Bionova.

Guarantee of Certain DNAP Indebtedness. Pursuant to the Merger Agreement,
during the three-year period immediately following the Closing Date, ELM has
agreed to provide when requested by Bionova a

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<PAGE>

guarantee of Bionova's indebtedness to a financial institution under a loan or
line of credit, provided that (i) ELM's maximum exposure under such guarantee
is limited to $20 million and (ii) the documents evidencing such loan or line
of credit provide that the aggregate amount loaned to Bionova thereunder will
not exceed at any time the sum of (x) 80% of the accounts receivable of
Bionova and its consolidated subsidiaries and (y) 50% of the inventories of
Bionova and its consolidated subsidiaries and such loan is secured by such
accounts receivable and inventories.

Conditions to the Merger; Waiver and Amendment. The respective obligations
of the parties to the Merger Agreement to effect the Merger are subject to the
satisfaction of certain conditions, including (i) the adoption of the Merger
Agreement by the holders of DNAP Common Stock; (ii) no proceeding, claim,
suit, investigation or inquiry before any arbitrator, or any court or tribunal
in any jurisdiction, or any federal, state, municipal or other governmental
authority, department or instrumentality (a "Governmental Entity") seeking to
restrain, prohibit or obtain damages or other relief in connection with the
Merger Agreement or the consummation of the transactions contemplated thereby
being pending; (iii) the Registration Statement having been declared effective
under the Securities Act and no stop order suspending the effectiveness of the
Registration Statement being in effect and no proceedings for such purpose
being pending before or threatened by the Commission; (iv) the shares of
Bionova Common Stock to be issued pursuant to the Merger having been
authorized for listing on the Nasdaq National Market; (v) the performance by
the parties in all material respects of their respective obligations under the
Merger Agreement, and the correctness in all material respects of the parties'
respective representations and warranties contained therein; and (vi) delivery
of certain closing certificates and opinions of counsel.

The obligations of DNAP to effect the Merger are also subject to (i) Piper
Jaffray's fairness opinion not having been withdrawn or amended in a manner
adverse to DNAP or its stockholders; (ii) the absence of an occurrence having
a material adverse effect on the business, assets, results of operations,
condition (financial or otherwise) or prospects of Bionova Mexico, Bionova and
the Bionova Group considered as a whole or on the ability of ELM, Bionova
Mexico, Bionova or Merger Sub to perform on a timely basis any of their
respective material obligations under the Merger Agreement or any agreement,
instrument or document entered into or delivered in connection therewith;
(iii) the execution and delivery by ELM and Bionova of the Governance
Agreement and the Long Term Funded Research Agreement; and (iv) the execution
and delivery of severance agreements by certain executives of DNAP. See "The
Merger and Related Transactions--Conflicts of Interest."

The obligations of ELM, Bionova Mexico, Bionova and Merger Sub to effect the
Merger are also subject to (i) the absence of an occurrence having a material
adverse effect on the business, assets, results of operations, condition
(financial or otherwise) or prospects of DNAP and its subsidiaries, considered
as a whole, or on the ability of DNAP to perform on a timely basis any of its
material obligations under the Merger Agreement or any agreement, instrument
or document entered into in connection therewith; and (ii) no party, if any,
holding preemptive rights to acquire capital stock or any other security of
DNAP or any of its subsidiaries having notified DNAP or such subsidiary, as
the case may be, of the exercise of such rights.

The parties to the Merger Agreement may (i) waive any inaccuracies in the
representations and warranties of the other parties contained in the Merger
Agreement or in any document delivered pursuant thereto and (ii) waive the
other parties' compliance with any agreements and fulfillment of any
conditions contained in the Merger Agreement.

The parties to the Merger Agreement may amend the Merger Agreement before or
after its adoption by the holders of DNAP Common Stock, but after such
stockholder approval, Delaware law does not permit any amendment that changes
the amount or type of the consideration payable to holders of DNAP Stock.

Termination. The Merger Agreement may be terminated prior to the Effective
Time (notwithstanding adoption by the stockholders of DNAP) by (i) mutual
agreement of DNAP and Bionova; (ii) either DNAP or Bionova, if the Merger has
not been effected on or prior to October 31, 1996, unless the failure to
effect the Merger is due to a breach of the Merger Agreement by the party
seeking to terminate it; (iii) either DNAP or

49
<PAGE>

Bionova, if there has been a material misrepresentation or material breach in
the representations, warranties, or covenants of ELM, Bionova Mexico, Bionova
or Merger Sub, on the one hand, or DNAP, on the other, and such breach is not
cured, in the case of a representation or warranty, prior to the Effective
Time, or, in the case of a covenant, within 30 days following written notice
thereof; (iv) either DNAP or Bionova, if any statute, rule or regulation makes
consummation of the transactions contemplated by the Merger Agreement illegal
or otherwise prohibited, or any Governmental Entity has issued an order,
decree, or ruling or takes any other action permanently restraining,
enjoining, or otherwise prohibiting the consummation of the transactions
contemplated by the Merger Agreement, and such order, decree, ruling or other
action has become final and nonappealable; (v) either DNAP or Bionova, if the
holders of DNAP Common Stock shall have failed to approve the Merger Agreement
at a special meeting called for such purpose; or (vi) either DNAP or Bionova,
if the Board of Directors of DNAP has approved and/or recommended to the
stockholders of DNAP an alternative transaction pursuant to which any person
or group of persons other than Bionova or its affiliates (a "Third Party")
would acquire (including by means of a merger or tender offer) capital stock
(or other securities convertible, exchangeable or exercisable into capital
stock) of DNAP representing more than 15% of DNAP, or any Third Party would
acquire control of more than 15% of the assets of DNAP (an "Alternative
Transaction").

The Merger Agreement permits the parties to waive certain conditions to
their respective obligations without further approval by the stockholders of
DNAP. Accordingly, the respective parties are authorized to elect not to
terminate the Merger Agreement even if the requirements or conditions
described above are not met or complied with at or before the Effective Time.

Conduct of Businesses Prior to the Merger. DNAP has covenanted in the Merger
Agreement to conduct its business prior to the Merger in the ordinary and
usual course and in a manner consistent with past practice, and not to take
certain specified actions. ELM, Bionova Mexico, Bionova and Merger Sub have
agreed to cause Bionova Mexico, Bionova, Merger Sub and the Bionova
Subsidiaries Group to conduct their respective businesses prior to the Merger
in the ordinary and usual course and in a manner consistent with past
practice, and not to take certain specified actions.

Expenses. Except as otherwise described below in this section, all costs and
expenses incurred in connection with the Merger, regardless of whether or not
consummated, are to be paid by DNAP, if DNAP is the party incurring such
expenses, and by ELM, if ELM, Bionova, Bionova Mexico or Merger Sub is the
party incurring such expenses. Costs for printing and filing of the
Registration Statement are to be shared equally by DNAP and Bionova.

If the Merger Agreement is terminated (i) by Bionova because DNAP's Board of
Directors has withdrawn or modified in a manner adverse to Bionova its
approval or recommendation of the Merger Agreement or the Merger, or has
approved and/or recommended to the stockholders of DNAP an Alternative
Transaction, or DNAP has materially breached any representation, warranty,
covenant or agreement contained in the Merger Agreement, or (ii) after October
31, 1996, by DNAP without cause at a time when Bionova could have terminated
the Merger Agreement because of a material breach by DNAP, then the Merger
Agreement requires DNAP to reimburse Bionova for all reasonable out-of-pocket
expenses and fees (including filing fees, printing fees, fees and expenses of
its counsel and other professionals' fees and expenses) incurred or required
to be paid by or on behalf of Bionova in connection with the Merger, up to a
maximum amount of $1,500,000.

If the Merger Agreement is terminated (i) by DNAP because ELM, Bionova
Mexico, Bionova or Merger Sub materially breaches any representation,
warranty, covenant or agreement contained in the Merger Agreement, or (ii)
after October 31, 1996, by Bionova without cause at a time when DNAP could
have terminated the Merger Agreement because of a material breach, then the
Merger Agreement requires ELM or Bionova to reimburse DNAP for all reasonable
out-of-pocket expenses and fees (including filing fees, printing fees, fees
and expenses of its counsel, and other professionals' fees and expenses)
incurred or required to be paid by or on behalf of DNAP in connection with the
Merger, up to a maximum amount of $1,500,000.

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<PAGE>

If the Merger Agreement terminates under any circumstance in which DNAP is
obligated to pay expenses to Bionova as described above, and within one year
of such termination an Alternative Transaction occurs or is announced, or DNAP
enters into an agreement with respect thereto (substituting 35% thresholds for
the 15% thresholds described in the definition of Alternative Transaction set
forth above), then DNAP shall also be obligated to pay to Bionova a fee equal
to the excess of $2 million over the reimbursement of expenses paid by DNAP to
Bionova.

THE LOAN AGREEMENT

In connection with the Merger Agreement, Bionova and DNAP entered into the
Loan Agreement. Pursuant to the Loan Agreement, Bionova loaned $5 million to
DNAP on January 26, 1996 and an additional $5 million to DNAP on July 1, 1996.
The outstanding principal balance of the Loan bears interest at the rate of
10.25% per annum and, together with all accrued interest thereon, will become
due and payable on the earlier of (i) January 26, 1999, (ii) if either DNAP or
Bionova has terminated the Merger Agreement because the Board of Directors of
DNAP has approved and/or recommended to the stockholders of DNAP an
Alternative Transaction, then on the date on which DNAP consummates an
Alternative Transaction and (iii) if the Merger Agreement terminates for any
other reason, then on the date an Alternative Transaction is consummated
(substituting 35% thresholds for the 15% thresholds described in the
definition of Alternative Transaction set forth above). The Loan may be
accelerated by Bionova at any time during the continuance of certain events of
default specified in the Loan Agreement and may be prepaid by DNAP at any time
without premium or penalty. A percentage of certain royalty fees to be
received by DNAP must be used to satisfy DNAP's obligations under the Loan
Agreement.

The Loan is secured by the assignment to Bionova of DNAP's right, title and
interest in and to the Transwitch Patents pursuant to an Assignment of
Patents, dated as of January 26, 1996 (the "Assignment of Patents"). If, in
the opinion of experts agreed on by DNAP and Bionova, at any time from July 1,
1997 until 180 days prior to the scheduled termination date of the Loan
Agreement, the excess of the value of the Transwitch Patents over the
aggregate amount due and owing in respect of the Loan is less than $3,000,000,
Bionova may require DNAP to provide additional security sufficient to make up
such shortfall. The Loan Agreement provides that any losses suffered by DNAP
as a result of any claim that the assignment of the Transwitch Patents
violated the terms of an existing license of a Transwitch Patent may be offset
against the amounts owed by DNAP in respect of the Loan.

Prior to the repayment in full of the Loan, DNAP may not pay any dividends
on, or make other distributions in respect of, any class of its capital stock,
or take certain other actions, without the written consent of Bionova.

THE SOLE LICENSE AGREEMENT AND THE NON-EXCLUSIVE LICENSE AGREEMENT

As noted above, DNAP has assigned to Bionova all of its right, title and
interest in and to the Transwitch Patents. Bionova and DNAP have entered into
the Sole License Agreement, pursuant to which Bionova granted back to DNAP an
exclusive, royalty-free license to use the Transwitch Patents to develop and
market products using the products or processes covered by such patents and to
satisfy DNAP's obligations under existing licenses of the Transwitch Patents.
Under the Loan Agreement, Bionova is obligated to assign the Transwitch
Patents back to DNAP upon the payment in full of all amounts due and owing in
respect of the Loan. If Bionova accelerates the maturity of the Loan as a
result of an event of default under the Loan Agreement, DNAP's right to have
the Transwitch Patents reassigned to it will terminate and the license to use
the Transwitch Patents granted by Bionova to DNAP under the Sole License
Agreement will convert to a non-exclusive, royalty-free license to use the
Transwitch Patents.

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<PAGE>

commercialization of products or processes resulting from the funded research,
bears commercially reasonable royalties and 50% of the royalties received by
DNAP are paid by it to Bionova to reduce DNAP's outstanding obligations under
the Loan Agreement. DNAP may also enter into sublicenses of the Transwitch
Patents with other entities with the approval of Bionova, which approval has
been obtained in certain cases.

DNAP and Bionova have also entered into the Non-Exclusive License Agreement
under which Bionova was granted a license to use the Transwitch Patents except
that such license does not include rights in the following areas: (i)
floricultural varieties (meaning ornamental flowers, cut flowers, potted
flowers, bedding flowers or ornamental foliage plants) of use solely for their
aesthetic value but not of use as a source of chemicals, extracts or food, and
(ii) blackberries, raspberries and strawberries. The Non-Exclusive License
Agreement prohibits Bionova from assigning or sublicensing its rights
thereunder, other than to its affiliates, and provides for the payment of
royalties by Bionova to DNAP of $250,000 per calendar quarter, except that
royalties for the quarter ended March 31, 1996 were $50,000 and royalties for
the quarter ending June 30, 1996 were $125,000. In lieu of such royalties,
however, Bionova may convert the license to a fully paid license by paying
DNAP either (i) $1,500,000 prior to September 30, 1996, plus a royalty of 2.5%
of the net sales price of products covered by one or more of the Transwitch
Patents as long as such patents remain in effect or (ii) a lump sum amount
after September 30, 1996 which, when discounted at a discount rate of 10% per
annum, together with the discounted value of all quarterly royalty payments
made with respect to calendar quarters after the calendar quarter ending June
30, 1996, yields a total present value of $5 million as of January 26, 1996.

THE LONG TERM FUNDED RESEARCH AGREEMENT

On the Closing Date, DNAP and ELM (directly or through its affiliates) will
enter into the Long Term Funded Research Agreement, pursuant to which they
will use their best efforts to agree on research projects to be conducted by
DNAP for ELM or its affiliates which will result in payments to DNAP of $30
million over a 10-year period, with minimum funding (subject to carryforwards)
of $9 million in any three-year period. The Long Term Funded Research
Agreement contemplates that such projects will relate to the utilization of
biotechnology in the seed industry. Unless otherwise agreed by the parties,
payments of at least $625,000 in respect of ELM's obligation to fund research
projects are to be paid to DNAP at the beginning of each calendar quarter
during the term of the Long Term Funded Research Agreement. The Long Term
Funded Research Agreement provides that ELM may terminate any project at any
time upon payment to DNAP of its costs through the date of termination and
actual losses or commitments made.

Intellectual property developed by DNAP in connection with a project
("Developed Intellectual Property") will belong to ELM and/or its affiliates,
and such entities will retain the exclusive rights to commercialization of the
Developed Intellectual Property in the project's intended market (the
"Field"). The Long Term Funded Research Agreement will also provide that DNAP
will have a perpetual, royalty-free (i) non-exclusive license to use the
Developed Intellectual Property for research purposes in the Field and (ii)
sole license to use and commercialize the Developed Intellectual Property
outside the Field. In addition, the Long Term Funded Research Agreement will
grant ELM a non-exclusive license to use all other intellectual property owned
(in whole or in part), controlled or licensable by DNAP from time to time
solely to the extent necessary or appropriate in connection with the
commercialization of any Developed Intellectual Property within the Field. ELM
will pay royalties for the use of such intellectual property at standard
industry rates, after taking into account the existence of the Non-Exclusive
Patent License, with the specific rates to be negotiated in connection with
specific projects.

THE GOVERNANCE AGREEMENT

On the Closing Date, ELM and Bionova will enter into the Governance
Agreement which, among other things, will provide for certain arrangements
with respect to the composition of Bionova's Board of Directors prior to the
1999 annual meeting of stockholders of Bionova and will restrict the ability
of ELM and its affiliates to acquire or dispose of shares of Bionova Common
Stock prior to the third anniversary of the Closing Date.

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<PAGE>

Under the Governance Agreement, the Board of Directors of Bionova will
consist of 11 members, except as described below, with four of such members
being "Independent Directors," which is defined as a person who: (i) is not an
employee or affiliate of Bionova, ELM or any affiliate of ELM (other than as a
result of serving as a director of Bionova) and (ii) qualifies as an
independent director for purposes of Rule 4460 of the Rules of the Nasdaq
Stock Market. Of the four Independent Directors, three will be designated as
"DNAP Independent Directors" and will initially be Gerald Laubach, Evelyn
Berezin and Douglas Luke, Jr., each of whom currently serves as an independent
director of DNAP. The remaining Independent Director (the "ELM Independent
Director"), together with the remaining seven members of the Bionova Board of
Directors, will be designated by ELM. See "Management--Bionova."

The Governance Agreement will provide that at such time as the first DNAP
Independent Director resigns from the Bionova Board of Directors or dies, the
aggregate size of the Board of Directors will be reduced at the next
succeeding annual meeting of stockholders to nine members, including the
remaining two DNAP Independent Directors and the ELM Independent Director. The
number of DNAP Independent Directors will be reduced to two effective as of
the first annual meeting of stockholders after such time as ELM and its
affiliates collectively own 80% or more of the outstanding shares of Bionova
Common Stock.

Except as described above, Bionova will covenant to use its best efforts to
cause each of the Independent Directors then in office to be nominated for
election as a director of Bionova at each annual meeting of stockholders of
Bionova held prior to the 1999 annual meeting of stockholders (which the
Governance Agreement provides may not be held prior to May 1, 1999), and ELM
will covenant to vote all of the shares of Bionova Common Stock directly or
indirectly owned by it for the election of such Independent Directors.

Except as provided above, if any DNAP Independent Director resigns or
otherwise leaves the Board of Directors, a majority of the remaining DNAP
Independent Directors may, subject to ELM's consent, which consent shall not
be unreasonably withheld or delayed, designate an individual to serve as a
replacement DNAP Independent Director. If the ELM Independent Director resigns
or otherwise leaves the Board of Directors, ELM may, subject to the consent of
a majority of the DNAP Independent Directors, which consent shall not be
unreasonably withheld or delayed, designate an individual to serve as the
replacement ELM Independent Director.

The Governance Agreement provides that each committee established by the
Board of Directors must have at least one DNAP Independent Director, and that
the approval of a majority of the Independent Directors then in office will be
required to approve any of the following:

(a) the sale, lease, license, transfer or other disposal of, including
any pledge or other grant of a security interest in, all or a substantial
portion of the business or assets of Bionova, in one or in a series of
transactions, or any merger or consolidation of any kind involving Bionova;

(b) any material transaction or activities, including any repurchase,
redemption or issuance of any capital stock entitled to vote generally in
the election of directors of Bionova or any option, warrant or other right
to acquire such capital stock (each, an "Equity Security"), by Bionova or
one of its subsidiaries with or for the benefit of ELM or an affiliate of
ELM (other than any benefit that is derived from ELM's or its affiliate's
ownership interest in Bionova) other than as expressly permitted by the
Related Agreements, except that any amendment to the Related Agreements or
any waiver by Bionova of any covenant or other provision under them or the
Merger Agreement requires the approval of a majority of the Independent
Directors;

(c) the repurchase or redemption of any Equity Securities or other
capital stock of Bionova, other than redemptions required by the terms
thereof and purchases made at fair market value in connection with any
deferred compensation plan maintained by Bionova;

(d) the creation of any committee of the Board of Directors of Bionova
with power to approve any matter that is the subject of the Governance
Agreement;

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<PAGE>

(e) a tender offer, directly or indirectly, by ELM for Equity Securities
of Bionova, except as described below;

(f) the amendment or the waiver by Bionova of a provision of the
Governance Agreement;

(g) any amendment to the Certificate of Incorporation or Bylaws of
Bionova which would have a direct adverse effect on the rights or
protections provided to the holders of Bionova Common Stock other than ELM
and its affiliates under the Governance Agreement; or

(h) any attempt to effect, or any action that reasonably could be
anticipated to result in, the delisting or deregistering of the Bionova
Common Stock from the Nasdaq National Market or from any national
securities exchange on which the Bionova Common Stock may then be listed.

The Governance Agreement also provides that, prior to the third anniversary
of the Closing Date, ELM and its affiliates will not purchase or otherwise
acquire any Equity Securities of Bionova if such acquisition would cause the
aggregate beneficial ownership of Bionova Common Stock by ELM and its
affiliates to exceed 80.1%. If Bionova issues any stock (other than to an
affiliate of ELM or upon the exercise of certain warrants or options), ELM has
a right to purchase directly from Bionova such amount of shares required to
maintain its percentage of votes for election of directors of Bionova at the
level held immediately before such issuance. For information concerning other
potential issuances of Bionova Common Stock, see "Business of DNAP--Legal
Proceedings."

The Governance Agreement will permit ELM or an affiliate to make a tender
offer for all of the outstanding shares of Bionova Common Stock prior to the
third anniversary of the Effective Time, provided that a majority of the
Independent Directors then in office has determined that the tender offer is
fair to the holders of Bionova Common Stock, other than ELM and its
affiliates, from a financial point of view.

The Governance Agreement also provides that, prior to the third anniversary
of the Closing Date, ELM and its affiliates may not, directly or indirectly,
sell or otherwise transfer shares of Bionova Common Stock if, after giving
effect to such sale, ELM and its affiliates would beneficially own less than
51% of the outstanding Bionova Common Stock on a fully diluted basis except:
(i) for pledges of shares to secure loans from unaffiliated commercial lenders
or other unaffiliated financing sources; (ii) transfers to an entity that is
directly or indirectly 51% or more owned and controlled by ELM, provided that
such entity agrees in writing to assume ELM's obligations under the Governance
Agreement; (iii) if it becomes illegal for ELM to own such shares of Bionova
Common Stock, directly or indirectly, or to exercise fully its rights of
ownership with respect thereto; (iv) pursuant to an unsolicited tender offer
by a person not affiliated with ELM; and (v) any sale or other transfer which
results in ELM and its affiliates collectively owning less than 51% of the
outstanding shares of Bionova Common Stock (on a fully diluted basis) and all
holders of Bionova Common Stock (other than ELM and its affiliates) are given
the opportunity to sell all of their shares of Bionova Common Stock in the
transaction on substantially the same terms per share as ELM and its
affiliates (provided that such holders have the opportunity to receive all of
their consideration in cash). The foregoing restriction on transfers by ELM
and its affiliates of shares of Bionova Common Stock will not be deemed to
apply to a transfer of a controlling interest in ELM.

The Governance Agreement grants ELM the right to demand two registrations
under the Securities Act of Bionova Common Stock at any time during the period
from the third anniversary of the Closing Date (or such earlier date on which
it shall have become illegal for ELM directly or indirectly to own shares of
Bionova Common Stock or to exercise fully all rights of ownership with respect
thereto) through the tenth anniversary of the Closing Date. Bionova will bear
the expense of any such registration.

Except as indicated above to the contrary, the Governance Agreement by its
terms will terminate on the earlier of (i) the date on which ELM and its
affiliates beneficially own 100% of the voting stock of Bionova and (ii) the
date immediately preceding Bionova's 1999 annual meeting of stockholders,
which meeting shall be held no earlier than May 1, 1999.

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<PAGE>

BUSINESS OF BIONOVA

OVERVIEW

Bionova is a holding company that owns a controlling interest in the Bionova
Subsidiaries. The Bionova Subsidiaries consist of ABSA, IPHC and their
respective subsidiaries.

ABSA's business is the production in Mexico of fresh fruits and vegetables,
primarily tomatoes and peppers. A group of subsidiaries of ABSA, the
"Interfruver Group," markets and distributes fresh produce in Mexico,
including the fruits and vegetables produced by ABSA.

IPHC is a holding company whose subsidiaries are in the business of
marketing and distributing fresh produce in the United States and Canada,
including fruits and vegetables produced by ABSA. IPHC's subsidiaries include
the "R.B. Packing Group" of three fresh produce distribution companies, as
well as two fresh produce wholesalers.

Bionova owns 50.004% of the capital stock of ABSA, which in turn owns a
50.01% interest in the Interfruver Group. Bionova owns 51% of the capital
stock of IPHC, which in turn owns all of the capital stock of the R.B. Packing
Group, 75% of the capital stock of a wholesale produce company located in Los
Angeles, California and 80% of a wholesale produce company located in
Montreal, Quebec.

This ownership interest of Bionova in the Bionova Subsidiaries is as shown
in the following diagram:

Bionova

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

50.004% 51%
ABSA(1) IPHC

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

-------------------
50.01% 100% 75% 80%
Tanimura Premier Fruits
Interfruver R.B. Packing and
Distributing, Vegetables BBL,
Group(2) Group(3) Inc. Inc.
("TDI") ("Premier
Canada")

- --------
(1) Includes ABSA and its wholly-owned subsidiary, Comercializadora Premier,
S.A. de C.V.
(2) Includes Interfruver de Mexico, S.A. de C.V. ("Interfruver"), and its
wholly-owned subsidiaries Premier del Pacifico, S.A. de C.V., Excelencia
en Frutas y Verduras, S.A. de C.V., and Asesoria y Servicios del Noreste,
S.A. de C.V.
(3) Includes R.B. Packing, Inc. ("R.B. Packing Arizona"), R.B. Packing of
California, Inc. ("R.B. Packing California"), R.B. Packing of Texas, Inc.
("R.B. Packing Texas"), and Batiz & Sons, Inc.

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<PAGE>

BACKGROUND

The indirect parent company of Bionova is ELM, one of Mexico's largest
corporations. ELM is the leading producer and distributor of cigarettes in
Mexico through its subsidiary Cigarrera La Moderna, S.A. de C.V. ("CLM"); the
leading vegetable seed company in the world and one of the five largest seed
companies in the world through the Seminis group of companies, including
Asgrow Seed Company, Petoseed Co., Inc. and Royal Sluis, B.V.; and the leading
producer of folding boxboard in Mexico through the Ponderosa Industrial, S.A.
de C.V. group of companies, including Empaques Ponderosa, S.A. de C.V. For
the year ended December 31, 1995, the cigarette division accounted for
approximately 56%, the agrobiotechnology division 32%, and the packaging
division 12%, of ELM's net sales.

Through its Bionova Mexico subsidiary, ELM entered the fresh produce
industry in 1993 by agreeing to a series of business relationships with Raul
Batiz Echavarria and members of his family (the "Batiz Family"). In February
1993, Bionova Mexico and the Batiz Family established ABSA, to which the Batiz
Family transferred land and other assets used for growing and packing fresh
produce. Bionova Mexico and the Batiz Family then negotiated the structure of
their joint ownership of the Batiz Family's fresh produce distribution
business. In December 1994, this relationship was formalized with the
organization of IPHC. The Batiz Family owns the 49.996% minority interest in
ABSA and the 49% minority interest in IPHC.

In December 1993, Bionova Mexico made a capital contribution toward the
formation of TDI, a fresh produce wholesaler in Los Angeles, California. In
September 1994, Bionova Mexico made a capital contribution toward the
formation of Premier Canada, a fresh produce wholesaler in Montreal, Quebec,
Canada. These interests were contributed to IPHC in December 1994.

In January 1995, ABSA acquired a 50.01% stake in Interfruver. Interfruver is
one of the largest distributors of fresh produce in Mexico.

On July 1, 1996, Bionova Mexico transferred its interests in the Bionova
Subsidiaries to Bionova.

As of the end of 1995, the Bionova Subsidiaries had grown from a regional
grower-shipper to become a fully-integrated grower, packer, shipper and
distributor of fresh produce throughout North America with 1995 combined
revenues of approximately $198 million. Product and regional diversification
have enabled the Bionova Subsidiaries to establish a strong commercial
offering of quality year-round supply under the "Premier Seleccion" and
"Master's Touch" trademarks.

Significant market developments over the past three years have included the
continuation of market deregulation in Mexico, the passage of the North
American Free Trade Agreement which codifies low tariff levels for certain
goods traded among Mexico, the United States and Canada, and a growing market
for fresh produce in the United States. Bionova believes there is potential
for growth in the U.S. market both for commodity fresh produce and for branded
produce that can command a premium price on a sustained basis, provided it
consistently meets consumer expectations for freshness and quality.

PRODUCTION

ABSA is a leading grower of fresh produce in Mexico, primarily tomatoes and
peppers and, to a lesser extent, melons, cucumbers, grapes and other fruits
and vegetables. Most of ABSA's farming operations are located in the Mexican
states of Sinaloa, Sonora, Baja California and Jalisco. Advanced technology is
used to ensure consistent quality and yields, including special hybrid
varieties, pest management control, greenhouse production and computerized
drip irrigation. ABSA's produce is distributed in the United States, Mexico
and Canada under the "Master's Touch" and "Premier Seleccion" brands as well
as other labels, depending on produce grades.

ABSA's supply derives from (i) produce grown on land owned or leased by
ABSA, (ii) produce grown by producers with whom ABSA enters into a
distribution contract and (iii) produce grown by producers with whom

56
<PAGE>

ABSA enters into both a production association agreement and a distribution
contract. When ABSA enters into a distribution contract only, it agrees to
provide the grower limited financial assistance for harvesting and packing in
exchange for exclusive distribution rights. ABSA does not share any of the
agricultural risk under these distribution contracts. Distribution is carried
out by the R.B. Packing Group in the United States and the Interfruver Group
in Mexico.

When ABSA enters into a production association agreement, ABSA finances up
to 100% of the production cost in a joint venture with the grower. ABSA
provides technical support and agrees to handle the distribution. Net proceeds
are shared according to the terms of the association agreement after ABSA
recoups its investment.

In 1995, 21% of ABSA's total supply came from land owned or leased by ABSA.
ABSA owns approximately 2,635 acres in Sinaloa and Sonora, and leases
approximately 1,564 acres in Sinaloa. Approximately 34% of ABSA's owned
acreage is devoted to tomatoes, 29% to peppers, 20% to cucumbers, 13% to
grapes and the remaining 4% to mixed vegetables and melons.

In 1995, 37% of ABSA's total supply was sourced from growers under
distribution contracts and 42% from growers under production associations. The
majority of ABSA's distribution contracts and production association
agreements are located in the states of Baja California Norte, Baja California
Sur and Jalisco, with additional growers in five other Mexican states.

In each of the last three years, ABSA's overall production has been
allocated approximately as follows: tomatoes--52%, peppers--26%, cucumbers--
6%, melons--3%, grapes--3%, and mixed vegetables (including eggplant and
squash)--10%.

MARKETING AND DISTRIBUTION

The marketing and distribution activities of the Bionova Subsidiaries are
carried out by the Interfruver Group in Mexico and IPHC in the United States
and Canada. The Interfruver Group, based in Guadalajara, is one of Mexico's
largest fresh produce distributors. The Interfruver Group distributes produce
from ABSA and other Mexican producers. Interfruver also imports produce from
the United States and other countries. It is one of the largest importers of
Chilean produce in Mexico. Approximately 60% of its sales is to wholesalers
and other intermediaries and 40% is to supermarkets. Interfruver's sales,
which totalled $49 million in 1995 (approximately 25% of Bionova's total sales
of $198 million in 1995), are denominated in pesos.

R.B. Packing Arizona accounts for approximately 50% of the sales of IPHC.
R.B. Packing Arizona is located in Nogales, Arizona, the main point of entry
for Mexican produce into the United States. Approximately 85% of the produce
distributed by R.B. Packing Arizona is provided by ABSA (including produce
grown by ABSA and produce grown by growers with whom ABSA enters into
distribution contracts and/or production arrangements). R.B. Packing Arizona
sells the majority of its supply to customers in Arizona and California, which
accounted in 1995 for 26% and 25% of its sales, respectively. No other state
accounted for more than 10% of its sales except Michigan, which accounted for
11% in 1995. No single customer accounted for more than 5% of R.B. Packing
Arizona's sales in 1995. In 1995 its sales were 50% to supermarkets, 40% to
wholesalers and 10% to brokers. Its main selling season is December through
May.

R.B. Packing California is located in San Diego, California and distributes
produce grown in California and the Mexican states of Baja California Norte
and Baja California Sur. In 1995 its sales were 40% to supermarkets, 45% to
wholesalers, and 15% to brokers. Its main selling season is July through
November.

R.B. Packing Texas is a distributor located in McAllen, Texas that began
operations in the Fall of 1995. R.B. Packing Texas distributes produce grown
in Mexico and the United States. Its selling season is spread evenly
throughout the year.

Bionova has also established partnerships with wholesalers to expand its
distribution capabilities including TDI and Premier Canada. TDI is managed by
Kirby Tanimura, who has more than 10 years of experience in the

57
<PAGE>

fresh produce industry and owns 25% of the company. In 1995, its sales were
50% to supermarkets, 30% to food service and 20% to other wholesalers.

Premier Canada is managed by Robert M. Levine, who has more than 15 years of
experience in the fresh produce industry and owns 20% of the company. Premier
Canada distributes produce throughout eastern Canada and its sales were
approximately 40% to supermarkets, 40% to independent retailers, and 20% to
food service/jobbers in 1995. All of Premier Canada's revenues (approximately
$16.9 million in 1995) are denominated in Canadian dollars.

COMPETITION

Though the fresh produce industry in general, and the tomato industry in
particular, are characterized by numerous competitors and low barriers to
entry at the production level, Bionova believes that a small group of
participants produces over one-third of the tomatoes sold in the United
States. In the United States, Bionova competes directly with the larger tomato
and pepper growers in Florida during the winter, and in California in the
summer and fall. As is the case with Mexico, the U.S. tomato industry is
characterized by numerous competitors. Major Florida growers include Six L's,
DiMare and NTGargiulo, which was recently acquired by Monsanto. Meyer Tomatoes
is one of the largest growers in California.

ABSA believes it has advantages over its competitors because, among other
things, (i) the type of tomato ABSA farms, vine ripe, has different and
generally more desirable attributes than the gas-green tomato typically
produced by most U.S. growers and (ii) ABSA's production occurs in Mexico
where the climate is often more favorable and labor costs are relatively lower
than in the United States.

POTENTIAL ACQUISITION

In April 1996, ELM signed a letter of intent to acquire 51% of Rijnhout Food
Group B.V., a Holland-based holding company whose subsidiaries include
Koninklijke Exporthandel Jac. Van Namen & Zonen B.V. and Rijnhout Groenten
B.V. (collectively, "Royal Van Namen"). Royal Van Namen is a fresh produce
distributor with 1995 sales of $49 million, dealing primarily in tomatoes,
peppers, citrus and apples which it buys locally through auctions and
importers. It exports throughout Europe, the Middle East, the Far East and
North America to food services, wholesalers and chain stores. ELM is
considering effecting this acquisition through IPHC, subject to the approval
of the boards of directors of Bionova and IPHC and any other approval required
by the Governance Agreement. If such acquisition is effected through IPHC, the
effect of the acquisition on the combined financial statements of the Bionova
Subsidiaries is not anticipated to be material.

INTELLECTUAL PROPERTY

Bionova's distribution companies market produce under the Master's Touch and
Premier Seleccion brand names. ABSA and R.B. Packing Arizona have registered
the Master's Touch name as a trademark in Mexico and the United States,
respectively. ELM has registered the Premier Seleccion name in Mexico and has
licensed rights to such name on a royalty-free basis to various of the Bionova
Subsidiaries. In addition, trademark registrations of the name "Master's
Touch" are pending in Great Britain, Ireland, Sweden, the Benelux countries
and Japan.

PROPERTIES

ABSA owns approximately 1,822 acres of agricultural land in Sinaloa and
approximately 813 acres in Sonora. ABSA leases approximately 1,564 acres of
land in Sinaloa.

Interfruver leases office and warehouse space in Jalisco. Members of the
Interfruver Group also lease warehouse space in Mexico City, Sinaloa, Sonora,
Chihuahua and Nuevo Leon.

R.B. Packing Arizona and Batiz and Sons, Inc. own warehouse and office space
in Nogales, Arizona. The other subsidiaries of IPHC lease office and warehouse
space.

58
<PAGE>

EMPLOYEES

Bionova and the Bionova Subsidiaries (other than ABSA) have a total of 284
employees.

ABSA has no employees. Copropriedad Agricola Batiz Hermanos, a Mexican
entity that is controlled by the Batiz Family but is not one of the Bionova
Subsidiaries ("CABH") provides services to ABSA pursuant to a contractual
agreement. CABH provides services to ABSA and ABSA pays a fee to CABH based on
CABH's costs incurred in connection with providing such services. The number
of persons providing such services to ABSA ranges from a minimum of 200 to a
maximum during the harvesting season (January-April) of approximately 9,500.
See "Principal Stockholders and Management of Bionova--Certain Relationships
and Related Transactions."

POTENTIAL TRADE RESTRAINTS ON TOMATOES AND OTHER FRESH VEGETABLES

Bionova, through the Bionova Subsidiaries, currently imports approximately
$52 million of fresh or chilled tomatoes annually into the United States from
Mexico. Of this amount, approximately 32% enter the United States during the
winter marketing season from November 15 through the last day of February.
Bionova is aware of efforts by certain U.S. producers, mainly in the State of
Florida, to convince the U.S. Government to restrict further the importation
of Mexican tomatoes and other fresh vegetables, particularly during the winter
period.

Imports of tomatoes during the winter period are currently affected by a
tariff-rate quota under the terms of the North American Free Trade Agreement.
A tariff-rate quota is a trade restriction by which one tariff rate is applied
to imports under a set value or volume and another, higher tariff rate is
applied to imports over the quota amount. In the case of tomatoes, imports
from Mexico subject to the quota increase every year, beginning with
172,300,000 kg. in 1994-95 and ending with 218,264,000 kg. in 2002-2003.
Thereafter, the quantitative restriction shall cease to apply to fresh or
chilled tomatoes. The tariff rate applicable to imports under the quota is
currently 2.3 cents per kilogram while the rate applicable to imports in
excess of the quota is 3.1 cents per kilogram.

During the second half of 1995 and in 1996, the United States producers of
winter tomatoes in Florida complained to the Clinton Administration, to
representatives in the U.S. Congress and to representatives in the state
government of Florida, about an increase in the level of imports of tomatoes
from Mexico, particularly during the winter marketing periods (November
through February), and expressed their fears about rising levels of imports.
The U.S. Trade Representative took two actions: (i) he initiated consultations
with the government of Mexico on possible ways to address the concerns of the
U.S. producers and (ii) he published a request for comments in the Federal
Register on a proposal to change the allocation period of the quotas on
Mexican tomatoes from a seasonal to a weekly basis. This proposal elicited
favorable comments from the U.S. tomato producers and opposing comments from
producers of other crops who felt their exports might be affected by
countermeasures taken by foreign governments whose exports to the United
States were disadvantaged.

To date, the U.S. Trade Representative has not announced any results or
decisions stemming from the two initiatives. If the proposal to alter the
basis for the quota allocation is adopted by the Clinton Administration, it
could adversely affect the imports of tomatoes by the Bionova Subsidiaries
into the United States by subjecting some imports to the higher over-quota
rate. The Mexican tomato industry estimates that approximately 60% of its
exports to the United States of winter tomatoes could be subject to the over-
quota rate. At current levels of business done by the Bionova Subsidiaries,
and based on a tariff differential of 0.8 cents per kilogram between the
under-quota and over-quota rates, this would mean an additional financial
burden of approximately $150,000 annually, some or all of which may be passed
on to consumers.

On March 29, 1996, the Florida Tomato Growers Exchange, the Florida Fruit
and Vegetable Association, the Florida Farm Bureau Federation, the South
Carolina Tomato Association, Inc., the Gadsden County Tomato Growers
Association, Inc., the Accomack County Farm Bureau and the Florida Tomato
Exchange filed a petition before the United States Department of Commerce,
International Trade Administration and the U.S. International Trade Commission
(the "ITC") requesting the imposition of antidumping duties on imports of
fresh tomatoes

59
<PAGE>

from Mexico. The Department of Commerce accepted the petition and initiated
its investigation in April 1996. The ITC by voting in the affirmative with
regard to the preliminary decision of the existence of injury to the U.S.
tomato industry, also accepted the petition in May 1996. Therefore, the
Department of Commerce will continue its investigation to determine whether
fresh tomatoes from Mexico are being sold in the United States at less than
fair market prices, and the ITC will investigate whether such imports are
materially injuring the U.S. industry. If both investigations result in
affirmative findings, an antidumping duty will be assessed equal to the
difference between the U.S. price and either the "constructed value" (cost of
materials and production plus profit) of the tomatoes or the home market
price. The case could be dismissed following a negative finding by either
agency. If both agencies make final affirmative findings, the case will
normally be concluded in 280 days. The Bionova Subsidiaries, through ABSA,
export tomatoes to the United States and, therefore, have an interest in this
case. The effect on ABSA of an unfavorable decision in this case cannot be
predicted at this time.

In 1995, the ITC rejected a claim brought under section 202 of the Trade Act
of 1974 relating to Mexican tomatoes and earlier this year the ITC rejected an
expanded section 202 claim that alleged that increases in imports of Mexican
tomatoes and bell peppers resulted in injury to the U.S. vegetable industry.
Bionova is aware that United States Senator Bob Graham (D-Fla.) has proposed
legislation (SR1463) which would make it easier in the future for producers of
perishable products to obtain import relief under section 202 by amending the
definition of domestic industry to encompass the producers of a seasonal crop
as constituting the entire domestic industry for purposes of determining
whether imports have caused injury. The Senate passed the Graham bill on
January 26, 1996, but the House Ways and Means Committee postponed action to
allow further discussion on the issue. Representative Clay Shaw (R-Fla.) has
introduced similar legislation in the United States House of Representatives,
which is under consideration along with the Graham bill by the House Ways and
Means Committee. During the comment period, the Committee received supporting
statements from numerous Florida organizations and dissenting statements from
16 different foreign governments and a diversified group of American
organizations representing producers of vegetables, fruits, meats and dairy
products. In view of the controversial nature of the measure, it is not
possible to predict whether or not it will be enacted, nor is it possible to
predict whether a subsequent case filed against imported tomatoes would be
successful and if so whether there would be significant impact on the imports
of the Bionova Subsidiaries to the United States of this or any other product.

Senator Graham has also introduced a bill (SR1462) that would change the
packaging and labelling requirements for imported tomatoes. This bill, if
enacted, could raise marginally the costs of the Bionova Subsidiaries'
products imported into the United States. It would not be expected to have a
significant impact on Bionova.

LEGAL PROCEEDINGS

R.B. Packing Arizona is currently undergoing an audit by the IRS for 1991
and 1992. The IRS has asserted that the sales commission charged to ABSA is
unreasonable. R.B. Packing Arizona believes that the sales commissions charged
between related parties is reasonable and supportable; however, the ultimate
outcome of this matter cannot be determined at this time.

In addition to the foregoing, from time to time the Bionova Subsidiaries are
involved in various legal actions that arise in the ordinary course of their
business. Any such legal actions are not expected, individually or in the
aggregate, to have a material adverse effect on the Bionova Subsidiaries'
financial condition or results of operations.

60
<PAGE>

SELECTED COMBINED HISTORICAL FINANCIAL DATA OF THE BIONOVA SUBSIDIARIES

The selected financial data set forth below for, and as of the end of, each
of the years in the three-year period ended December 31, 1995 and the three-
month periods ended March 31, 1996 and 1995 are derived from the combined
financial statements and related notes of the Bionova Subsidiaries. The
combined financial statements and related notes as of December 31, 1995 and
1994 and for each of the years in the three-year period ended December 31,
1995 are included elsewhere in this Proxy Statement/Prospectus, and the
selected combined financial information set forth below should be read in
conjunction with such combined financial statements and notes. The selected
combined historical financial data of the Bionova Subsidiaries includes
financial data for ABSA, IPHC, and Interfruver as from their date of
acquisition. Financial data for the predecessor companies prior to their
acquisition by Bionova Mexico is not included because management has concluded
that the information is not reliable.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
-------------------- --------------------------------------------
1996 1995 1995 1994 1993
--------- --------- -------------- ------------- -------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Total revenues........ $ 51,359 $ 52,873 $ 197,586 $ 64,112 $ 164
Cost of Sales......... (40,622) (42,747) (162,290) (59,044) (3,802)
Selling and adminis-
trative.............. (6,903) (6,535) (29,183) (16,225) (915)
Operating income
(loss)............... 3,699 3,456 5,575 (11,561) (4,957)
Interest expense,
net.................. (1,148) (551) (4,940) (1,254) 404
Exchange loss, net.... (1,268) (1,034) (4,748) (1,473) (7)
Income (loss) before
income taxes......... 1,283 1,871 (4,113) (14,288) (4,560)
(Provision) benefit
for income taxes..... (1,093) (1,813) (2,320) 1,842 513
Minority interests.... (154) (213) 3,049 5,673 1,770
Combined net income
(loss)............... 36 (155) (3,384) (6,773) (2,277)
Combined net income
(loss) per common
share (1)............
Weighted average
number of common
shares outstanding
(1)..................
</TABLE>

<TABLE>
<CAPTION>
AT DECEMBER 31,
AT MARCH 31, -----------------------
1996 1995 1994 1993
------------ ------- ------- -------
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents............... 3,328 $ 1,580 $ 2,540 $ 4,079
Accounts and notes receivable, net...... 40,277 33,333 22,649 3,246
Inventories............................. 10,829 14,730 10,450 10,758
Total current assets.................... 54,541 49,785 35,761 18,661
Total assets............................ 93,380 89,126 71,682 45,428
Bank loans and current portion of long-
term debt.............................. 33,146 33,103 27,977 3,590
Total current liabilities............... 58,634 54,823 40,922 7,371
Long-term debt and payables............. 10,618 10,515 2,223 1,485
Stockholder's equity.................... 15,221 15,185 17,839 22,083
</TABLE>
- --------
(1) Comparative per share information is not presented because the information
is not meaningful.

61
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS OF THE BIONOVA SUBSIDIARIES

The following discussion should be read in conjunction with the selected
financial information of the Bionova Subsidiaries and the financial statements
of Bionova and the Bionova Subsidiaries and related notes included elsewhere
in this Proxy Statement/Prospectus.

BUSINESS OVERVIEW

The Bionova Subsidiaries engage in the production, distribution and sale of
fresh produce to wholesalers and retailers. In July 1996, Bionova Mexico
transferred ownership of the Bionova Subsidiaries to Bionova, which was formed
in January 1996 and is beneficially owned by ELM. The business strategy of the
Bionova Subsidiaries continues to be (i) vertical integration within the
produce/agronomics industry, (ii) growth by acquisition of complementary
businesses and (iii) aggressive growth of the businesses acquired. From 1993
to 1995, Bionova Mexico and the Bionova Subsidiaries acquired various
businesses in Mexico and the United States to implement this business
strategy.

Bionova Mexico first entered the fresh produce industry in February 1993 by
acquiring a controlling interest in ABSA. In 1995, total revenues of the
Bionova Subsidiaries reached nearly $198 million and combined income from
operations was achieved for the first time ($5.6 million or 2.8% of total
revenues). This very rapid growth has been achieved via acquisitions,
expansion of distribution and sales reach into the United States and Canada
through "partnered" startups with co-owner/management and the aggressive
effort to build branded produce sales through these distribution and sales
businesses. See "Business of Bionova."

Several critical factors allowed the Bionova Subsidiaries to achieve
positive operating income in 1995. First, the sharp decline in the Mexican
peso/U.S. dollar exchange rate has made Mexican fruits and vegetables far more
cost competitive in the United States, leading to a rapid acceleration in
imports of these products from Mexico into the United States. Second, the
Bionova Subsidiaries substantially increased the volume of fruits and
vegetables available for sale by developing joint venture relationships with
growers. Finally, sales were expanded through the new distribution outlets
resulting from acquisitions and startups of the distribution and sales
companies that make up IPHC and through the acquisition of Interfruver. All
three of these factors contributed to the significant increase in sales year-
on-year, which resulted in a marked improvement in gross margin and a
reduction of selling, general and administrative expenses as a percentage of
total revenues. For the three months ended March 31, 1996, the Bionova
Subsidiaries essentially broke even; on combined revenues of $51.4 million,
they recognized income before taxes of $1.3 million and net income of $.04
million. In 1995, the Bionova Subsidiaries generated positive operating income
for the first time; on combined revenues of $197.6 million, they recognized
$5.6 million in operating income, but incurred a pre-tax loss of $4.1 million
and a net loss of $3.4 million. In 1994, the Bionova Subsidiaries incurred an
operating loss of $11.6 million and a net loss of $6.8 million on total
revenues of $64.1 million.

BUSINESS ENVIRONMENT AND RISKS

As a multinational business operating in Mexico, Canada and the United
States, the Bionova Subsidiaries face multiple business risks including
inherent industry and financial risks as well as international economic and
political risks. Products sold by the Bionova Subsidiaries are either grown by
them, grown under production association agreements and distribution
arrangements with independent growers or purchased from independent producers.
A significant portion of the product sold by the Bionova Subsidiaries in 1995
was produced by the Bionova Subsidiaries or other growers operating in Mexico.

A risk inherent in the agriculture industry is the possibility of crop
failures or depressed yields as a result of adverse weather conditions, market
conditions or other reasons; such events may result in an adverse economic
impact to the Bionova Subsidiaries, as occurred in 1993. One of the ways the
Bionova Subsidiaries have

62
<PAGE>

attempted to mitigate this potential adverse impact is by forming joint
ventures with independent growers to share the risks of loss.

It is a customary practice in the produce/agronomic industry for marketing
enterprises such as the Bionova Subsidiaries to provide working capital
financing to contract growers as a means of securing sources of supply. In
addition to financing planting and farming costs during the growing season,
the Bionova Subsidiaries provide marketing and administrative services for
their contract growers, including sales of produce and collection services for
transactions with wholesalers and retailers. The Bionova Subsidiaries recover
their advances to contract growers from the proceeds of sales of produce to
wholesalers and retailers. While they do not take title to the contract
growers' produce, the Bionova Subsidiaries assume risk of loss in the event
that accounts receivable prove to be uncollectible. In the event of adverse
collection experience, the Bionova Subsidiaries' ability to recover in full
their advances to contract growers may be adversely impacted. The Bionova
Subsidiaries have attempted to mitigate this risk by obtaining security and
collateral agreements from Mexican contract growers, monitoring this exposure
and providing reserves when there appears to be a reasonable probability the
advances are not likely to be collected. Historically, the Bionova
Subsidiaries have not experienced significant bad debt expense arising from
sales to wholesalers and retailers. In 1993 and 1995, the Bionova Subsidiaries
determined that recoverability of several advances to growers was uncertain
and provided reserves to offset the estimated exposure.

To the extent not financed by internally-generated funds, the Bionova
Subsidiaries will depend on obtaining credit facilities from financial
institutions to continue to finance growers in order to assure a continuing
supply of produce or to pursue acquisitions. At December 31, 1995, the Bionova
Subsidiaries had credit facilities in the amount of $36.6 million of which
$31.3 million was outstanding. In addition, during the three-year period
immediately following the Closing Date, ELM has agreed to provide when
requested by Bionova a guarantee of up to $20 million of Bionova's
indebtedness to a financial institution under a loan or line of credit, based
on certain levels of accounts receivable and inventories.

As a multinational business, the Bionova Subsidiaries may experience
significant fluctuations in profitability as a result of fluctuations in
foreign currency exchange rates, interest rate volatility and changes in
import/export or other regulations and tariff rates. Political actions and
economic events such as the rapid devaluation of the Mexican peso in December
1994 may significantly impact, positively or negatively, operating results.
The Bionova Subsidiaries currently do not hedge their foreign currency,
interest rate or commodity price risks.

Historically, the Bionova Subsidiaries' operations are seasonal in nature.
Farming operations of both the Bionova Subsidiaries and most contract growers
generally yield only one crop per season. Planting usually begins in the
September to December time period, followed by cultivation until harvesting.
In 1995, approximately 60% of the Bionova Subsidiaries' net sales occurred in
the January-to-June time period and a majority of its income before income
taxes was earned in that time period. The Bionova Subsidiaries have begun
expanding distribution activities to increase sales in the May-to-December
time period by expanding geographically and developing other programs.

RESULTS OF OPERATIONS

The following table provides selected financial data of the Bionova
Subsidiaries as percentages of net sales for the years ended December 31, 1994
and 1995, and the quarters ended March 31, 1996 and 1995. Data for 1993 are
not provided due to the minimal amount of sales during the year.

63
<PAGE>

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
DECEMBER 31, MARCH 31,
-------------- --------------
1995 1994 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Total revenues.................................. 100.0% 100.0% 100.0% 100.0%
Cost of sales................................... (82.1) (92.1) (79.1) (80.8)
------ ------ ------ ------
Gross profit.................................... 17.9 7.9 20.9 19.2
Selling, general and administrative............. (14.7) (25.3) (13.4) (12.4)
Amortization of goodwill........................ (0.3) (0.6) (0.3) (0.3)
------ ------ ------ ------
Operating income (expense)...................... 2.9 (18.0) 7.2 6.5
Interest expense................................ (4.3) (3.4) (3.2) (2.2)
Interest income................................. 1.7 1.4 1.0 1.2
Exchange loss, net.............................. (2.4) (2.3) (2.5) (2.0)
------ ------ ------ ------
Income (loss) before income taxes............... (2.1) (22.3) 2.5 3.5
Income tax (expense) benefit.................... (1.2) 2.9 (2.1) (3.4)
------ ------ ------ ------
Net loss before minority interest............... (3.3) (19.4) 0.4 0.1
Minority interest............................... 1.5 8.8 (0.3) (0.4)
------ ------ ------ ------
Combined net income (loss)...................... (1.8) (10.6) 0.1 (0.3)
====== ====== ====== ======
</TABLE>

Three Months ended March 31, 1996 Compared to Three Months ended March 31,
1995

Net sales for the quarter ended March 31, 1996 declined $170 (.03%) from the
comparable period in 1995, reflecting the effects of increased volumes sold
(+7.8% for boxes shipped) but at a lower average realized price (-9.2%). The
increase in volume in 1996 over 1995 resulted from the Bionova Subsidiaries'
efforts to increase production acreage and distribution of independent
growers' products. The decrease in average realized prices reflected general
supply and product availability conditions that existed during most of the
first quarter of 1996.

Gross profit margins increased from 16.5% of net sales in the 1995 quarter
to 20.4% in the 1996 quarter, reflecting the joint effects of a better mix of
sales and lower growing costs. Profit margins realized in production improved
as a result of a relatively stronger dollar against the peso and an increase
in acreage under cultivation.

Selling and administrative expenses increased $368 (5.6%) from the same
quarter in 1995. This increase was due to higher selling and distribution
costs of Premier Canada, consistent with its growth of operations, and the
impact of the high level of inflation in Mexico in 1995 on the personnel,
selling, and distribution costs of Interfruver, the Mexican distributing
company acquired in the first quarter of 1995.

Other income declined $1,344 (80.2%) from the year earlier due largely to
the Bionova Subsidiaries' decisions to selectively discontinue contracting
with specific growers in certain regions of Mexico. Other income includes
sales by the Bionova subsidiaries of fertilizers, other production supplies,
and management services to contract growers. Some of the discontinued growers
were large buyers of these products and services in 1995, who chose not to buy
in 1996.

Interest expense increased $498 (42.9%) due to an increase in borrowings to
finance the growth in the business. Average total borrowings outstanding for
the quarter ended March 31, 1996 increased approximately $9,000 over
comparable 1995 levels. Interest income for the quarter ended March 31, 1996
declined $99 (16.3%) from the 1995 level due to lower interest rates in Mexico
in the 1996 quarter compared to 1995.

The exchange loss increased $234 (22.6%) in the 1996 quarter compared to the
1995 quarter because the value of the peso relative to the dollar declined
during the last two months of the first quarter of 1996 when the Mexican-based
companies held higher levels of peso denominated assets.

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The provision for income taxes declined $720 (39.7%) for the quarter ended
March 31, 1996, consistent with the decrease in income before income taxes of
31.4%.

Year ended December 31, 1995 compared to year ended December 31, 1994

Total revenues during 1995 increased 201% to $197.6 million from $64.1
million in 1994. The increase reflects the effect of the startup of Premier
Canada (1995 sales of $16.9 million), the acquisition of the R.B. Packing
Group by IPHC (1995 sales of $90.8 million) in December 1994 and the
acquisition of Interfruver by ABSA in January 1995 (1995 sales of $48.8
million). ABSA's sales in 1994 amounted to $27.0 million, including $20.9
million of sales to the R.B. Packing Group prior to its acquisition by IPHC.
ABSA's sales in 1995 amounted to $36.8 million, of which $30.9 million
represented intercompany sales (eliminated in consolidation) due in part to
inclusion of the R.B. Packing Group by IPHC. Other income increased from $0.4
million in 1994 to $5.9 million in 1995. Included in other income is the
income from the sale of materials (seeds, fertilizer, etc.) to contract
growers, net of costs. During 1995, the number of acres that ABSA cultivated
through association agreements increased to 14,326 acres from 3,201 acres in
1994. While sales increased 201%, cost of sales increased only 175%; gross
profit as a percentage of total revenues increased from 7.9% in 1994 to 17.9%
in 1995 reflecting the effects of higher average sales prices, sales volumes
and harvest yields.

Selling and administrative expenses increased 80% to $29.2 million from
$16.2 million in 1994 but decreased as a percentage of sales from 25.3% in
1994 to 14.7% in 1995 reflecting higher sales volumes in 1995.

The non-cash charge for amortization of goodwill increased in 1995 due to
the acquisition of IPHC in December 1994 and Interfruver in January 1995.

Interest expense increased from $2.2 million in 1994 to $8.4 million in 1995
reflecting the higher average levels of borrowing outstanding during the year
and the higher average cost of borrowing during 1995 (16.4%) as compared to
1994 (12.1%). The increased borrowings were required to fund the higher
working capital requirements associated with the greatly expanding sales
activities and advances provided to growers. Interest income increased from
$0.9 million in 1994 to $3.5 million in 1995 reflecting the increased level of
financing provided to growers and higher interest rates in Mexico during 1995.
Exchange losses relate primarily to the significant effects of the devaluation
of the Mexican peso on the net peso monetary position of ABSA, whose
functional currency is the U.S. dollar.

Income tax expense increased to $2.3 million in 1995 from a benefit of $1.8
million in 1994 due to income tax payable by IPHC's subsidiaries and the
effects of the devaluation of the Mexican peso, which reduced the effect of
future tax benefits from net operating loss carryforwards in the Mexican
subsidiaries.

Year ended December 31, 1994 compared to year ended December 31, 1993

Net sales during 1994 increased to $63.7 million from minimal sales of $0.2
million in 1993. The increase reflects the first full year of operations of
the Bionova Subsidiaries. Cost of sales increased to $59.0 million from $3.8
million in 1993. Selling and administrative expenses increased to $16.2
million from $0.9 million in 1993. In 1993, cost of sales included $3.6
million of advances to a grower related to a minority stockholder which were
not collected due to a crop failure.

Interest expense increased from $0.2 million in 1993 to $2.2 million in 1994
reflecting the higher average levels of borrowing outstanding during the year
offset by the lower average cost of borrowing during 1994 (12.1%) as compared
to 1993 (13.1%). Interest income increased from $0.6 million in 1993 to $0.9
million in 1994 reflecting the increased level of financing provided to
growers during 1994.

Exchange losses related primarily to the effects of the devaluation of the
Mexican peso on the net peso monetary position of ABSA, whose functional
currency is the U.S. dollar.

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<PAGE>

Income tax benefit increased to $1.8 million in 1994 from $0.5 million in
1993 due to the recognition of the estimated future tax benefits from net
operating losses generated during 1994.

CAPITAL EXPENDITURES

Capital expenditures during 1993, 1994 and 1995 were $11.6 million, $6.1
million and $4.4 million, respectively, reflecting the initial investment
required to acquire and develop the Bionova Subsidiaries' owned and leased
acreage in Mexico. The Bionova Subsidiaries do not anticipate any significant
capital expenditures over the next 12 months.

ACQUISITION

As discussed under "Business of Bionova--Potential Acquisition," ELM is
negotiating the possible acquisition of 51% of Rijnhout Food Group B.V. If
this acquisition is consummated and effected through IPHC, IPHC would pay
approximately $1.5 million at the time of the acquisition. Additionally, IPHC
could be required to pay up to $.5 million per year for the next four years
depending on the financial performance of the acquired company.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used in operating activities by the Bionova Subsidiaries during the
years 1995, 1994, and 1993 was $10.0 million, $19.7 million, and $13.8
million, respectively. The two primary factors that affected this component of
the cash flows statement over these three years were the net losses incurred,
including minority interests ($6.4 million, $12.4 million, and $4.0 million)
and the significant increases in accounts receivable and advances to growers
resulting from the sizable growth in the business ($10.7 million, $12.0
million, and $10.8 million). Partially mitigating these cash uses were non-
cash depreciation and amortization charges and increases in accounts payable.

During the quarter ended March 31, 1996, net cash provided by operating
activities was $3.2 million reflecting the Bionova Subsidiaries' net earnings
during the quarter, improved working capital position and the effect of non
cash adjustments relating to depreciation, amortization and deferred income
taxes. The Bionova Subsidiaries' working capital position improved by $1.1
million, deferred income taxes increased by $1.1 million, and non-cash
depreciation and amortization charges contributed $.9 million.

The major components of the working capital change during the first quarter
of 1996 were as follows. Accounts receivable at March 31, 1996 increased $6.9
million from December 31, 1995 reflecting normal seasonal increases in sales
and marketing during high production periods. Inventories decreased by $3.9
million from December 31, 1995 levels, which is consistent with the winding
down of the prime selling season (December through April). Payables to growers
increased $10.1 million at March 31, 1996, which is consistent with normal
seasonal trends, but even larger at the 1996 first quarter-end due to the
higher sales resulting from higher produce prices experienced during the last
two weeks of the quarter. Accounts payable and accrued liabilities decreased
$5.0 million from December 31, 1995 levels, in part because packaging for
spring production is typically purchased in advance of the peak selling
period.

In addition to the capital expenditures discussed above, investment
requirements reflected in the cash flows include the Bionova Subsidiaries'
acquisition of controlling interests in Premier Canada and IPHC in 1994 and
Interfruver in 1995. Net of the cash acquired, these investments in 1994 and
1995 amounted to $.9 million and $2.0 million in 1994 and 1995, respectively.
See Note 3 of the Bionova Subsidiaries' combined financial statements for an
expanded discussion of these acquisitions.

Initial financing for the operations of the Bionova Subsidiaries was
obtained from Bionova Mexico (via capital contributions from ELM) which
provided $24.4 million, $2.6 million and $0.9 million in 1993, 1994 and 1995,
respectively, to support the acquisitions of the Bionova Subsidiaries and
startups of the new distribution companies. Minority stockholders contributed
$0.4 million and $0.9 million to the Bionova Subsidiaries in 1994

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and 1995, respectively. While the stockholders have provided capital for
acquisitions, working capital has been provided primarily from short term bank
and other loans, which at December 31, 1995 amounted to $32.5 million. The
Bionova Subsidiaries have various lines of credits (all denominated in U.S.
dollars) amounting to $36.6 million, of which $31.3 million was outstanding at
December 31, 1995.

As of December 31, 1995 and 1994, the Bionova Subsidiaries reflected a
negative working capital position of $5.0 and $5.1 million, respectively.
These positions were due to the seasonality of their growing and sales
activities, the financing required to fund the expansion strategy and amounts
advanced to growers.

During the quarter ended March 31, 1996, the working capital deficit of the
Bionova Subsidiaries declined to $1.3 million. If and when the Merger is
consummated, ELM has agreed to make or cause to be made an additional $8
million capital contribution in part, to address the current working capital
deficit and to enhance the overall equity position of the new company going
forward.

The Bionova Subsidiaries believe that their existing cash, the additional
cash being contributed by ELM, available borrowing capacity, and funds from
operations will be sufficient to meet their operating and capital expenditure
requirements for at least the next twelve months, but may not be sufficient to
permit Bionova to pursue its proposed business strategies to achieve
significant organic growth or to acquire additional producers, distributors or
marketers and related businesses.

Preliminary Second Quarter Results

Bionova's results of operations for the quarter ended June 30, 1996 are
still being finalized. Preliminary figures indicate that sales revenues for
the second quarter of 1996 will be lower than the comparable quarter in 1995,
but higher than the quarter ended March 31, 1996. The sales decline versus the
prior year quarter will result primarily from a decline in contracted growing
acreage. Preliminary figures also show operating income for the quarter ended
June 30, 1996 will be significantly lower than both the quarter ended March
31, 1996 and the quarter ended June 30, 1995. This decrease will be due
primarily to higher production and distribution costs resulting from higher
unit volumes and the effect of the high level of inflation in Mexico over the
past year. A net loss is anticipated for the quarter ended June 30, 1996.

Post-Merger Liquidity

If the Merger is consummated it is expected that Bionova will benefit from
the remaining portion of funds obtained by DNAP under the Loan Agreement ($5
million loaned on January 26, 1996, and $5 million loaned on July 1, 1996),
the $8 million cash contribution to Bionova to be made at Closing, funding to
be provided under the Long Term Funded Research Agreement, and ELM's agreement
to provide a guarantee of certain DNAP indebtedness. Bionova will also attempt
to refinance its bank loans. See "Risk Factors--Possible Need for Additional
Financing" and "The Merger Agreement and Related Agreements--The Loan
Agreement."

BUSINESS OF DNAP

SUMMARY

DNAP was incorporated in Delaware in 1981 and is an agribusiness
biotechnology company focused on the development and application of genetic
engineering and transformation technologies in plants, as well as development
and marketing of premium, differentiated, fresh and processed, branded fruits
and vegetables. DNAP uses advanced breeding, genetic engineering, and other
biotechniques to achieve improvements in the taste, texture, product form,
color, and shelf life of produce and to improve production characteristics,
such as disease resistance and production or processing yields. DNAP, through
its FreshWorld subsidiary, is engaged in the production and marketing of
branded, premium fruits and vegetables. It currently is marketing its first
generation of products developed through advanced biotechnological techniques
to supermarkets and institutions. DNAP is developing its second generation
products using genetic engineering.

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DNAP's business strategy is to use its technology to develop and market what
it believes are superior, differentiated products. In the near term, DNAP
intends to focus its financial, technological, and marketing resources on
fresh fruits and vegetables. Over the longer term, DNAP believes that its
technology will also have important applications in processed and frozen
fruits and vegetables.

DNAP's strategy in the fresh produce area is to focus its research and
development efforts on products which meet identified consumer needs not
satisfied by existing products. DNAP will seek to deliver consistently
superior products, thereby building brand name awareness, which DNAP believes
will enable it to sell its products at premium prices. Because it perceives
public dissatisfaction with the quality of tomatoes generally available in
supermarkets, DNAP is initially concentrating on marketing its FreshWorld
Farms tomato. DNAP believes that the success of this product will help to
establish consumer awareness of, and demand for, its other products.

In bringing its products to market, DNAP intends to utilize the existing
fresh produce infrastructure, including growers, packers, repackers and
established sales and distribution channels, thereby minimizing DNAP's capital
needs and enabling DNAP to benefit from the business relationships, experience
and expertise of the participants in this industry.

PRODUCTS

DNAP is currently marketing products it developed through advanced
biotechnological techniques to supermarkets and food service outlets. The
products, which are marketed under the FreshWorld Farms or VegiSnax brand
name, are:

<TABLE>
<CAPTION>
PLANT PREMIUM BRANDED PRODUCT CURRENT CUSTOMERS
----- ----------------------- -----------------
<S> <C> <C>
Tomato FreshWorld Farms Tomatoes Distributors and supermarket
chains in the mid-Atlantic,
Northeast and Midwest regions
and Canada
Cherry Tomato FreshWorld Farms Cherry Tomatoes Distributors and supermarket
chains in the mid-Atlantic,
Northeast and Midwest regions
and Canada
Carrot FreshWorld Farms Carrots, Carrot Select supermarkets in numerous
Bites and Cello Carrots states
Pepper FreshWorld Farms Mini-Peppers Distributors in several states
</TABLE>

The FreshWorld Farms tomato developed by DNAP is a full-size tomato with a
deep red color, hearty texture, and a shelf life of 10 to 14 days. This
compares to a three to seven day shelf life for most vine-ripened tomatoes.

The FreshWorld Farms cherry tomato is a proprietary hybrid with a deep red
color, sweet flavor and an extended shelf life of up to fifteen days.

FreshWorld is currently selling carrot bites and cello carrots under its
label, which are sourced through a co-packing arrangement with an industry
leader in the carrot business.

Another product on the market is the FreshWorld Farms sweet mini-pepper,
which has a novel sweet taste, deep red color, and a low number of seeds. This
new variety of pepper was developed through anther culture, an advanced
breeding technique that captures and genetically stabilizes preferred
characteristics such as taste, texture and low seed count.

DNAP is using genetic engineering to develop its second generation of
products. Plant genetic engineering involves either the suppression of
specific genes, for example those that control ripening, or the over-
expression of certain genes controlling characteristics such as sweetness. One
of DNAP's most significant technological

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developments in this area is its Transwitch gene suppression technology. DNAP
has received three issued United States patents and has made additional
pending filings directed to Transwitch technology. Using Transwitch
technology, DNAP has grown tomatoes with a shelf life of up to 90 days in the
laboratory, while preserving desirable characteristics such as taste, color
and texture. DNAP has received approval from the U.S. Department of
Agriculture (the "USDA") and the Food and Drug Administration (the "FDA") to
grow and ship initial varieties of its second generation tomatoes anywhere in
the United States. DNAP has also received the requisite government approvals
in Canada. In the first half of 1995, DNAP conducted a test market of delayed
ripening tomatoes developed by using the Transwitch gene suppression
technology to switch off the ACC synthase gene. These tomatoes were sold under
the Endless Summer tomato brand name and labeled as "farm grown from
genetically-modified seed." The market test demonstrated that there was
consumer acceptance of these genetically-modified fresh market tomatoes and
validated the use of this technology for extending tomato shelf life both on
the vine and after harvest. After the test market was completed, sales of
Endless Summer tomatoes were suspended according to the terms of a settlement
agreement with Monsanto Company which related to patents covering a particular
promoter and a particular marker gene. DNAP has developed alternative genetic
engineering approaches, based on proprietary promoters and licensed marker
genes, for the suppression of ACC synthase in tomatoes. Current plans call for
this second generation ACC synthase suppressed tomato to be marketed under the
Endless Summer brand name. Other second generation products being developed by
DNAP through plant genetic engineering include cherry tomatoes, snap peas,
peppers, bananas, pineapples and strawberries.

Other products under development using plant genetic engineering are
described below:

<TABLE>
<CAPTION>
PLANT TECHNOLOGY TARGETED BENEFIT
----- ---------- ----------------
<S> <C> <C>
Cherry Transwitch technology to suppress Extended shelf life of up to
Tomato a gene responsible for ripening three months; facilitates
harvesting.
Snap Pea Transwitch technology to suppress Improved taste compared to
a gene responsible for the existing types; pea remains
conversion of sugar to starch sweeter for a longer time.
Increased yield.
Pepper Transwitch technology to suppress Extended shelf life compared to
a gene responsible for softening existing types; peppers remain
firmer for a longer time after
harvest.
Banana and Transwitch technology to suppress Extended shelf life compared to
Pineapple a gene responsible for rotting existing types.
Strawberry Addition of genes to regulate Improved texture compared to
freezing tolerance existing types; fruit remains
firm after freeze-thaw cycle.
</TABLE>

Some of DNAP's work in fruit crops is being supported by corporate and
government grants, including contracts with Alida Marine, Inc. for pineapple,
Zeneca PLC for bananas and United Agricorp, Inc. ("UAC") for strawberries.

RESEARCH AND TECHNOLOGY

DNAP believes that it is a leader in the application of plant biotechnology
to develop new and improved fruit and vegetable varieties designed to appeal
to the consumer. The research team of 33 scientists (including 16 with Ph.D.
degrees) and support staff includes scientists in the fields of cell biology,
plant genetic engineering, plant genetics, biochemistry, plant breeding,
agronomy, plant pathology and food science (the science of processing and
packaging food). DNAP's scientists have published over 300 articles in peer-
reviewed scientific literature and are named inventors on more than forty
United States patents owned by DNAP or FreshWorld.

DNAP's research and product development system involves a two-track strategy
employing advanced breeding methods to develop first generation products, and
genetic engineering coupled with breeding methods

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to develop second generation products (which build on the varieties developed
from the first generation). The primary goal of the research effort is to
develop fruit and vegetable varieties which are differentiated in taste,
appearance, texture, and retention of freshness, attributes which are
attractive to the consumer. DNAP's secondary goal is to improve production
characteristics such as higher yield, disease resistance and more efficient
harvesting characteristics. Additionally, DNAP is working to develop improved
processing attributes for fruits and vegetables.

ADVANCED BIOTECHNOLOGICAL BREEDING

DNAP's scientists have pioneered the use of advanced biotechnological
breeding methods in commercial agriculture. These methods take advantage of
DNAP's ability to regenerate plants from single cells in culture. Through a
process known as somaclonal variation, regenerated plants incorporate multiple
variations that would not typically be generated by traditional breeding
methods. Somaclonal variation allows more rapid development of characteristics
such as improved taste, texture, appearance and yield. These improved
characteristics are passed on to future generations via the seed. Somaclonal
variation was used in the creation of the FreshWorld Farms tomato.

Another advanced breeding method used by DNAP's scientists is anther
culture, which captures and stabilizes preferred characteristics from two
separate varieties in a single step. Traditionally, this process takes
multiple generations of crossing between the two parental lines and their
progeny. Anther culture, in combination with plant breeding techniques, was
used to develop the small size and low seed trait of DNAP's sweet mini-pepper.
Anther culture has been used to reduce the development time for a new pepper
variety from six years to three years and to reduce the development time for a
new carrot variety from 13 years to six years.

PLANT GENETIC ENGINEERING

DNAP believes that it is a leader in plant genetic engineering which it is
using to develop its second generation of products. Genetic engineering
involves the modification of a plant's chromosomes, which are made up of DNA
segments including genes encoding plant characteristics. Genetic engineering
enables the development of new varieties by promoting specific traits in
plants such as extended freshness, enhanced sweetness and disease resistance.
The genetic engineering process requires identification of genes responsible
for certain characteristics; the expression or suppression of such genes in
plant cells using transformation technology, vector systems and gene
expression technology; the selection of successfully engineered plant cells;
and the regeneration of whole plants from the engineered plant cells. The
insertion of desired genes into plant cells can either add a desired
characteristic, such as sweetness, to the plant or, if inserted using DNAP's
proprietary Transwitch gene suppression technology, suppress an undesirable
characteristic or process, such as rotting. These technologies are described
below:

Gene identification technologies are procedures for the identification and
characterization of genes. Genes are specific sequences of DNA that control
specific plant characteristics, through the expression of certain proteins
which in turn initiate certain biological processes. For example, there are
genes that cause the expression of a certain protein that controls the
ripening process in tomatoes.

DNAP's scientists have extensive experience in chemically-based methods for
gene identification and have pioneered a method for gene identification in
plants called heterologous transposon technology. A United States patent has
been granted to DNAP for the use of certain aspects of transposon technology
to isolate genes. Transposons are genetic elements capable of moving from one
location on a plant's chromosome to another. The points at which transposons
insert themselves in the chromosome can be determined. When a transposon
inserts itself into a gene encoding a specific characteristic, it alters the
function of the host gene, causing detectable changes in the characteristic.
Tracing the location of the transposon leads to the location of the host gene
controlling the characteristic. The advantage of this proprietary gene
identification technique is that it allows scientists to associate ultimate
plant characteristics with specific genes without the need for first
developing an understanding of the intermediate operative proteins and
biological processes involved. DNAP's scientists were

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the first to successfully use this method and have used it to isolate genes
affecting acidity in plants. Acidity is one of the major determinants of
flavor in fruits. Isolated acidity genes are the subject of a United States
patent application under notice of allowance filed by DNAP. DNAP's scientists
have also used this method to isolate genes that influence sugar production in
plants and have applied this proprietary technology to identify and isolate
additional genes that are responsible for traits such as freezing and
dehydration tolerance, and sweetness and flavor regulation.

Transformation/regeneration technology is a tissue culture-based method by
which new genes are stably incorporated into selected plant cells, which are
subsequently regenerated into whole plants. DNAP believes it is a leader in
the development and use of this technology and has used it to develop
efficient systems in commercially important varieties of tomatoes, peppers,
melons, peas, strawberries, carrots, potatoes, and lettuce. FreshWorld was
granted United States patents for certain transformation/regeneration methods
in peppers and peas developed by DNAP. DNAP and Du Pont were jointly granted a
United States patent for certain transformation methods in corn developed by
DNAP.

Vector Systems are means for inserting genes into plant cells. The principal
vector system is based on Agrobacterium tumefaciens, a soil bacterium, which
as part of its natural life cycle delivers DNA to plants. DNAP has licenses
from the Max Planck Institute and others providing certain rights to this
vector system. The rights of the Max Planck Institute to a patent in this
technology is in dispute. See "Proprietary Protection."

Gene expression technology is the manipulation of gene systems to ensure
successful, timely and specific expression of introduced genes in plant cells.
DNAP has developed promoter systems for enhancing gene expression in plants
and has been issued a United States patent for certain of those promoter
systems. Other promoter systems are the subject of pending United States
patent applications filed by DNAP.

Engineered plant cell selection technologies are techniques for
distinguishing plant cells which have been successfully engineered to
incorporate the desired genetic material from cells not so engineered. The
technique involves using a marker gene conferring resistance to a phytotoxic
compound, such as an antibiotic, which is inserted into cells along with the
gene encoding the desired plant characteristic. Cells are then treated with
the phytotoxic compound, and only successfully engineered cells survive. These
cells can then be used for plant regeneration.

DNAP's scientists have developed proprietary cell selection systems for the
selection of engineered plant cells. DNAP was issued two United States patents
directed to the use of certain marker genes which confer resistance to the
antibiotic spectinomycin. DNAP also has royalty-free license rights to a
sulfonylurea-resistance gene for use as a marker gene in developing new
plants.

Transwitch gene suppression technology, one of DNAP's most significant
technological developments, is a method for switching off gene expression in
plants. DNAP has received three United States patents and a European patent
directed to methods of using this technology for suppressing plant genes. This
technology is an effective alternative to antisense technology for gene
suppression.

As more fully described herein, DNAP's scientists are using plant genetic
engineering, including its proprietary Transwitch gene suppression technology,
to enhance DNAP's existing product line of fresh fruits and vegetables and to
develop new products. For example, the shelf life of DNAP's FreshWorld Farms
tomato has been extended from 10 to 14 days to up to 90 days under laboratory
conditions by using Transwitch technology to switch off the ACC synthase gene.
This gene is responsible for the biosynthesis of ethylene, which triggers the
ripening process in tomatoes. On the basis of its experience with the ACC
synthase suppressed Endless Summer tomatoes test marketed in 1995, DNAP
believes that an ACC synthase suppressed tomato will offer considerable cost
savings in production and distribution. Transwitch technology has also been
used to turn off ethylene biosynthesis and extend shelf life to 8 to 9 weeks
in DNAP's cherry tomato varieties.

The texture of DNAP's mini-pepper is being further enhanced through the use
of Transwitch technology to inhibit the gene responsible for hemicellulase.
Hemicellulase causes the breakdown of the cell walls in peppers,

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a process which triggers softening when peppers reach their maximum sweetness.
DNAP has also used Transwitch technology to enhance and maintain the sweetness
of snap peas and thereby extend their shelf life by inhibiting the
biosynthesis of ADPG pyrophosphorylase, an enzyme which causes the conversion
of sugar to starch. By inhibiting this process, the pea's natural sweetness
can be preserved for up to 15 days after harvest as compared with one to two
days for current varieties. FreshWorld has an issued United States patent
directed to the use of the ADPG pyrophosphorylase gene in peas for sweetness
control.

DNAP is also developing tools to apply plant genetic engineering technology
to a range of additional crops, including tropical crops such as bananas and
pineapples. DNAP believes the application of its Transwitch technology and its
ripening control technology may have significant commercial applications in
controlling spoilage of these fruits during transportation. For example, by
inhibiting the production of ethylene in bananas, rotting can be delayed so
that fruits being shipped long distances will arrive in better condition with
less spoilage.

In other areas of plant genetic engineering, DNAP's scientists were the
first to demonstrate the ability to control fungal diseases affecting plants
by inserting a chitinase gene into plants. Chitinase is a naturally occurring
enzyme with anti-fungal activity. DNAP has been issued two United States
patents directed to plants transformed with chitinase genes.

PROPRIETARY PROTECTION

In order to develop and maintain its competitive position, DNAP seeks to
protect its intellectual property through patent filings in the United States
and abroad, maintenance of trade secrets and ongoing technological innovation.
DNAP and FreshWorld have over forty issued patents in the United States. DNAP
and FreshWorld have pursued proprietary protection across the spectrum of
their activities, including protection for basic tools of plant genetic
engineering and the protection of specific products.

DNAP has obtained United States patent protection for key plant genetic
engineering technologies in the areas of gene isolation through transposon
tagging; transformation/regeneration methods for pepper, pea and corn;
promoter systems; and selectable marker systems. DNAP has also established a
patent position for important gene systems developed by DNAP including two
issued United States patents directed to plants transformed with the anti-
fungal chitinase gene and pending United States patent applications for genes
involving control of sweetness, color and acidity.

One of DNAP's most significant technological developments in the area of
plant genetic engineering is its proprietary Transwitch gene suppression
technology. DNAP has received three United States patents and one European
patent directed to methods of using this technology for suppressing plant
genes. The European patent is in opposition. DNAP has made additional pending
filings in the United States and abroad directed to Transwitch technology.
Transwitch technology has the same goal (i.e., gene suppression) as antisense
technology, but uses a different methodology. In connection with the Merger
Agreement and the Loan Agreement, DNAP has assigned its rights to the
Transwitch Patents to Bionova. See "The Merger Agreement and Related
Agreements--The Loan Agreement--The Sole License Agreement and the Non-
Exclusive License Agreement."

DNAP has pursued patents and plant variety protection ("PVP") certificates
specific to certain DNAP products. DNAP has filed patent applications in the
United States claiming certain FreshWorld parent and hybrid tomato lines,
resulting in two issued U.S. patents. In addition, DNAP has pending patent
applications directed to ripening controlled tomato lines and cherry tomato
lines. DNAP also has a granted United States patent directed to the method of
somaclonal variation in tomato which was used to create the FreshWorld Farms
tomato. DNAP has been granted a United States patent covering a broad class of
low seed peppers, including the FreshWorld Farms sweet mini-pepper. DNAP
additionally has four issued United States patents directed to the method of
processing its VegiSnax carrots. PVP certificates, which are issued by the
USDA, have also been pursued for specific fruit and vegetable varieties. DNAP
was issued two PVP certificates for tomato varieties and two for pepper
varieties. FreshWorld has two pending PVP applications for watermelon
varieties developed by DNAP.

72
<PAGE>

DNAP has strengthened its proprietary position by obtaining license rights
from third parties, either to secure freedom to operate via non-exclusive
licenses or to create additional areas of exclusivity through exclusive
licenses. DNAP has obtained license rights from several third parties under
patent filings related to plant molecular biology methods. These license
rights include non-exclusive rights from Stanford University under the basic
recombinant-DNA patent filings, from the Max Planck Institute under patent
filings directed to certain methods of plant transformation using
Agrobacterium (although the rights of the Max Planck Institute to one of such
patents is in dispute), and from Mogen International N.V. under filings also
directed to certain methods of plant transformation using Agrobacterium. DNAP
also has license rights from the USDA under patent filings directed to the ACC
synthase gene. Suppression of this gene, e.g. with Transwitch technology, has
been shown by DNAP to permit control of the ripening process. DNAP's license
from the USDA is co-exclusive for tomato, and exclusive for 25 other crops
including peppers, bananas, peas, strawberries, and watermelons.

DNAP uses trade secret protection for certain innovations and technical
know-how on which new products may be based. DNAP also uses trade secret
protection for inbred parent lines of its hybrid plants. DNAP believes that
the use of hybrid seed (from which hybrid plants are grown) provides
additional protection for the FreshWorld Farms tomato, since seeds from the
tomatoes sold to consumers will not breed true. In addition, a hybrid seed
generally produces a heartier plant. In-house procedures are in place to
protect trade secrets, know-how and inbred parent plant lines.

DNAP has ongoing programs to develop patentable processes, plant varieties
and products, and these programs are monitored by DNAP's patent counsel to
insure that timely and appropriate action is taken to seek patent rights or to
maintain trade secret protection. To gain further value from its technology,
DNAP may from time to time license its technology to others, particularly in
connection with corporate collaborations or instances in which a financial or
technology return may be earned without competitive disadvantage.

GOVERNMENTAL REGULATION

The agribusiness industry saw rapid acceleration of U.S. government
approvals for genetically engineered plant products in 1995. In the past year,
the FDA concluded consultations on seven genetically engineered foods,
bringing the total number of such foods cleared for marketing to 15. In 1995,
USDA deregulated 12 genetically-engineered crop varieties and received
petitions to deregulate seven additional crops. The Environmental Protection
Agency ("EPA") registered four genetically engineered plant-pesticides for
commercial sale and distribution and received applications to register another
four products. DNAP believes these events signal maturation of the regulatory
approval processes in the U.S. and growing demand for agricultural
biotechnology products.

Regulation by federal, state and local government authorities in the United
States and foreign countries will be a factor in the future production and
marketing of DNAP's genetically-engineered plants and plant products. The
process of obtaining government approvals can be costly and time consuming,
and there can be no assurance that necessary approvals will be granted in a
timely manner, if at all. The extent of government regulation of biotechnology
that might arise from future legislative or administrative actions and the
potential consequences to DNAP are not known and cannot be predicted with
certainty.

The U.S. federal government has implemented a coordinated policy for
regulating biotechnology research and products in the United States. The USDA
has jurisdiction over specific research and pre-commercial activities
involving genetically engineered plants, in particular the growing and
interstate shipment of genetically engineered plants and plant products. The
FDA has jurisdiction over plant products that are used for human or animal
food. The EPA has jurisdiction over the field testing and commercial use of
plants genetically engineered to resist pests and diseases, so-called plant-
pesticides, as well as administering various federal environmental quality
statutes. Failure to comply with applicable regulatory requirements could
result in enforcement action, including withdrawal of marketing approval,
seizure or recall of product, injunction or criminal prosecution.

73
<PAGE>

In January 1995, DNAP received USDA approval for unrestricted production and
distribution of the initial varieties of its genetically-engineered Endless
Summer tomato. That approval closely followed successful completion in October
1994 of consultations with the FDA concerning the safety, nutrition and
composition of Endless Summer tomatoes. In 1995, DNAP also received clearances
from Agriculture and Agri-Food Canada and Health Canada to import and sell
Endless Summer tomatoes in Canada. Together, these approvals allowed DNAP to
grow and ship initial varieties of Endless Summer tomatoes anywhere in the
U.S. and Canada in the same manner as conventionally developed tomatoes. As
described above, the initial varieties of Endless Summer tomatoes cannot be
sold due to the terms of the Monsanto Settlement, however, the experience DNAP
gained from satisfying regulatory requirements for the initial ACC synthase
suppressed tomato will be helpful in obtaining regulatory approval for future
tomato varieties.

DNAP is continuing consultations with the FDA, begun in 1994, on additional
products, including delayed-ripening tomatoes containing a plant-based
selectable marker gene, sweetness-enhanced peas and peppers with improved
texture. DNAP has recently received permission from USDA to field test
genetically-engineered grape plants.

To date, DNAP, to the best of its knowledge, has successfully functioned
within the scope of applicable laws and regulations, including rules
administered by the FDA, USDA and EPA. The company believes it is in
compliance with all applicable laws and regulations pertaining to the
development and commercialization of its products. DNAP believes that its
current research and development activities and products will not be subject
to delays other than the ordinary delays associated with government review and
approvals for traditional products, when and if such review and approvals are
required. DNAP further believes that its experience in this area enables it to
deal effectively with the applicable regulatory processes.

PRODUCTION, MARKETING AND DISTRIBUTION

DNAP's current product line consists of bulk and packaged tomatoes, cherry
tomatoes, carrot bites, cello carrots, sweet mini-peppers, precut pineapples
and clementines. DNAP plans to expand its product line to include additional
fruits and vegetables.

Tomato. The United States fresh tomato market is approximately $2 billion at
wholesale. Tomatoes picked before they are ripe currently represent more than
80% of the volume of tomatoes sold in the United States. Growers harvest
tomatoes while they are unripe for several reasons: (i) immature tomatoes are
firmer, enabling them to withstand shipping and handling more successfully;
(ii) harvesting immature tomatoes is less labor-intensive and less costly than
a vine ripened harvest; and (iii) the less time the fruit stays in the field,
the less the risk of loss from weather or pests. After harvest, either the
packer or the repacker exposes green tomatoes to ethylene gas.

Consumer research has indicated that 85% of United States households consume
fresh market tomatoes during the year. Despite such widespread penetration,
consumers in a survey conducted by the USDA cite the tomato as the most
consistently disappointing vegetable. DNAP believes that a large percentage of
tomato consumers drop out of the market in the winter due to dissatisfaction
with taste and texture of available product. DNAP's market research indicates
that these consumers would be willing to pay a premium for better-tasting
tomatoes, ranging from 50% to 250% of the price of the generic product, which
currently averages about $1.00 per pound at retail. To reach these consumers,
retailers now are stocking their produce departments with a variety of
tomatoes, including cherries, Romas, hydroponically produced, imported and
yellows.

DNAP believes it can achieve market acceptance for its tomato by providing
consumers with improved quality throughout the year while maintaining premium
pricing. FreshWorld is dedicated to providing a premium tomato that offers
good taste, color and texture. These tomatoes will be sources year-round in
established growing areas and handled by the existing distribution
infrastructure. In order to reduce financial volatility and exposure,
FreshWorld has shifted its sourcing strategy from vertically integrated
contract growing to marketing

74
<PAGE>

arrangements with independent growers. FreshWorld will be selling tomato
varieties developed by DNAP as well as other commercial varieties.

DNAP's FreshWorld Farms tomatoes are sold by FreshWorld's sales force. The
tomatoes are currently sold in the mid-Atlantic, Northeast and Midwest
regions. DNAP supports its tomato sales with in-store merchandising programs
and a calendar of promotional events to build consumer awareness of the
FreshWorld Farms tomato.

Cherry Tomatoes. DNAP began commercial rollout of a cherry tomato in 1994.
They are now being sold through distributors and supermarket chains in the
mid-Atlantic, Northeast and Midwest regions. Using its advanced breeding
techniques, DNAP has developed an improved cherry tomato variety with superior
taste, longer shelf life and year-round availability compared to existing
varieties.

Carrot. The carrot products are sold by FreshWorld's sales force. As with
tomatoes, FreshWorld works with the existing produce business infrastructure
to capitalize on its expertise. FreshWorld Farms carrot bites and cello
carrots are available in select supermarkets in the Pacific Northwest and mid-
Atlantic states.

Pepper. Applying its expertise in advanced plant breeding, DNAP has
developed a proprietary sweet red mini-pepper variety as FreshWorld's first
product offering in the United States fresh pepper market. In this case,
DNAP's scientists have combined the red color and convenient size of a
jalepeno pepper with the sweet juicy taste of a bell pepper into a new low-
seed variety which is sold under the FreshWorld Farms brand. FreshWorld market
tested this product in 1992 and 1993, and in the U.S. has principally sold
this product to the food service industry.

COMPETITION

The fresh and processed fruit and vegetable product markets are highly
competitive, and DNAP will continue to be faced with intense competition from
many established fruit and vegetable growing, processing and marketing
companies with far greater financial, marketing and other resources than DNAP.
DNAP believes that it can compete successfully with companies in this market
by developing products that offer what DNAP believes are unique and desirable
attributes with superior quality. DNAP believes that the proprietary
protection of such products will create important competitive advantages for
DNAP.

There are also many companies engaged in research and product development
activities based on agricultural biotechnology. Competitors include
specialized biotechnology firms, as well as major pharmaceutical, food and
chemical companies that have biotechnology divisions, many of which have
considerably greater financial, technical, and marketing resources than DNAP.
Competition may intensify as technological developments occur at a rapid rate
in the agricultural biotechnology industry. In competing with such companies,
DNAP relies primarily on the experience of its sales, marketing and production
staff at FreshWorld, the reputations and qualifications of its scientific
staff and its technological capabilities.

EMPLOYEES AND CONSULTANTS

At July 12, 1996, DNAP employed 71 persons. DNAP also maintains
relationships with, and from time to time engages the services of, university
professors and other consultants to assist in market, product and
technological research. None of DNAP's employees are covered by a collective
bargaining agreement. All of DNAP's management and research employees have
signed confidentiality agreements and DNAP believes its relations with its
employees are good.

PROPERTIES

During the second quarter of 1994, DNAP relocated its corporate headquarters
and its product development activities from Cinnaminson, New Jersey to its
California facilities, which include offices, laboratories and greenhouse
space in Oakland and an experimental farm in Brentwood. DNAP completed the
sale of the Cinnaminson property in March 1996. The proceeds from the sale
were paid to Du Pont as part of the "Du Pont

75
<PAGE>

Transaction". During the fourth quarter, DNAP cancelled its vegetable
processing facility lease in Arvin, California. The early termination of the
lease resulted in DNAP recording a charge to operations. See Note 5 to DNAP's
Consolidated Financial Statements for more details.

These properties are more fully described below:

<TABLE>
<CAPTION>
ACRES OF LEASE
LOCATION OWNERSHIP FACILITIES LAND EXPIRATION
- -------- --------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Oakland, California..... Leased 41,000 square feet of laboratory -- 05/31/99
and office space
7,500 square feet of greenhouse
space
Brentwood, California... Leased 12,700 square feet of greenhouse 61 leased(1) 10/31/96
and and warehouse space 10 owned(1)
Owned
Eddystone, Leased -- 06/30/2000
Pennsylvania........... 2,300 square feet of office space
Salinas, California..... Leased 1,500 square feet of office space -- month to
month(2)
Bonita Springs, Leased -- 11/14/96
Florida................ 1,000 square feet of office space
</TABLE>
- --------
(1) Includes farm land for field trials
(2) DNAP intends to discontinue using this facility in July 1996 in connection
with the consolidation in Eddystone, Pennsylvania of the administrative
function of FreshWorld.

DNAP also has arrangements in various locations throughout the United States
for field evaluations of improved plant varieties which DNAP is developing.
DNAP's current facilities are not adequate for large scale growing, processing
operations or distribution. Depending on the needs for its products, DNAP
contracts for the requisite facilities with third parties.

LEGAL PROCEEDINGS

By letters dated May 3, 1996 and July 16, 1996, DNAP has been advised by a
holder of DNAP Convertible Exchangeable Preferred Stock that such holder
believes that the Merger will result in the occurrence of a "corporate change"
with respect to DNAP pursuant to Section 9 of the Certificate of Designation
for the DNAP Convertible Exchangeable Preferred Stock, thereby resulting in
special conversion privileges. Under such holder's theory, as a result of the
Merger each share of DNAP Convertible Exchangeable Preferred Stock will be
converted into the right to receive approximately 4.6 shares of Bionova Common
Stock instead of the .68375 shares of Bionova Common Stock as provided in the
Merger Agreement. Such holder has further advised DNAP that such holder has
reserved any rights which it may have as a holder of DNAP Convertible
Exchangeable Preferred Stock, whether or not the Merger is consummated.

It is DNAP's position that the special conversion privilege specified in
Section 9 of the Certificate of Designation with respect to the DNAP
Convertible Exchangeable Preferred Stock will not be triggered as a result of
the Merger. However, if this holder were to institute litigation with respect
to such issue and were to prevail therein and if Bionova were thereupon
required to issue additional shares of Bionova Common Stock to the former
holders of DNAP Convertible Exchangeable Preferred Stock, such issuance of
additional shares of Bionova Common Stock would substantially dilute the
interest of the other holders of Bionova Common Stock. If such holder or
another holder of DNAP Convertible Exchangeable Preferred Stock were
successful in such litigation, if any, a court could require other remedies,
including a cash judgment, which could materially adversely affect Bionova.

76
<PAGE>

represent (when added to the shares of [Bionova] Common Stock outstanding as
of the date of . . . [the Merger] Agreement) . . . 70% of the issued and
outstanding shares thereof as of the Effective Time of the Merger." Section
2.3 of the Merger Agreement provides that "[Bionova] Common Stock into which
DNAP Stock shall be converted pursuant to the Merger Agreement and the Merger
shall be deemed to have been issued at the Effective Time . . ." Accordingly,
if Bionova is required to issue additional shares of Bionova Common Stock to
the former holders of DNAP Convertible Exchangeable Preferred Stock, as
described above, and if such shares are deemed to have been issued at the
Effective Time pursuant to Section 2.3 of the Merger Agreement, Bionova may be
obligated to issue additional shares of Bionova Common Stock to Bionova Mexico
or its designee (including ELM), for no additional consideration, pursuant to
Section 1.11(e) of the Merger Agreement so that, after giving effect to the
issuances to the former holders of DNAP Convertible Exchangeable Preferred
Stock and to Bionova Mexico or its designee (including ELM), Bionova Mexico
and its affiliates (including ELM) will own 70% of the outstanding shares of
Bionova Common Stock. The foregoing issuances of additional shares of Bionova
Common Stock would substantially dilute the interest in Bionova of the holders
of DNAP Common Stock receiving shares of Bionova Common Stock in the Merger.

By letter dated April 22, 1996, DNAP was also notified that a holder of DNAP
Common Stock intended to commence litigation against DNAP. Such holder alleged
that DNAP had breached its contractual obligations to register under the
Securities Act by April 1, 1996 approximately 5.5 million shares of DNAP
Common Stock obtained by such holder and certain other holders in private
placement transactions with DNAP. As of the date hereof, no such litigation
has been commenced. DNAP believes such allegation is without merit and intends
to vigorously defend against any such claim which may be formally asserted in
a future lawsuit.

In addition to the foregoing, from time to time, DNAP is involved in various
legal actions that arise in the ordinary course of its business. Such legal
actions are not expected, individually or in the aggregate, to have a material
adverse effect on DNAP's financial condition or results of operations.

MARKET PRICES OF DNAP COMMON STOCK AND RELATED MATTERS

The DNAP Common Stock is listed for trading on the Nasdaq National Market
under the symbol "DNAP." The following table sets forth for each period
indicated the high and low last sale prices for the DNAP Common Stock as
reported on the Nasdaq National Market.

<TABLE>
<CAPTION>
CALENDAR PERIOD HIGH LOW
--------------- -------- --------
<S> <C> <C>
1994:
1st Quarter........................................... $5 5/8 $4 1/2
2nd Quarter........................................... 4 7/8 3 1/8
3rd Quarter........................................... 4 3/8 2 3/8
4th Quarter........................................... 4 3/8 2 9/16
1995:
1st Quarter........................................... $3 7/16 $2 7/16
2nd Quarter........................................... 2 7/8 1 11/16
3rd Quarter........................................... 2 1/16 1 1/4
4th Quarter........................................... 1 3/8 5/8
1996:
1st Quarter........................................... $1 23/32
2nd Quarter........................................... 13/16 1/2
3rd Quarter (through August 8)........................ 21/32 15/32
</TABLE>

There were 2,962 holders of record of DNAP Common Stock as of August 8,
1996. DNAP has not paid any dividends on the DNAP Common Stock since its
inception and does not intend to pay dividends in the foreseeable future. The
terms of the DNAP Convertible Exchangeable Preferred Stock restrict the
payment of dividends on the DNAP Common Stock. DNAP has ceased paying
dividends on the DNAP Convertible Exchangeable Preferred Stock and four
quarterly dividends (aggregating $3,105,000) have accrued and remain unpaid as
of August 8, 1996.

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<PAGE>

BENEFICIAL OWNERSHIP OF DNAP COMMON STOCK
BY CERTAIN STOCKHOLDERS AND MANAGEMENT

PRINCIPAL STOCKHOLDERS

Set forth below are the only persons known by the Board of Directors of DNAP
to be the beneficial owners of more than five percent of the outstanding
shares of DNAP Common Stock as of August 5, 1996:

<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT
BENEFICIAL OWNER OWNERSHIP OF CLASS
------------------- ---------- --------
<S> <C> <C>
E.I. du Pont de Nemours and Company .................. 5,750,000(1) 11.8%
8052 Du Pont Building
Wilmington, Delaware 19898
Grace Brothers, Ltd. ................................. 3,625,604(2) 8.2%
1560 Sherman Avenue, Suite 900
Evanston, Illinois 60201
Michael G. Jesselson ................................. 2,705,000 5.9%
3 East 71st Street
New York, NY 10021
Alida Marine, Inc. ................................... 2,564,725(3) 5.7%
#30-11, Policentro Bldg, 30th Street
Panama City, Republic of Panama
</TABLE>
- --------
(1) Represents shares owned by Du Pont and its wholly-owned subsidiaries.
(2) Includes 1,100,000 shares which would be received upon exercise of certain
warrants held by Grace Brothers, Ltd. and 525,604 shares which would be
received upon conversion of DNAP Convertible Exchangeable Preferred Stock.
(3) Alida Marine, Inc. has a preemptive right to purchase additional
securities of DNAP under certain circumstances.

Except as noted in the footnotes above, the Board of Directors of DNAP
believes the beneficial owners listed above have sole voting and investment
power regarding the shares shown as being beneficially owned by them.

78
<PAGE>

BENEFICIAL OWNERSHIP BY DIRECTORS AND MANAGEMENT OF DNAP

The table below sets forth the beneficial ownership of DNAP Common Stock
held as of March 31, 1996 by each director of DNAP, by each of the five most
highly compensated executive officers of DNAP, and by all directors and
executive officers of DNAP as a group.

<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL
OWNERSHIP OF
COMMON STOCK AS PERCENT
NAME POSITION OF MARCH 31, 1996 OF CLASS
---- -------- ----------------- --------
<S> <C> <C> <C>
Evelyn Berezin.......... Director 108,266(1)(2) (3)
James L. Ferguson....... Director 47,000(1) (3)
Dr. Gerald D. Laubach... Director 43,000(1) (3)
Douglas S. Luke......... Director 52,000(1) (3)
Somchit Sertthin........ Director 14,000(1) (3)
Robert Serenbetz........ Chairman and Chief Executive 666,926(1) 1.5%
Officer
Dr. John R. Bedbrook.... Executive Vice President and 273,142(1)(4) (3)
Director of Science
Dr. David A. Evans...... Executive Vice President-- 423,519(1) (3)
Business Development
Robert Igleheart........ Chief Operating Officer and 132,927(1)(5) (3)
President--FreshWorld Farms
Stephen Prichard........ Vice President--Human 132,125(1) (3)
Resource and Administration
All directors and
executive officers of
DNAP as a group
(consisting of eleven
persons)............... 2,316,424(6) 5.4%
</TABLE>
- --------
(1) Includes currently exercisable options to purchase shares of DNAP Common
Stock as follows: Ms. Berezin--48,500 shares; Mr. Ferguson--43,500 shares;
Dr. Laubach--39,500 shares; Mr. Luke--48,500 shares; Mr. Serenbetz--
642,000 shares; Mr. Sertthin--10,500 shares; Dr. Bedbrook--257,200 shares;
Dr. Evans--213,000 shares; Mr. Igleheart--120,000 shares; Mr. Prichard--
121,000 shares. Does not include options to purchase shares of DNAP Common
Stock not exercisable within 60 days of March 31, 1996 as follows:
Dr. Laubach--4,000 shares; Mr. Serenbetz--303,000 shares; Dr. Bedbrook--
156,000 shares; Dr. Evans--182,000 shares; Mr. Igleheart--380,000 shares;
Mr. Prichard--94,000 shares.
(2) Includes 51,266 shares of DNAP Common Stock owned jointly by Ms. Berezin
and her husband.
(3) Represents less than 1% of the DNAP Common Stock outstanding on March 31,
1996.
(4) Includes 4,218 shares of DNAP Common Stock owned and options that are
currently exercisable options to purchase 20,200 shares of DNAP Common
Stock held by Dr. Bedbrook's wife, who is an employee of DNAP, as to which
shares Dr. Bedbrook disclaims beneficial ownership. Does not include
options to purchase 8,000 shares of DNAP Common Stock held by Dr.
Bedbrook's wife which are not exercisable within 60 days of March 12,
1996.
(5) Mr. Igleheart resigned from his positions with DNAP and FreshWorld
effective May 10, 1996.
(6) Gives effect to the above footnotes.

Except as noted in the footnotes above, DNAP believes the beneficial holders
listed above have sole voting and investment power regarding the shares shown
as being beneficially owned by them.

79
<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA OF DNAP

The selected consolidated financial data set forth below as of and for each
of the years in the five-year period ended December 31, 1995 are derived from
the audited consolidated financial statements and related notes of DNAP. The
consolidated financial statements and related notes as of December 31, 1995
and 1994 and for each of the years in the three-year period ended December 31,
1995 are included elsewhere in this Proxy Statement/Prospectus, and the
selected consolidated financial information set forth below should be read in
conjunction with such consolidated financial statements and notes.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenues:
Produce sales(1)............ $ 10,074 $ 12,673 $ 1,330 $ -- $ --
Product development......... 1,720 2,143 5,823 7,578 8,876
Investment and royalty
income..................... 2,555 1,515 1,874 2,925 2,026
-------- -------- -------- -------- --------
Total Revenue............... 14,349 16,331 9,027 10,503 10,902
-------- -------- -------- -------- --------
Operating Expenses:
Cost of produce sales(1).... 15,284 21,868 1,662 -- --
Exit carrot processing...... 1,647 3,210 -- -- --
Research and product
development................ 5,880 6,769 11,999 11,922 12,137
Selling, general and
administrative............. 5,753 7,031 2,610 3,034 2,964
Consolidation and relocation
costs...................... 70 2,048 -- 2,265 --
Purchased in-process
research and product
development(2)............. -- -- 15,238 -- --
-------- -------- -------- -------- --------
Total Operating Expenses.... 28,634 40,926 31,509 17,221 15,101
-------- -------- -------- -------- --------
Loss from Operations........ (14,285) (24,595) (22,482) (6,718) (4,199)
Gains on sale of assets..... 239 225 60 3,703 --
-------- -------- -------- -------- --------
Loss from continuing
operations before equity in
loss of joint ventures..... (14,046) (24,370) (22,422) (3,015) (4,199)
Equity in operating loss of
joint ventures(1).......... -- -- (9,026) (10,615) (9,470)
-------- -------- -------- -------- --------
Loss from Continuing
Operations................. (14,046) (24,370) (31,448) (13,630) (13,669)
Loss from Discontinued
Operations................. -- (1,913) (2,494) (4,531) (1,272)
-------- -------- -------- -------- --------
Net Loss.................... (14,046) (26,283) (33,942) (18,161) (14,941)
Preferred Stock Dividends... (2,343) (3,105) (3,105) (3,105) (776)
-------- -------- -------- -------- --------
Net loss applicable to
common stockholders........ $(16,389) $(29,388) $(37,047) $(21,266) $(15,717)
======== ======== ======== ======== ========
Net loss per common share:
Continuing Operations....... $ (.47) $ (.95) $ (1.56) $ (.78) $ (.69)
Discontinued Operations..... -- (.07) (.11) (.21) (.06)
-------- -------- -------- -------- --------
Net loss per common share... $ (.47) $ (1.02) $ (1.67) $ (.99) $ (.75)
======== ======== ======== ======== ========
Weighted average common
shares outstanding......... 34,823 28,868 22,156 21,572 20,818
======== ======== ======== ======== ========
Produce Sales(1)
FreshWorld.................. $ 10,074 $ 12,673 $ 5,059 $ 1,773 $ 1,451
DNAP........................ -- -- 1,330 -- --
-------- -------- -------- -------- --------
Total...................... $ 10,074 $ 12,673 $ 6,389 $ 1,773 $ 1,451
======== ======== ======== ======== ========
</TABLE>

80
<PAGE>

<TABLE>
<CAPTION>
AT DECEMBER 31
----------------------------------------
1995 1994 1993 1992 1991
------ ------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and temporary investments....... $1,742 $ 4,489 $ 7,695 $ 27,364 $ 40,228
Working capital...................... 260 2,446 2,586 24,055 39,752
Total assets......................... 11,821 16,550 22,625 36,170 49,153
Total stockholders' equity........... $5,049 $ 8,692 $12,304 $ 30,561 $ 46,298
</TABLE>
- --------
(1) FreshWorld's produce sales and cost of produce sales are excluded from
DNAP's total revenues and operating expenses for the years prior to 1994,
since the operations of FreshWorld were accounted for under the equity
method. As a result of the Du Pont Transaction, DNAP now owns 100% of
FreshWorld and, accordingly, FreshWorld's produce sales and other
operating results are fully consolidated with DNAP's operating results in
1995 and 1994. See Notes 2 and 4 to the Consolidated Financial Statements
for further details.
(2) Represents a non-recurring, non-cash charge reflecting the allocation of a
portion of DNAP's purchase price for FreshWorld to in-process research and
product development which amount is charged to operations in accordance
with purchase accounting practices.

81
<PAGE>

The selected consolidated financial data set forth below as of and for the
three month periods ended March 31, 1996 and 1995 were derived from the
unaudited consolidated financial statements of DNAP, which are included
elsewhere in this Proxy Statement/Prospectus, and included, in the opinion of
DNAP, all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of DNAP's financial position at that date
and results of operations for those periods. The results for the three month
period ended March 31, 1996 are not necessarily indicative of the results of
any future periods. The selected consolidated financial data set forth below
is qualified in its entirety by, and should be read in conjunction with, the
Consolidated Financial Statements and Notes thereto of DNAP and "Management's
Discussion and Analysis of Financial Condition and Results of Operations of
DNAP" included elsewhere in this Proxy Statement/Prospectus.

<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
----------------
1996 1995
------- -------
<S> <C> <C>
OPERATING DATA:
Revenues
Produce sales.............................................. $ 3,509 $ 3,071
Product development........................................ 495 340
Investment and royalty income.............................. 254 1,479
------- -------
Total Revenue.............................................. 4,258 4,890
------- -------
Operating Expenses:
Cost of produce sales...................................... 3,614 3,619
Exit carrot processing..................................... -- 380
Research and product development........................... 1,344 1,636
Selling, general and administrative........................ 2,011 1,340
Consolidation and relocation cost.......................... -- 50
------- -------
Total Operating Expenses................................... 6,969 7,025
------- -------
Loss from Operations......................................... (2,711) (2,135)
Gains on sale of assets...................................... 64 24
------- -------
Net Loss..................................................... (2,647) (2,111)
Preferred Stock Dividends.................................... (776) (776)
------- -------
Net loss applicable to common stockholders................... $(3,423) $(2,887)
======= =======
Net loss per common share.................................... $ (.08) $ (.09)
======= =======
Weighted average common shares outstanding................... 42,847 30,793
======= =======
<CAPTION>
AT MARCH 31
----------------
1996 1995
------- -------
<S> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and temporary investments............................... 3,629 353
Working capital.............................................. 1,857 1,058
Total assets................................................. 12,809 12,221
Stockholders' equity......................................... 1,696 5,866
</TABLE>

82
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF DNAP

GENERAL

DNAP is an agribusiness biotechnology company focused on the development and
marketing of premium, fresh and processed, branded fruits and vegetables
developed through advanced breeding, genetic engineering and other
biotechniques.

Although DNAP reduced its losses from continuing operations from $24.4
million in 1994 to $14.0 million in 1995, its capital resources and liquidity
situation continued to worsen. During 1995, these losses and DNAP's continuing
operations were funded by the proceeds from the private placement of an
aggregate of 8,969,725 shares of DNAP Common Stock, 1,500 shares of preferred
stock of DNAP and warrants to purchase 4,070,182 shares of DNAP Common Stock.
In the view of DNAP's management, its capital resources at year end of $1.7
million in cash and temporary investments were inadequate to fund existing
operations during 1996 without significant new capital or major restructuring.

To this end, in January 1996, DNAP entered into the Merger Agreement and the
Loan Agreement pursuant to which DNAP received a loan of $5 million on January
26, 1996 and an additional loan of $5 million on July 1, 1996.

In November 1995, DNAP issued 1,557,377 shares of DNAP Common Stock in
exchange for 1,364,118 shares of common stock of UAC, which represents
approximately 13% of the outstanding shares of UAC. UAC is an agribusiness
biotechnology company focused on the improvement of strawberries, raspberries
and grapes.

RESULTS OF OPERATIONS

Three Months ended March 31, 1996 Compared to Three Months ended March 31,
1995

For the three months ended March 31, 1996, DNAP's loss increased to $2.6
million from $2.1 million in the 1995 period, primarily as a result of $.6
million in expenses related to the pending Merger.

For the three months ended March 31, 1996, produce sales increased fourteen
percent to $3.5 million from $3.1 in 1995. This $.4 million increase was a
result of increased volume and higher sales prices for carrots and cherry
tomatoes.

Revenues from product development agreements increased slightly to $.5
million in 1996 from $.3 million in 1994, principally due to new product
development contracts entered into during the last six months of fiscal 1995.

Investment and royalty income decreased to $.3 million in 1996 from $1.5
million in 1995, principally as a result of the recording in 1995 of $1.1
million of net revenue from the sale of a subsidiary of DNAP, Frost
Technology, and recognizing revenue for cash received on an option to purchase
certain licensed technology.

Cost of produce sales remained unchanged at $3.6 million even though produce
sales increased fourteen percent, largely because of enhanced margins due to
higher prices.

Research and product development expenses decreased eighteen percent to $1.3
million in 1996 from $1.6 million in 1995, primarily due to DNAP's efforts to
conserve its cash resources by focusing exclusively on fruit and vegetable
programs.

Selling, general and administrative expenses increased to $2.0 million in
1996 from $1.4 million in 1995 as a result of $.6 million in expenses related
to the pending Merger.

83
<PAGE>

The decrease in assets held for sale to $.1 million at March 31, 1996 from
$1.0 million at December 31, 1995 is primarily due to the sale of DNAP's New
Jersey facility during the first quarter. Net proceeds from the sale were
remitted to Du Pont during the second quarter of 1996.

The decrease in accounts payable to $.7 million at March 31, 1996 from $1.4
million at December 31, 1995 is a result of the timing of payments to vendors
by DNAP and the availability of cash resources as a result of the issuance of
a note payable in the amount of $5 million. Dividends payable increased by $.8
million, the amount of preferred dividends declared, but not paid during the
first quarter.

Year ended December 31, 1995 Compared to Year Ended December 31, 1994

For the year ended December 31, 1995, DNAP's loss from continuing operations
decreased to $14.0 million from $24.4 million for the prior year. Included in
the $14.0 million loss in 1995 was a non-recurring charge of $1.6 million for
costs associated with the shutdown of the carrot processing plant and $.8
million of costs incurred as a result of the announced Merger (see Note 21 to
DNAP's Consolidated Financial Statements). The 1995 loss represented a
decrease from the loss incurred in 1994 partially as a result of the decrease
in the gross margin loss due to a change in DNAP's sales mix from carrots to
the higher margin tomatoes. Included in 1994 results was a $3.2 million non-
recurring charge for costs associated with the shutdown of the carrot
processing plant and the cello carrot product line and $2.0 million in
consolidation and relocation costs.

For the year ended December 31, 1995, produce sales decreased 20% to $10.1
million from $12.7 million in 1994. This $2.6 million decrease in revenues was
a result of DNAP exiting the processing of its own carrots in the fourth
quarter of 1994 which resulted in substantially lower sales of carrots in 1995
as compared to 1994, partially offset by substantially higher tomato sales in
1995 due to expansion into new and existing geographic areas. In addition, the
1994 results include $1.4 million of revenues associated with a marketing
joint venture that was dissolved in the fourth quarter of 1994.

Revenues from product development agreements decreased 19% to $1.7 million
in 1995 from $2.1 million in 1994, principally due to fewer government grants.

Investment and royalty income increased to $2.6 million in 1995 from $1.5
million in 1994 as a result of recording $1.1 million of net revenue from the
sale of Frost Technology Corporation, a wholly-owned subsidiary, and
recognizing revenue on an option to purchase licensed technology.

Cost of produce sales decreased 30% to $15.3 million in 1995 from $21.9
million in 1994. This decrease was primarily a result of DNAP discontinuing
the processing of its own carrots in the fourth quarter of 1994 and the change
in its product mix toward the higher margin tomato product. In addition, the
1994 cost of produce sales included $1.3 million associated with the marketing
joint venture dissolved in the fourth quarter of 1994.

Research and product development expenses decreased to $5.9 million in 1995
from $6.8 million in 1994, primarily due to DNAP's decision to further sharpen
the focus of its research efforts and concentrate those efforts principally in
the area of fruits and vegetables.

Selling, general and administrative expenses decreased to $5.8 million from
$7.0 million. This decrease was due to DNAP's effort to consolidate its
operations, eliminate duplication of administrative staff and facilities, and
focus its marketing efforts on tomatoes.

Inventory and fixed assets decreased from $1.2 million and $4.6 million,
respectively, at December 31, 1994 to $.4 million and $2.3 million,
respectively, at December 31, 1995 primarily as a result of DNAP discontinuing
the processing of its own carrots and the corresponding write-down of these
assets.

The decrease in accrued restructuring and consolidation costs from $2.1
million at December 31, 1994 to $.1 million at December 31, 1995 consisted of
$.7 million related to the write-down of inventory and fixed assets

84
<PAGE>

discussed above, $1.0 million related to the payment of employee termination
costs, and $.3 million related to payment of lease termination costs. The
remaining balance at December 31, 1995 in accrued restructuring and
consolidation costs relates to employee termination costs resulting from the
severance of employees during the fourth quarter of 1995.

The increase in the non-marketable equity investment to $1.9 million at
December 31, 1995 is a result of DNAP's exchange of shares of DNAP Common
Stock for shares of common stock in UAC. See Note 15 of DNAP's Consolidated
Financial Statements.

The impact of inflation on revenues and results of operations has not been
significant.

Year ended December 31, 1994 Compared to Year Ended December 31, 1993

For the year ended December 31, 1994, DNAP's loss from continuing operations
decreased to $24.4 million from $31.4 million for the prior year. Included in
the $24.4 million loss in 1994 was a non-recurring charge of $3.2 million for
costs associated with the shutdown of the carrot processing plant and the
cello carrot product line, a non-recurring charge of $2.0 million related to
DNAP's relocation of its headquarters to California and 100% of the losses of
FreshWorld as compared to 50% in 1993, reflecting DNAP's increased ownership
in FreshWorld, effective December 31, 1993. The 1994 loss also reflects an
increased gross margin loss due to a higher level of produce sales. Included
in 1993 results was a $15.2 million non-recurring charge for purchased in-
process research and product development relating to DNAP's acquisition of Du
Pont's 50% interest in FreshWorld.

For the year ended December 31, 1994, produce sales nearly doubled to $12.7
million as compared to the combined DNAP and FreshWorld produce sales of $6.4
million in 1993. In 1993, FreshWorld's $5.1 million of produce sales were
accounted for under the equity method and accordingly were not reflected in
DNAP's consolidated statement of operations. The $6.3 million increase in
produce revenues is a result of increased sales of tomatoes and carrots in
existing and new geographic areas, the addition of new products, including
carrot bites, which were only produced in small quantities and sold through
test markets beginning in the third quarter of 1993, and $1.4 million of
revenues from the partnership established with Fresh Choice which was
terminated in the fourth quarter of 1994 (see Note 2 to DNAP's Consolidated
Financial Statements).

Revenues from product development agreements decreased to $2.1 million in
1994 from $5.8 million in 1993 principally because in 1994 the operating
results of FreshWorld were fully consolidated with those of DNAP's and all
intercompany transactions were eliminated. In 1993 FreshWorld results were
accounted for using the equity method, therefore DNAP's 1993 revenues from
product development agreements included $3.2 million from FreshWorld.

Investment and royalty income decreased to $1.5 million in 1994 from $1.9
million in 1993 as a result of lower invested funds and lower effective yields
on invested funds.

Cost of produce sales increased 45% to $21.9 million in 1994, from combined
DNAP and FreshWorld cost of produce sales of $15.1 million in 1993. In 1993,
the $13.5 million of FreshWorld's cost of produce sales were accounted for
under the equity method and accordingly were not reflected in DNAP's operating
expenses in the consolidated statement of operations. The $6.8 million
increase reflected growing, harvesting and other costs relating to a higher
volume of production and $1.3 million of costs related to the Fresh Choice
partnership revenues.

Research and product development expenses decreased to $6.8 million in 1994
from $12.0 million in 1993, primarily due to DNAP's decision to concentrate
its efforts principally in the area of fruits and vegetables.

Selling, general and administrative expenses increased to $7.0 million from
$2.6 million principally due to the consolidation in 1994 of FreshWorld's
operating results with those of DNAP. However, these expenses

85
<PAGE>

actually decreased approximately $1.0 million compared to the combined 1993
pro forma results of DNAP and FreshWorld.

The impact of inflation on revenues and results of operations has not been
significant.

LIQUIDITY AND CAPITAL RESOURCES

During the three months ended March 31, 1996 and 1995 and the years ended
December 31, 1995, 1994 and 1993, DNAP's cash used in operating activities was
$3.8 million, $2.6 million, $11.9 million, $25.6 million and $9.0 million,
respectively. The increase in cash used in operations for 1994 was a result of
the increased cash required to fund the FreshWorld operations, primarily in
the carrot processing operations. Prior to 1994, FreshWorld was a joint
venture and 1993 investing activities includes a use of cash in the amount of
$8.1 million related to DNAP's funding of its portion of the FreshWorld joint
venture losses. At the end of 1994, DNAP exited its carrot processing
operations resulting in a decrease in the use of cash in operating activities
in the periods subsequent to 1994. For 1995 and the three months ended March
31, 1996, cash was used in operations primarily to fund DNAP's produce sales
efforts and to fund research and development activities.

At March 31, 1996, DNAP had $3.6 million in cash and cash equivalents, a
$1.9 million net increase from $1.7 million at December 31, 1995. This
increase was primarily the net result of proceeds from the issuance of a note
payable of $5.0 million and the sale of assets held for sale for $.7 million
offset by the funding of operating activities of $3.8 million. The $.7 million
in proceeds from the sale of assets was used to satisfy a payable to Du Pont
in April, 1996 arising out of DNAP's acquisition of Du Pont's interest in
FreshWorld.

At December 31, 1995, DNAP had $1.7 million in cash and temporary
investments, a $2.8 million net decrease from $4.5 million at December 31,
1994. This decrease was primarily the net result of $10.8 million in net
proceeds received from the sale of common and preferred stock discussed below
offset by the funding of operating activities of $12.0 million and the payment
of $2.3 million of dividends on the DNAP Convertible Exchangeable Preferred
Stock. At December 31, 1995, working capital was $.3 million and stockholders'
equity was $5.0 million.

During 1995, DNAP received cash proceeds of $1.3 million from the sale of
Frost Technology Corporation, a wholly-owned subsidiary. The assets of this
subsidiary consisted primarily of technology rights.

Historically, DNAP has financed its operations primarily through the public
and private offering of common and preferred stock and, to a lesser extent,
from payments related to research and development arrangements, royalty
agreements, and investment earnings. During 1995, DNAP privately placed an
aggregate of 8,969,725 shares of DNAP Common Stock and warrants to purchase
4,070,182 shares of DNAP Common Stock and received net proceeds, after
commissions and expenses, of $9.5 million (see Note 12 to DNAP's Consolidated
Financial Statements). In addition, DNAP privately placed 750 shares of
Convertible Series B and 750 shares of Convertible Series C preferred stock
and received net proceeds, after commission and expenses, of $1.3 million.
These preferred shares were converted into DNAP Common Stock during the third
quarter (see Note 13 to DNAP's Consolidated Financial Statements).

Net proceeds from DNAP's stock offerings have primarily been used to
purchase temporary investments with maturities that approximate management of
DNAP's anticipated cash flow requirements. Investing activities of DNAP
consist primarily of the purchases and sales/maturities of these temporary
investments and have generally decreased as available proceeds from DNAP's
stock offerings has decreased.

At December 31, 1995, DNAP had commitments of $192,000 for grower fees
related to the future harvest of crops.

In October 1995, DNAP entered into an agreement to lease to a third party
certain carrot processing equipment with a net book value of $1.7 million in
return for the payment to DNAP of $15,935 per month for

86
<PAGE>

sixty months. Concurrent with the leasing of the equipment, DNAP terminated
its carrot processing facility lease and agreed to make payments totaling
$945,000 consisting of a termination penalty under the terms of the lease
agreement, monthly lease payments through December 1995 and the cost to
restore the facility to its prelease condition (see Note 5 to DNAP's
Consolidated Financial Statements).

Subsequent to December 31, 1995, DNAP received $5 million in January 1996
and an additional $5 million in July 1996 from Bionova in connection with the
Merger Agreement and the Loan Agreement. See "The Merger and Related
Transactions" and "The Merger Agreement and Related Agreements."

Based on its current business plans including consummation of the Merger,
DNAP believes that its current cash resources, including the $5 million
received from Bionova in January 1996, and the $5 million received on July 1,
1996, its revenues from prospective and existing research, product development
and licensing arrangements, revenues from produce sales, accompanied by
projected improvements in the gross margin on such produce sales and reduction
of fixed overhead and administrative costs will be sufficient to fund its cash
requirements into 1997, although there can be no assurance with respect
thereto.

Notwithstanding the foregoing, if the holders of DNAP Common Stock do not
adopt the Merger Agreement by the requisite vote required under applicable
Delaware law, based upon the historical cash needs of DNAP it will be
necessary for DNAP to raise new capital, to seek a new business combination
transaction with a third party or to consider other available strategic
alternatives in early 1997 if not sooner. Because of the anticipated financial
condition of DNAP following its use of the $10 million provided by Bionova
under the Loan Agreement, there can be no assurance that DNAP would be
successful in its pursuit of new capital or a new business combination
transaction with a third party. As a result, it then would be necessary for
DNAP to consider other strategic alternatives, which could have a material
adverse effect on the continuing investment of DNAP's stockholders therein.
See "Risk Factors--Risks Relating to Rejection of the Merger; DNAP's Lack of
Liquidity; Possible Delisting of DNAP's Shares; Possible Loss of DNAP's Patent
Rights."

Preliminary Second Quarter Results

Based on preliminary figures, for the three month period ended June 30,
1996, DNAP's total revenues increased 10% to $4.0 million from $3.6 million
from the three month period ended June 30, 1995. Net loss applicable to common
stockholders was $3.4 million for the three month period ended June 30, 1996
as compared to $4.8 million for the same period in 1995. The decrease in the
net loss applicable to common stockholders is primarily due to a decrease in
cost of produce sales of $1.6 million as a result of a shift from higher risk
equity growing to lower risk marketing arrangements, and a decrease in
research and development expense of $.3 million. Offsetting these factors was
an increase in administrative expenses of $.9 million principally consisting
of severance of $.3 million, primarily for the Company's Chief Operating
Officer, $.2 million of expenses relating to the pending Merger, and interest
expense of $.1 million relating to the note payable to Bionova.

87
<PAGE>

UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL INFORMATION OF BIONOVA

Set forth below are certain unaudited pro forma condensed combined financial
statements of Bionova presenting the pro forma effects of the Merger, assuming
that such transaction occurred on the date of the balance sheet and at the
beginning of the year for which results of operations are presented. The
Merger will be accounted for as an acquisition of DNAP by Bionova using the
purchase method of accounting. The pro forma information is derived from and
should be read in conjunction with the financial statements of DNAP and
Bionova included elsewhere herein. The pro forma information is presented for
illustrative purposes only and is not necessarily indicative of the results of
operations or financial position that would have been achieved if the
transactions included in the pro forma adjustments had been consummated in
accordance with the assumptions set forth below, nor is it necessarily
indicative of future operating results or financial position. The pro forma
financial statements are based on preliminary estimates of value and
transaction costs. The actual recording of the Merger and related transactions
will be based on final appraisals, values and transaction costs. Accordingly,
the actual recording of the Merger and related transactions can be expected to
differ from these pro forma financial statements.

[The remainder of this page left blank intentionally]

88
<PAGE>

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF MARCH 31, 1996 (IN THOUSANDS)

<TABLE>
<CAPTION>
HISTORICAL
--------------------------------
DNA PLANT BIONOVA BIONOVA PRO FORMA PRO FORMA
TECHNOLOGY SUBSIDIARIES U.S. ADJUSTMENTS COMBINED
---------- ------------ ------- ----------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents.......... $ 3,629 $ 3,328 $ 25 $ 13,000 (b) $ 19,982
Accounts and notes
receivable, net...... 2,191 40,277 137 (137)(c) 42,468
Inventories........... 287 10,829 11,116
Assets held for sale.. 412 412
Prepaids and other.... 120 107 227
--------- -------- ------ --------- --------
Total current
assets............. 6,639 54,541 162 12,863 74,205
Note receivable......... 5,000 (5,000)(b)
Property, plant and
equipment, net......... 2,252 25,903 28,155
Patents and trademarks
and other assets, net.. 500 14,200(a) 14,700
Investment in other
companies.............. 1,946 1,946
Goodwill................ 1,472 9,184 4,331(a) 14,987
Other assets............ 3,752 3,752
--------- -------- ------ --------- --------
Total assets........ $ 12,809 $ 93,380 $5,162 $ 26,394 $137,745
========= ======== ====== ========= ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Bank loans and other
notes payable........ $ $ 32,571 $5,000 $ (5,000)(b) $ 32,571
Accounts payable and
accrued liabilities.. 2,308 4,096 137 1,577 (a)(c) 8,118
Payable to growers.... 18,993 18,993
Dividend payable...... 1,553 (1,553)(a)
Current portion of
long-term debt....... 209 575 784
Amount payable to Du
Pont................. 712 712
--------- -------- ------ --------- --------
Total current
liabilities........ 4,782 56,235 5,137 (4,976) 61,178
Deferred taxes.......... 2,399 2,399
Deferred revenue and
compensation........... 677 677
Long-term debt and
payables............... 5,654 10,618 (5,000)(b) 11,272
--------- -------- ------ --------- --------
Total liabilities... 11,113 69,252 5,137 (9,976) 75,526
--------- -------- ------ --------- --------
Minority interest....... 8,907 8,907
--------- -------- ------ --------- --------
Stockholders' equity:
Preferred stock....... 14 (14)(a) --
Common stock.......... 429 25 (270)(a) 184
Additional paid-in
capital.............. 159,698 27,848 (108,791)(a)(b) 78,755
Deficit............... (158,445) (12,398) 145,445 (a) (25,398)
Cumulative translation
adjustment........... (229) (229)
--------- -------- ------ --------- --------
Total stockholders'
equity............. 1,696 15,221 25 36,370 53,312
--------- -------- ------ --------- --------
Total liabilities
and stockholders'
equity............. $ 12,809 $ 93,380 $5,162 $ 26,394 $137,745
========= ======== ====== ========= ========
Common shares
outstanding.......... 42,829 ** 25 18,371*
</TABLE>
- --------
* Includes common shares to be distributed upon consummation of the Merger.
See note (d).
** Common share information for the Bionova Subsidiaries is not presented
because the information is not meaningful.

See notes accompanying these unaudited pro forma condensed combined financial
statements.

89
<PAGE>

UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT
FOR YEAR ENDED DECEMBER 31, 1995 (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
HISTORICAL
-----------------------
DNA PLANT BIONOVA PRO FORMA PRO FORMA
TECHNOLOGY SUBSIDIARIES ADJUSTMENTS COMBINED
---------- ------------ ----------- ---------
<S> <C> <C> <C> <C>
Revenues:
Produce sales.............. $ 10,074 $191,711 $ $201,785
Other...................... 4,275 5,875 2,500 (1) 12,650
-------- -------- ------ --------
Total revenues........... 14,349 197,586 2,500 214,435
-------- -------- ------ --------
Operating expenses:
Cost of produce sales...... 15,284 162,290 177,574
Research and product devel-
opment.................... 5,880 1,250 (1) 7,130
Selling, general and admin-
istrative................. 5,753 29,183 (800)(2) 34,136
Other...................... 1,717 538 1,515 (3) 3,770
-------- -------- ------ --------
Total operating ex-
penses.................. 28,634 192,011 1,965 222,610
-------- -------- ------ --------
Income (loss) from opera-
tions....................... (14,285) 5,575 535 (8,175)
-------- -------- ------ --------
Interest, net................ (4,940) (4,940)
Foreign exchange loss........ (4,748) (4,748)
Gains on sales of assets..... 239 239
-------- -------- ------ --------
239 (9,688) (9,449)
-------- -------- ------ --------
Income (loss) before income
tax......................... (14,046) (4,113) 535 (17,624)
Income taxes................. (2,320) (4) (2,320)
-------- -------- ------ --------
Loss before minority inter-
est......................... (14,046) (6,433) 535 (19,944)
Minority interests........... 3,049 3,049
-------- -------- ------ --------
Net income (loss)............ (14,046) (3,384) 535 (16,895)
Preferred stock dividends.... (2,343) 2,343 (5)
-------- -------- ------ --------
Net income (loss) applicable
to common stockholders...... $(16,389) $ (3,384) $2,878 $(16,895)
======== ======== ====== ========
Average common shares out-
standing.................... 34,823 ** 18,371 *
Net income (loss) per common
share....................... $ (.47) $ (.92)
</TABLE>
- --------
*Includes common shares to be distributed upon consummation of the Merger. See
note (d).
** Comparative per share data for the Bionova Subsidiaries is not presented
because the information is not meaningful.

See notes accompanying these unaudited pro forma condensed combined financial
statements.

90
<PAGE>

UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT
FOR THREE MONTHS ENDED MARCH 31, 1996 (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
HISTORICAL
-------------------------------
DNA PLANT BIONOVA BIONOVA PRO FORMA PRO FORMA
TECHNOLOGY SUBSIDIARIES U.S. ADJUSTMENTS COMBINED
---------- ------------ ------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Revenues:
Produce sales......... $ 3,509 $51,027 $54,536
Other................. 749 332 $ 50 $ 625 (1) 1,756
------- ------- ---- ------ -------
Total revenues...... 4,258 51,359 50 625 56,292
Operating expenses:
Cost of produce
sales................ 3,614 40,622 44,236
Research and product
development.......... 1,344 312 (1) 1,656
Selling, general and
administrative....... 2,011 6,903 (563)(2) 8,351
Other................. 135 50 379 (3) 564
------- ------- ---- ------ -------
Total operating
expenses........... 6,969 47,660 50 128 54,807
------- ------- ---- ------ -------
Income (loss) from
operations............. (2,711) 3,699 -- 497 1,485
------- ------- ---- ------ -------
Interest, net........... (1,148) (1,148)
Foreign exchange loss... (1,268) (1,268)
Gains on sales of
assets................. 64 64
------- ------- ---- ------ -------
64 (2,416) -- (2,352)
------- ------- ---- ------ -------
Income (loss) before
income tax............. (2,647) 1,283 -- 497 (867)
Income taxes............ (1,093) -- (4) (1,093)
------- ------- ---- ------ -------
Income (loss) before
minority interest...... (2,647) 190 -- 497 (1,960)
Minority interests...... (154) -- (154)
------- ------- ---- ------ -------
Net income (loss)....... (2,647) 36 497 (2,114)
Preferred stock
dividends.............. (776) 776 (5)
------- ------- ---- ------ -------
Net income (loss)
applicable to common
stockholders........... $(3,423) $ 36 $-- $1,273 $(2,114)
======= ======= ==== ====== =======
Average common shares
outstanding............ 42,847 ** 25 18,371*
Net income (loss) per
common share........... $ (.08) $ (.12)
</TABLE>
- --------
*Includes common shares to be distributed upon consummation of the Merger. See
note (d).
** Comparative per share data for the Bionova Subsidiaries is not presented
because the information is not meaningful.

See notes accompanying these unaudited pro forma condensed combined financial
statements.

91
<PAGE>

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
FOR YEAR ENDED DECEMBER 31, 1995 AND QUARTER ENDED MARCH 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

BALANCE SHEET ADJUSTMENTS

(a) Merger transaction:

Adjustment to reflect the elimination of DNAP stockholders' equity, to
reflect the issuance in the Merger of Bionova Common Stock having a value
(as determined below) of $28,566, and to record the purchase price of the
Merger.

The value of the shares of Bionova Common Stock to be issued in the
Merger was determined based on the number of shares of DNAP Common Stock
and DNAP Convertible Exchangeable Preferred Stock outstanding at June 30,
1996 times their respective closing prices on July 29, 1996.

<TABLE>
<CAPTION>
ESTIMATED
OUTSTANDING CLOSING
SHARES SHARE PRICE VALUE AT
JUNE 30, JULY 29, JULY 29,
1996 1996 1996
----------- ----------- -----------
(THOUSANDS) (THOUSANDS)
<S> <C> <C> <C>
DNAP Common stock (*).................. 45,676 $ .531 $24,254
DNAP Convertible Exchangeable Preferred
Stock................................. 1,380 3.125 4,312
-------
28,566
Plus: Costs incurred by ELM associated
with the merger....................... 5,000
-------
Total purchase price................... $33,566
=======
</TABLE>
--------
* Includes 2,750 shares issued upon conversion of the DNAP Series A
Preferred Stock and 43 shares issued to DNAP's 401K plan during the
second quarter 1996.

The purchase price has been allocated to the following items based on a
valuation of the intangibles by an independent appraiser.

<TABLE>
<CAPTION>
AS OF MARCH 31,
1996
---------------
<S> <C>
Patents and trademarks...................................... $14,700
Research and development.................................... 13,000**
Goodwill.................................................... 5,803
Net assets of DNAP at historical value ($1,696) net of
goodwill ($1,472) and preferred stock dividend payable
($1,553)................................................... 1,777
DNAP estimated Merger costs ($3,077 less $1,363 paid prior
to March 31, 1996)......................................... (1,714)
-------
$33,566
=======
</TABLE>
--------
** Research and development costs of $13,000 were charged off to deficit at
March 31, 1996.

(b) Capital contributions:

Adjustment to reflect ELM's contribution of capital of $23,000 from
conversion of the $5,000 loan to capital, of an additional $13,000 capital
contribution before or at closing, and of $5,000 for ELM payment of Bionova
Subsidiaries merger and other transaction costs.

Elimination of intercompany receivable and payable on loan.

92
<PAGE>

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
FOR YEAR ENDED DECEMBER 31, 1995 AND QUARTER ENDED MARCH 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(d) Pro forma common shares outstanding

<TABLE>
<CAPTION>
COMMON PREFERRED
STOCK STOCK TOTAL
------ --------- ------
<S> <C> <C> <C>
Number of DNAP shares outstanding at March 31,
1996............................................. 42,883 1,380
Estimated shares required for DNAP's 401K Plan.... 43
Conversion of Series A Preferred Stock............ 2,750
------ ------
45,676 1,380
Exchange ratios................................... .10000 .68375
------ ------
Common Shares to be issued to DNAP stockholders... 4,568 944 5,512
------ ------
Common shares to be issued to Bionova
International.................................... 12,859
------
Pro forma common shares outstanding............... 18,371
======
</TABLE>

On July 1, 1996, Bionova Mexico contributed cash and its shares of the
Bionova Subsidiaries to Bionova for 271 shares of Bionova Common Stock. On
August 1 and 2, 1996 Bionova Mexico contributed to Bionova cash and the note
from Bionova for 53 shares of Bionova Common Stock. On August 5, 1996 Bionova
Mexico contributed its 349 shares of Bionova Common Stock to Bionova
International. Upon consummation of the Merger, Bionova will issue an
additional 12,510 shares of Bionova Common Stock to Bionova International.

INCOME STATEMENT ADJUSTMENTS

(1) Long Term Funded Research Agreement:

Adjustment to reflect $2,500 of revenue and $1,250 of expenses associated
with the Long Term Funded Research Agreement under which a minimum revenue
of $625 is due each quarter. Estimated expenses are based on management's
estimates of the incremental headcount and associated expenses which would
be incurred in conducting the research under the terms of this agreement.

(2) Non-recurring Merger costs:

Adjustment to eliminate $800 of DNAP non-recurring expenses associated
with the Merger incurred during 1995 and $563 during the three months ended
March 31, 1996.

(3) Amortization of goodwill and patents and trademarks:

Adjustment to reflect the amortization of DNAP's patents and trademarks
over the estimated average remaining life of the patents of 12 years
($1,225) and goodwill of 20 years ($290).

(4) Tax effect of pro forma adjustment:

Due to pro forma losses during the year ended December 31, 1995 and the
three months ended March 31, 1996, no tax effect of pro forma adjustments
is required.

(5) Preferred stock dividends:

Adjustment to eliminate dividends on the DNAP Convertible Exchangeable
Preferred Stock which will not be paid after the Merger.

(6) Non-recurring items:

Pro forma income data does not include the write-off of research and
development costs of $13,000 (see (a) above) which will be written off
immediately following the consummation of the Merger and does not include
additional Merger transaction costs of $1,714 to be incurred by DNAP. Also,
the pro forma income data does not include the severance expense of $312
recognized in DNAP's premerger financial statements at the date of the
Chief Operating Officer's resignation.

93
<PAGE>

BIONOVA

CORPORATE ORGANIZATION

Bionova was formed on January 12, 1996, as Bionova U.S. Inc., a Delaware
corporation. On the same day, Merger Sub was formed as a wholly-owned
subsidiary of Bionova. At or prior to the Closing Date, Bionova's corporate
name will be changed to DNAP Holding Corporation. Pursuant to the Merger, the
stockholders of DNAP will receive shares of Bionova Common Stock in exchange
for their shares of DNAP Stock. As of August 9, 1996, 348,722 shares of
Bionova Common Stock were issued and outstanding. Bionova expects that,
immediately after the Closing Date, there will be outstanding approximately
18,370,640 shares of Bionova Common Stock and warrants and options to purchase
934,229 shares of Bionova Common Stock. Bionova has filed with the Commission
a Registration Statement under the Securities Act with respect to the Bionova
Common Stock to be issued in connection with the Merger to the holders of DNAP
Stock. It is a condition to the Merger that (i) the Registration Statement is
declared effective under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement be in effect and no proceedings
for such purpose be pending before or threatened by the Commission and (ii)
the shares of Bionova Common Stock to be issued in connection with the Merger
be authorized for quotation on the Nasdaq National Market, subject to notice
of such issuance.

DESCRIPTION OF CAPITAL STOCK

Bionova is authorized to issue up to 250 million shares of common stock,
$0.01 par value per share. Holders of Bionova Common Stock are entitled to one
vote for each share held on all matters submitted to a vote of stockholders.
Holders of Bionova Common Stock are entitled to receive ratably such
dividends, if any, as may be declared by the Bionova Board out of funds
legally available therefor, subject to any preferential dividend rights of any
outstanding preferred stock. Upon the liquidation, dissolution or winding up
of Bionova, the holders of Bionova Common Stock are entitled to receive
ratably the net assets of Bionova available after the payment of all debts and
other liabilities and subject to the prior rights of any outstanding preferred
stock. The rights, preferences and privileges of holders of Bionova Common
Stock are subject to any series of preferred stock which Bionova may designate
and issue in the future.

The Bionova Board is authorized, subject to any limitations prescribed by
law, from time to time to issue up to an aggregate of 5 million shares of
preferred stock, $0.01 par value per share, in one or more series, each of
such series to have such rights and preferences, including voting rights,
dividend rights, conversion rights, redemption privileges and liquidation
preferences, as shall be determined by the Bionova Board. The rights of the
holders of Bionova Common Stock will be subject to, and may be adversely
affected by, the rights of holders of any preferred stock that may be issued
in the future. Bionova has no present plans to issue any shares of preferred
stock.

Bionova intends to amend its Certificate of Incorporation prior to the
Effective Time to reduce the number of its authorized shares of common stock
to 25 million and preferred stock to 5,000.

COMPARISON OF
CERTIFICATES OF INCORPORATION AND BYLAWS

GENERAL

If the Merger is consummated, stockholders of DNAP will become holders of
Bionova Common Stock, which will result in their rights as stockholders being
governed by the Certificate of Incorporation and Bylaws of Bionova. It is not
practical to describe all the differences between the Certificate of
Incorporation and Bylaws of DNAP and the Certificate of Incorporation and
Bylaws of Bionova. The following is a summary of certain differences which may
affect the rights of stockholders of DNAP. This summary is qualified in its
entirety by reference to the full text of such documents.

94
<PAGE>

AUTHORIZED CAPITAL STOCK

DNAP. The authorized capital stock of DNAP consists of 60 million shares of
DNAP Common Stock and 5 million shares of preferred stock, par value $.01 per
share, of which 1,380,000 shares have been designated as DNAP Convertible
Exchangeable Preferred Stock and 2,750 shares have been designated as DNAP
Series A Preferred Stock. The Certificate of Incorporation of DNAP does not
give the stockholders preemptive rights.

Bionova. The authorized capital stock of Bionova consists of 250 million
shares of Bionova Common Stock and 5 million shares of preferred stock, par
value $.01 per share. Bionova intends to amend its Certificate of
Incorporation prior to the Effective Time to reduce the number of its
authorized shares of common stock to 25 million and preferred stock to 5,000.
The Certificate of Incorporation of Bionova does not give the stockholders
preemptive rights.

DIRECTORS

DNAP. The Bylaws of DNAP provide that the number of directors constituting
DNAP's entire Board of Directors may be set from time to time by resolution of
a majority of the then authorized number of directors. A majority of the total
number of directors constitutes a quorum for the transaction of business. The
vote of a majority of the directors present at any meeting at which a quorum
is present shall be the act of the board.

Bionova. The Bylaws of Bionova provide that the number of directors
constituting Bionova's entire Board of Directors may be set from time to time
by resolution of a majority of the entire board of directors, provided that
the number so fixed may not be less than five. A majority of the total number
of directors constitutes a quorum for the transaction of business. The vote of
a majority of the directors present at any meeting at which a quorum is
present shall be the act of the board. Additional provisions regarding the
number of directors and their election, the filling of vacancies, and
requirements for board approval of certain actions, are contained in the
Governance Agreement. See "The Merger Agreement and Related Agreements--The
Governance Agreement."

SPECIAL MEETINGS OF STOCKHOLDERS

DNAP. The Bylaws of DNAP provide that special meetings of stockholders may
be called by the President, the Board of Directors or the holders of shares of
capital stock entitled to cast not less than 25% of the votes at such meeting.

Bionova. The Bylaws of Bionova provide that special meetings of stockholders
may be called by the Chairman of the Board, the Chief Executive Officer, or a
majority of the entire Board of Directors.

ACTION BY WRITTEN CONSENT OF STOCKHOLDERS

Under the DGCL, unless a certificate of incorporation provides otherwise,
stockholders may take action by written consent without a meeting as to any
matter for which stockholder approval is required or which is permitted to be
taken based on the approval of stockholders. Action by written consent
requires the consent of the holders of a percentage of all the outstanding
shares eligible to vote equal to the percentage that would be required for
approval by shares present and voting at a meeting. Under both the Certificate
of Incorporation of DNAP and the Certificate of Incorporation of Bionova,
stockholders are permitted to take action by written consent without a meeting
as to any matter for which stockholder approval is required or which is
permitted to be taken on the approval of stockholders.

AMENDMENT OF BYLAWS

Delaware law reserves the power to amend, repeal, or adopt bylaws
exclusively to the stockholders, unless the certificate of incorporation also
confers such power upon the board of directors. Both the Certificate of
Incorporation of DNAP and the Certificate of Incorporation of Bionova confer
such powers upon the Board of Directors of such corporations.

95
<PAGE>

LIABILITY OF DIRECTORS AND OFFICERS

Bionova has included in its Certificate of Incorporation provisions to
indemnify its directors and officers to the fullest extent permitted by
Section 145 of the DGCL. Bionova's Certificate of Incorporation also includes
provisions to eliminate the personal monetary liability of its directors to
Bionova or its stockholders for breaches of fiduciary duty, except as
specifically provided under the DGCL. Bionova believes that these provisions
are necessary to attract and retain qualified persons as directors and
officers. The Certificate of Incorporation of DNAP contains similar
provisions.

DELAWARE ANTI-TAKEOVER LAW

Both DNAP and Bionova are subject to the provisions of Section 203 of the
DGCL. Section 203 prohibits a publicly held Delaware corporation from engaging
in a "business combination" with an "interested stockholder" for a period of
three years after the date of the transaction in which the person became an
"interested stockholder" unless the business combination is approved in a
prescribed manner. A "business combination" includes mergers, asset sales and
other transactions resulting in a financial benefit to the "interested
stockholder." Subject to certain exceptions, an "interested stockholder" is a
person who, together with affiliates and associates, owns (or within three
years did own) 15% or more of the corporation's voting stock.

PRINCIPAL STOCKHOLDERS AND
MANAGEMENT OF BIONOVA

PRINCIPAL STOCKHOLDERS

As of the date hereof, Bionova International is the record owner, and ELM,
whose address is Edificio Torrealta, Av. Roble 300 Mezzanine, 66265 Garza
Garcia, N.L. Mexico, is the beneficial owner, of the outstanding Bionova
Common Stock.

The shares of Bionova Common Stock to be issued to holders of DNAP Stock
pursuant to the Merger will constitute 30% of the total shares of Bionova
Common Stock issued and outstanding immediately after the Effective Time. The
remaining issued and outstanding shares of Bionova will be owned of record by
Bionova International and beneficially by ELM.

As of June 30, 1996, Alfonso Romo Garza, the Chairman of the Board of
Directors and Chief Executive Officer of ELM, directly or indirectly
controlled approximately 50.3% of the outstanding voting securities of ELM
with the power to elect a majority of its directors and to determine the
outcome of any action requiring the approval of the holders of such
securities.

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information as of the Effective Time
with respect to each person who is expected to then be serving as a director
or executive officer of Bionova (including certain executive officers of
subsidiaries). Each director is elected to serve until the next annual meeting
of stockholders and until his or her successor is elected and qualified. The
Governance Agreement contains additional provisions regarding the election and
terms of the DNAP Independent Directors. The DNAP Independent Directors are
Dr. Laubach, Ms. Berezin, and Mr. Luke. See "The Merger Agreement and Related
Agreements--The Governance Agreement." Each executive officer of Bionova is
elected to hold office for such term as may be prescribed by the Board of
Directors and until his or her successor is elected and qualified.

96
<PAGE>

<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL
BIONOVA OR OTHER OWNERSHIP OF
OFFICES TO BE BIONOVA PRO FORMA
NAME AGE HELD COMMON STOCK PERCENT OF CLASS(1)
---- --- ---------------- ------------ -------------------
<S> <C> <C> <C> <C>
Bernardo Jimenez........ 43 *Chairman of the Board and 0 (4)
Director
Carlos Herrera.......... 55 Chief Executive Officer 0 (4)
and Director
Robert Serenbetz........ 52 *Chief Operating Officer 66,693(2) (4)
and Director
Arthur H. Finnel........ 45 Treasurer and Chief 0 (4)
Financial Officer
Joe A. Rudberg.......... 49 Secretary 0
Evelyn Berezin.......... 71 *Director 10,826(2)(3) (4)
Dr. Nam-Hai Chua........ 52 *Director 0 (4)
Dr. Peter Davis......... 52 Director 0 (4)
Francisco Gonzalez...... 65 Director 0 (4)
Erik C. Jurgensen....... 54 Director 0 (4)
Dr. Gerald Laubach...... 70 *Director 4,300(2) (4)
Douglas Luke............ 54 *Director 5,200(2) (4)
Alejandro Rodriguez..... 45 Director 0 (4)

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

Raul Batiz E. .......... 71 President of IPHC and R.B. 0 (4)
Packing Arizona
Guillermo Batiz G. ..... 44 President of ABSA 0 (4)
Raul Batiz G. .......... 46 Chief Operating Officer of 0 (4)
ABSA
All directors and
executive officers of
Bionova as a group
(consisting of 16
persons)............... 87,019(5) (4)
</TABLE>
- --------
* Nominee
(1) Gives pro forma effect to the Merger and to the issuance of Bionova Common
Stock in the Merger.
(2) Includes options to purchase shares of Bionova Common Stock that will be
assumed at the Closing and will be exercisable at that time as follows:
Ms. Berezin--4,850 shares; Dr. Laubach--3,950 shares; Mr. Luke--4,850
shares; Mr. Serenbetz--64,200 shares. Does not include options to purchase
shares of Bionova Common Stock that will not be exercisable within 60 days
of the Closing as follows: Dr. Laubach--400 shares; and Mr. Serenbetz--
30,300 shares.
(3) Includes 5,127 shares of Bionova Common Stock to be owned jointly by Ms.
Berezin and her husband.
(4) Represents less than 1% of the Bionova Common Stock to be outstanding at
the Effective Time.
(5) Gives effect to the above footnotes.

Except as noted in the footnotes above, Bionova believes the beneficial
holders listed above have sole voting and investment power regarding the
shares shown as being beneficially owned by them.

97
<PAGE>

Bernardo Jimenez is the Chief Operating Officer of the agrobiotechnology
division of ELM. From 1993 to 1996, he served as the head of the Industrial
Banking Division at the Vector Group, the Vice President of New Business
Development for Pulsar Internacional, S.A. de C.V., and the Chief Financial
Officer of ELM. From 1975 to 1993, he held various positions in finance and
management at Grupo Industrial Alfa, S.A. de C.V.

Carlos Herrera has served as the Managing Director (Chief Executive Officer)
of Bionova Mexico since 1993. Prior to that time, he served as the Director of
Operations of Cigarrera La Moderna, S.A. de C.V., the leading cigarette company
in Mexico and a wholly-owned subsidiary of ELM. Mr. Herrera is a director of
ELM.

Robert Serenbetz has been Chairman of DNAP since 1994, Chief Executive
Officer of DNAP since 1992, and President of DNAP since 1991. Mr. Serenbetz was
Chief Operating Officer of DNAP from 1991 to 1992. From 1989 to 1991, he was
Group President of the American Chicle Division of Warner Lambert Company, a
manufacturer of pharmaceutical and consumer products.

Arthur H. Finnel has been a financial planning consultant to ELM and Bionova
Mexico since 1995. From 1982-1995 he was an executive with Mars, Incorporated,
where he held positions of General Manager and President of its Canadian pet
food division and Vice President of Finance of Uncle Ben's, Inc. From 1976-1982
Mr. Finnel was an Associate Director of the Wharton Applied Research Center.

Joe A. Rudberg is an attorney with Thompson & Knight, P.C., of Dallas, Texas.
He has been a shareholder (and, prior to the firm's incorporation, a partner)
of the firm since 1978.

Evelyn Berezin has been a venture capital consultant since 1987 and was
President of Greenhouse Management Corporation, the general partner of a
venture capital firm, from 1981 until 1987. Ms. Berezin is a director of
Standard Microsystems Corporation.

Dr. Nam-Hai Chua has served since 1988 as the Andrew W. Mellon Professor and
Head of the Laboratory of Plant Molecular Biology at the Rockefeller University
in New York City. He serves on numerous advisory and editorial boards in the
United States and other countries relating to plant biotechnology. He is a
director of Delta Pine Land Company.

Dr. Peter Davis is a member of the Executive Committee of Pulsar
Internacional, S.A. de C.V., and a director of Seminis. Dr. Davis was
previously a professor at the Wharton School, where he also served as Director
of the Wharton Applied Research Center and Director of Executive Education.

Francisco Gonzalez is the Chief Executive Officer of Seminis. From 1995 to
1996, he served as the Chief Executive Officer of ELM's agrobiotechnology
division, and prior to that time served as the Chief Executive Officer of ELM's
cigarette division. Mr. Gonzalez is a director of ELM.

Erik C. Jurgensen has been the Director of Planning and Corporate Development
at Pulsar Internacional, S.A. de C.V., since 1994. Pulsar Internacional, S.A.
de C.V., is the parent company of ELM. From 1992 to 1994, Mr. Jurgensen was the
Chief Executive Officer of Vector Group, a financial services company in
Mexico.

Dr. Gerald D. Laubach was the President of Pfizer, Inc., a pharmaceutical
company, from 1972 to 1991.

Douglas S. Luke has served as President and Chief Executive Officer of WLD
Enterprises, Inc., a private investment company, since 1991. He was Managing
Director of Rothschild Inc., an investment banking, venture capital, an asset
management firm, from 1987 to 1990, and an officer of Rothschild, Inc., and its
predecessor from 1979 to 1990. He is a director of Orbital Science Corporation
and Regency Realty Corporation.

Alejandro Rodriguez is the General Director (Chief Operating Officer) of
Agroindustrias Moderna, S.A. de C.V., a subsidiary of ELM. For the past five
years, Mr. Rodriguez has worked in various positions in the agribusiness
division of ELM.

Raul Batiz E. is the President of IPHC and since 1984 has served as the
President of R.B. Packing Arizona.

98
<PAGE>

Guillermo Batiz G. has served as the President of ABSA since 1993. Prior to
that time, he acted for twenty years as head of administration of Agricola
Batiz Hermanos, which was engaged in the fresh produce business in Mexico. He
is the son of Raul Batiz E.

Raul Batiz G. has served as the Chief Operating Officer of ABSA since 1993.
Prior to that time he acted for twenty years as the head of operations of
Agricola Batiz Hermanos, which was engaged in the fresh produce business in
Mexico. He is the son of Raul Batiz E.

EXECUTIVE COMPENSATION

Bionova was incorporated in January 1996. Bionova anticipates that during
the fiscal year ending December 31, 1996, its most highly paid executive
officers (including each person who, in his capacity as an executive officer
of a subsidiary of Bionova, exercises material policy marking functions with
respect to Bionova) will be Carlos Herrera, Robert Serenbetz, Raul Batiz E.,
Guillermo Batiz G. and Raul Batiz G. (the "Named Executive Officers").

During the fiscal year ended December 31, 1995, the Named Executive Officers
other than Mr. Serenbetz (who will not become an employee of Bionova until the
Effective Time of the Merger) received total compensation with respect to
services performed for Bionova Subsidiaries as follows: Mr. Herrera--cash
compensation of $160,000 and no non-cash compensation; Raul Batiz E.--cash
compensation of $435,233 and non-cash compensation in the form of an
automobile provided for his personal use; Guillermo Batiz G.--cash
compensation of $75,000 and non-cash compensation of approximately $10,000;
and Raul Batiz G.--cash compensation of $75,000 and non-cash compensation of
approximately $10,000.

The compensation received by Mr. Serenbetz from DNAP during the fiscal year
ended December 31, 1995 is set forth in the following table. No stock
appreciation rights were granted to Mr. Serenbetz during the last fiscal year
and none were held by him at the end of the fiscal year.

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS(1) OTHER
---------------------------------- --------------------- ---------------
RESTRICTED SECURITIES
NAME AND BASE OTHER ANNUAL STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) AWARDS($) OPTIONS(#) COMPENSATION(3)
------------------ ---- --------- -------- --------------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert Serenbetz........ 1995 225,000 0 23,076(2) 25,000(4) 180,000 4,623
Chairman, Chief
Executive Officer, and
President
</TABLE>
- --------
(1) DNAP does not offer named executives a Long Term Incentive Plan.
(2) DNAP paid certain expenses, including tax equalization on nondeductible
reimbursements, for the relocation of Mr. Serenbetz from New Jersey to
California.
(3) Represents contributions made by DNAP to its 401(k) Retirement and Savings
Plan.
(4) Represents the value at date of grant of restricted stock awarded in lieu
of cash for the 1995 base salary increase.

99
<PAGE>

The following table contains information concerning the grant of options
under DNAP's 1986 and 1994 Stock Option Plans (the "Stock Option Plans") to
Mr. Serenbetz during the year ended December 31, 1995.

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATE OF
OPTION GRANTS IN LAST FISCAL YEAR STOCK PRICE FOR
INDIVIDUAL GRANTS OPTION TERM(2)
--------------------------------------------------------------------- ---------------------
NUMBER OF SECURITIES % OF TOTAL OPTIONS EXERCISE OR
UNDERLYING OPTIONS GRANTED TO EMPLOYEES BASE PRICE
GRANTED(#)(1) IN FISCAL YEAR ($/SHARE) EXPIRATION DATE 5% 10%
-------------------- -------------------- ----------- --------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Robert Serenbetz........ 180,000 21.5% 2.4688 3/28/05 279,500 708,200
</TABLE>
- --------
(1) Options granted become exercisable one year after vesting. Vesting will
occur in two equal installments upon achievement for 90 calendar days of
an average share price of the DNAP Common Stock of $7.00 for the first
installment and $9.00 for the second installment. If vesting does not
occur as described above, then 100% vesting will occur on March 28, 2000.
All options were granted at the fair market value of the DNAP Common Stock
as provided in the Stock Option Plans and generally expire upon the
earlier of 10 years from the date of grant or the date of termination of
employment.
(2) Potential realizable value is based on the assumption that the DNAP Common
Stock appreciates at the annual rate shown (compounded annually) from the
date of the grant until the end of the ten-year option term.

The following table summarizes options exercised during 1995 and presents
the value of unexercised options held by Mr. Serenbetz at December 31, 1995.

<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED IN-THE-
UNEXERCISED OPTIONS AT MONEY OPTIONS AT FISCAL
SHARES FISCAL YEAR END(#) YEAR END($)(2)
ACQUIRED ON VALUE ------------------------- -------------------------
EXERCISE(1) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert Serenbetz........ 0 0 599,000 346,000 0 0
</TABLE>
- --------
(1) Mr. Serenbetz did not exercise options during 1995.
(2) Based upon the closing market price of the DNAP Common Stock on December
31, 1995 and the exercise price per share of options awarded to Mr.
Serenbetz, Mr. Serenbetz did not hold any "in-the-money" options at
December 31, 1995.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

ABSA, a subsidiary of Bionova, has entered into a contractual arrangement
with CABH pursuant to which CABH provides services to ABSA and ABSA pays a fee
to CABH based on CABH's costs incurred in connection with providing such
services. See "Business of Bionova--Employees." Both Raul Batiz G. and
Guillermo Batiz G. own in excess of 10% of CABH and are deemed, by virtue of
their positions with ABSA, to be executive officers of Bionova. In 1995, ABSA
paid a total of approximately $8,381,000 to CABH under this arrangement.

Pursuant to the Merger Agreement, DNAP and ELM agreed that on the Closing
Date they would enter into the Long Term Funded Research Agreement, pursuant
to which they will use their best efforts to agree on research projects to be
conducted by DNAP for ELM or its affiliates which will result in payments to
DNAP of $30 million over a 10 year period, with minimum funding (subject to
carryforwards) of $9 million in any 3 year period. Unless otherwise agreed by
the parties, payments of at least $625,000 in respect of ELM's obligation to
fund research projects are to be paid to DNAP at the beginning of each
calendar quarter during the term of the Long Term Funded Research Agreement.
See "The Merger Agreement and Related Agreements--The Long Term Funded
Research Agreement."

100
<PAGE>

Bionova has entered into an Administrative Services Agreement with certain
of its affiliates pursuant to which such affiliates will provide services to
Bionova and the Bionova Subsidiaries, who will pay a fee based on the costs of
providing such services, including salary, benefit and overhead expenses
related to approximately 8 people. Annual payments under this agreement are
expected to be $1.2 million.

Pedro Batiz G. is the Vice President of Marketing of R.B. Packing Arizona.
In 1995, his total compensation was approximately $280,000. He is the son of
Raul Batiz E.

Rodolfo Batiz G. is a Senior Salesman at R.B. Packing Arizona. In 1995 his
total compensation was approximately $83,000. He is the son of Raul Batiz E.

Joe A. Rudberg, the Secretary of Bionova, is a shareholder in the law firm
of Thompson & Knight, P.C. Thompson & Knight, P.C. provides legal services to
Bionova and several of its affiliates.

EXPERTS

The financial statements and schedule of DNAP as of December 31, 1995 and
1994 and for each of the years in the three-year period ended December 31,
1995 included in this Proxy Statement/Prospectus, and elsewhere in the
Registration Statement, have been audited by KPMG Peat Marwick LLP,
independent certified public accountants, as set forth in their report thereon
appearing herein and elsewhere in the Registration Statement. Such financial
statements and schedule are included herein and in the Registration Statement
in reliance upon the report of KPMG Peat Marwick LLP, upon the authority of
said firm as experts in accounting and auditing.

The financial statements of the Bionova Subsidiaries as of December 31, 1995
and 1994 and for each of the three years in the period ended December 31, 1995
and of Bionova U.S. Inc., for the period from inception (January 12, 1996) to
March 31, 1996 included in this Proxy Statement/Prospectus, and elsewhere in
the Registration Statement, have been audited by Price Waterhouse, independent
accountants, as set forth in their reports thereon appearing herein and
elsewhere in the Registration Statement. Such financial statements are
included in reliance upon the reports of Price Waterhouse, given on the
authority of said firm as experts in accounting and auditing.

LEGAL OPINION

The legality of the shares of Bionova Common Stock to be issued in the
Merger and certain federal income tax matters pertaining to the Merger will be
passed on by Thompson & Knight, P.C., 1700 Pacific Avenue, Suite 3300, Dallas,
Texas 75201, counsel to Bionova. Joe A. Rudberg, the Secretary of Bionova, is
a shareholder of Thompson & Knight, P.C.

STOCKHOLDER PROPOSALS

Stockholder proposals for inclusion in Bionova's proxy materials for the
1997 annual meeting of stockholders must be received by Bionova's secretary,
Joe A. Rudberg, 1700 Pacific Avenue, Suite 3300, Dallas, Texas 75201, no later
than November 15, 1996.

If the Merger is not consummated, stockholder proposals for inclusion in the
proxy materials for DNAP's 1996 annual meeting of stockholders must be
received by DNAP at its offices in Oakland, California, no later than October
31, 1996.

Stockholder proposals must meet all applicable requirements under the rules
of the Commission.

101
<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S> <C>
CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE OF DNA PLANT TECHNOLOGY
CORPORATION AND SUBSIDIARIES
Independent Auditors' Report............................................ F-2
Consolidated balance sheets at December 31, 1995 and 1994............... F-3
Consolidated statements of operations for the years ended December 31,
1995, 1994 and 1993.................................................... F-4
Consolidated statements of stockholders' equity for the years ended
December 31, 1995, 1994 and 1993....................................... F-5
Consolidated statements of cash flows for the years ended December 31,
1995, 1994 and 1993.................................................... F-6
Notes to consolidated financial statements.............................. F-7
Schedule II: Valuation and qualifying account for the years ended
December 31, 1995, 1994 and 1993....................................... F-22
Unaudited consolidated balance sheets at March 31, 1996 and December 31,
1995................................................................... F-23
Unaudited consolidated statements of operations for the three months
ended March 31, 1996 and 1995.......................................... F-24
Unaudited consolidated statements of cash flows for the three months
ended March 31, 1996 and 1995.......................................... F-25
Notes to unaudited consolidated financial statements.................... F-26
COMBINED FINANCIAL STATEMENTS OF THE BIONOVA SUBSIDIARIES
Report of independent accountants....................................... F-28
Combined balance sheet at December 31, 1995 and 1994.................... F-29
Combined statement of operations for the years ended December 31, 1995
and 1994 and for the period from February 10, 1993 to December 31,
1993................................................................... F-30
Combined statement of changes in stockholder's equity for the period
ended December 31, 1995................................................ F-31
Combined statement of cash flows for the years ended December 31, 1995
and 1994 and for the period from February 10, 1993 to December 31,
1993................................................................... F-32
Notes to combined financial statements.................................. F-33
Unaudited combined balance sheet at March 31, 1996 and December 31,
1995................................................................... F-44
Unaudited combined statement of operations for the three months ended
March 31, 1996 and 1995................................................ F-45
Unaudited combined statement of cash flows for the three months ended
March 31, 1996 and 1995................................................ F-46
Notes to unaudited combined financial statements........................ F-47
CONSOLIDATED FINANCIAL STATEMENTS OF BIONOVA U.S. INC.
Report of independent accountants....................................... F-48
Consolidated balance sheet at March 31, 1996............................ F-49
Consolidated statement of income for the period from January 12, 1996 to
March 31, 1996......................................................... F-50
Consolidated statement of changes in stockholder's equity for the period
from January 12, 1996 to March 31, 1996................................ F-51
Consolidated statement of cash flows for the period from January 12,
1996 to March 31, 1996................................................. F-52
Notes to consolidated financial statements.............................. F-53
COMBINED FINANCIAL STATEMENTS OF R.B. PACKING, INC., R.B. PACKING OF
CALIFORNIA, INC. AND BATIZ & SONS, INC.
Report of independent accountants....................................... F-55
Combined balance sheet at December 31, 1994............................. F-56
Combined statement of income for the year ended December 31, 1994....... F-57
Combined statement of changes in stockholder's equity for the year ended
December 31, 1994...................................................... F-58
Combined statement of cash flows for the year ended December 31, 1994... F-59
Notes to combined financial statements.................................. F-60
</TABLE>

F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
DNA Plant Technology Corporation:

We have audited the consolidated financial statements of DNA Plant
Technology Corporation and subsidiaries as listed in the accompanying index.
In connection with our audits of the consolidated financial statements, we
also audited the financial statement schedule as listed in the accompanying
index. These consolidated financial statements and financial statement
schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements and financial statement schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of DNA Plant
Technology Corporation and subsidiaries as of December 31, 1995 and 1994, and
the results of their operations and their cash flows for each of the years in
the three-year period ended December 31, 1995, in conformity with generally
accepted accounting principles. Also in our opinion, the related consolidated
financial statement schedule when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.

KPMG Peat Marwick LLP

San Francisco, California
February 14, 1996

F-2
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 1995 AND 1994
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents.............................. $ 1,742 $ 1,202
Temporary investments.................................. -- 3,287
Accounts receivable, net of allowance for bad debts of
$106 in 1995 and $346 in 1994......................... 1,922 2,344
Inventories............................................ 380 1,168
Prepaids............................................... 156 302
Other current assets................................... 269 298
Assets held for sale................................... 1,038 900
--------- ---------
Total Current Assets..................................... 5,507 9,501
--------- ---------
Fixed assets, net of accumulated depreciation of $6,612
and $8,024 in 1995 and 1994, respectively............... 2,345 4,639
Notes receivable......................................... -- 250
Patents and other assets, net of amortization of $354 in
1995 and $256 in 1994................................... 503 450
Non-marketable equity investment......................... 1,946 --
Excess of purchase price over net assets acquired, net of
accumulated amortization of $380 in 1995 and $190 in
1994.................................................... 1,520 1,710
--------- ---------
Total Assets............................................. $ 11,821 $ 16,550
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable....................................... $ 1,384 $ 1,537
Accrued liabilities.................................... 1,452 1,189
Accrued compensation................................... 361 462
Accrued restructuring and consolidation costs.......... 87 2,108
Dividends payable...................................... 776 776
Amount payable to Du Pont.............................. 983 983
Current portion of note payable........................ 204 --
--------- ---------
Total Current Liabilities................................ 5,247 7,055
--------- ---------
Deferred revenue......................................... 584 518
Deferred compensation.................................... 232 285
Note payable............................................. 709 --
--------- ---------
Total Long Term Liabilities.............................. 1,525 803
--------- ---------
Commitments and Contingencies............................
--------- ---------
Stockholders' Equity:
Preferred stock, par value $.01 per share; authorized
5,000 shares; $2.25 convertible preferred stock;
issued and outstanding 1,380 shares in 1995 and 1994.. 14 14
Series A convertible preferred stock, par value $.01
per share; authorized 3 shares; issued and outstanding
3 shares in 1995 and 1994............................. -- --
Series B convertible preferred stock, par value $.01
per share; authorized 1 share; issued and outstanding
no shares in 1995 and 1994............................ -- --
Series C convertible preferred stock, par value $.01
per share; authorized 1 share; issued and outstanding
no shares in 1995 and 1994............................ -- --
Common stock, par value of $.01 per share; authorized
60,000 shares; issued 42,829 shares in 1995 and 30,713
in 1994............................................... 428 307
Common stock to be issued, par value of $.01 per share,
no shares in 1995, 100 shares in 1994................. -- 1
Additional paid-in capital............................. 160,405 149,918
Accumulated deficit.................................... (155,798) (141,752)
Unrealized holding gain................................ -- 204
--------- ---------
Total Stockholders' Equity............................... 5,049 8,692
--------- ---------
Total Liabilities and Stockholders' Equity............... $ 11,821 $ 16,550
========= =========
</TABLE>

See accompanying notes to consolidated financial statements

F-3
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Revenues:
Produce sales................................. $ 10,074 $ 12,673 $ 1,330
Product development........................... 1,720 2,143 5,823
Investment and royalty income................. 2,555 1,515 1,874
-------- -------- --------
Total Revenues.................................. 14,349 16,331 9,027
-------- -------- --------
Operating Expenses:
Cost of produce sales......................... 15,284 21,868 1,662
Exit carrot processing........................ 1,647 3,210 --
Research and product development.............. 5,880 6,769 11,999
Selling, general and administrative........... 5,753 7,031 2,610
Consolidation and relocation costs............ 70 2,048 --
Purchased in-process research and product
development.................................. -- -- 15,238
-------- -------- --------
Total Operating Expenses........................ 28,634 40,926 31,509
-------- -------- --------
Loss from Operations............................ (14,285) (24,595) (22,482)
Gains on sales of assets........................ 239 225 60
-------- -------- --------
Loss from continuing operations before equity in
loss of joint ventures......................... (14,046) (24,370) (22,422)
-------- -------- --------
Equity in operating loss of joint ventures...... -- -- (9,026)
-------- -------- --------
Loss from Continuing Operations................. (14,046) (24,370) (31,448)
Discontinued Operations:
Loss from operations........................ -- (640) (2,494)
Loss on disposition......................... -- (1,273) --
-------- -------- --------
Total Discontinued Operations............. -- (1,913) (2,494)
-------- -------- --------
Net Loss........................................ (14,046) (26,283) (33,942)
Preferred stock dividends....................... (2,343) (3,105) (3,105)
-------- -------- --------
Net Loss Applicable to Common Stockholders...... $(16,389) $(29,388) $(37,047)
======== ======== ========
Net Loss Per Common Share:
Continuing operations......................... $ (.47) $ (.95) $ (1.56)
Discontinued operations....................... -- (.07) (.11)
-------- -------- --------
Net Loss per Common Share....................... $ (.47) $ (1.02) $ (1.67)
======== ======== ========
Weighted Average Common Shares Outstanding...... 34,823 28,868 22,156
======== ======== ========
</TABLE>

See accompanying notes to consolidated financial statements

F-4
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(IN THOUSANDS)

<TABLE>
<CAPTION>
PREFERRED STOCK COMMON STOCK
----------------------------- ----------------------------
ISSUED TO BE ISSUED ISSUED TO BE ISSUED
-------------- -------------- ------------- --------------
NUMBER NUMBER NUMBER NUMBER ADDITIONAL UNREALIZED
OF OF OF OF PAID-IN HOLDING ACCUMULATED
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL GAIN DEFICIT
------ ------ ------ ------- ------ ------ ------ ------ ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31
1992................... 1,380 $ 14 -- $ -- 21,915 $ 219 -- $ -- $111,855 $ -- $ (81,527)
Exercise of options &
warrants.............. -- -- -- -- 143 1 -- -- 645 -- --
Issuance of common
stock for
compensation.......... -- -- -- -- 70 1 -- -- 331 -- --
Stock to be issued..... -- -- 3 10,312 -- -- 2,000 7,500 -- -- --
Net loss............... -- -- -- -- -- -- -- -- -- -- (33,942)
Preferred dividends.... -- -- -- -- -- -- -- -- (3,105) -- --
----- ---- --- ------- ------ ----- ------ ------ -------- ----- ---------
Balance, December 31,
1993................... 1,380 $ 14 3 $10,312 22,128 $ 221 2,000 $7,500 $109,726 -- $(115,469)
----- ---- --- ------- ------ ----- ------ ------ -------- ----- ---------
Exercise of options &
warrants.............. -- -- -- -- 35 -- -- -- 112 -- --
Issuance of common
stock for cash........ -- -- -- -- 6,500 65 -- -- 25,180 -- --
Issuance of common
stock for
compensation.......... -- -- -- -- 50 1 -- -- 213 -- --
Issuance of common
stock for acquisition
of FreshWorld......... -- -- -- -- 2,000 20 (2,000) (7,500) 7,480 -- --
Issuance of preferred
stock for acquisition
of FreshWorld......... 3 -- (3) (10,312) -- -- -- -- 10,312 -- --
Stock to be issued..... -- -- -- -- -- -- 100 1 -- -- --
Unrealized holding
gain.................. -- -- -- -- -- -- -- -- -- 204 --
Net loss............... -- -- -- -- -- -- -- -- -- -- (26,283)
Preferred dividends.... -- -- -- -- -- -- -- -- (3,105) -- --
----- ---- --- ------- ------ ----- ------ ------ -------- ----- ---------
Balance, December 31,
1994................... 1,383 $ 14 -- $ -- 30,713 $ 307 100 $ 1 $149,918 $ 204 $(141,752)
----- ---- --- ------- ------ ----- ------ ------ -------- ----- ---------
Issuance of common
stock and warrants for
cash.................. -- -- -- -- 9,070 90 -- -- 9,273 -- --
Issuance of common
stock for
compensation.......... -- -- -- -- 170 2 -- -- 290 -- --
Issuance of common
stock for investment
in UAC................ -- -- -- -- 1,557 16 -- -- 1,930 -- --
Issuance of preferred
stock for cash........ 2 -- -- -- -- -- -- -- 1,350 -- --
Conversion of preferred
stock................. (2) -- -- -- 1,319 13 -- -- (13) -- --
Stock to be issued..... -- -- -- -- -- -- (100) (1) -- -- --
Unrealized holding
gain.................. -- -- -- -- -- -- -- -- -- (204) --
Net loss............... -- -- -- -- -- -- -- -- -- -- (14,046)
Preferred dividends.... -- -- -- -- -- -- -- -- (2,343) -- --
----- ---- --- ------- ------ ----- ------ ------ -------- ----- ---------
Balance, December 31,
1995................... 1,383 $ 14 -- $ -- 42,829 $ 428 -- $ -- $160,405 $ -- $(155,798)
===== ==== === ======= ====== ===== ====== ====== ======== ===== =========
</TABLE>

See accompanying notes to consolidated financial statements

F-5
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(IN THOUSANDS)

<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Loss from continuing operations................ $(14,046) $(24,370) $(31,448)
Reconciliation of loss from continuing opera-
tions to net cash used in operating activi-
ties:
Depreciation and amortization................ 578 1,293 829
Provision for uncollectible accounts......... (450) 166 12
Loss from disposal of carrot processing as-
sets........................................ 1,268 2,303 --
Loss on purchase commitments................. -- -- 738
Loss (gains) on disposal of assets........... (239) 398 (259)
Loss from discontinued operations............ -- (1,913) (2,494)
Equity in loss of joint ventures............. -- -- 9,026
Purchased in-process product development..... -- -- 15,238
Compensation and expenses paid in common
stock....................................... 142 217 --
Net changes (exclusive of changes due to
business acquired) in:
Accounts receivable........................ 873 (92) (206)
Inventory.................................. 517 (572) 35
Other current assets....................... 174 470 218
Accounts payable and accrued liabilities... (885) (3,630) (116)
Other assets and liabilities............... 121 169 (594)
-------- -------- --------
Net cash used in operating activities............ (11,947) (25,561) (9,021)
-------- -------- --------
Cash flows from investing activities:
Investments in joint ventures.................. -- -- (8,109)
Capital expenditures........................... (171) (554) (331)
Purchases of temporary investments............. -- (18,185) (12,891)
Sales and maturities of temporary investments.. 3,287 19,544 32,795
Proceeds from sales of assets.................. 919 435 401
Business acquired.............................. -- -- (150)
-------- -------- --------
Net cash provided by investing activities........ 4,035 1,240 11,715
-------- -------- --------
Cash flows from financing activities:
Proceeds from issuance of stock................ 10,827 25,374 646
Preferred stock dividends...................... (2,343) (3,105) (3,105)
Payment of principle on note payable........... (32) -- --
-------- -------- --------
Net cash provided by (used in) financing ac-
tivities.................................... 8,452 22,269 (2,459)
-------- -------- --------
Net increase (decrease) in cash and cash equiva-
lents........................................... 540 (2,052) 235
Cash and cash equivalents, beginning of year..... 1,202 3,254 3,019
-------- -------- --------
Cash and cash equivalents, end of year........... $ 1,742 $ 1,202 $ 3,254
======== ======== ========
</TABLE>

See accompanying notes to consolidated financial statements

F-6
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1995

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation:

The accompanying consolidated financial statements of the Company include
the accounts of DNA Plant Technology Corporation, and its wholly-owned and
majority-owned subsidiaries. The results of operations for Quantix Systems,
L.P. ("Quantix") have been accounted for as discontinued operations (see Note
3 for further information related to discontinued operations). All significant
intercompany balances and transactions have been eliminated.

Investments in and advances to the branded produce and edible oils joint
ventures, in which the Company had a 50% or less ownership, were accounted for
by the equity method through December 31, 1993. Under such method, the
Company's share of net earnings (losses) is included as a separate item in the
Consolidated Statement of Operations.

The Company accounts for its non-marketable equity investment at cost (See
Note 15).

Business:

The Company is an agribusiness biotechnology company focused on the
development and marketing of premium fresh and processed branded fruits and
vegetables developed through advanced biotechnological breeding, genetic
engineering and other technologies.

In January 1994, the Company completed a transaction (the "Du Pont
Transaction") with E.I. du Pont de Nemours and Company ("Du Pont") whereby the
Company became the sole owner of FreshWorld, L.P. ("FreshWorld"), a
partnership engaged in the development and marketing of branded, premium fresh
fruits and vegetables. The Company acquired Du Pont's ownership interest in
FreshWorld in exchange for the Company's approximately 28% interest in
InterMountain Canola Company L.P. ("InterMountain"), another partnership
between the Company and Du Pont, which was engaged in developing and marketing
edible oils; 2,000,000 shares of common stock of the Company; 2,750 shares of
a new issue of Series A preferred stock of the Company which is convertible
into 2,750,000 shares of common stock; nonexclusive rights to certain Company
technology; and future cash payments upon the sale of the Company's New Jersey
facility. The terms of the Du Pont Transaction further provided that the
Company was to become sole owner of FreshWorld as of December 31, 1993.
Accordingly, the Company's accompanying consolidated financial statements
reflect the purchase of FreshWorld and the effect of the stock to be issued
effective on December 31, 1993.

As described in Note 21, on January 26, 1996 the Company entered into an
Agreement and Plan of Merger with Empresas La Moderna, S.A. de C.V. and
related entities.

Use of Estimates:

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Reclassification:

Certain reclassifications have been made to prior years' amounts to be
consistent with the 1995 presentation.

F-7
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Revenue:

Revenue from produce sales is recognized at time of shipment to customers.

Revenue from product development activities is recognized during the period
the Company performs the development efforts in accordance with the terms of
the agreements and activities undertaken. The revenue is recognized ratably
over the term of the agreement, which generally approximates the performance
effort. Revenue that is related to future performance under such agreements is
deferred and recognized as revenue when earned.

Temporary Investments:

Effective January 1, 1994, the Company adopted Statement of Financial
Accounting Standard Statement No. 115, Accounting for Certain Investments in
Debt and Equity Securities. The Company's temporary investments consisted of
short and intermediate-term notes and bonds and marketable equity securities
which are classified as available for sale and stated at fair value as
determined by quoted market values. Changes in the net unrealized holding
gains and losses are included as a separate component of stockholders' equity.
For the purpose of determining gross realized gains and losses, the cost of
temporary investments sold is based upon specific identification. Adoption of
Statement No. 115 did not have a material impact on the Company's consolidated
financial statements.

Inventories:

Inventories are stated at the lower of cost, determined on the first-in,
first-out method, or market and are primarily comprised of prepaid grower
fees, raw material seed and finished goods produce.

Fixed Assets:

Fixed assets are stated at cost. Depreciation and amortization of buildings,
improvements and equipment are provided on a straight-line basis over the
estimated useful lives of the respective assets, generally five to twenty
years for buildings and improvements and three to ten years for equipment and
furniture.

Excess of Purchase Price Over Net Assets Acquired:

The excess purchase price over the fair value of identifiable net assets
acquired is capitalized and amortized on a straight-line basis over its
estimated useful life (ten years). Amortization charged to continuing
operations amounted to $190,000 in each of the years ended December 31, 1995
and 1994. The Company periodically evaluates the recoverability of its
recorded asset based upon projected, undiscounted cash flows and operating
income of the related business unit.

Patents:

The costs of obtaining patents are capitalized. Costs relating to successful
patent efforts are amortized on a straight-line basis over the estimated
useful lives of the patents, generally five years. Costs relating to
unsuccessful or terminated patent efforts are expensed in the period
management believes such efforts may not result in an approved patent or when
a patent application is denied.

Research and Product Development Costs:

All research and product development costs incurred or acquired are
expensed.

F-8
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Stock Based Compensation:

In October 1995, the Financial Accounting Standards Board issued Statement
No. 123, Accounting for Stock-Based Compensation. Statement No. 123 applies to
all transactions in which an entity acquires goods or services by issuing
equity instruments such as common stock, except for employee stock ownership
plans. Statement No. 123 establishes a new method of accounting for stock-
based compensation arrangements with employees which is fair value based. The
statement encourages (but does not require) employers to adopt the new method
in place of the provisions of Accounting Principles Board Opinion (APB) No.
25, Accounting for Stock Issued to Employees. Companies may continue to apply
the accounting provisions of APB No. 25 in determining net income, however,
they must apply the disclosure requirements of Statement No. 123. If the
Company adopts the fair value based method of Statement No. 123, a higher
compensation cost would result for fixed stock option plans and a different
compensation cost will result for the Company's contingent or variable stock
option plans. The recognition provisions and disclosure requirements of
Statement No. 123 are effective January 1, 1996. The Company plans to continue
to use its current accounting practice under APB No. 25.

Income Taxes:

Effective January 1, 1993, the Company adopted Statement No. 109. The
cumulative effect of that change in the method of accounting for income taxes
had no impact on the 1993 Consolidated Statement of Operations.

Statement No. 109 requires a change from the deferred method of accounting
for income taxes under APB Opinion 11 to the asset and liability method of
accounting for income taxes.

Net Loss Per Common Share:

Net loss per common share applicable to common stockholders has been
computed by dividing the net loss, including preferred stock dividends, by the
weighted average number of common shares outstanding during each period.

Common shares issuable upon the exercise of stock options and warrants or
conversion of preferred shares have been excluded from the computation of net
loss per common share since their inclusion was antidilutive.

Statements of Cash Flows:

For purposes of the accompanying consolidated statements of cash flows, the
Company considers all highly-liquid investments with maturities at time of
purchase of three months or less as cash equivalents.

Supplemental Cash Flow Information:

In 1993 the Company issued common stock in accordance with the terms of a
severance agreement resulting from its strategic consolidation and as partial
payment under its management incentive program in the amounts of $120,000 and
$91,000, respectively.

F-9
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

In January 1994 the Company completed the Du Pont Transaction (see Note 4)
which, in accordance with the terms of the agreement, has been accounted for
as if the acquisition was completed on December 31, 1993. The following are
the elements of the transaction (in thousands):

<TABLE>
<S> <C>
Assets acquired
Trade receivables.............................................. $ 877
Fixed assets................................................... 4,761
Intangibles.................................................... 1,900
All other assets............................................... 1,478
In-process research and product development...................... 15,238
Liabilities assumed.............................................. (3,098)
Estimated liability to Du Pont................................... (1,500)
Preferred stock to be issued to Du Pont.......................... (10,312)
Common stock to be issued to Du Pont............................. (7,500)
Common stock issued to financial advisor......................... (121)
Company's interest in net assets................................. (1,573)
--------
Cash payments made........................................... $ 150
========
</TABLE>

In 1993 the Company sold a parcel of land for an aggregate purchase price of
$550,000. The Company received $100,000 in cash and a note receivable in the
amount of $450,000 payable semi-annually over a three year period. A gain on
the sale of the land of $261,000 was deferred and included in deferred revenue
at December 31, 1993. During 1994, the Company wrote down the note $41,000,
received the remaining balance and recognized the resulting gain of $220,000.

In 1995 the Company issued 1,557,377 shares of its common stock in exchange
for 1,364,118 shares of common stock of United Agricorp, Inc. ("UAC") (see
Note 15).

(2) INVESTMENTS IN JOINT VENTURES

In September 1994 the Company entered into a partnership agreement with
Fresh Choice Produce, Inc. ("Fresh Choice") to market both Fresh Choice's and
FreshWorld's fruits and vegetables. The agreement outlined written provisions
whereby for a limited period of time Fresh Choice could terminate the
agreement for any reason. In the fourth quarter of 1994 Fresh Choice exercised
this option and terminated the partnership. Amounts included in the Company's
Consolidated Statement of Operations for the fiscal year ended December 31,
1994 as a result of this partnership consisted of produce sales, cost of
produce sales, and other costs of $1,369,000, $1,301,000 and $68,000,
respectively. In addition, the Company recognized $140,000 of income for its
investment interest in selected Fresh Choice crops.

As a result of the Du Pont Transaction (see Note 4), the Company's
investment in joint ventures at December 31, 1993 was zero. Prior to December
31, 1993, the Company's investment in joint ventures related principally to
its two joint venture partnerships with Du Pont, a principal stockholder of
the Company. The two joint ventures were FreshWorld, a 50%-owned limited
partnership and InterMountain, an approximately 28% owned limited partnership.

F-10
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Summarized financial information for these joint ventures is as follows for
1993:

<TABLE>
<CAPTION>
1993
--------------
(IN THOUSANDS)
<S> <C>
Operating Data:
Revenues.................................................. $ 10,160
Expenses *................................................ 38,143
--------
Net loss *.............................................. $(27,983)
========
Company's equity in net loss................................ $ (9,026)
========
</TABLE>
- --------
* Excludes purchased in-process research and product development of $15,238.

Included in revenues and expenses in the above table are $5,101,000 and
$16,111,000, respectively, which relate to InterMountain. These amounts are
unaudited.

(3) DISPOSAL OF QUANTIX

Effective May 1994, the Company completed the sale of substantially all of
the assets of Quantix to Idetek, Inc. ("Idetek"), a privately held
biotechnology company, for a $250,000 convertible promissory note bearing
interest at 10% per annum due July 11, 1996 and 2,900,000 shares of Idetek
common stock. After completion of the transaction, the Company held less than
10% of the voting interest of Idetek. The note has been recorded at its
estimated net realizable value and is shown as an other current asset in the
accompanying Consolidated Balance Sheets. No value has been assigned to the
Idetek common stock as there is no established market value. A $1.3 million
charge was recorded during 1994 for the loss on disposal of Quantix consisting
of employee severance and termination costs of $.5 million, operating losses
through the anticipated date of disposition of $.4 million, and a $.4 million
write-down to net realizable value of assets sold. Revenue related to the
operations of Quantix was approximately $.3 million and $1.3 million for 1994
and 1993 respectively.

(4) DU PONT TRANSACTION AND FRESHWORLD ACQUISITION

In January 1994, the Company completed the Du Pont Transaction whereby
2,000,000 shares of common stock; 2,750 shares of a new series of preferred
stock (convertible into 2,750,000 shares of common stock); future cash
payments from the sale of the Company's New Jersey facility which is
classified as assets held for sale at December 31, 1995 and 1994; nonexclusive
licenses to certain Company technology; and the Company's approximately 28%
interest in InterMountain were exchanged for Du Pont's 50% interest in
FreshWorld resulting in the Company becoming the sole owner of FreshWorld. The
Du Pont Transaction has been accounted for as a purchase business combination
in accordance with generally accepted accounting principles and, in accordance
with the terms of the related agreement, as if the Du Pont Transaction had
been completed on December 31, 1993. The stock issued to Du Pont in the
transaction has been valued on the basis of $3.75 per share of common stock,
which along with the other items, represents an aggregate purchase price of
$19,880,000. The per share price represents the quoted market price of the
Company's common stock on the date the Du Pont Transaction closed, less a
discount as determined by an investment banker to reflect restrictions on Du
Pont's ability to sell such stock in the public markets.

Under purchase accounting, the assets and liabilities of the acquired entity
are required to be adjusted to their estimated fair value. The cost in excess
of the fair value of net assets acquired represents goodwill and other
intangibles of $1,900,000 which has been capitalized, and $15,238,000 of in-
process research and product development, which is not capitalized under
generally accepted accounting principles and accordingly, has been charged to
operations in December 1993. The Company's investment in InterMountain was
zero, and no value was assigned to the Company's 28% interest in
InterMountain; accordingly, there was no gain or loss on the transfer of such
interest.

F-11
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Under the terms of the Du Pont Transaction, the Company agreed to dispose of
a facility in New Jersey and to remit the net proceeds from the sale to Du
Pont. Accordingly, the estimated net realizable value of this property of
$900,000 is recorded in assets held for sale with a corresponding liability of
$900,000 recorded in the amount payable to Du Pont in the accompanying
consolidated balance sheets.

In connection with the Du Pont Transaction, the common stock and preferred
stock were issued in January 1994.

The following unaudited pro forma summary consolidated statements of
operations presents the Company's results of operations as if the increase in
ownership of FreshWorld had occurred on January 1, 1993. These pro forma
results have been prepared for comparative purposes only and are not
necessarily indicative of actual financial results if the Du Pont Transaction
had been consummated on January 1, 1993, or of future results of operations.

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1993
--------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C>
Revenues:
Produce sales............................................. $ 6,389
Product development....................................... 2,810
Investment, royalty and other income...................... 1,934
--------
Total Revenues.............................................. $ 11,133
========
Net Loss.................................................... $(26,820)
========
Net loss applicable to common shareholders.................. $(29,925)
========
Net loss per common share................................... $ (1.24)
========
</TABLE>

Excludes non-recurring charge of $15,238,000 relating to purchased in-
process research and product development.

(5) EXIT CARROT PROCESSING

During 1994, the Company discontinued processing its own carrots and shut
down its carrot processing plant. The Company recorded charges related to the
exiting of carrot processing of $1.6 million and $3.2 million for the years
ended December 31, 1995 and 1994, respectively. The 1994 charge consisted of a
$1.6 million charge to write down the equipment to its then estimated net
realizable value, a $.5 million charge to write down packaging material and
seed inventory, a $.2 million charge for lease payments, net of estimated
sublease payments, and $.1 million for severance and termination benefits. As
of December 31, 1994, the Company had reserves of $1.3 million for the write
down of the carrot processing assets to their net realizable value and
$.2 million for estimated lease termination costs. During 1995, the reserve
for lease termination costs was reduced by cash payments and the reserve for
carrot processing assets was reduced by $.9 million for the write down of
equipment and inventory and $.4 million for losses realized on the disposal of
equipment and inventory. The 1995 charge consisted of an additional $1.3
million for termination and other costs related to the Company's leased
facility and $.3 million related to an additional write down of carrot
processing equipment, seed and packaging inventory. At December 31, 1995,
there are no amounts reserved for the exit of carrot processing.

As part of the exit plan, during 1995 the Company entered into an agreement
to lease carrot processing equipment with a net book value of $1,725,000 to a
third party. The lease is an operating lease with a term of sixty months
beginning November 1, 1995, and terminating October 31, 2000. Lease payments
are $15,935 per month. The lessee has an option to purchase the equipment at
the end of the lease term at its then fair market

F-12
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

value. Carrot processing equipment not leased, with an estimated net
realizable value of $138,000 as of December 31, 1995, is recorded in the
accompanying Consolidated Balance Sheets as assets held for sale.

Concurrent with the leasing of its carrot processing equipment, the Company
terminated its carrot processing facility lease. In accordance with the terms
of the termination agreement, the Company delivered a note payable to the
lessor in the principal amount of $945,000 payable over 48 months and bearing
interest at a rate of 10% per annum. The future principle payments under this
note are 1996, $204,000; 1997, $225,000; 1998, $249,000; and 1999, $235,000.

Revenue and cost of produce sales related to the carrot processing
operations were $5.6 million and $12.4 million, respectively, for the year
ended December 31, 1994 prior to the shut-down of such operations. Prior to
1994, the operating results of the carrot processing operations were included
in the accounts of FreshWorld which was accounted for under the equity method.
Revenue and cost of produce sales related to FreshWorld's carrot processing
operations were $4.9 million and $12.2 million, respectively, for the year
ended December 31, 1993.

(6) INCOME TAXES

As discussed in Note 1, the Company adopted Statement No. 109 as of January
1, 1993. Income tax expense differed from the amounts computed by applying the
statutory U.S. Federal income tax rate to pretax income from continuing
operations as a result of the following (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------
1995 1994 1993
------- ------ --------
<S> <C> <C> <C>
Computed "expected" tax benefit.................. $ 4,776 $8,936 $ 11,540
Reduction in income tax benefit resulting from:
Losses for which no benefit was recognized..... (5,021) (8,748) (11,351)
Other.......................................... 245 (188) (189)
------- ------ --------
$ -- $ -- $ --
======= ====== ========
</TABLE>

At December 31, 1995, the Company had net operating loss carryforwards of
approximately $134,935,000 and $97,189,000 for Federal and States,
respectively. Because of prior transactions involving the issuance of equity
securities by the Company, certain annual limitations apply to the Company's
future use of these carryforwards. The Company also had Federal and State
research and development and Federal investment tax credit carryforwards at
December 31, 1995 of approximately $4,217,000, $200,000 and $332,000,
respectively. The tax operating loss and tax credit carryforwards expire as
follows (in thousands):

<TABLE>
<CAPTION>
FEDERAL STATE
FEDERAL STATES TAX TAX
YEAR NOL NOL CREDITS CREDITS
---- -------- ------- ------- -------
<S> <C> <C> <C> <C>
1996........................................ $ -- $ 41 $ 13 $--
1997........................................ -- 10,257 85 --
1998........................................ 3,617 15,088 109 --
1999........................................ 7,230 20,263 174 --
2000........................................ 6,479 18,905 111 --
2001 and thereafter......................... 117,609 32,635 4,057 200
-------- ------- ------ ----
Total..................................... $134,935 $97,189 $4,549 $200
======== ======= ====== ====
</TABLE>

F-13
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Significant components of the Company's deferred tax liabilities and assets
as of December 31, 1995 and 1994 are shown below (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1995 1994
------- -------
<S> <C> <C>
Deferred tax assets (in thousands):
Net operating loss carryforwards......................... $51,836 $46,160
Investment and research and development tax credits...... 4,743 4,549
In-process research and product development.............. 4,927 5,689
Other.................................................... 2,304 1,677
------- -------
Total deferred tax assets.............................. 63,810 58,075
Valuation allowance........................................ (63,530) (57,794)
------- -------
Net deferred tax assets.................................... 280 281
Deferred tax liabilities:
Fixed assets, principally depreciation................... 280 281
------- -------
Net deferred tax........................................... $ -- $ --
======= =======
</TABLE>

A valuation allowance of $63,530,000 has been recognized to offset the
deferred tax assets, as realization of such assets is uncertain. The valuation
allowance for deferred tax assets increased $5,736,000, $9,067,000 and
$13,784,000 for the years ended December 31, 1995, 1994 and 1993,
respectively.

Under the provisions of the Internal Revenue Code, should certain
substantial changes in the Company's ownership occur, the amount of net
operating loss carryforwards and credit carryforwards may be limited. The
closing of the contemplated Merger, discussed in Note 21, would cause a
substantial change in the Company's ownership. The result of this change in
ownership would be a material limitation in the Company's ability to utilize
the net operating loss and credit carryovers.

(7) INVENTORIES

Inventories consisted of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
-------------
1995 1994
-------------
<S> <C> <C>
Prepaid grower fees........................................... $ 119 $ 581
Raw materials and seed........................................ 192 407
Finished goods................................................ 69 180
----- -------
Total Inventories............................................. $ 380 $ 1,168
===== =======
</TABLE>

Prepaid grower fees were written down $585,000 at December 31, 1995, to
their net realizable value to recognize the estimated loss to complete certain
tomato contracts in progress and to terminate certain tomato growing
agreements that had been entered into for which harvesting had yet to begin.
The loss of $585,000 was recorded to cost of produce sales during the fourth
quarter 1995.

F-14
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(8) FIXED ASSETS

Fixed assets consisted of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1995 1994
------- -------
<S> <C> <C>
Buildings and improvements................................. $ 3,875 $ 3,899
Equipment and furniture.................................... 5,082 8,764
------- -------
Total Fixed Assets......................................... 8,957 12,663
Less accumulated depreciation.............................. (6,612) (8,024)
------- -------
Net Fixed Assets........................................... $ 2,345 $ 4,639
======= =======
</TABLE>

Included in fixed assets is equipment with a net book value of $1,695,000 at
December 31, 1995, which has been leased to a third party under an operating
lease (see Note 5). Depreciation expense was $291,000, $1,002,000 and $694,000
for each of the years ended December 31, 1995, 1994, and 1993, respectively.

(9) RESEARCH AND PRODUCT DEVELOPMENT

The Company has commitments to perform research and product development work
for customers.

The Company and Campbell Soup Company ("Campbell") formerly held joint
rights to certain tomato lines, including certain of the lines used to make
the hybrid seed from which the FreshWorld Farms(R) tomato is grown. In 1993,
the Company and Campbell entered into an agreement under which Campbell gave
up its rights to commercialize the jointly owned tomato lines with the result
that the Company has worldwide exclusive rights to such jointly-owned tomato
lines. The Company paid Campbell $1,000,000 in cash in January 1994, which was
charged to operations in 1993, and will be required to pay royalties on
certain tomato sales commencing in 1997.

Research and product development revenues from FreshWorld and InterMountain
amounted to 48% and 5%, respectively, in 1993 of the Company's total research
and product development revenues.

Research and product development expenses include the direct costs of
services performed under agreements of $1,111,000 in 1995, $1,196,000 in 1994
and $2,826,000 in 1993, and the direct costs of Company-sponsored programs
plus the indirect costs of all research and product development activities
totaling $4,769,000 in 1995, $5,573,000 in 1994 and $9,173,000 in 1993.

(10) STOCK OPTIONS AND WARRANTS

The Company maintained three stock option plans at December 31, 1995, the
1986 Stock Option Plan (the "1986 Plan"), the 1994 Stock Option Plan (the
"1994 Plan"), and the Non-Employee Directors Stock Option Plan (the
"Directors' Plan"), under which a maximum of 1,600,000 shares, 3,000,000
shares and 800,000 shares of common stock, respectively, are available for
issuance. The Company previously maintained three other stock option plans
under which approximately 520,720 options are currently outstanding and no
further grants will be awarded.

The 1986 Plan and the 1994 Plan provide for the granting of incentive stock
options, as defined under the Internal Revenue Code, nonqualified stock
options, restricted stock and stock appreciation rights to officers and
employees of and consultants and advisors to the Company at prices which
generally have not been less than the fair market value of the Company's
common stock on the date of grant and expiring ten years from the date of
grant.

F-15
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The Directors' Plan currently provides for initial and annual grants of
nonqualified stock options to each non-employee director at prices which are
equal to 90% and 100% respectively of the fair market value of the Company's
common stock on the date of grant and expiring ten years from the date of
grant. An initial director's option becomes exercisable in five equal annual
installments, beginning one year from the date of grant and the annual awards
become fully exercisable within one year from the date of grant.

A summary of the activity under all of the Company's stock option plans is
as follows:

<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
(NUMBER OF SHARES, IN THOUSANDS)
<S> <C> <C> <C>
Outstanding, beginning of period..... 3,623 2,418 2,471
Granted............................ 1,329 1,875 235
Exercised.......................... -- (35) (143)
Expired or Cancelled............... (466) (635) (145)
----------- ----------- -----------
Outstanding, end of period........... 4,486 3,623 2,418
=========== =========== ===========
Available for grant at December 31... 1,228 1,736 358
=========== =========== ===========
Exercisable at December 31........... 2,244 1,864 1,773
=========== =========== ===========
Option prices per share:
Granted............................ $0.88- 3.00 $3.00- 5.38 $4.39- 5.00
Exercised.......................... none $3.00- 5.00 $2.81- 5.50
Expired or Cancelled............... $2.47-10.38 $3.00-16.26 $2.81-17.00
</TABLE>

In addition to the above, at December 31, 1995 the Company had warrants and
options outstanding that provide for the purchase of 200,000 shares of common
stock at $10.00 per share that expire in November 1996; 400,000 shares of
common stock at $6.65 per share that expire in January 1999; 4,070,182 shares
of common stock at $2.50 per share that expire during the third and fourth
quarters of 2000; 725,000 shares of common stock at $1.75 per share that
expire in September 1997; and 362,500 shares of common stock at $1.75 per
share that expire no later than September 1998 or one year from the exercise
of the Unit Purchase Options as described in Note 12.

(11) PREFERRED STOCK

The Company has 1,380,000 shares of $2.25 Convertible Exchangeable Preferred
Stock outstanding at December 31, 1995. The liquidation value of each
preferred share is $25 plus unpaid dividends. The preferred shares are
convertible at any time at the option of the holder into common stock at an
initial conversion price of $6.15 (equivalent to a conversion rate of 4.065
shares of common stock for each preferred share subject to adjustment under
certain circumstances). The preferred shares are exchangeable at the option of
the Company in whole, but not in part, on any dividend payment date beginning
August 1, 1993, for 9% convertible subordinated debentures due 2016 at the
rate of $25 principal amount of debentures for each preferred share. The
preferred shares are redeemable for cash at the option of the Company on or
after August 2, 1994, in whole or in part, at prices declining to $25 per
share on August 1, 2002, together with unpaid dividends to the redemption
date. If the preferred shares are called for redemption, the preferred
stockholder may elect to tender the preferred shares or convert such shares
into the Company's common stock. Dividends on the preferred stock at an annual
rate of $2.25 per share are cumulative and payable quarterly when and as
declared by the Company's Board of Directors. Holders of the preferred stock
are not entitled to vote except as required by law and under certain
circumstances. The Company did not declare or pay the regular quarterly
dividend ($.5625 per share) due on November 1, 1995. In addition, the Company
did not declare or pay the regular quarterly dividend ($.5625 per

F-16
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

share) due on February 1, 1996 and as of the date of these consolidated
financial statements, the total arrearage with respect to such class of stock
is $1,552,500. As part of the proposed Merger Agreement (see Note 21), each
share of $2.25 Convertible Exchangeable Preferred Stock will be converted into
6.8375 shares of common stock of Bionova U.S.

In January 1994, the Company, as part of the Du Pont Transaction, issued
2,750 shares of Series A convertible preferred stock to Du Pont. The
liquidation value of each share of Series A preferred stock is $6,000. Each
share of Series A preferred stock is convertible at any time at the option of
the holder into common stock of the Company at a conversion rate of 1,000
shares of common stock for each share of Series A preferred stock. The Series
A preferred stock is redeemable for cash at the option of the Company after
January 1995 at a price of $6,000 per share, subject to certain limitations.
If the Company's Board of Directors declares and pays a dividend on its common
stock, the holders of Series A preferred stock are entitled to receive cash
dividends at the rate per share of Series A preferred stock based upon the
number of shares of common stock to which the holders of Series A preferred
stock would be entitled if they had converted such shares into shares of
common stock. Du Pont has been granted certain demand and "piggyback"
registration rights with respect to the 2,000,000 shares of common stock
issued to Du Pont and the 2,750,000 shares of common stock issuable upon the
conversion of the Series A convertible preferred stock.

(12) COMMON STOCK ISSUANCE

During 1995, the Company privately placed 7,714,725 shares of common stock
of the Company together with warrants that expire during the third and fourth
quarters of 2000 which entitle the holders to purchase an additional 4,070,182
shares of common stock at $2.50 per share, for net proceeds, after commissions
and expenses, of $7.3 million. The holders of these shares have agreed not to
publicly trade such shares prior to April 1996. The shares of common stock
issuable upon the exercise of the warrants are subject to shareholder approval
if additional shares must be authorized before the common stock can be issued;
if shareholder approval is not obtained on or prior to June 30, 1996 and the
Company does not have a sufficient number of authorized but not yet issued
shares, then the Company will be obligated to redeem the warrants at $.25 per
warrant ($1,017,546 in the aggregate). As part of the compensation to the
consultant who assisted the Company in placing these securities, the Company
granted the consultant unit purchase options (the "Unit Purchase Options")
entitling the consultant to purchase for $1.75, 725,000 units ("Placement
Units") that expire in September, 1997. Each Placement Unit consists of one
share of common stock and a warrant entitling the holder to purchase, during
the one year period following the date of exercise of the Unit Purchase
Options, one half share of common stock (362,500 in total if all Unit Purchase
Options are exercised) for $1.75. The issuance of the Placement Units is also
subject to shareholder approval if an increase in the authorized number of
shares of the Company's common stock is required. In addition, during 1995
through two other separate transactions the Company privately placed 1,255,000
shares of the Company's common stock for net proceeds, after commissions and
expenses, of $2.2 million.

In accordance with the terms of the stock purchase agreement entered into
with Alida Marine, Inc. ("Alida") in 1994, the Company issued in 1995, at no
further cost to Alida, an additional 100,000 shares of common stock. These
shares were recorded at December 31, 1994 as common stock to be issued in the
accompanying Consolidated Balance Sheets. In addition, during 1995 the Company
issued 169,784 shares of common stock for its 401(k) plan matching
contribution and for merit increases and bonuses resulting in compensation
expense of $292,000.

(13) SALE AND CONVERSION OF SERIES B AND SERIES C PREFERRED STOCK

During 1995, the Company sold 750 shares of Convertible Series B and 750
shares of Convertible Series C preferred stock for $1,000 per share for net
proceeds to the Company of $1.3 million. These preferred shares

F-17
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

were subsequently converted into 1,318,839 shares of the Company's common
stock at an average conversion price of $1.14.

(14) SALE OF FROST TECHNOLOGY CORPORATION

In February 1995, the Company sold the stock of Frost Technology
Corporation, a wholly-owned subsidiary, to a third party for $1,300,000 of
consideration. The assets of this subsidiary consisted primarily of technology
rights. This transaction resulted in a gain of $1,070,000, which was recorded
by the Company as licensing revenue. The Company received the entire
$1,300,000 during 1995 as a result of this sale.

(15) NON-MARKETABLE EQUITY INVESTMENT

During the fourth quarter of 1995, the Company issued 1,557,377 shares of
its common stock valued at $1.25 per share in exchange for 1,364,118 shares of
common stock of UAC, which represents approximately 13% of the outstanding
shares of UAC. The per share price of the stock issued was based on the
stock's quoted market price as of the close of business on the date the
transaction closed. This investment is accounted for on the cost basis since
the Company owns less than 20% of UAC and does not have the ability to
exercise significant influence over UAC. UAC is an agribusiness biotechnology
company focused on the improvement of strawberries, raspberries and grapes.

(16) CONSOLIDATION AND RELOCATION OF FACILITIES

During 1994, the Company relocated its headquarters and consolidated its
research operations from its New Jersey facility to its research facility in
Oakland, California. This consolidation and relocation was a further step in
the Company's efforts to consolidate its operations, eliminate duplication of
staff and facilities, and focus primarily on the development and marketing of
fresh and processed fruits and vegetables. In 1994, the Company incurred $2.0
million of non-recurring costs to accomplish this relocation and
consolidation. These costs are comprised of $1.0 million for severance and
termination benefits for employees whose jobs in New Jersey were eliminated;
$.7 million for relocation costs and a $.3 million non-cash charge to write
down excess furniture and equipment to net realizable value. At December 31,
1994, the reserve for the consolidation and relocation of facilities was $.5
million, consisting of $.2 million for employee termination benefits, $.2
million to adjust furniture and equipment to its estimated net realizable
value, and $.1 million for future obligations to employees who had completed
their relocation in 1993. An additional $70,000 was incurred in 1995 related
to housing allowances and other continuing relocation costs. At December 31,
1995, a $.1 million reserve remained for relocation costs for employees who
had completed their relocation in 1993.

(17) LIQUIDITY

Based on its current business plans, including the pending Merger (see Note
21) , the Company believes that its current cash resources, inclusive of the
$5.0 million received from Bionova U.S. in January 1996 and the $5.0 million
to be received on July 1, 1996, if the closing of the Merger has not been
effected by such date, its revenues from prospective and existing research,
product development and licensing arrangements, revenues from produce sales,
accompanied by projected improvements in the gross margin on such produce
sales and reduction of fixed overhead and administrative costs will be
sufficient to fund its cash requirements into 1997.

(18) COMMITMENTS

The Company occupies offices and other facilities and leases farm equipment
under operating leases expiring at various dates. At December 31, 1995 future
minimum rental payments applicable to operating leases are 1996, $666,000;
1997, $675,000; 1998, $686,000; 1999, $298,000; and 2000, $9,000.

F-18
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The Company has contractual agreements with various produce growers. These
agreements provide that the Company is responsible for full payment of grower
service on approved ground and in approved quantities unless acreage is lost
due to the grower's negligence in any aspect of the growing process. At
December 31, 1995, the Company had future commitments requiring the Company to
pay an aggregate of $192,000 upon harvest of crops during the first half of
1996.

(19) CONCENTRATION OF CREDIT RISK

Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of trade receivables.
Generally, the Company's credit risk concentration in its trade receivables is
limited due to the geographic dispersion of its customers. The Company does
not require collateral or other security to support customer receivables.

(20) EMPLOYEE BENEFIT PLANS

The Company has a deferred compensation plan (the "401(k) Plan") under
section 401(k) of the Internal Revenue Code. For 1995, the Company matched up
to 3% of each contributing member employee's compensation in the Company's
common stock. Prior to 1995, the Company matched up to 1% of each contributing
member employee's compensation in cash. Company contributions to the 401(k)
Plan in 1995, 1994 and 1993 were approximately $116,000, $70,000 and $60,000,
respectively.

(21) AGREEMENT AND PLAN OF MERGER AND RELATED TRANSACTIONS

On January 26, 1996, the Company entered into an Agreement and Plan of
Merger (the "Merger Agreement") with Empresas La Moderna, S.A. de C.V., a
corporation under the laws of the United Mexican States ("ELM"), Bionova, S.A.
de C.V., a corporation organized under the laws of the United Mexican States
("Bionova"), Bionova U.S. Inc., a Delaware corporation ("Bionova U.S."), and
Bionova Acquisition, Inc., a Delaware corporation ("Merger Sub"), pursuant to
which, among other things: (i) Merger Sub will be merged with and into the
Company (the "Merger"); (ii) the Company will become a wholly-owned subsidiary
of Bionova U.S.; (iii) each share of common stock, par value $.01 per share
("Common Stock") of the Company issued and outstanding at the time of the
Merger (the "Effective Time") will be converted into and represent the right
to receive one share of Bionova U.S.'s common stock, each share of the
Company's $2.25 Convertible Exchangeable Preferred Stock, par value $.01
("$2.25 Convertible Preferred Stock"), issued and outstanding at the Effective
Time will be converted into and represent the right to receive 6.8375 shares
of Bionova U.S.'s common stock, and each share of the Company's Series A
Preferred Stock ("Series A Preferred Stock"), par value $.01 issued and
outstanding at the Effective Time will be converted into and represent the
right to receive 1,000 shares of Bionova U.S.'s common stock, except for any
shares of the Company's securities held in the treasury of the Company or held
by any subsidiary of the Company, which will be cancelled; and (iv) each
option or warrant to purchase shares of Common Stock outstanding at the
Effective Time will be assumed by Bionova U.S. and will be converted into a
corresponding right to acquire shares of Bionova U.S.'s common stock. Assuming
no exercise of dissenter's rights of appraisal in connection with the Merger,
the holders of the Company's capital stock, as a group, will own approximately
30% of the outstanding shares of Bionova U.S.'s common stock after the Merger.
It is expected that Bionova U.S. will change its name to DNAP Holding
Corporation as of the Effective Time.

At the Effective Time, ELM will cause to be transferred to Bionova U.S. its
controlling interests in the companies constituting The Bionova Group, other
than the stock of Bionova, which serves as the holding company through which
ELM owns such interests. The Bionova Group is a group of affiliated companies
engaged in the businesses of growing fresh produce in Mexico and marketing and
distribution in Mexico, the United States and Canada.

F-19
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Pursuant to the Merger Agreement, ELM has agreed to provide when requested
by Bionova U.S. a guarantee for three years following the Effective Time
Bionova U.S.'s indebtedness to a financial institution under a loan or line of
credit, provided that: (i) ELM's maximum liability under such guarantee will
not exceed $20,000,000 and (ii) the documents evidencing such loan or line of
credit will provide that the aggregate amount loaned to Bionova U.S.
thereunder will not exceed the sum of (x) 80% of the accounts receivable of
Bionova U.S. and its consolidated subsidiaries and (y) 50% of the inventories
of Bionova U.S. and its consolidated subsidiaries and such loan is secured by
such accounts receivables and inventories.

In connection with the Merger Agreement, Bionova U.S. and the Company
entered into a Loan Agreement, dated January 26, 1996 (the "Loan Agreement").
Pursuant to the Loan Agreement, Bionova U.S. loaned $5,000,000 to the Company
on January 26, 1996 and will loan an additional $5,000,000 to the Company on
July 1, 1996 if the closing of the Merger has not been effected by such date,
subject to the Company not then being in default under the Loan Agreement
(collectively, the "Loan"). The outstanding principal balance of the Loan
bears interest at the rate of 10.25% per annum and, together with all accrued
interest thereon, will become due and payable on the earlier of (i) January
26, 1999, or (ii) the date on which the Company consummates an Alternative
Transaction, as defined in the Loan Agreement. Subject to the consummation by
the Company of an Alternative Transaction, the Loan Agreement will survive the
termination of the Merger Agreement. The Loan may be accelerated by Bionova
U.S. at any time during the continuance of certain events of default specified
in the Loan Agreement and may be prepaid by the Company at any time without
premium or penalty. Certain royalty fees to be received by the Company must be
used to pay down the Loan. ELM will cause the principal amount of the Loan
provided by Bionova U.S. to the Company prior to the Effective Time to be
treated as a capital contribution to Bionova U.S. pursuant to the Merger
Agreement. The Loan is secured by the assignment to Bionova U.S. of the
Company's right, title and interest in the patents relating to the Company's
Transwitch(R) gene suppression technology (the "Transwitch(R) Patents"), and
Bionova U.S. may require additional security under certain circumstances.
Prior to the repayment in full of the loan, the Company may not pay any
dividends on, or make other distributions in respect of, any class of its
capital stock, or take certain other actions, without the written consent of
Bionova U.S.

Bionova U.S. and the Company have entered into the Sole Patent License
Agreement, dated as of January 26, 1996 (the "Sole License Agreement"),
pursuant to which Bionova U.S. granted back to the Company a royalty-free sole
license to use the Transwitch(R) Patents to develop and market products using
the products or processes covered by such patents and to satisfy the Company's
obligations under existing licenses of the Transwitch(R) Patents. Under the
Loan Agreement, Bionova U.S. is obligated to assign the Transwitch(R) Patents
back to the Company upon the repayment in full of the Loan. If Bionova U.S.
accelerates the maturity of the Loan as a result of an event of default under
the Loan Agreement, the Company's right to have the Transwitch(R) Patents
reassigned to it will terminate and the license to use the Transwitch(R)
Patents granted by Bionova U.S. to the Company under the Sole License
Agreement will convert to a non-exclusive, royalty-free license to use the
Transwitch(R) Patents. If the merger is not consummated, any such termination
of the Company's right to reacquire the Transwitch(R) Patents and loss of the
sole rights to use the Transwitch(R) Patents would have a material adverse
effect on the Company's business and prospects.

The Sole License Agreement provides that Bionova U.S. may not make any use
of the Transwitch(R) Patents on its own behalf prior to the termination of the
Company's right to have the Transwitch(R) Patents reassigned to it, subject to
the Non-Exclusive License Agreement (see below). The Company may enter into
sublicenses of the Transwitch(R) Patents only to entities which fund at least
$350,000 of research by the Company in any three-year period, and only if the
sublicense is non-exclusive, relates solely to the development and
commercialization of products or processes resulting from the funded research,
bears commercially reasonable royalties and 50% of the royalties received by
the Company are paid by it to Bionova U.S. to reduce the outstanding balance
of the Loan. The Company may also enter into sublicenses of the Transwitch(R)
Patents with other entities upon approval

F-20
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

of Bionova U.S., which approval has been obtained in certain respects. The
Company and Bionova U.S. have also entered into a non-exclusive patent license
agreement (the "Non-Exclusive License Agreement") under which Bionova U.S. was
granted a non-exclusive, royalty-bearing license to use the Transwitch Patents
with an option, upon making certain payments, to convert the license to a
fully paid license. Payments under the Non-Exclusive License Agreement may be
credited against the outstanding balance of the Loan.

At the Effective Time, ELM and the Company will enter into a Long Term
Funded Research Agreement (the "Long Term Funded Research Agreement") pursuant
to which they will use their best efforts to agree on research projects to be
conducted by the Company for ELM or its affiliates which will result in
payments to the Company of $30,000,000 over a 10-year period, with minimum
funding (subject to carryforwards) of $9,000,000 in any three-year period and
at least $625,000 due each quarter until such $30 million has been paid.
Intellectual property developed by the Company in connection with a project
will belong to ELM, and ELM will retain the exclusive rights to
commercialization of such intellectual property in the project's intended
market and the Company will have royalty-free sole license rights to such
intellectual property outside the project's intended market. There can be no
assurance, however, that ELM and the Company will agree on any specific
projects to be conducted by the Company or that any project begun by the
Company will not be terminated by ELM.

At the Effective Time, ELM and Bionova U.S. will enter into a Governance
Agreement which, among other things, will provide for certain arrangements
with respect to the composition of Bionova U.S.'s Board of Directors prior to
the 1999 annual meeting of stockholders of Bionova U.S. and will restrict
ELM's ability to acquire or dispose of shares of Bionova U.S.'s Common Stock
prior to the third anniversary of the Effective Time. Under the Governance
Agreement, the approval of a majority of the "DNAP Independent Directors" (as
defined in the Governance Agreement) will be required to approve certain
transactions between ELM and its affiliates and Bionova U.S. or certain
acquisitions of Bionova U.S.'s Common Stock by ELM or its affiliates.

The consummation of the Merger is subject to a number of conditions,
including the approval of the common stockholders of the Company.

During 1995 the Company incurred approximately $800,000 in expenses
associated with this proposed merger included in selling, general, and
administrative expenses in the accompanying Consolidated Statements of
Operations.

F-21
<PAGE>

SCHEDULE II

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNT

YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993

(IN THOUSANDS)

<TABLE>
<CAPTION>
RESERVES
BALANCE AT CHARGED TO CHARGED ACQUIRED BALANCE
BEGINNING COST AND TO OTHER FROM BALANCES AT END OF
CLASSIFICATION OF PERIOD EXPENSES ACCOUNTS FRESHWORLD WRITTEN OFF PERIOD
-------------- ---------- ---------- -------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
For the year ended De-
cember 31, 1995
Allowance for doubtful
accounts.............. $346 $ 450 $ -- $-- $(690) $106
---- ----- ----- ---- ----- ----
For the year ended De-
cember 31, 1994
Allowance for doubtful
accounts.............. $236 $ 166 $ 180 $-- $(236) $346
==== ===== ===== ==== ===== ====
For the year ended De-
cember 31, 1993
Allowance for doubtful
accounts.............. $118 $ 12 $ 3 $103 $ -- $236
==== ===== ===== ==== ===== ====
</TABLE>

F-22
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
----------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........................... $ 3,629 $ 1,742
Accounts receivable, net of allowance for bad debts
of $63 in 1996 and $106 in 1995.................... 2,191 1,922
Inventory........................................... 287 380
Other current assets................................ 412 425
Assets held for sale................................ 120 1,038
---------- ----------
Total current assets.............................. 6,639 5,507
---------- ----------
Fixed assets, net of accumulated depreciation of
$6,657 in 1996 and $6,612 in 1995.................... 2,252 2,345
Patents and other assets, net of amortization of $380
in 1996 and $354 in 1995............................. 500 503
Non-marketable equity investment...................... 1,946 1,946
Excess of purchase price over net assets acquired, net
of amortization of $428 in 1996 and $380 in 1995..... 1,472 1,520
---------- ----------
Total assets....................................... $ 12,809 $ 11,821
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.................................... $ 708 $ 1,384
Accrued liabilities................................. 1,167 1,539
Accrued compensation................................ 433 361
Dividends payable................................... 1,553 776
Amount payable to Du Pont........................... 712 983
Current portion of note payable..................... 209 204
---------- ----------
Total current liabilities......................... 4,782 5,247
---------- ----------
Deferred revenue...................................... 445 584
Deferred compensation................................. 232 232
Note payable less current portion..................... 5,654 709
---------- ----------
Total long-term liabilities....................... 6,331 1,525
---------- ----------
Stockholders' Equity:
Preferred stock, par value $.01 per share;
authorized 5,000 shares;
$2.25 convertible preferred stock; issued and
outstanding--1,380 shares in 1996 and 1995
(aggregate liquidation preference of $34,500)...... 14 14
Series A convertible preferred stock, par value $.01
per share; authorized
3 shares; issued and outstanding 3 shares in 1996,
and 1995 (aggregate liquidation preference of
$16,500)........................................... -- --
Series B convertible preferred stock, par value $.01
per share; authorized
1 share; issued and outstanding no shares in 1996
and 1995........................................... -- --
Series C convertible preferred stock, par value $.01
per share; authorized
1 share; issued and outstanding no shares in 1996
and 1995........................................... -- --
Common stock, par value of $.01 per share;
authorized 60,000 shares; issued 42,883 shares in
1996 and 42,829 shares in 1995..................... 429 428
Additional paid-in capital.......................... 159,698 160,405
Accumulated deficit................................. (158,445) (155,798)
---------- ----------
Total Stockholders' Equity........................ 1,696 5,049
---------- ----------
Total Liabilities and Stockholders' Equity........ $ 12,809 $ 11,821
========== ==========
</TABLE>

See accompanying notes to consolidated financial statements

F-23
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
1996 1995
--------- ---------
<S> <C> <C>
Revenues:
Produce sales.......................................... $ 3,509 $ 3,071
Product development agreements......................... 495 340
Investment and royalty income.......................... 254 1,479
--------- ---------
Total Revenues....................................... 4,258 4,890
--------- ---------
Operating Expenses:
Cost of produce sales.................................. 3,614 3,619
Exit carrot processing................................. -- 380
Research and product development....................... 1,344 1,636
Selling, general and administrative.................... 2,011 1,390
--------- ---------
Total Operating Expenses............................. 6,969 7,025
--------- ---------
Loss from Operations..................................... (2,711) (2,135)
Gain on sales of assets.................................. 64 24
--------- ---------
Net loss................................................. (2,647) (2,111)
Preferred stock dividend................................. (776) (776)
--------- ---------
Net loss applicable to common stockholders............... $ (3,423) $ (2,887)
========= =========
Net loss per common share................................ $ (.08) $ (.09)
Weighted average common shares outstanding............... 42,847 30,793
========= =========
</TABLE>

See accompanying notes to consolidated financial statements

F-24
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)
(UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
1996 1995
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net loss............................................... $ (2,647) $ (2,111)
Reconciliation of net loss to net cash used in
operating activities:
Depreciation and amortization........................ 164 120
Provision for uncollectible accounts................. (43) (161)
Compensation and expenses paid in common stock....... 70 54
Net (gain) loss from disposal of fixed assets........ (64) 32
Net changes in:
Accounts receivable.................................. (225) 270
Inventory............................................ 93 (268)
Other current assets................................. 13 (318)
Other assets......................................... (23) (12)
Accounts payable and accrued liabilities............. (970) (181)
Deferred revenue and compensation.................... (139) (21)
--------- ---------
Net cash used in operating activities.................. (3,771) (2,596)
--------- ---------
Cash flows from investing activities:
Capital expenditures................................... -- (6)
Sales and maturities of temporary investments.......... -- 2,505
Proceeds from sale of assets........................... 713 24
--------- ---------
Net cash provided by investing activities............ 713 2,523
--------- ---------
Cash flows from financing activities:
Proceeds from issuance of note payable................. 5,000 --
Preferred stock dividends.............................. -- (776)
Payment of principle on notes payable.................. (55) --
--------- ---------
Net cash provided by (used in) financing activities.. 4,945 (776)
--------- ---------
Net increase (decrease) in cash and cash equivalents..... 1,887 (849)
Cash and cash equivalents, beginning of period........... 1,742 1,202
--------- ---------
Cash and cash equivalents, end of period................. $ 3,629 $ 353
========= =========
</TABLE>

See accompanying notes to consolidated financial statements

F-25
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 1996

(UNAUDITED)

NOTE 1--BASIS OF PRESENTATION

The consolidated financial statements included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. These consolidated financial
statements should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's 1995 Annual Report on
Form 10-K.

In the opinion of the Company's management, the accompanying unaudited,
consolidated financial statements contain adjustments, all of which are of a
normal recurring nature, necessary to present fairly the Company's financial
position as of March 31, 1996 and the results of its operations and its cash
flows for the three months ended March 31, 1996.

Certain reclassifications have been made to prior period amounts to be
consistent with the current period presentation.

Interim results are not necessarily indicative of results for the full
fiscal year.

NOTE 2--AGREEMENT AND PLAN OF MERGER

On January 26, 1996, the Company entered into an Agreement and Plan of
Merger (the "Merger Agreement") with Empresas La Moderna, S.A. de C.V., a
corporation under the laws of the United Mexican States ("ELM"), Bionova, S.A.
de C.V., a corporation organized under the laws of the United Mexican States
("Bionova"), Bionova U.S. Inc., a Delaware corporation ("Bionova U.S."), and
Bionova Acquisition, Inc., a Delaware corporation ("Merger Sub"), pursuant to
which, among other things: (i) Merger Sub will be merged with and into the
Company (the "Merger"); (ii) the Company will become a wholly-owned subsidiary
of Bionova U.S.; (iii) each share of common stock, par value $.01 per share
("Common Stock") of the Company issued and outstanding at the time of the
Merger (the "Effective Time") will be converted into and represent the right
to receive 0.10 shares of Bionova U.S.'s common stock, and each share of the
Company's $2.25 Convertible Exchangeable Preferred Stock, par value $.01
("$2.25 Convertible Preferred Stock"), issued and outstanding at the Effective
Time will be converted into and represent the right to receive .68375 shares
of Bionova U.S.'s common stock, except for any shares of the Company's
securities held in the treasury of the Company or held by any subsidiary of
the Company, which will be cancelled and (iv) each option or warrant to
purchase shares of Common Stock outstanding at the Effective Time will be
assumed by Bionova U.S. and will become a corresponding right to acquire
shares of Bionova U.S.'s common stock, adjusted in accordance with the
exchange ratios set forth above. The holders of the Company's capital stock,
as a group, will own approximately 30% of the outstanding shares of Bionova
U.S.'s common stock after the Merger. For additional information regarding the
Merger Agreement see the Company's 1995 Form 10-K.

NOTE 3--INVENTORIES

Inventories consisted of the following (in thousands):

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
--------- ------------
(UNAUDITED)
<S> <C> <C>
Prepaid grower fees..................................... $ 59 $ 119
Raw materials and seed.................................. 154 192
Finished goods.......................................... 74 69
----- -----
Total Inventories....................................... $ 287 $ 380
===== =====
</TABLE>

F-26
<PAGE>

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 4--SUBSEQUENT EVENT

During the second quarter of 1996, the Chief Operating Officer ("COO") of the
Company resigned from the Company. Pursuant to the terms of the COO's
employment agreement, the Company is obligated to pay to the COO $312,000 over
a twelve month period commencing May 11, 1996, and ending April 30, 1997.

On June 3, 1996 E.I. du Pont de Nemours and Company ("Du Pont") converted
2,750 shares of DNA Plant Technology Corporate Series A Convertible Preferred
Stock into 2,750,000 shares of Common Stock. As a result of the conversion Du
Pont owns 5,750,000 shares of Common Stock on June 3, 1996.

F-27
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of Bionova, S. A. de C. V.

In our opinion, the accompanying combined balance sheets and the related
combined statements of operations, of changes in stockholders' equity and of
cash flows present fairly, in all material respects, the combined financial
position of Agricola Batiz, S. A. de C. V. and its subsidiaries and of
International Produce Holding Company and its subsidiaries (collectively
referred to as the Subsidiaries or the Bionova Subsidiaries-See Note 1) at
December 31, 1995 and 1994, and the combined results of their operations and
their cash flows for the period from inception on February 10, 1993 to
December 31, 1993 and for each of the two years in the period ended December
31, 1995, in conformity with accounting principles generally accepted in the
United States of America. These financial statements are the responsibility of
Bionova Subsidiaries' management; our responsibility is to express an opinion
on these financial statements based on our audits. We conducted our audits of
these statements in accordance with generally accepted auditing standards in
the United States of America which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.

PRICE WATERHOUSE

Monterrey, N. L., Mexico
May 3, 1996, except as to Note 6,
which is as of June 20, 1996

F-28
<PAGE>

BIONOVA SUBSIDIARIES
(SUBSIDIARIES OF BIONOVA, S. A. DE C. V.)

COMBINED BALANCE SHEET
THOUSANDS OF U.S. DOLLARS

<TABLE>
<CAPTION>
DECEMBER 31,
---------------
1995 1994
------- -------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...................................... $ 1,580 $ 2,540
Accounts receivable (Note 5)................................... 25,444 11,482
Advances to growers (Note 6), includes balances with related
parties amounting to $1,642 in 1995 and $1,975 in 1994........ 7,889 11,167
Inventories (Note 7)........................................... 14,730 10,450
Other current assets........................................... 142 122
------- -------
Total current assets........................................... 49,785 35,761
Property, plant and equipment, net (Note 8).................... 25,983 24,360
Deferred income taxes (Note 10)................................ 3,281 3,503
Goodwill, net of accumulated amortization of $1,346 in 1995 and
$808 in 1994.................................................. 9,319 8,013
Other assets................................................... 758 45
------- -------
Total assets................................................... $89,126 $71,682
======= =======
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Short-term bank loans (Note 9)................................. $32,493 $27,659
Current portion of long-term debt (Note 9)..................... 610 318
Accounts payable to related parties............................ 2,645 522
Payable to growers............................................. 8,885 3,556
Accounts payable and accrued expenses.......................... 8,153 7,596
Deferred income taxes (Note 10)................................ 2,037 1,271
------- -------
Total current liabilities...................................... 54,823 40,922
Long-term debt (Note 9)........................................ 10,222 2,223
Long-term debt with related parties (Note 11).................. 293 --
------- -------
Total liabilities.............................................. 65,338 43,145
------- -------
Minority interests............................................. 8,603 10,698
------- -------
Commitments and Contingencies (Note 13)........................
Stockholder's equity........................................... 15,185 17,839
------- -------
Total liabilities and stockholder's equity..................... $89,126 $71,682
======= =======
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-29
<PAGE>

BIONOVA SUBSIDIARIES (SUBSIDIARIES OF BIONOVA, S.A. DE C.V.)

COMBINED STATEMENT OF OPERATIONS THOUSANDS OF U.S. DOLLARS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, PERIOD FROM
------------------------- FEBRUARY 10,1993
1995 1994 TO DECEMBER 31, 1993
------------ ----------- --------------------
<S> <C> <C> <C>
Net sales................. $ 191,711 $ 63,683 $ 247
Other income (expenses)--
net (Note 12)............ 5,875 429 (83)
------------ ----------- -------
Total revenues.......... 197,586 64,112 164
------------ ----------- -------
Cost of sales (Note 6).... (162,290) (59,044) (3,802)
Selling and administrative
expenses................. (29,183) (16,225) (915)
Amortization of goodwill.. (538) (404) (404)
------------ ----------- -------
(192,011) (75,673) (5,121)
------------ ----------- -------
Operating income (loss)... 5,575 (11,561) (4,957)
------------ ----------- -------
Interest expense.......... (8,430) (2,160) (216)
Interest income........... 3,490 906 620
Exchange loss, net (Note
4)....................... (4,748) (1,473) (7)
------------ ----------- -------
(9,688) (2,727) 397
------------ ----------- -------
Loss before income tax.... (4,113) (14,288) (4,560)
Income tax (expense)
benefit (Note 10)........ (2,320) 1,842 513
------------ ----------- -------
Net loss before minority
interest................. (6,433) (12,446) (4,047)
Minority interest in net
loss of subsidiaries..... 3,049 5,673 1,770
------------ ----------- -------
Combined net loss......... $ (3,384) $ (6,773) $(2,277)
============ =========== =======
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-30
<PAGE>

BIONOVA SUBSIDIARIES (SUBSIDIARIES OF BIONOVA, S.A. DE C.V.)

COMBINED STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY

THOUSANDS OF U.S. DOLLARS
<TABLE>
<CAPTION>
CUMULATIVE
CONTRIBUTED TRANSLATION ACCUMULATED
CAPITAL ADJUSTMENT DEFICIT TOTAL
----------- ----------- ----------- -------
<S> <C> <C> <C> <C>
Investment by Bionova, S.A. de
C.V............................. $24,360 -- -- $24,360
Net loss for the period.......... -- -- $ (2,277) (2,277)
------- ----- -------- -------
Balances at December 31, 1993.... 24,360 -- (2,277) 22,083
Investment by Bionova, S.A. de
C.V............................. 2,552 -- -- 2,552
Net loss for the year............ -- -- (6,773) (6,773)
Cumulative translation
adjustment...................... -- $ (23) -- (23)
------- ----- -------- -------
Balances at December 31, 1994.... 26,912 (23) (9,050) 17,839
Investment by Bionova, S.A. de
C.V............................. 936 -- -- 936
Net loss for the year............ -- -- (3,384) (3,384)
Cumulative translation
adjustment...................... -- (206) -- (206)
------- ----- -------- -------
Balances at December 31, 1995.... $27,848 $(229) $(12,434) $15,185
======= ===== ======== =======
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-31
<PAGE>

BIONOVA SUBSIDIARIES (SUBSIDIARIES OF BIONOVA, S.A. DE C.V.)

COMBINED STATEMENT OF CASH FLOWS

THOUSANDS OF U.S. DOLLARS

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, PERIOD FROM
------------------ FEBRUARY 10, 1993
1995 1994 TO DECEMBER 31, 1993
-------- -------- --------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Combined net loss.................. $ (3,384) $ (6,773) $ (2,277)
Adjustments to reconcile net income
to net cash used in operating
activities:
Minority interest in net loss of
subsidiaries...................... (3,049) (5,673) (1,770)
Depreciation....................... 2,805 2,858 1,192
Amortization of goodwill........... 538 404 404
Deferred income taxes.............. 2,320 (1,842) (513)
Net changes (exclusive of changes due
to subsidiaries acquired) in:
Accounts receivable and advances to
growers........................... (10,683) (11,999) (10,758)
Inventories........................ (4,280) 723 (3,823)
Other assets....................... (733) (109) --
Accounts payable and accrued
expenses.......................... 4,344 2,714 3,740
Income tax payable................. 204 (27) --
-------- -------- --------
Net cash used in operating
activities.......................... (11,918) (19,724) (13,805)
-------- -------- --------
Cash flows from investing activities:
Acquisition of subsidiaries, net of
cash acquired..................... (2,026) (943) --
Acquisition of property, plant and
equipment......................... (4,426) (6,121) (11,550)
-------- -------- --------
Net cash used in investing
activities.......................... (6,452) (7,064) (11,550)
-------- -------- --------
Cash flows from financing activities:
Proceeds from bank loans........... 13,122 21,932 4,945
Amounts due to related parties..... 2,416 392 130
Investment by Bionova, S.A. de
C.V. ............................. 936 2,552 24,360
Investment by minority interests... 936 372 --
-------- -------- --------
Net cash provided by financing
activities........................ 17,410 25,248 29,435
-------- -------- --------
Net (decrease) increase in cash and
cash equivalents.................... (960) (1,540) 4,080
Cash and cash equivalents at
beginning of the period............. 2,540 4,080 --
-------- -------- --------
Cash and cash equivalents at end of
the period.......................... $ 1,580 $ 2,540 $ 4,080
======== ======== ========
Supplemental disclosure of cash flow
information:
Cash paid during the period for:
Interest........................... $ 4,578 $ 1,874 $ 80
Income taxes....................... 996 -- --
</TABLE>

In connection with the formation of Agricola Batiz, S. A. de C. V. in 1993,
the minority interest stockholder contributed certain assets with a fair
market value of $8,180.

The accompanying notes are an integral part of these combined financial
statements.

F-32
<PAGE>

BIONOVA SUBSIDIARIES
(SUBSIDIARIES OF BIONOVA, S.A. DE C.V.)

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1994 AND 1993

(THOUSANDS OF U. S. DOLLARS, EXCEPT AS OTHERWISE INDICATED)

NOTE 1--BASIS OF PRESENTATION

Bionova, S. A. de C. V. (Bionova Mexico), a wholly-owned subsidiary of
Empresas La Moderna, S. A. de C.V. (ELM), is a Mexican corporation that
carries out its activities through its operating subsidiaries. In January 1996
ELM and Bionova Mexico entered into an agreement with DNA Plant Technology
Corporation (DNAP), a U.S. publicly traded corporation, whereby Bionova Mexico
will transfer all of its interests in its operating subsidiaries to Bionova
U.S. Inc. (Bionova), a newly formed corporation.

The combined financial statements include the accounts of the Bionova
Subsidiaries, which consist of Agricola Batiz, S. A. de C. V. and subsidiaries
(ABSA), a Mexican company, and International Produce Holding Company and
subsidiaries (IPHC), a U.S. company. These companies (collectively referred to
as the Bionova Subsidiaries or the Subsidiaries) were formed or acquired by
Bionova Mexico as described in Note 3.

The main activities of the Bionova Subsidiaries are the production and/or
distribution of fresh produce to wholesalers and retailers. Information about
the Bionova Subsidiaries' operations by geographic areas is summarized in Note
14. IPHC markets and distributes fresh produce in the United States and
Canada.

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The combined financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America and
are expressed in U. S. dollars. The significant accounting policies used in
the preparation of the accompanying combined financial statements are
summarized below:

a. Basis of combination

All significant intercompany balances and transactions have been eliminated.

b. Management estimates and assumptions

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

c. Revenue recognition

The Bionova Subsidiaries sell produce on their own account and on behalf of
growers and other parties on a commissioned basis. Revenue from such sales is
recognized when the produce is shipped, net of an allowance for estimated
returns. Since the Subsidiaries bear risk of loss for collection of sales
proceeds, sales on behalf of growers and other parties, on which commissions
are earned, are recognized at the gross sales amounts, net of allowance for
estimated returns. In the combined statement of operations, 1995 sales
recognized on a commissioned basis amounted to $35,080 and generated
commissions of $3,189. Sales in 1994 and 1993 represent sales on their own
account.

d. Cash and cash equivalents

Cash equivalents are stated at cost, which approximates the fair value. The
Subsidiaries consider all highly liquid and temporary cash investments with
original maturities of three months or less to be cash equivalents. The
Subsidiaries' policy is to place its cash and cash equivalents with large
credit worthy financial institutions and to limit the amount of credit
exposure.

F-33
<PAGE>

BIONOVA SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

e. Advances to growers

Advances to growers are made for supplies, seed, harvesting and other
growing costs. The advances are repaid from amounts withheld from sales
proceeds due to growers.

f. Associations

The Bionova Subsidiaries have entered into certain participation agreements
with growers under which the Subsidiaries share in the profits and losses
associated with growing activities. Since the Subsidiaries exercise control
over the associations, the Subsidiaries consolidate the results of operations
of those growing activities in the statement of operations.

g. Inventories

Inventories are stated at the lower of cost or market. Cost is determined by
using the first-in, first-out method for finished produce. Cost of growing
crops includes direct material and labor and an allocation of indirect costs
and are accumulated until the time of the harvest, subject to lower of cost or
market adjustments.

h. Property, plant and equipment

Property, plant and equipment are stated at their acquisition cost.
Additions to property, plant and equipment, including significant betterments
and renewals, are capitalized. Maintenance and repair costs are charged to
expense as incurred. Depreciation is computed using straight-line methods over
estimated useful lives mentioned in Note 8.

i. Concentration of credit risk

Financial instruments which potentially subject the Bionova Subsidiaries to
concentrations of credit risk consist principally of trade receivables and
advances to growers. Credit risk associated with the trade accounts receivable
is limited due to the quality of customers comprising the Subsidiaries'
customer base. Concentrations of credit risk associated with the advances to
growers is limited due to the geographic dispersion of the growers. However,
there can be no assurance that an event outside of the Subsidiaries' control
will not occur and cause these advances to be at risk. The Bionova
Subsidiaries perform on-going credit evaluations of their customers' and
growers' financial condition to determine the need for an allowance for
doubtful accounts. Except as discussed in Note 6, the Bionova Subsidiaries
have not experienced significant losses and management believes that adequate
provision has been made for any such credit risk.

j. Acquisitions

Underlying assets and liabilities of acquired companies are recorded at fair
market values and the excess purchase price is recorded as goodwill. This
goodwill has been pushed down from Bionova Mexico. The Bionova Subsidiaries
periodically evaluate the recoverability of the recorded goodwill based upon
projected operating income of the related subsidiary. Goodwill is amortized
over 20 years.

k. Impairment of long-lived assets

Management periodically reviews for impairment the long-lived assets and
certain identifiable intangibles to be held and used by the Bionova
Subsidiaries whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. An impairment loss is
recognized whenever it is determined that recoverability is impaired.
Measurement of an impairment loss for long-lived assets and identifiable
intangibles that they expect to hold and use is based on the fair value of the
asset.

F-34
<PAGE>

BIONOVA SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

l. Income taxes

Income tax is provided using the asset and liability approach following the
provisions of the Statement of Financial Accounting Standard (SFAS) No. 109.
Under this approach, deferred taxes are provided for the differences between
the financial statement and tax bases of assets and liabilities. Deferred
income tax expense (benefit) is the net change during the year in the deferred
income tax asset or liability. Current income tax expense is the amount of
income taxes expected to be payable for the current year.

m. Fair value of financial instruments

The carrying amount of the Subsidiaries' financial instruments, including
cash and cash equivalents, trade receivables and payables, and advances to
growers, approximate their fair market value due to their short-term
maturities. The carrying amount of the Subsidiaries' long-term receivables and
debt is estimated to approximate their fair value.

n. Translation of financial statements

The financial statements for subsidiaries whose functional currency is not
the U.S. dollar are translated in the following manner: assets and liabilities
at the year end rates; stockholders' equity at historical rates and results of
operations at the average exchange rates during the year. The effects of
exchange rate changes are reflected as a separate component of stockholders'
equity.

For subsidiaries whose activities are recorded in currencies which are not
the functional currency, the components in the financial statements are
translated in the following manner:

<TABLE>
<CAPTION>
EXCHANGE RATE
-------------
<S> <C>
Balance Sheet
Current assets except inventories............................ year-end
Inventories.................................................. historical
Liabilities.................................................. year-end
Property, plant and equipment................................ historical
Stockholders' equity......................................... historical
Results of operations
Sales........................................................ historical
Cost of sales................................................ historical
Depreciation and amortization................................ historical
Interest..................................................... average
Other expenses and income.................................... average
Income taxes................................................. average
</TABLE>

Gains and losses in remeasurement arise mainly from the effect of exchange
rate fluctuations on net monetary items denominated in pesos and are included
in the results of operations.

o. Pro forma net loss per share

Pro forma net loss per share is not presented because the information is not
meaningful.

p. Impact of recently issued accounting pronouncements

The potential effects of adoption of recently issued accounting
pronouncements are not anticipated to have a material effect on the financial
position and results of operations of the Bionova Subsidiaries.

F-35
<PAGE>

BIONOVA SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 3--ACQUISITIONS

During the periods ended December 31, 1995, 1994 and 1993, Bionova Mexico
acquired control of its subsidiaries, as follows:

.50.004% of ABSA, a Mexican producer of fresh produce, was acquired during
March 1993. The purchase price totalled approximately $24,360 in cash, and
resulted in recognition of goodwill of $8,075. In 1995 Bionova and the
minority stockholder each made an additional capital contribution of $936.

.During December 1993, Bionova Mexico made a capital contribution toward
the formation of Tanimura Distributing, Inc. (Tanimura). The contribution
amounted to $191 in cash and represented a 38% stake in Tanimura. Later,
during December 1994, this investment was contributed to IPHC. Due to the
fact that, since the Tanimura inception, the Subsidiaries exercised control
over this company, Tanimura is included as a subsidiary in the accompanying
statement of operations beginning in January 1994.

.During December 1994 Bionova Mexico made a capital contribution toward the
formation of Premier Fruits & Vegetables BBL, Inc. (Premier) in the amount
of $161 in cash, representing a 40% share of the capital stock. This
investment was contributed to IPHC during December 1994.

.During December 1994, Bionova Mexico acquired 51% of IPHC for $2,200 in
cash. This U. S. company distributes fresh produce within the United States
and Canada through its subsidiaries, R. B. Packing, Inc., R. B. Packing of
California, Inc. (all 100% owned), Tanimura (75% owned) and Premier (80%
owned). The goodwill resulting from this acquisition amounted to $675.

.In January 1995, ABSA acquired a 50.01% stake in Interfruver de Mexico, S.
A. de C. V. (Interfruver), a Mexican distributor of fresh produce, for
$2,055 in cash, resulting in recognition of goodwill of $1,940. The
agreement to acquire Interfruver establishes that, in addition to the
purchase price mentioned above, a contingent payment of $2,000 could be
paid to the sellers (the minority stockholders) on an earnout basis over a
four-year period beginning in 1995. This contingent payment, if any, of the
purchase price will result in an increase in goodwill and the related
amortization in the future. No amounts were paid in 1995 under this
agreement.

The following table summarizes the net investment by Bionova Mexico in the
companies acquired since 1993.

<TABLE>
<CAPTION>
AT DECEMBER 31,
--------------------------
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Company acquired
ABSA................................................. $ 25,296 $ 24,360 $ 24,360
Tanimura............................................. 191 191
IPHC................................................. 2,200 2,200
Premier.............................................. 161 161
-------- -------- --------
$ 27,848 $ 26,912 $ 24,360
======== ======== ========
</TABLE>

These acquisitions were accounted for under the purchase method. The
companies are included in the combined financial statements since the date of
their acquisition. Tanimura and Premier had no operations prior to their
formation with Bionova Mexico as controlling stockholder.

F-36
<PAGE>

BIONOVA SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

The following unaudited pro forma financial information assumes that the
IPHC acquisition occurred at the beginning of 1994 and gives effect to certain
adjustments, including depreciation and amortization of the assets acquired,
amortization of goodwill, and related income tax effects.

<TABLE>
<CAPTION>
PRO FORMA COMBINED
------------------
(UNAUDITED)
<S> <C>
Net sales................................................. $ 89,730
Net loss.................................................. (5,882)
</TABLE>

The pro forma results are presented for information purposes only and are
not necessarily indicative of the operating results that would have occurred
had the acquisition been consummated as of the above date, nor are they
necessarily indicative of future operating results. Reliable financial
information for IPHC in 1993 and for Interfruver in 1994 and 1993 does not
exist.

NOTE 4--EXCHANGE LOSS

In December 1994 the Mexican government devalued the peso and, since then,
has allowed it to float freely in the foreign exchange market. At December 31,
1995 the exchange rate was Ps7.739 to the U.S. dollar (Ps4.995 and Ps3.107 at
December 31, 1994 and 1993, respectively).

Exchange losses amounted to $4,748, $1,473 and $7 in 1995, 1994 and 1993.

NOTE 5--ACCOUNTS RECEIVABLE

Accounts receivable comprised the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1995 1994
-------- --------
<S> <C> <C>
Trade.................................................... $ 24,092 $ 10,135
Current portion of long-term
accounts receivable..................................... 360 --
Mexican value-added-tax recoverable...................... 980 1,177
Officers and employees................................... 32 40
Sundry debtors........................................... 10 130
-------- --------
25,474 11,482
Allowance for doubtful accounts and returns.............. (30)
-------- --------
$ 25,444 $ 11,482
======== ========
</TABLE>

The Bionova Subsidiaries sell their produce primarily to retailers and
wholesalers in the United States, Mexico and Canada. No single customer
accounted for more than 5% of the Subsidiaries' sales and there were no
significant accounts receivable from a single customer at December 31, 1995
and 1994.

NOTE 6--ADVANCES TO GROWERS

The Bionova Subsidiaries have agreements with certain produce growers, in
Mexico and in the United States, whereby a significant portion of growing
costs are paid in advance by the Subsidiaries. The costs are recorded as
advances to growers and are recognized as a component of cost of produce sales
when the produce is sold. The advances in Mexico ($10,689 at December 31,
1995) in some cases are secured by promissory notes and/or the right to use
the acreage if the advances are not repaid. Advances to growers in the United
States ($2,200 at December 31, 1995) are generally not collateralized. Because
of failed crops, the age and repayment history associated with some of these
advances, a valuation allowance of $5,000 was recorded at December 31, 1995.

F-37
<PAGE>

BIONOVA SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

The advances earn interest of 12% at December 31, 1995 and 1994. Interest
income from these advances amounted to $811 and $279 in 1995 and 1994,
respectively.

NOTE 7--INVENTORIES

Inventories comprised the following:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1995 1994
------- -------
<S> <C> <C>
Finished produce........................................... $ 3,357 $ 721
Growing crops.............................................. 8,436 6,161
Advances to suppliers...................................... 718 956
Spare parts and materials.................................. 1,932 2,607
Merchandise in transit..................................... 387 236
------- -------
14,830 10,681
Allowance for slow moving inventory........................ (100) (231)
------- -------
$14,730 $10,450
======= =======
</TABLE>

NOTE 8--PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment comprised the following:

<TABLE>
<CAPTION>
DECEMBER 31, ESTIMATED
---------------- USEFUL
1995 1994 LIFE
------- ------- ---------
<S> <C> <C> <C>
Land............................................. $ 8,490 $ 7,963 --
Buildings........................................ 6,767 6,565 25 years
Machinery and equipment.......................... 8,366 6,091 15 years
Office equipment................................. 3,341 2,928 4 years
Transportation equipment......................... 2,126 2,026 10 years
Vineyards and agricultural tools................. 2,672 2,307 3 years
Land improvements................................ 438 422 13 years
------- -------
32,200 28,302
Accumulated depreciation and amortization........ (6,217) (3,942)
------- -------
$25,983 $24,360
======= =======
</TABLE>

Equipment amounting to $5,279 at December 31, 1995 and 1994 has been
recorded above under capitalized leases. Related accumulated depreciation
amounted to $951 and $634 at December 31, 1995 and 1994, respectively, and
related depreciation amounted to $317, for each of the years ended on December
31, 1995 and 1994 and for the period from February 10, 1993 to December 31,
1993.

NOTE 9--BANK LOANS AND LONG-TERM DEBT

Short-term bank loans

Short-term bank loans consist of amounts due to banks, denominated in U.S.
dollars, under various line of credit facilities. The lines of credit contain
certain covenants which, among other things, require maintenance of certain
ratio levels and tangible net worth levels. Bionova Mexico is in compliance
with those covenants. The

F-38
<PAGE>

BIONOVA SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

lines of credit have various maturity dates ranging from March, 1996 to
December, 1996. The lines of credit bear interest at prime (8.5% at December
31, 1995 and 1994) plus 0.25% to Libor (5.64% at December 31, 1995) plus
10.0%, and certain lines of credit with borrowings outstanding of $7,972 are
secured primarily by the same amount of accounts receivable and inventories.

Various credit facilities are available with banks whereby the Bionova
Subsidiaries may borrow upon such terms as the Subsidiaries and the banks
mutually agree. At December 31, 1995, such credit lines amounted to $36,560
approximately, of which $5,305 was not used.

The amounts due under lines of credit arrangements with Mexican banks are
generally renewable at the discretion of the banks. The Bionova Subsidiaries
have informal arrangements with these banks which permit additional
borrowings, subject to the availability of funds by the banks.

Long-term debt

Combined obligations under long-term debt arrangements are denominated in
U.S. dollars and are comprised of:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------
1995 1994
------- ------
<S> <C> <C>
Unsecured bank loan bearing interest at 16.5%. Principal
and interest are payable in one installment due May
1997..................................................... $ 8,508
Capital leases secured by the related equipment acquired,
bearing interest at variable annual rates (12% at
December 31, 1995 and 1994).............................. 1,222 $1,619
Mortgage notes payable to banks secured by the related
real estate, interest at prime (8.5% at December 31, 1995
and 1994) plus 1.5% interest payable monthly and maturing
on dates through June 2000............................... 687 679
Other..................................................... 415 243
------- ------
10,832 2,541
Less current portion...................................... (610) (318)
------- ------
Long-term portion......................................... $10,222 $2,223
======= ======
</TABLE>

The maturities of the long-term debt at December 31, 1995 are as follows:

F-39
<PAGE>

BIONOVA SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 10--INCOME TAXES

The (charges) credits to income are summarized as follows:
<TABLE>
<CAPTION>
PERIOD FROM
FEBRUARY 10,
YEAR ENDED DECEMBER 31, 1993 TO
------------------------- DECEMBER 31,
1995 1994 1993
------------ ----------- ------------ ---
<S> <C> <C> <C>
Current
United States
Federal............................ $ (740)
State.............................. (256)
------------
(996)
------------
Deferred
Mexico--Federal.................... (955) $ 1,460 $513
United States
Federal............................ (323) 382
State.............................. (46)
------------ ----------- ----
(1,324) 1,842 513
------------ ----------- ----
Income tax (expense) benefit......... $(2,320) $ 1,842 $513
============ =========== ====
</TABLE>

Income tax (expense) benefit differs from the amounts computed by applying
the statutory federal income tax rate (34% in both Mexico and the United
States) to pretax income as a result of the following.

<TABLE>
<CAPTION>
PERIOD FROM
FEBRUARY 10,
YEAR ENDED DECEMBER 31, 1993 TO
------------------------ DECEMBER 31,
1995 1994 1993
----------- ----------- ------------
<S> <C> <C> <C>
Computed expected tax benefit at the
statutory rate in Mexico (34%)........ $ 1,398 $ 4,857 $1,550
Special tax rate of 17% for
agricultural business in Mexico....... (1,122) (1,915) (663)
Net operating losses for which tax
benefit was lost due to the peso
devaluation........................... (1,235) (890)
Inflationary component................. (1,064) (188) (208)
Depreciation on inflation--indexed
value of fixed assets................. 252 197 69
State taxes............................ (210)
Other permanent differences............ (339) (219) (235)
----------- ----------- ------
$(2,320) $ 1,842 $ 513
=========== =========== ======
</TABLE>

F-40
<PAGE>

BIONOVA SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

Significant components of the Bionova Subsidiaries' deferred tax liabilities
and assets at December 31, 1995 and 1994 are shown below:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1995 1994
------- -------
<S> <C> <C>
Deferred tax assets
Net operating loss carryforward............................ $ 2,403 $ 3,510
Allowance for amounts advanced to growers.................. 850 --
Other...................................................... 49 16
------- -------
Total deferred tax assets.................................. 3,302 3,526
Valuation allowance........................................ (21) (23)
------- -------
Net deferred tax assets.................................... 3,281 3,503
------- -------
Deferred tax liabilities
Inventories................................................ (1,818) (1,165)
Other...................................................... (219) (106)
------- -------
Total deferred tax liabilities............................. (2,037) (1,271)
------- -------
Net deferred tax assets.................................... $ 1,244 $ 2,232
======= =======
</TABLE>

The Mexican asset tax of 1.8% on certain net assets is not applicable in the
first four years of operations. This tax, once applicable, is due if federal
income taxes are not in excess of the asset tax. It can be recovered in future
years from future income taxes in excess of the future asset tax.

At December 31, 1995 the Bionova Subsidiaries had net operating loss
carryforwards of approximately $23,222, which can be inflation-indexed in
Mexico until the date of its application against future taxable profits and
expire as follows:

<TABLE>
<CAPTION>
DECEMBER 31, MEXICO U.S. TOTAL
------------ ------- ------ -------
<S> <C> <C> <C>
2003.................................................. $ 9,106 $ 9,106
2004.................................................. 12,016 12,016
2005.................................................. 864 864
2008.................................................. $1,236 1,236
------- ------ -------
$21,986 $1,236 $23,222
======= ====== =======
</TABLE>

The contemplated merger, as discussed in Note 1, would cause a substantial
change in the ownership of the Bionova subsidiaries. Therefore, under
provisions of the U.S. Internal Revenue Code, the Subsidiaries' ability to
utilize the net operating loss carryforwards relating to their U.S. operations
may be limited.

Management periodically reviews and evaluates the likelihood of realizing
the future tax benefits of recorded deferred tax assets and provides a
valuation allowance as deemed appropriate. Management believes that it is more
likely than not that the deferred tax assets at December 31, 1995 will be
realized by the Company.

NOTE 11--BALANCES AND TRANSACTIONS WITH RELATED PARTIES

The short-term accounts payable to related parties shown in the combined
balance sheet bear interest at variable rates similar to those prevailing in
the market place. The debt with related parties arose from the long-term
credit line made available to affiliates of Bionova Mexico and bears interest
at variable rates similar to those prevailing in the market place. The credit
line expires in 2003.

F-41
<PAGE>

BIONOVA SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

The combined statement of operations includes the following charges in
respect of transactions with related parties.

<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED FEBRUARY 10,
DECEMBER 31, 1993 TO
-------------- DECEMBER 31,
1995 1994 1993
------ ------- ------------
<S> <C> <C> <C>
Commissions paid to IPHC subsidiaries before
acquisition...................................... -- $ 3,784 $ 308
Interest.......................................... $ 223 -- --
Labor and administrative services................. 8,381 12,624 5,296
Insurance premiums................................ 339 -- --
</TABLE>

ABSA has no employees. A company which is controlled by the minority
stockholder makes available its employees to ABSA and ABSA pays a fee to the
Company pursuant to a contractual arrangement.

Advances to growers includes a balance due from a grower who is a relative
of the minority stockholders of ABSA. The balance with this grower amounted to
$1,642 and $1,975 at December 31, 1995 and 1994 and the interest earned on
that account amounted to $197 during 1995 and $77 in 1994.

In 1993, cost of sales includes $3,589 of advances to a grower related to a
minority stockholder which were not collected due to a failed crop.

NOTE 12--OTHER INCOME (EXPENSES)

Other income (expenses) in 1995 includes $3,160 representing the income that
arose from sales of seeds, agrochemicals, spare parts and other materials to
growers. In addition it includes $527 of technical and support services
provided to the growers.

NOTE 13--COMMITMENTS AND CONTINGENCIES

Contingencies

a. R. B. Packing, Inc., a subsidiary of IPHC, is currently undergoing an
audit by the Internal Revenue Service for 1991 and 1992. The IRS has
asserted that the sales commissions charged to ABSA are too low. The
company believes that the sales commissions charged between related
parties are reasonable and supportable, and that it will ultimately
prevail. Management believes that the ultimate outcome of this matter
will not be significant and no provision for any liability which may
result from this matter, has been recorded in the combined financial
statements.

b. In August 1995, R.B. Packing, Inc. received a subpoena from the United
States Departments of Agriculture and of Justice, Anti-Trust Division.
The United States Department of Justice conducted an investigation to
determine whether certain anti-trust laws were violated in the produce
industry. The subpoena required R.B. Packing, Inc. to furnish certain
documents, which the company provided. R.B. Packing, Inc. subsequently
received notice that the investigation was terminated without liability
to R.B. Packing, Inc.

c. In addition to the foregoing, the Bionova Subsidiaries have from time to
time encountered litigation in the normal course of business.
Management, however, believes that the ultimate resolution of these
claims will not be material.

F-42
<PAGE>

BIONOVA SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

Commitments

The Bionova Subsidiaries lease certain facilities and land under
noncancellable operating lease agreements. The leases expire at various dates
through 2000 and provide that the Bionova Subsidiaries pay the taxes,
insurance and maintenance expenses related to the leased facilities, and the
monthly rental payments are subject to periodic adjustments. Certain leases
contain fixed escalation clauses and rent under these leases is charged
ratably over the lease term.

The aggregate future minimum lease commitments are due as follows:

<TABLE>
<CAPTION>
FOR THE YEAR
ENDING DECEMBER 31
------------------
<S> <C>
1996............................................................... $ 576
1997............................................................... 243
1998............................................................... 262
1999............................................................... 71
2000............................................................... 4
------
Total future minimum lease payments.................................. $1,156
======
</TABLE>

Rent expense incurred under the noncancellable operating leases totaled $623
in 1995 and $606 in 1994.

NOTE 14--OPERATIONS IN DIFFERENT GEOGRAPHIC AREAS

Information about Bionova Subsidiaries' operations by geographic areas is
summarized as follows:

<TABLE>
<CAPTION>
ADJUSTMENTS
UNITED AND
MEXICO STATES OTHER ELIMINATIONS COMBINED
-------- -------- ------- ------------ --------
<S> <C> <C> <C> <C> <C>
1995
Sales to unaffiliated
customers................ $ 54,735 $125,974 $16,877 $197,586
Transfers................. 57,972 12,630 -- $(70,602) --
-------- -------- ------- -------- --------
Total revenue............. $112,707 $138,604 $16,877 $(70,602) $197,586
======== ======== ======= ======== ========
Operating income (loss)... $ 2,266 $ 3,966 $ (330) $ (327) $ 5,575
======== ======== ======= ======== ========
Identifiable assets....... $ 70,108 $ 24,052 $ 1,950 $ (6,984) $ 89,126
======== ======== ======= ======== ========
1994
Sales to unaffiliated
customers................ $ 38,851 $ 25,261 $ 64,112
======== ======== ========
Operating loss............ $(11,101) $ (842) $ 382 $(11,561)
======== ======== ======== ========
Identifiable assets....... $ 57,711 $ 14,949 $ 705 $ (1,683) $ 71,682
======== ======== ======= ======== ========
1993
Sales to unaffiliated
customers................ $ 164 $ 164
======== ========
Operating loss............ $ 4,957 $ 4,957
======== ========
Identifiable assets....... $ 45,428 $ 45,428
======== ========
</TABLE>

F-43
<PAGE>

BIONOVA SUBSIDIARIES
(SUBSIDIARIES OF BIONOVA, S. A. DE C. V.)

UNAUDITED COMBINED BALANCE SHEET
THOUSANDS OF U.S. DOLLARS

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
--------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................ $ 3,328 $ 1,580
Accounts receivable...................................... 25,836 25,444
Advances to growers...................................... 14,441 7,889
Inventories.............................................. 10,829 14,730
Other current assets..................................... 107 142
------- -------
Total current assets................................. 54,541 49,785
Property, plant and equipment, net....................... 25,903 25,983
Deferred income taxes.................................... 3,281 3,281
Goodwill, net............................................ 9,184 9,319
Other assets............................................. 471 758
------- -------
Total assets......................................... $93,380 $89,126
======= =======
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Short-term bank loans.................................... $32,571 $32,493
Current portion of long-term debt........................ 575 610
Accounts payable to related parties...................... 920 2,645
Payable to growers....................................... 18,993 8,885
Accounts payable and accrued expenses.................... 3,176 8,153
Deferred income taxes.................................... 2,399 2,037
------- -------
Total current liabilities............................ 58,634 54,823
Long-term debt........................................... 9,932 10,222
Long-term debt with related parties...................... 686 293
------- -------
Total liabilities.................................... 69,252 65,338
------- -------
Minority interests....................................... 8,907 8,603
------- -------
Commitments and contingencies
Stockholder's equity..................................... 15,221 15,185
------- -------
Total liabilities and stockholder's equity............... $93,380 $89,126
======= =======
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-44
<PAGE>

BIONOVA SUBSIDIARIES
(SUBSIDIARIES OF BIONOVA, S.A. DE C.V.)

UNAUDITED COMBINED STATEMENT OF OPERATIONS
THOUSANDS OF U.S. DOLLARS

<TABLE>
<CAPTION>
THREE MONTH PERIOD
ENDED MARCH 31,
--------------------
1996 1995
--------- ---------
<S> <C> <C>
Net sales................................................ $ 51,027 $ 51,197
Other income, net........................................ 332 1,676
--------- ---------
51,359 52,873
--------- ---------
Cost of sales............................................ (40,622) (42,747)
Selling and administrative expenses...................... (6,903) (6,535)
Amortization of goodwill................................. (135) (135)
--------- ---------
(47,660) (49,417)
--------- ---------
Operating income......................................... 3,699 3,456
--------- ---------
Interest expense......................................... (1,658) (1,160)
Interest income.......................................... 510 609
Exchange loss, net....................................... (1,268) (1,034)
--------- ---------
(2,416) (1,585)
--------- ---------
Income before income tax................................. 1,283 1,871
Income tax expense....................................... (1,093) (1,813)
--------- ---------
Net income before minority interest...................... 190 58
Minority interest in net income of subsidiaries.......... (154) (213)
--------- ---------
Combined net income (loss)............................... $ 36 $ (155)
========= =========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-45
<PAGE>

BIONOVA SUBSIDIARIES
(SUBSIDIARIES OF BIONOVA, S.A. DE C.V.)

UNAUDITED COMBINED STATEMENT OF CASH FLOWS
THOUSANDS OF U.S. DOLLARS

<TABLE>
<CAPTION>
THREE MONTH PERIOD
ENDED MARCH 31,
--------------------
1996 1995
--------- ---------
<S> <C> <C>
Cash flow from operating activities:
Combined net income (loss)............................ $ 36 $ (155)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Minority interest in net income of subsidiaries....... 154 213
Depreciation.......................................... 701 701
Amortization of goodwill.............................. 135 135
Deferred income taxes................................. 1,093 1,813
Net changes (exclusive of changes due to subsidiaries
acquired) in:
Accounts receivable and advances to growers........... (6,944) (4,949)
Inventories........................................... 3,901 5,370
Other assets.......................................... 322 (499)
Accounts payable and accrued expenses................. 5,131 (5,104)
Income tax payable, net............................... (1,282) 580
--------- ---------
Net cash provided by (used in) operating activities..... 3,247 (1,895)
--------- ---------
Cash flows from investing activities:
Acquisition of subsidiaries, net of cash acquired..... (2,026)
Disposition (acquisition) of property, plant and
equipment............................................ 80 (1,980)
--------- ---------
Net cash provided by (used in) investing activities..... 80 (4,006)
--------- ---------
Cash flows from financing activities:
Net proceeds from short-term bank loans............... (247) 6,919
Amounts due to related parties........................ (1,332) (1,497)
Investment by Bionova, S. A. de C. V.................. 936
Investment by minority interests...................... 936
--------- ---------
Net cash (used in) provided by financing activities..... (1,579) 7,294
--------- ---------
Net increase in cash and cash equivalents............... 1,748 1,393
Cash and cash equivalent at beginning of the period..... 1,580 2,540
--------- ---------
Cash and cash equivalent at end of the period........... $ 3,328 $ 3,933
========= =========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-46
<PAGE>

BIONOVA SUBSIDIARIES
(SUBSIDIARIES OF BIONOVA, S.A. DE C.V.)

NOTES TO UNAUDITED COMBINED FINANCIAL STATEMENTS
(THOUSANDS OF U.S. DOLLARS)

NOTE 1--BASIS OF PRESENTATION

The unaudited combined financial statements included herein have been
prepared by the Bionova Subsidiaries, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations. These consolidated
financial statements should be read in conjunction with the combined financial
statements and notes thereto for the year ended December 31, 1995 included
elsewhere in this Proxy.

In the opinion of the Bionova Subsidiaries' management, the accompanying
unaudited combined financial statements contain adjustments, all of which are
of a normal recurring nature, necessary to present fairly the Bionova
Subsidiaries' financial position as of March 31, 1996 and the results of its
operations and its cash flows for the three months ended March 31, 1996 and
1995. Interim results are not necessarily indicative of results for the full
fiscal year.

NOTE 2--INVENTORIES

Inventories consist of the following:

<TABLE>
<CAPTION>
MARCH 31, 1996 DECEMBER 31, 1995
-------------- -----------------
<S> <C> <C>
Finished produce............................ $ 2,816 $ 3,357
Growing crops............................... 3,402 8,436
Advances to suppliers....................... 1,382 718
Spare parts and materials................... 2,911 1,932
Merchandise in transit...................... 418 387
------- -------
10,929 14,830
Allowance for slow moving inventory......... (100) (100)
------- -------
$10,829 $14,730
======= =======
</TABLE>

F-47
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholder of Bionova U.S. Inc.

In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of income, of changes in stockholder's equity and of
cash flows present fairly, in all material respects, the financial position of
Bionova U.S. Inc. and its subsidiary at March 31, 1996, and the results of
their operations and their cash flows for the period from January 12, 1996
(date of inception) to March 31, 1996, in conformity with generally accepted
accounting principles in the United States of America. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these statements in accordance with
generally accepted auditing standards in the United States of America which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.

PRICE WATERHOUSE LLP

Dallas, Texas
May 6, 1996

F-48
<PAGE>

BIONOVA U.S. INC.
(A WHOLLY-OWNED SUBSIDIARY OF BIONOVA, S.A. DE C.V.)

CONSOLIDATED BALANCE SHEET
MARCH 31, 1996

<TABLE>
<S> <C>
ASSETS
Current Assets:
Cash............................................................. $ 25,000
Accrued interest receivable...................................... 87,055
Receivable from grant of option for patent sublicense to related
party........................................................... 50,000
----------
Total Current Assets............................................... 162,055
Note receivable.................................................... 5,000,000
----------
Total Assets................................................... $5,162,055
==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Accrued interest payable......................................... $ 87,055
Accrued royalty fees............................................. 50,000
Note payable to affiliate........................................ 5,000,000
----------
Total Current Liabilities.......................................... 5,137,055
----------
Stockholder's equity:
Preferred stock, $.01 par value, 5,000,000 shares authorized, 0
shares issued and outstanding..................................... --
Common stock, $.01 par value, 250,000,000 shares authorized, 25,000
shares issued and outstanding..................................... 250
Additional paid-in capital......................................... 24,750
Retained earnings.................................................. --
----------
Total Stockholder's Equity..................................... 25,000
----------
Total Liabilities and Stockholder's Equity..................... $5,162,055
==========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements

F-49
<PAGE>

BIONOVA U.S. INC.
(A WHOLLY-OWNED SUBSIDIARY OF BIONOVA, S.A. DE C.V.)

CONSOLIDATED STATEMENT OF INCOME
FOR THE PERIOD FROM JANUARY 12, 1996 (DATE OF INCEPTION)
TO MARCH 31, 1996

<TABLE>
<S> <C>
Revenues:
Interest income..................................................... $ 87,055
Grant of option for patent sublicense to related party.............. 50,000
--------
Total revenues.................................................... 137,055
--------
Expenses:
Interest expense.................................................... 87,055
Royalty expense..................................................... 50,000
--------
Total expenses.................................................... 137,055
--------
Net income.......................................................... $ --
========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements

F-50
<PAGE>

BIONOVA U.S. INC.
(A WHOLLY-OWNED SUBSIDIARY OF BIONOVA, S.A. DE C.V.)

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
FOR THE PERIOD FROM JANUARY 12, 1996 (DATE OF INCEPTION) TO MARCH 31, 1996

<TABLE>
<CAPTION>
ADDITIONAL TOTAL
SHARES COMMON PAID-IN RETAINED STOCKHOLDER'S
OUTSTANDING STOCK CAPITAL EARNINGS EQUITY
----------- ------ ---------- -------- -------------
<S> <C> <C> <C> <C> <C>
Issuance of common
stock................... 25,000 $250 $24,750 $-- $25,000
Net income............... -- --
------ ---- ------- ---- -------
Balance at March 31,
1996.................... 25,000 $250 $24,750 $-- $25,000
====== ==== ======= ==== =======
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements

F-51
<PAGE>

BIONOVA U.S. INC.
(A WHOLLY-OWNED SUBSIDIARY OF BIONOVA, S.A. DE C.V.)

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM JANUARY 12, 1996 (DATE OF INCEPTION)
TO MARCH 31, 1996

<TABLE>
<S> <C>
Cash flows from operating activities:
Net income...................................................... $ --
Adjustments to reconcile net income to net cash provided by
operating activities:
Increase in accrued interest receivable......................... (87,055)
Increase in receivable from grant of option..................... (50,000)
Increase in accrued interest payable............................ 87,055
Increase in accrued royalty fees................................ 50,000
-----------
Net cash provided by operating activities..................... --
-----------
Cash flows from investing activities:
Increase in note receivable..................................... (5,000,000)
-----------
Net cash used in investing activities......................... (5,000,000)
-----------
Cash flows from financing activities:
Issuance of common stock........................................ 25,000
Increase in note payable........................................ 5,000,000
-----------
Net cash provided by financing activities..................... 5,025,000
-----------
Net increase in cash.............................................. 25,000
Cash, beginning of period......................................... --
-----------
Cash, end of period............................................... $ 25,000
===========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements

F-52
<PAGE>

BIONOVA U.S. INC.
(A WHOLLY-OWNED SUBSIDIARY OF BIONOVA, S.A. DE C.V.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

Bionova U.S. Inc. (the Company) was formed to be the holding company of the
consolidated group including certain subsidiaries of Bionova, S.A. de C.V.,
and DNA Plant Technology Corporation (DNAP).

The accompanying consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiary, Bionova Acquisition, Inc. All
intercompany accounts and transactions are eliminated in consolidation.

The Company's financial statements are prepared in conformity with generally
accepted accounting principles in the United States of America.

Concentration of credit risk

The Company has a note receivable from DNAP which bears interest at a fixed
rate of 10.25%. Principal and accrued interest are due on the earlier of (i)
January 26, 1999 or (ii) the date DNAP consummates an alternative transaction
if the merger of Bionova Acquisition, Inc. with DNAP (the "Merger") is not
effected. Accrued interest receivable on the note is $87,055 at March 31,
1996.

The note receivable is secured by assignment to the Company of DNAP's right,
title and interest in certain patents. If the Merger is not effected, failure
by DNAP to meet its obligation related to the note could have a material
adverse effect on the Company's business.

If the Merger is not effected before July 1, 1996, and DNAP is not in
default under the loan agreement, the Company has agreed to lend DNAP an
additional $5,000,000.

Fair value of financial instruments

The carrying amount of the Company's financial instruments, including cash,
approximate their fair value due to their short-term maturities. The carrying
value of the Company's non-current note receivable is estimated to approximate
its fair value.

Income and expense recognition

Interest income and interest expense are recognized as earned (incurred) and
are accrued in the financial statements.

2. NOTE PAYABLE

Note payable at March 31, 1996 consists of the following note to a related
party:

<TABLE>
<S> <C>
Demand note payable, interest rate
fixed at 10.25%, principal and interest
payable on demand. $5,000,000
</TABLE>

Accrued interest payable on the note is $87.055 at March 31, 1996.

F-53
<PAGE>

BIONOVA U.S. INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

If the Merger is consummated, the parent of Bionova, S.A. de C.V. or an
affiliate thereof will contribute to the capital of the Company an amount
equal to the then outstanding balance of the note payable. In the event the
Merger does not occur, this note is payable on demand.

3. LICENSE AGREEMENT

The Company has entered into a license agreement with DNAP to use certain
patents and to make, have made, use and sell certain licensed products. The
royalty fee payable by the Company is $50,000 for the quarter ended March 31,
1996, $125,000 for the quarter ended June 30, 1996 and $250,000 for each
quarter thereafter during which the license agreement is in effect.

The Company has granted to a related party the option to obtain a sublicense
from the Company to use certain licensed patents in the field of tobacco
products and to make, have made, use and sell certain licensed products
related to the field of tobacco. The term of this option was for two months
ended March 31, 1996, extendable by the related party for an additional six
months. In exchange for the option the related party is obligated to pay
$50,000 to the Company for the initial two months and $5,000 per month for
each additional month. The related party has extended the term for an
additional three months.

F-54
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of R.B. Packing, Inc., R.B. Packing
of California, Inc. and Batiz & Sons, Inc.

In our opinion, the accompanying combined balance sheet and the related
combined statements of income, of stockholders' equity and of cash flows
present fairly, in all material respects, the financial position of
R.B. Packing, Inc., R.B. Packing of California, Inc. and Batiz & Sons, Inc.
(collectively referred to as the Company) at December 31, 1994, and the
results of their operations and their cash flows for the year in conformity
with generally accepted accounting principles. These financial statements are
the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audit. We
conducted our audit of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for the opinion expressed above.

PRICE WATERHOUSE LLP

San Diego, California
June 4, 1996

F-55
<PAGE>

R.B. PACKING, INC., R.B. PACKING OF CALIFORNIA, INC. AND BATIZ & SONS, INC.

COMBINED BALANCE SHEET

DECEMBER 31, 1994

(THOUSANDS OF U.S. DOLLARS)

<TABLE>
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents............................................ $ 1,257
Accounts receivable.................................................. 4,242
Accounts receivable from related parties............................. 1,702
Advances to growers.................................................. 884
Inventories.......................................................... 414
Deferred income taxes................................................ 183
Prepaid expenses and other assets.................................... 42
-------
Total current assets............................................... 8,724
Property and equipment, net............................................ 2,560
-------
$11,284
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities............................. $ 1,100
Accounts payable to growers.......................................... 2,714
Accounts payable to related parties.................................. 1,186
Bank lines of credit................................................. 2,355
Current portion of long-term debt.................................... 256
-------
Total current liabilities.......................................... 7,611
Long-term debt, less current portion................................... 683
-------
Total liabilities.................................................. 8,294
Commitments and contingencies (Note 6).................................
Stockholders' equity................................................... 2,990
-------
$11,284
=======
</TABLE>

See accompanying notes to combined financial statements.

F-56
<PAGE>

R.B. PACKING, INC., R.B. PACKING OF CALIFORNIA, INC. AND BATIZ & SONS, INC.

COMBINED STATEMENT OF INCOME

YEAR ENDED DECEMBER 31, 1994

(THOUSANDS OF U.S. DOLLARS)

<TABLE>
<S> <C>
Sales.................................................................. $54,917
-------
Costs and expenses:
Cost of produce sold................................................. 49,980
Distribution costs................................................... 998
General and administrative........................................... 1,697
Marketing and selling................................................ 760
Interest expense..................................................... 188
Other (income) expense, net.......................................... (211)
-------
53,412
-------
Income before income taxes............................................. 1,505
Provision for income taxes............................................. (580)
-------
Net income............................................................. $ 925
=======
</TABLE>

See accompanying notes to combined financial statements.

F-57
<PAGE>

R. B. PACKING, INC., R. B. PACKING OF CALIFORNIA, INC. AND BATIZ & SONS, INC.

COMBINED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

YEAR ENDED DECEMBER 31, 1994

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS)

<TABLE>
<CAPTION>
R.B. PACKING BATIZ &
R.B. PACKING, INC. OF CALIFORNIA, INC. SONS, INC.
-------------------- --------------------- -------------
100,000 SHARES 10,000 SHARES 10,000 SHARES BATIZ & SONS
AUTHORIZED AUTHORIZED AUTHORIZED BATIZ & SONS ADDITIONAL
$10 PAR VALUE NO PAR VALUE $1 PAR VALUE PARTNER'S PAID-IN RETAINED
COMMON STOCK COMMON STOCK COMMON STOCK EQUITY CAPITAL EARNINGS TOTAL
-------------------- --------------------- ------------- ------------ ------------ -------- ------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- --------- ---------- --------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1993.................. 96,000 $ 960 5,000 $ 25 $ 211 $ 869 $2,065
Exchange of partners'
equity for common
stock................. 1,000 $ 1 (278) $277
Net income............. 67 858 925
---------- -------- ---------- --------- ----- --- ----- ---- ------ ------
Balance at December 31,
1994.................. 96,000 $ 960 5,000 $ 25 1,000 $ 1 $ 0 $277 $1,727 $2,990
========== ======== ========== ========= ===== === ===== ==== ====== ======
</TABLE>

See accompanying notes to combined financial statements.

F-58
<PAGE>

R. B. PACKING, INC., R. B. PACKING OF CALIFORNIA, INC. AND BATIZ & SONS, INC.

COMBINED STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 1994

(THOUSANDS OF U.S. DOLLARS)

<TABLE>
<S> <C>
Cash flows from operating activities:
Net income............................................................. $ 925
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation......................................................... 292
Deferred income taxes................................................ (47)
Increase in accounts receivable...................................... (1,103)
Increase in accounts receivable from related parties................. (1,691)
Increase in inventories.............................................. (277)
Increase in advances to growers...................................... (253)
Increase in prepaid expenses and other assets........................ (28)
Increase in accounts payable and accrued liabilities................. 398
Increase in accounts payable to growers.............................. 240
Increase in account payable to related parties....................... 1,041
-------
Net cash used in operating activities.............................. (503)
-------
Cash flows from investing activities:
Acquisition of property and equipment................................ (107)
-------
Net cash used in investing activities.............................. (107)
-------
Cash flows from financing activities:
Proceeds from issuance of long-term debt and notes payable........... 157
Repayment of long-term debt.......................................... (352)
Net proceeds from bank lines of credit............................... 1,495
-------
Net cash provided by financing activities.......................... 1,300
-------
Net increase in cash and cash equivalents.............................. 690
Cash and cash equivalents at beginning of year......................... 567
-------
Cash and cash equivalents at end of year............................... $ 1,257
=======
</TABLE>

See accompanying notes to combined financial statements.

F-59
<PAGE>

R. B. PACKING, INC., R.B. PACKING OF CALIFORNIA, INC. AND BATIZ & SONS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS

(THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

NOTE 1--THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF COMBINATION AND OPERATIONS

The combined financial statements include the accounts of the following
commonly controlled entities; R.B. Packing, Inc., R.B. Packing of California,
Inc. and Batiz & Sons, Inc. (collectively referred to as the "Company"). All
significant intercompany transactions and balances have been eliminated. The
Company's primary business is to sell Mexican grown and United States grown
produce to wholesalers and retailers in the United States. Batiz & Sons, Inc.
leases commercial real estate to R. B. Packing, Inc.

Batiz & Sons, Inc. was incorporated in Arizona in 1994. On December 1, 1994,
the equity interests with a book value of $278 in a predecessor partnership
Batiz & Sons were exchanged for equity interests in the corporation. The
equity of the corporation was recorded as 1,000 shares of common stock with a
par value of $1 per share, and additional paid in capital of $277.

MANAGEMENT'S ESTIMATES AND ASSUMPTIONS

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

REVENUE RECOGNITION

The Company sells produce on behalf of growers on a commissioned basis and
on its own account. Revenue from sales is recognized when the produce is
shipped, net of allowance for estimated returns. The Company bears risk of
loss for collection of sales proceeds. For the year ended December 31, 1994,
sales and cost of sales on a commissioned basis were $31,740 and $27,896,
respectively.

ADVANCES TO GROWERS

Advances to growers are made for supplies, seed, harvesting and other
growing costs. The advances are repaid from amounts withheld by the Company
from sales proceeds due to growers and are generally not collateralized.

ASSOCIATIONS

The Company has entered into certain participation agreements with growers
under which the Company shares in the profits and losses associated with
growing activities. Since the Company exercises control over the associations,
the Company consolidates the results of operations of those growing activities
in the statement of operations.

INVENTORIES

Inventories maintained are stated at the lower of cost or market; cost is
determined using the first-in, first-out method.

CONCENTRATIONS OF CREDIT RISK

Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of trade receivables and
advances to growers. Credit risk associated with the trade accounts receivable

F-60
<PAGE>

R.B. PACKING, INC., R. B. PACKING OF CALIFORNIA, INC. AND BATIZ & SONS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
is limited due to the quality of customers comprising the Company's customer
base. Concentrations of credit risk associated with the advances to growers is
limited due to the large number and geographic dispersion of the growers.
However, there can be no assurance that an event outside of the Company's
control will not occur and cause these advances to be at risk. The Company
performs on-going credit evaluations of its customers and growers financial
condition to determine the need for an allowance for doubtful accounts. The
Company has not experienced significant losses to date and management believes
that adequate provision has been made for any such credit risk.

PROPERTY AND EQUIPMENT

Property and equipment are stated on the basis of cost. Additions to
property and equipment, including significant betterments and renewals are
capitalized. Maintenance and repair costs are charged to expense as incurred.
Depreciation is computed using accelerated and straight-line methods over
estimated useful lives of 3 to 32 years.

INCOME TAXES

Income taxes are provided using the asset and liability approach. Under the
asset and liability approach, deferred taxes are provided for the differences
between the financial statement and tax bases of assets and liabilities.
Deferred income tax expense (benefit) is the net change during the year in the
deferred income tax asset or liability. Current income tax expense is the
amount of income taxes expected to be payable for the current year.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of highly liquid investments purchased
with maturities of 90 days or less at date purchased. Cash equivalents consist
of investments in money market accounts backed by Federal government
securities. The carrying amount is reflected at cost, which approximates the
fair value due to the short maturity of these instruments. The Company's
policy is to place its cash and cash equivalents with high credit quality
financial institutions and to limit the amount of credit exposure.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of the Company's financial instruments, including cash
and cash equivalents, trade receivables and payables, and advances to growers,
approximate their fair market value due to their short-term maturities. The
fair value of the Company's long-term debt is estimated to approximate the
carrying amount.

ADVERTISING

Advertising costs are expensed as incurred or the first time the advertising
takes place. Advertising expenses were $142, net of reimbursements from
growers, for the year ended December 31, 1994.

F-61
<PAGE>

R.B. PACKING, INC., R. B. PACKING OF CALIFORNIA, INC. AND BATIZ & SONS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
NOTE 2--COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS

<TABLE>
<CAPTION>
DECEMBER 31,
1994
------------
<S> <C>
PROPERTY AND EQUIPMENT
Land............................................................ $ 597
Land Improvements............................................... 327
Buildings....................................................... 1,999
Equipment....................................................... 1,106
Airplane........................................................ 335
------
4,364
Less accumulated depreciation................................... 1,804
------
$2,560
======
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable................................................ $ 667
Accrued liabilities............................................. 326
Income taxes payable............................................ 107
------
$1,100
======
</TABLE>
NOTE 3--LONG-TERM DEBT

Obligations under long-term debt arrangements are comprised of:

<TABLE>
<CAPTION>
DECEMBER 31,
1994
------------
<S> <C>
Mortgage note payable to bank secured by the related real
estate, interest at 7.5%, principal of $5 plus interest is
payable monthly through December 1997......................... $180
Mortgage notes payable to bank secured by the related real
estate, interest at prime plus 1.5% (10% at December 31,
1994), principal of $13 plus interest payable monthly and
maturing on dates through March 2003.......................... 499
Note payable secured by airplane, prime plus 1.5% (10% at
December 31, 1994) principal of $2 plus interest payable in
monthly installments through July 2002........................ 189
Note payable secured by equipment, interest at 5%, principal
and interest due in monthly installments of $1 maturing on
dates through May 1998........................................ 31
Other.......................................................... 40
----
939
Less current portion........................................... 256
----
Long-term portion.............................................. $683
====
</TABLE>

The Company paid an aggregate of $214 of interest on all outstanding debt
during fiscal 1994.

Principal payments due on long-term debt during the five years subsequent to
December 31, 1994 are as follows: 1995--$256, 1996--$168, 1997--$242, 1998--
$36, 1999--$36, thereafter--$201.

NOTE 4--BANK LINES OF CREDIT

Various credit facilities are available with banks whereby the Company may
borrow upon such terms as the Company and the banks mutually agree. At
December 31, 1994, such credit lines amounted to approximately $6,000, of
which $2,355 was outstanding. The lines of credit contain certain covenants
which, among other

F-62
<PAGE>

R.B. PACKING, INC., R. B. PACKING OF CALIFORNIA, INC. AND BATIZ & SONS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
things, require maintenance of certain ratio levels and tangible net worth
levels. The Company is in compliance with these covenants. The lines of credit
have various maturity dates ranging from April 30, 1995 to November 30, 1995.
The lines of credit bear interest, payable monthly, at prime plus 1% or .5%
(prime was 8.5% at December 31, 1994) and are secured primarily by the
Company's accounts receivable and inventories.

NOTE 5--INCOME TAXES

The provision (benefit) for income taxes is summarized as follows:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1994
------------
<S> <C>
Current tax expense:
Federal....................................................... $483
State......................................................... 143
----
Total current............................................... 626
----
Deferred tax expense (benefit):
Federal....................................................... (40)
State......................................................... (6)
----
Total deferred.............................................. (46)
----
Total provision for income taxes............................ $580
====
</TABLE>

A reconciliation of the provision for income taxes to the amount computed by
applying the statutory federal income tax rate to income before income taxes
is as follows:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1994
------------
<S> <C>
Tax expense at statutory rate................................... 34.0%
State taxes and other, net of federal benefit................... 6.2
Other........................................................... (1.7)
----
Provision for income taxes...................................... 38.5%
====
</TABLE>

The Company paid an aggregate of $310 of income taxes during 1994.

Deferred tax assets (liabilities) are summarized as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
1994
------------
<S> <C>
Deferred employee costs......................................... $ 85
State income taxes.............................................. 46
Other........................................................... 70
----
Total deferred tax assets....................................... 201
Deferred tax liabilities........................................ (18)
----
Deferred tax assets, net........................................ $183
====
</TABLE>

NOTE 6--COMMITMENTS AND CONTINGENCIES

LEASE COMMITMENTS

The Company leases certain facilities under noncancelable operating lease
agreements. The leases expire at various dates through 1996. The leases
provide that the Company pay the taxes, insurance and maintenance

F-63
<PAGE>

R.B. PACKING, INC., R. B. PACKING OF CALIFORNIA, INC. AND BATIZ & SONS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
expenses related to the leased facilities, and the monthly rental payments are
subject to periodic adjustments. Certain leases contain fixed escalation
clauses and rent under these leases is charged ratably over the lease term.
Rent expense incurred under these and other non-cancelable operating leases
totaled $106 in fiscal 1994.

The aggregate future minimum rental commitments under non-cancelable
operating leases are reflected in the following table:

<TABLE>
<S> <C>
1995................................................................... $ 92
1996................................................................... 84
----
Total future minimum lease payments.................................... $176
====
</TABLE>

CONTINGENCIES

In August 1995, the Company received a subpoena from the United States
District Court, District of Arizona, on behalf of the United States Department
of Agriculture and the United States Department of Justice, Anti-Trust
Division. The United States Department of Justice conducted an investigation
to determine whether or not certain anti-trust laws were violated in the
produce industry. The subpoena required the Company to furnish certain
documents, which the Company provided. The Company subsequently received
notice that the investigation was terminated without liability to the Company.

The Company is currently undergoing an IRS audit for 1991 and 1992 tax
years. The IRS has asserted that the sales commission charged to a related
party is unreasonable. The Company believes that the sales commission charged
to the related party is reasonable and supportable, and that it will
ultimately prevail. The ultimate outcome of this matter cannot be determined
at this time, and no provision for any liability which may result from this
matter has been recorded in the combined financial statements.

NOTE 7--RELATED PARTY TRANSACTIONS

The following table summarizes the transactions between the Company and its
affiliates/stockholders and the payable and receivable balances outstanding at
the end of the year.

<TABLE>
<CAPTION>
AS OF OR FOR THE
YEAR ENDED
DECEMBER 31,
1994
----------------
<S> <C>
STOCKHOLDERS
Batiz Family:
Receivables.................................................. $ 69
Notes payable................................................ 30
Payables..................................................... 94
AFFILIATES
Agricola Batiz, S.A. de C.V.:
Receivables.................................................. $ 270
Payables..................................................... 1,092
Purchases.................................................... 20,887
Tanimura Distributing Inc.:
Receivables.................................................. $1,363
Sales........................................................ 7,983
</TABLE>

F-64
<PAGE>

ANNEX I

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

AGREEMENT AND PLAN OF MERGER

AMONG

EMPRESAS LA MODERNA, S.A. DE C.V.

BIONOVA, S.A. DE C.V.

BIONOVA U.S. INC.

BIONOVA ACQUISITION, INC.

AND

DNA PLANT TECHNOLOGY CORPORATION

JANUARY 26, 1996

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
AGREEMENT AND PLAN OF MERGER............................................. 8
ARTICLE I THE MERGER AND RELATED TRANSACTIONS............................ 9
1.1 The Merger..................................................... 9
1.2 Effective Time of the Merger................................... 9
1.3 Closing........................................................ 9
1.4 Effects of the Merger.......................................... 9
1.5 Certificate of Incorporation................................... 9
1.6 Bylaws......................................................... 9
1.7 Directors...................................................... 9
1.8 Officers....................................................... 9
1.9 Name Change.................................................... 10
1.10 Directors of the Surviving Corporation......................... 10
1.11 Capitalization of Bionova U.S. and Surviving Corporation....... 10
ARTICLE II CONVERSION OF SECURITIES; ASSUMPTION OF OPTIONS AND WARRANTS.. 11
2.1 Conversion of Securities....................................... 11
2.2 Dissenting Shares.............................................. 11
2.3 Exchange of Certificates....................................... 12
2.4 Adjustment..................................................... 14
2.5 Stock Options.................................................. 14
2.6 Warrants....................................................... 14
ARTICLE III REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY......... 15
3.1 Corporate Organization......................................... 15
3.2 Qualification.................................................. 15
3.3 Charter and Bylaws............................................. 15
3.4 Capitalization of the Company.................................. 15
3.5 Authority Relative to This Agreement........................... 16
3.6 Noncontravention............................................... 16
3.7 Governmental Approvals......................................... 16
3.8 Company Subsidiaries........................................... 16
3.9 Inapplicability of Section 203................................. 17
3.10 SEC Filings.................................................... 17
3.11 Absence of Undisclosed Liabilities............................. 18
3.12 Absence of Certain Changes..................................... 18
3.13 Tax Matters.................................................... 18
3.14 Compliance With Laws........................................... 18
3.15 Legal Proceedings.............................................. 19
3.16 Title to Properties............................................ 19
3.17 Sufficiency and Condition of Properties........................ 19
3.18 Intellectual Property.......................................... 19
3.19 Permits........................................................ 21
3.20 Agreements..................................................... 21
3.21 ERISA.......................................................... 22
3.22 Environmental Matters.......................................... 23
3.23 Labor Relations................................................ 25
3.24 Employees...................................................... 25
3.25 Confidentiality Matters........................................ 26
3.26 Insurance...................................................... 26
3.27 Insider Interests.............................................. 26
</TABLE>

2
<PAGE>

<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
3.28 Offerings of Securities........................................ 26
3.29 Brokerage Fees................................................. 26
3.30 Disclosure..................................................... 27
3.31 Disclosure Documents........................................... 27
3.32 Representations and Warranties on Closing Date................. 27
3.33 Receivables.................................................... 27
ARTICLE IV REPRESENTATIONS AND WARRANTIES REGARDING PARENT, BIONOVA MEXI-
CO, BIONOVA U.S. AND SUB...................................... 27
4.1 Corporate Organization......................................... 27
4.2 Qualification.................................................. 28
4.3 Charter and Bylaws............................................. 28
4.4 Authority Relative to This Agreement........................... 28
4.5 Noncontravention............................................... 28
4.6 Governmental Approvals......................................... 29
4.7 Legal Proceedings.............................................. 29
4.8 Brokerage Fees................................................. 29
4.9 Stock Ownership of Bionova Mexico, Bionova U.S. and Sub........ 29
4.10 Parent Securities Filings...................................... 30
4.11 Control........................................................ 30
ARTICLE V REPRESENTATIONS AND WARRANTIES REGARDING THE BIONOVA GROUP..... 31
5.1 Corporate Organization......................................... 31
5.2 Qualification.................................................. 31
5.3 Charter and Bylaws............................................. 31
5.4 Capitalization of the Bionova Group............................ 31
5.5 Financial Statements........................................... 32
5.6 Absence of Undisclosed Liabilities............................. 32
5.7 Absence of Certain Changes..................................... 32
5.8 Tax Matters.................................................... 32
5.9 Compliance With Laws........................................... 33
5.10 Legal Proceedings.............................................. 33
5.11 Title to Properties............................................ 33
5.12 Sufficiency and Condition of Properties........................ 33
5.13 Intellectual Property.......................................... 34
5.14 Permits........................................................ 34
5.15 Agreements..................................................... 35
5.16 ERISA.......................................................... 35
5.17 Environmental Matters.......................................... 37
5.18 Labor Relations................................................ 38
5.19 Employees...................................................... 38
5.20 Insurance...................................................... 39
5.21 Insider Interests.............................................. 39
5.22 Disclosure..................................................... 39
5.23 Disclosure Documents........................................... 39
5.24 Representations and Warranties on Closing Date................. 40
5.25 Confidentiality Matters........................................ 40
5.26 Offerings of Securities........................................ 40
5.27 Customers and Suppliers........................................ 40
5.28 No Prior Activities............................................ 40
5.29 Holding Company................................................ 40
</TABLE>

3
<PAGE>

<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
5.30 Arm's Length Contracts.......................................... 40
5.31 Real Property................................................... 40
5.32 Leased Property................................................. 41
5.33 Receivables..................................................... 41
5.34 Bionova U.S. Common Stock....................................... 41
5.35 Capital Contribution............................................ 41
5.36 Inventory....................................................... 41
ARTICLE VI CONDUCT OF PARTIES PENDING CLOSING............................. 41
6.1 Conduct and Preservation of Business............................ 41
6.2 Restrictions on Certain Actions................................. 42
ARTICLE VII ADDITIONAL AGREEMENTS......................................... 43
7.1 Access to Information; Confidentiality.......................... 43
7.2 Acquisition Proposals........................................... 44
7.3 Special Meeting; Proxy Statement................................ 44
7.4 Proxy Statement/Registration Statement.......................... 45
7.5 Reasonable Best Efforts......................................... 45
7.6 HSR Act Notification............................................ 46
7.7 Public Announcements............................................ 46
7.8 Delivery and Amendment of Schedules............................. 46
7.9 Delivery of 1995 Audited Financial Statements................... 47
7.10 Notice of Litigation............................................ 47
7.11 Notification of Certain Matters................................. 47
7.12 Bionova U.S. Standstill......................................... 47
7.13 Indemnification and Insurance................................... 48
7.14 Limited Guaranty of Parent...................................... 48
7.15 Governing Documents............................................. 48
7.16 Fairness Opinion................................................ 48
7.17 Bionova U.S. Organizational Documents........................... 48
7.18 Notices......................................................... 49
ARTICLE VIII CONDITIONS TO OBLIGATIONS OF THE PARTIES.................... 49
8.1 HSR Act......................................................... 49
8.2 Stockholder Approval............................................ 49
8.3 Legal Proceedings............................................... 49
8.4 Registration Statement.......................................... 49
8.5 Bionova U.S. Common Stock....................................... 49
ARTICLE IX CONDITIONS TO OBLIGATIONS OF THE COMPANY...................... 49
9.1 Representations and Warranties True............................. 49
9.2 Covenants and Agreements Performed.............................. 49
9.3 Certificate..................................................... 50
9.4 Fairness Opinion................................................ 50
9.5 Legal Opinion................................................... 50
9.6 No Material Adverse Change...................................... 50
9.7 Phase I Environmental........................................... 50
9.8 Governance Agreement............................................ 50
9.9 Long-Term Funded Research Agreement............................. 50
9.10 Severance Agreements............................................ 50
ARTICLE X CONDITIONS TO OBLIGATIONS OF PARENT, BIONOVA MEXICO, BIONOVA
U.S. AND SUB................................................... 50
10.1 Representations and Warranties True............................. 50
</TABLE>

4
<PAGE>

<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
10.2 Covenants and Agreements Performed........................... 51
10.3 Certificate.................................................. 51
10.4 Legal Opinion................................................ 51
10.5 No Material Adverse Change................................... 51
10.6 Preemptive Rights............................................ 51
10.7 Phase I Environmental........................................ 51
10.8 Authorized Shares............................................ 51
ARTICLE XI TERMINATION, AMENDMENT, AND WAIVER........................... 51
11.1 Termination.................................................. 51
11.2 Effect of Termination........................................ 52
11.3 Expenses..................................................... 52
11.4 Amendment.................................................... 54
11.5 Waiver....................................................... 54
ARTICLE XII MISCELLANEOUS............................................... 54
12.1 Nonsurvival of Representations, Warranties, and Agreements... 54
12.2 Indemnification.............................................. 54
12.3 Notices...................................................... 55
12.4 Entire Agreement............................................. 56
12.5 Binding Effect; Assignment; No Third Party Benefit........... 56
12.6 Severability................................................. 56
12.7 GOVERNING LAW................................................ 56
12.8 Further Assurances........................................... 56
12.9 Descriptive Headings......................................... 57
12.10 Gender....................................................... 57
12.11 References................................................... 57
12.12 Counterparts................................................. 57
12.13 Assignment................................................... 57
12.14 Confidentiality Agreement and Standstill..................... 57
ARTICLE XIII DEFINITIONS................................................ 57
13.1 Certain Defined Terms........................................ 57
13.2 Certain Additional Defined Terms............................. 60
13.3 Construction................................................. 61
</TABLE>

5
<PAGE>

SCHEDULES

<TABLE>
<C> <S>
1.7 Directors of Bionova U.S.
1.10 Directors of Surviving Corporation and Each Company Subsidiary
3.2 Foreign Qualification
3.4 Stock Options and Warrants
3.6 Noncontravention
3.8 Subsidiaries
3.12 Certain Changes
3.13 Tax Matters
3.15 Legal Proceedings
3.16 Title to Properties
3.18 Intellectual Property
3.18-1 Amendments
3.18-2 Research/License Agreements
3.18-3 Transwitch Technology
3.18-4 Expired Matters
3.19 Permits
3.20 Agreements
3.21 ERISA
3.22 Environmental Matters
3.23 Labor Relations
3.24 Employees
3.26 Insurance
4.2 Qualification
4.3 Charter and Bylaws of Bionova U.S. and Sub
4.5 Noncontravention
4.11 Control
5.1 Corporate Organization
5.2 Foreign Qualification
5.4 Capitalization of the Bionova Group
5.6 Undisclosed Liabilities
5.7 Certain Changes
5.8 Tax Matters
5.9 Compliance with Laws
5.10 Legal Proceedings
5.11 Title to Properties
5.13 Intellectual Property
5.14 Permits
5.15 Agreements
5.16 Benefit Plans
5.17 Environmental Matters
5.18 Labor Matters
5.19 Employees
5.20 Insurance
5.21 Insider Interests
5.29 Holding Company
5.30 Arm's Length Contracts
5.31 Real Property
5.32 Leased Property
</TABLE>

6
<PAGE>

<TABLE>
<C> <S>
6.2A Certain Actions Permitted to be Taken By Company Prior to Closing
Certain Actions Permitted to be Taken By Bionova Group Prior to
6.2B Closing
7.8A Company Omnibus Disclosure Schedule
7.8B Bionova Omnibus Disclosure Schedule
7.8C Requested Documents
7.9A Bionova Group 1995 Audited Financial Statements
7.9B Company 1995 Audited Financial Statements
7.15 Governing Documents
9.5 Bionova Legal Opinion
9.8 Governance Agreement
9.9 Long-Term Funded Research Agreement
9.10 Severance Agreements
10.4 Company Legal Opinion
10.8 Options/Warrants
</TABLE>

7
<PAGE>

AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of January 26,
1996, among Empresas La Moderna, S.A. de C.V., a corporation organized under
the laws of the United Mexican States ("Parent"), Bionova, S.A. de C.V., a
corporation organized under the laws of the United Mexican States and a wholly
owned subsidiary of Parent (except for four shares thereof owned by affiliates
of Parent) ("Bionova Mexico"), Bionova U.S. Inc., a Delaware corporation and a
wholly owned subsidiary of Bionova Mexico ("Bionova U.S."), Bionova
Acquisition, Inc., a Delaware corporation and a wholly owned subsidiary of
Bionova U.S. ("Sub"), and DNA Plant Technology Corporation, a Delaware
corporation (the "Company").

WITNESSETH:

WHEREAS, the respective Boards of Directors of Bionova Mexico, Bionova U.S.,
Sub and the Company have determined that the transactions contemplated hereby
are desirable and in the best interests of those entities and their respective
stockholders; and

WHEREAS, the respective Boards of Directors of Bionova U.S., Sub and the
Company, and Bionova U.S., acting as the sole stockholder of Sub, have
approved the Merger of Sub with and into the Company in a transaction in which
the Company will be the surviving entity and will become a wholly-owned
subsidiary of Bionova U.S. and the stockholders of the Company will become
stockholders of Bionova U.S., all upon the terms and subject to the conditions
set forth herein; and

WHEREAS, the Board of Directors of the Company has resolved to recommend
that stockholders of the Company approve this Agreement and the Merger; and

WHEREAS, on the Closing Date, Parent shall cause to be transferred to
Bionova U.S. all of the capital stock then owned by Parent or affiliates
thereof in International Produce Holding Company, a Delaware corporation
("IPHC"), and Agricola Batiz, S.A. de C.V., a corporation organized under the
laws of the United Mexican States ("ABSA"), as provided in Section 1.11(c);
and

WHEREAS, the Non-Exclusive Patent License Agreement and the Loan Agreement
have been executed and delivered as of the date hereof; and

WHEREAS, the parties intend that the Merger qualify for accounting treatment
as a purchase; and

WHEREAS, the parties intend that the Merger shall constitute for United
States federal income tax purposes a tax-free reorganization under the
Internal Revenue Code of 1986, as amended, and that this Agreement, as it
relates to the Merger, shall constitute a "plan of reorganization" within the
meaning thereof; and

WHEREAS, the parties desire to set forth certain representations, warranties
and covenants made by each to the other as an inducement to the consummation
of the Merger; and

WHEREAS, certain terms which are used herein shall have the respective
meanings ascribed to such terms in Article XIII;

NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent, Bionova Mexico, Bionova U.S., Sub and the Company hereby agree as
follows:

8
<PAGE>

ARTICLE I

THE MERGER AND RELATED TRANSACTIONS

1.1 The Merger. At the Effective Time, and on the terms and subject to the
conditions set forth in this Agreement, Sub shall be merged with and into the
Company (the "Merger"), the Company shall continue its corporate existence
under the General Corporation Law of the State of Delaware ("State Law") as
the surviving corporation in the Merger (the "Surviving Corporation"), and the
separate corporate existence of Sub shall cease.

1.2 Effective Time of the Merger. At the Closing, the parties hereto will
cause the Merger to be consummated by filing with the Secretary of State of
Delaware a certificate of merger in such form as required by, and executed in
accordance with, the relevant provisions of State Law. The Merger shall become
effective at such time as the certificate of merger is duly filed with the
Secretary of State of Delaware (the "Effective Time").

1.3 Closing. The closing of the Merger (the "Closing") shall take place (i)
at the offices of Thompson & Knight, 1700 Pacific Avenue, Suite 3300, Dallas,
Texas 75201, as soon as practicable after the satisfaction or, if permissible,
waiver of the conditions to the obligations of the parties set forth in
Articles VIII, IX and X or (ii) at such other time or place or on such other
date as the parties hereto shall agree, provided that the closing conditions
set forth in Articles VIII, IX and X have been satisfied or waived at or prior
to such other time and date. The date on which the Closing occurs is herein
referred to as the "Closing Date". All Closing transactions shall be deemed to
have occurred simultaneously.

1.4 Effects of the Merger. The Merger shall have the effects set forth in
the applicable provisions of State Law. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the properties,
rights, privileges, powers, and franchises of the Company and Sub shall vest
in the Surviving Corporation, without any transfer or assignment having
occurred, and all debts, liabilities, and duties of the Company and Sub shall
become the debts, liabilities, and duties of the Surviving Corporation.

1.5 Certificate of Incorporation. The Certificate of Incorporation of the
Company, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation, until thereafter
amended in accordance with its terms and as provided by State Law.

1.6 Bylaws. The Bylaws of the Company, as in effect immediately prior to the
Effective Time, shall be the Bylaws of the Surviving Corporation, until
thereafter amended in accordance with its terms and as provided by State Law.

1.7 Directors. The initial directors of Bionova U.S. following the Effective
Time shall be as set forth in Schedule 1.7, each to hold office in accordance
with the Certificate of Incorporation and Bylaws of Bionova U.S. and until his
successor is duly elected and qualified in accordance with State Law or until
his earlier death, resignation, or removal. Not later than the date on which
the Company first transmits its preliminary Proxy Statement to the Securities
and Exchange Commission as provided in Section 7.4, letters from each of those
persons identified in Schedule 1.7 shall have been obtained pursuant to which
they shall consent to their designation as such directors; provided that if
any such person shall not have consented to serve as a director by that date,
then a substitute therefor shall be appointed in a manner consistent with the
applicable terms of the Governance Agreement.

1.8 Officers. The initial officers of Bionova U.S. following the Effective
Time shall be identified by Bionova U.S. not later than the date on which the
Company first transmits its preliminary Proxy Statement to the Securities and
Exchange Commission as provided in Section 7.4. Each such officer shall hold
office in accordance with the Certificate of Incorporation and Bylaws of
Bionova U.S. and until his successor is duly elected and qualified in
accordance with State Law or until his earlier death, resignation, or removal.

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1.9 Name Change. Prior to or on the Closing Date, the Certificate of
Incorporation of Bionova U.S. shall be amended to change the name of Bionova
U.S. to "DNAP Holding Corporation."

1.10 Directors of the Surviving Corporation. Prior to or on the Closing
Date, the then existing directors of the Company and each Company Subsidiary
shall have submitted their resignations from such positions. On the Closing
Date, Bionova U.S., then acting as the sole stockholder of the Surviving
Corporation, and the Surviving Corporation, then acting as the sole
stockholder of each Company Subsidiary, shall cause to be elected as directors
of each of the Surviving Corporation and each Company Subsidiary, as the case
may be, the persons listed on Schedule 1.10. Such persons shall hold office in
accordance with the Certificate of Incorporation and Bylaws of the Surviving
Corporation and each Company Subsidiary, as the case may be, and until his
successor is duly elected and qualified in accordance with State Law or until
his earlier death, resignation, or removal. Not later than the date on which
the Company first transmits its preliminary Proxy Statement to the Securities
and Exchange Commission as provided in Section 7.4, letters from each of those
persons identified in Schedule 1.10 shall have been obtained pursuant to which
they shall consent to their designation as such directors; provided that if
any such person shall not have consented to serve as a director by that date,
then a substitute therefor shall be appointed by Parent.

1.11 Capitalization of Bionova U.S. and Surviving Corporation.

(a) Concurrent with the execution and delivery of this Agreement, Bionova
U.S. and the Company have entered into the Loan Agreement and Bionova U.S. has
loaned the sum of $5 million to the Company as provided in Section 2.01(i) of
the Loan Agreement. Subject to the terms of the Loan Agreement, on the date
specified in Section 2.01(ii) of the Loan Agreement, Bionova U.S. shall, and
Parent shall cause Bionova U.S. to, loan the additional sum of $5 million to
the Company as provided therein. In each such case, Parent or affiliates
thereof will have provided such funds to Bionova U.S. and such funds will have
been provided to Bionova U.S. from sources other than the members of the
Bionova Group.

(b) On the Closing Date, Parent shall cause to be transferred to Bionova
U.S. free and clear of all Encumbrances all of the capital stock then owned by
Parent or affiliates thereof in IPHC and ABSA, which entities shall then own,
directly or indirectly, all of the issued and outstanding capital stock of
each other member of the Bionova Group (except for Bionova Mexico, except to
the extent specified in Schedule 5.4 and except for dormant members of the
Bionova Group which do not have material operations or assets). At such time,
such transferred businesses shall represent all of the assets and earning
power indicated in the Bionova Group Financial Statements delivered pursuant
to Section 5.5 (except for immaterial variations resulting from the ordinary
course of business).

(c) On the Closing Date, Parent shall cause the $10 million provided to
Bionova U.S. referenced in Section 1.11(a) to be deemed a contribution to the
capital of Bionova U.S. Under such circumstances, any related accounting
entries previously recorded by any of Parent or its affiliates or by Bionova
U.S., as the case may be, shall be appropriately modified to reflect such
capital contribution, and any conflicting written arrangements shall be deemed
cancelled and of no further force and effect.

(d) In consideration of the transactions specified in Section 1.11(b) and
Section 1.11(c), on the Closing Date Bionova U.S. shall issue to Bionova
Mexico such number of shares of Bionova U.S. Common Stock as shall represent
(when added to the 25,000 shares of Bionova U.S. Common Stock owned by Bionova
Mexico as of the date of this Agreement) 70% (assuming that the holder of any
Dissenting Shares does not exercise its appraisal rights under State Law) of
the issued and outstanding shares thereof as of the Effective Time of the
Merger. Such shares shall be fully paid and nonassessable shares of Bionova
U.S. Common Stock. At the Effective Time, all other issued and outstanding
shares of Bionova U.S. Common Stock shall be represented by the shares thereof
issued pursuant to Sections 2.1(a), (b) and (c).

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ARTICLE II

CONVERSION OF SECURITIES; ASSUMPTION OF OPTIONS AND WARRANTS

2.1 Conversion of Securities. At the Effective Time, by virtue of the Merger
and without any action on the part of Parent, Bionova U.S., Sub, the Company
or any holder of any of the following securities, the following events will
transpire:

(a) Each then outstanding share of Common Stock, par value $0.01 per
share, of the Company ("Company Common Stock") (other than the shares of
Company Common Stock referred to in Section 2.1(d)) shall be converted into
the right to receive one fully paid and nonassessable share of Common
Stock, par value $0.01 per share, of Bionova U.S. ("Bionova U.S. Common
Stock"), provided, however, that no fractional shares of Bionova U.S.
Common Stock shall be issued, and, in lieu thereof, a cash payment shall be
made in accordance with Section 2.3(d). All such shares, when so converted,
shall no longer be outstanding and shall automatically be cancelled and
retired and shall cease to exist, and each holder of a certificate
representing any such shares shall cease to have any rights with respect
thereto, except the right to receive shares of Bionova U.S. Common Stock
and any cash in lieu of fractional shares as hereinafter provided.

(b) Each then outstanding share of $2.25 Convertible Exchangeable
Preferred Stock, par value $0.01 per share, of the Company ("Company
Convertible Exchangeable Preferred Stock") (other than the shares of such
stock referred to in Section 2.1(d)) shall be converted into the right to
receive 6.8375 fully paid and nonassessable shares of Bionova U.S. Common
Stock, provided, however, that no fractional shares of Bionova U.S. Common
Stock shall be issued, and, in lieu thereof, a cash payment shall be made
in accordance with Section 2.3(d). All such shares, when so converted,
shall no longer be outstanding and shall automatically be cancelled and
retired and shall cease to exist, and each holder of a certificate
representing any such shares shall cease to have any rights with respect
thereto, except the right to receive shares of Bionova U.S. Common Stock
and any cash in lieu of fractional shares as hereinafter provided.

(c) Each then outstanding share of Series A Convertible Preferred Stock,
par value $0.01 per share, of the Company ("Company Series A Preferred
Stock") (other than (i) the shares of such stock referred to in Section
2.1(d) and (ii) Dissenting Shares) shall be converted into the right to
receive 1,000 fully paid and non assessable shares of Bionova U.S. Common
Stock, provided, however, that no fractional shares of Bionova U.S. Common
Stock shall be issued, and, in lieu thereof, a cash payment shall be made
in accordance with Section 2.3(d). All such shares, when so converted,
shall no longer be outstanding and shall automatically be cancelled and
retired and shall cease to exist, and each holder of a certificate
representing any such shares shall cease to have any rights with respect
thereto, except the right to receive shares of Bionova U.S. Common Stock
and any cash in lieu of fractional shares or any amount paid in respect to
appraisal rights, if any, as hereinafter provided.

(d) Each share of Company Common Stock, Company Convertible Exchangeable
Preferred Stock and Company Series A Preferred Stock (collectively "Company
Stock") then held in the treasury of the Company or by any of the Company
Subsidiaries shall be cancelled and extinguished without any conversion
thereof and no payment shall be made with respect thereto.

(e) Each then outstanding share of Common Stock, par value $.01 per
share, of Sub shall be converted into and become one fully paid and
nonassessable share of Company Common Stock.

(f) All then outstanding options and warrants to purchase Company Common
Stock will be assumed by Bionova U.S. in accordance with Sections 2.5 and
2.6.

The consideration to be paid or delivered to each holder of Company Stock
pursuant to any of Sections 2.1(a), (b) and (c) is herein referred to as the
"Merger Consideration."

2.2 Dissenting Shares. Notwithstanding anything in this Agreement to the
contrary, if the holder of shares of Company Series A Preferred Stock has
demanded appraisal of such shares in accordance with State Law, and

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if State Law provides for appraisal rights for such shares in the Merger
("Dissenting Shares"), then such holder shall be entitled to appraisal rights
for his Dissenting Shares in accordance with the provisions of State Law;
provided that such holder properly perfects his right to appraisal of his
Dissenting Shares under State Law. The Company shall give Bionova U.S. prompt
notice of any demands received by the Company for appraisal of shares, and
Bionova U.S. shall have the right to participate in all negotiations and
proceedings with respect to such demands. The Company shall not, except with
the prior written consent of Bionova U.S., make or agree to make any payment
with respect to, or settle or offer to settle, any such demands.

2.3 Exchange of Certificates.

(a) Pursuant to an agreement, to be entered into on or before the Closing
Date among Bionova U.S., the Company, and such designee, Bionova U.S. shall
designate a bank or trust company reasonably acceptable to the Company to act
as exchange agent in the Merger (the "Exchange Agent") for purposes of
effecting the exchange for the Merger Consideration of certificates that,
immediately prior to the Effective Time, represented shares of Company Stock
entitled to receive the Merger Consideration pursuant to Section 2.1
("Certificates"). Upon the surrender to the Exchange Agent of each
Certificate, together with the letter of transmittal contemplated by Section
2.3(f) duly completed and executed, the Exchange Agent shall pay the holder of
such Certificate the applicable Merger Consideration in exchange therefor, and
such Certificate shall forthwith be cancelled. Until so surrendered and
exchanged, each such Certificate shall represent solely the right to receive
the applicable Merger Consideration and any amounts to which the holder
thereof is entitled pursuant to Sections 2.3(c) and (d). No interest shall be
paid or accrue on the Merger Consideration. If the Merger Consideration (or
any portion thereof) is to be delivered to any person other than the person in
whose name the Certificate surrendered in exchange therefor is registered, it
shall be a condition to such exchange that (i) the Certificate so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and
(ii) the person requesting such exchange shall pay to the Exchange Agent any
transfer or other Taxes required by reason of the payment of the Merger
Consideration to a person other than the registered holder of the Certificate
surrendered or establish to the satisfaction of the Exchange Agent that such
Tax has been paid or is not applicable. Bionova U.S. may impose such other
reasonable conditions upon the exchange of Certificates as it may deem
necessary or desirable and as are consistent with the provisions of this
Agreement. Bionova U.S. Common Stock into which Company Stock shall be
converted pursuant to this Agreement and the Merger shall be deemed to have
been issued at the Effective Time; provided, however, that, subject to
Applicable Law, no holder of an unsurrendered Certificate shall be entitled,
until the surrender of such Certificate, to vote the shares of Bionova U.S.
Common Stock into which his or her Company Stock shall have been converted.

(b) At or immediately prior to the Effective Time, Bionova U.S. shall
deposit, or cause to be deposited, in trust with the Exchange Agent stock
certificates representing the aggregate stock Merger Consideration to which
holders of shares of Company Stock shall be entitled at the Effective Time
pursuant to Section 2.1 (the "Payment Fund"). The Exchange Agent shall,
pursuant to irrevocable instructions, make the payments or deliveries referred
to in Section 2.3(a) out of the Payment Fund. The Payment Fund shall not be
used for any other purpose except as expressly provided in this Agreement.

(c) Unless and until a Certificate is surrendered, dividends payable to the
holders of record of Bionova U.S. Common Stock shall not be paid to the holder
of such Certificate in respect of the Bionova U.S. Common Stock represented
thereby, but, subject to applicable abandoned property, escheat, and similar
laws, there shall be paid to the holder thereof (i) upon surrender of such
Certificate, the amount of any dividends, the record date for the
determination of the holders entitled to which shall be after the Effective
Time, which theretofore shall have become payable with respect to the whole
shares of Bionova U.S. Common Stock represented by such Certificate and issued
in exchange upon its surrender, but without interest on such dividends, and
(ii) after surrender of such Certificate, the amount of any dividends with
respect to such whole shares of Bionova U.S. Common Stock, the record date for
the determination of the holders entitled to which shall be after the
Effective Time but prior to the surrender of such Certificate, and the payment
date of which shall be subsequent to such surrender, such amount to be paid on
such payment date.

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(d) No certificates or scrip representing fractional shares of Bionova U.S.
Common Stock shall be issued upon the surrender for exchange of any
Certificate. In lieu of any such fractional share of Bionova U.S. Common
Stock, each holder of a Certificate whose aggregate number of shares of
Company Stock are not convertible into a whole number of shares of Bionova
U.S. Common Stock shall be entitled to receive from the Exchange Agent, upon
surrender of such holder's Certificates for exchange as provided above, an
amount of cash rounded to the nearest cent (without interest) determined by
multiplying such fractional interest by the mean closing sales price of
Bionova U.S. Common Stock as reported on NASDAQ National Market System
("NASDAQ NMS") for the ten trading days immediately following the fifth
trading day after the Closing Date. After the Closing Date, Bionova U.S. shall
deposit with the Exchange Agent, as and when required, cash sufficient for the
Exchange Agent to make payment of cash in lieu of fractional shares in
accordance with this Section 2.3(d). Notwithstanding the foregoing, further
rules and regulations concerning the settlement of fractional shares otherwise
issuable, not inconsistent with this Agreement, may be adopted by Bionova U.S.

(e) Promptly following the date which is one year after the Effective Time,
the Exchange Agent shall deliver to Bionova U.S. all cash, certificates, and
other documents and instruments in its possession relating to the transactions
described in this Agreement, and the Exchange Agent's duties shall terminate.
Thereafter, each holder of a Certificate may surrender such Certificate to
Bionova U.S. and (subject to applicable abandoned property, escheat, and
similar laws) receive in exchange therefor the applicable Merger Consideration
and any amounts to which such holder is entitled pursuant to Sections 2.3(c)
and (d), but such holder shall have no greater rights against Bionova U.S.
than may be accorded to general creditors of Bionova U.S. under Applicable
Law. Notwithstanding anything in this Agreement to the contrary, neither the
Exchange Agent nor any party hereto shall be liable to a holder of shares of
Company Stock for any cash or other property delivered to a public official
pursuant to applicable abandoned property, escheat, or similar laws.

(f) Promptly after the Effective Time, the Exchange Agent shall mail to each
record holder of a Certificate a form of letter of transmittal (which shall
specify that delivery of a Certificate shall be effected, and risk of loss and
title to a Certificate shall pass, only upon proper delivery of the
Certificate to the Exchange Agent and shall be in such form and contain such
other provisions, reasonably acceptable to the Company, as Bionova U.S. shall
specify) and instructions for use in surrendering such Certificate and
receiving the applicable Merger Consideration in exchange therefor.

(g) At the Effective Time, the stock transfer books of the Company shall be
closed and no transfers of Company Stock shall thereafter be made. If, after
the Effective Time, Certificates are presented to the Surviving Corporation or
the Exchange Agent, they shall be cancelled and exchanged for the applicable
Merger Consideration as provided in Section 2.1, subject to State Law in the
case of Dissenting Shares.

(h) In the event any Certificate shall have been lost, stolen, or destroyed,
upon the making of an affidavit of that fact by the person claiming such
Certificate to be lost, stolen, or destroyed, Bionova U.S. shall issue or
cause to be issued in exchange for such lost, stolen, or destroyed Certificate
the Merger Consideration deliverable in respect thereof as determined in
accordance with Section 2.1. When authorizing such issue of the Merger
Consideration in exchange therefor, Bionova U.S. may, in its discretion and as
a condition precedent to the issuance thereof, require the owner of such lost,
stolen, or destroyed Certificate to give Bionova U.S. a bond in such sum as it
may direct as indemnity against any claim that may be made against Bionova
U.S. with respect to the Certificate alleged to have been lost, stolen, or
destroyed.

(i) Bionova U.S. shall be entitled to deduct and withhold from the Merger
Consideration otherwise payable pursuant to this Agreement to any holder of a
Certificate such amounts as Bionova U.S. is required to deduct and withhold
with respect to the making of such payment under the Code or any provision of
state, local, or foreign tax law. To the extent that amounts are so withheld
by Bionova U.S., such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the holder of the Certificate in respect
of which such deduction and withholding was made by Bionova U.S.

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2.4 Adjustment. Subject to compliance with Section 6.2, in the event of any
stock split, combination, reclassification, recapitalization, exchange, or
stock dividend or distribution with respect to shares of Company Common Stock
or Bionova U.S. Common Stock (or if a record date with respect to any of the
foregoing should occur) during the period between the date of this Agreement
and the Effective Time, then the conversion rates set forth in Section 2.1
shall be appropriately adjusted to reflect such stock split, combination,
reclassification, recapitalization, exchange, stock dividend, or other
distribution.

2.5 Stock Options.

(a) At the Effective Time, each then outstanding option (including any
option comprising a part of a unit) to purchase shares of Company Common Stock
(a "Company Stock Option") shall become an option applicable to Bionova U.S.,
which Company Stock Option shall thereafter constitute an option to acquire on
the same terms, conditions and vesting requirements as were applicable under
the Company Stock Option, the same number of shares of Bionova U.S. Common
Stock as the holder of such Company Stock Option would have been entitled to
receive pursuant to the Merger had such holder exercised such option in full
immediately prior to the Effective Time, at a price per share equal to (y) the
aggregate exercise price for the shares of Company Common Stock otherwise
purchasable pursuant to such Company Stock Option divided by (z) the number of
full shares of Bionova U.S. Common Stock deemed purchasable pursuant to such
option in accordance with the foregoing, and Bionova U.S. agrees to issue such
Bionova U.S. Common Stock upon any such exercise; provided, however, that in
the case of any Company Stock Option to which Section 422 of the Code applies
(incentive stock options), the option price, the number of shares purchasable
pursuant to such option and the terms and conditions of exercise of such
option shall be determined in order to comply with Section 424(a) of the Code.
As soon as practicable after the Effective Time, Bionova U.S. shall deliver to
the participants in the Company's stock option plans appropriate notice
setting forth such participants' rights pursuant thereto and the grants
pursuant to those plans shall continue in effect on the same terms and
conditions (subject to the adjustments required by this Section 2.5 after
giving effect to the Merger), Bionova U.S. shall ensure compliance with the
terms of the stock option plans and Bionova U.S. shall ensure, to the extent
required by, and subject to the provisions of, such plans and Applicable Laws,
that the stock options thereunder which qualified as incentive stock options
prior to the Effective Time continue to qualify as incentive stock options
after the Effective Time.

(b) Prior to the Effective Time, Bionova U.S. shall take all corporate
action necessary to reserve for issuance a sufficient number of shares of
Bionova U.S. Common Stock for delivery under the Company Stock Options
becoming options of Bionova U.S. in accordance with this Section 2.5. If and
to the extent required under the Securities Act, as soon as practicable after
the Effective Time, Bionova U.S. shall file a registration statement on Form
S-3 or Form S-8 as the case may be (or any successor or other appropriate
forms), or another appropriate form with respect to the shares of Bionova U.S.
Common Stock subject to such options and shall use its best efforts to
maintain the effectiveness of such registration statement or registration
statements (and maintain the current status of the prospectus or prospectuses
contained therein) for so long as such options remain outstanding. With
respect to those individuals who subsequent to the Merger will be subject to
the reporting requirements under Section 16(a) of the Exchange Act, where
applicable, Bionova U.S. shall ensure administration of Company Stock Options
assumed pursuant to this Section 2.5 in a manner that complies with Rule 16b-3
promulgated under the Exchange Act if and to the extent the Company Option
Plan complied with such rule prior to the Merger.

2.6 Warrants. At the Effective Time, each then outstanding warrant
(including any warrant comprising part of a unit) to purchase shares of
Company Common Stock shall become a warrant applicable to Bionova U.S., and
the registered holders thereof, after the Effective Time, will have the right
to acquire and receive in lieu of the shares of Company Common Stock
acquirable upon exercise of such warrants and upon payment of the
consideration required to be paid thereunder in connection with the exercise
thereof, such shares of Bionova U.S. Common Stock as would have been issued
pursuant to the Merger in exchange for the number of shares of Company Common
Stock acquirable if such warrants had been exercised immediately prior to the
Effective Time.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY

The Company represents and warrants to Parent, Bionova Mexico, Bionova U.S.
and Sub that:

3.1 Corporate Organization. The Company is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of
its incorporation and has all requisite corporate power and corporate
authority to own, lease, and operate its properties and to carry on its
business as now being conducted. Other than as contemplated by this Agreement,
no actions or proceedings to dissolve the Company are pending or, to the best
knowledge of the Company, threatened.

3.2 Qualification. Each of the Company and the Company Subsidiaries is duly
qualified or licensed to do business as a foreign corporation and each of the
Company and the Company Subsidiaries is in good standing in each of the
jurisdictions set forth opposite its name on Schedule 3.2, which are all the
jurisdictions in which the property owned, leased, or operated by it or the
conduct of its business requires such qualification or licensing, except
jurisdictions in which the failure to be so qualified or licensed would not,
individually or in the aggregate, have a Company Material Adverse Effect.

3.3 Charter and Bylaws. The Company has delivered to Bionova U.S. accurate
and complete copies of (i) the charter and bylaws of each of the Company and
the Subsidiaries as currently in effect and (ii) the stock records of each of
the Subsidiaries. Such records accurately reflect the stock ownership of the
Subsidiaries. Neither the Company nor any Subsidiary is in violation of any
provision of its charter or bylaws.

3.4 Capitalization of the Company. The authorized capital stock of the
Company consists of 60,000,000 shares of Common Stock, par value $0.01 per
share, of which, as of the date hereof, 42,828,563 shares are outstanding and
held by persons or entities other than a Company Subsidiary, no shares are
outstanding and held by a Company Subsidiary and no shares are held in the
Company's treasury; 5,000,000 shares of Preferred Stock, par value $0.01 per
share, of which, as of the date hereof, 1,380,000 shares designated as $2.25
Convertible Exchangeable Preferred Stock are outstanding and held by persons
or entities other than a Company Subsidiary and no shares designated as such
are held by a Company Subsidiary, 2,750 shares designated as Series A
Convertible Preferred Stock are outstanding and held by persons or entities
other than a Company Subsidiary and no shares designated as such are held by a
Company Subsidiary, and no such shares of either such designation are held in
the Company's treasury. All outstanding shares of capital stock of the Company
have been validly issued and are fully paid and nonassessable, and no shares
of capital stock of the Company are subject to, nor have any been issued in
violation of, preemptive or similar rights. All issuances, sales, and
repurchases by the Company of shares of its capital stock have been effected
in compliance with all Applicable Laws, including without limitation
applicable federal and state securities laws. Schedule 3.4 describes all
outstanding options and warrants to purchase Company Stock, and the aggregate
number of shares of Company Common Stock reserved for issuance and issuable
upon the exercise of outstanding warrants and stock options. Except as set
forth above in this Section and on Schedule 3.4, there are (and as of the
Closing Date there will be) outstanding (i) no shares of capital stock or
other voting securities of the Company, (ii) no securities of the Company
convertible into or exchangeable for shares of capital stock or other voting
securities of the Company, (iii) no options, warrants or other rights
(including preemptive rights) to acquire from the Company, and no obligation
of the Company to issue or sell, any shares of capital stock or other voting
securities of the Company or any securities of the Company convertible into or
exchangeable for such capital stock or voting securities, and (iv) no equity
equivalents, interests in the ownership or earnings, or other similar rights
of or with respect to the Company. There are (and as of the Closing Date there
will be) no outstanding obligations of the Company or any Subsidiary to
repurchase, redeem, or otherwise acquire any of the foregoing shares,
securities, options, warrants, equity equivalents, interests, or rights. The
Company is not a party to, and is not aware of, any voting agreement, voting
trust, or similar agreement or arrangement relating to any class or series of
its capital stock. The classes of Company Stock denominated as Company Common
Stock and Company Convertible Exchangeable Preferred Stock are each listed for
trading and trade on the NASDAQ NMS.

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3.5 Authority Relative to This Agreement. The Company has full corporate
power and corporate authority to execute, deliver, and perform this Agreement
and the Ancillary Documents to which it is a party and, subject to the
approval of this Agreement by the holders of Company Common Stock in
accordance with Applicable Law and the Company's Certificate of Incorporation,
to consummate the transactions contemplated hereby and thereby. The execution,
delivery, and performance by the Company of this Agreement and the Ancillary
Documents to which it is a party, and the consummation by it of the
transactions contemplated hereby and thereby, have been duly authorized by the
Board of Directors of the Company, and no other corporate proceedings (other
than the approval of this Agreement by the holders of Company Common Stock in
accordance with Applicable Law and the Company's Certificate of Incorporation)
are required on the part of the Company to authorize the execution, delivery,
and performance by the Company of this Agreement and such Ancillary Documents
and the consummation by it of the transactions contemplated hereby and
thereby. This Agreement has been duly executed and delivered by the Company
and constitutes, and each Ancillary Document executed or to be executed by the
Company has been, or when executed will be, duly executed and delivered by the
Company and constitutes, or when executed and delivered will constitute, a
valid and legally binding obligation of the Company, enforceable against the
Company in accordance with their respective terms, except that such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium, and similar laws affecting creditors' rights
generally, (ii) fiduciary obligations under the laws of the jurisdiction of
its incorporation, (iii) equitable principles which may limit the availability
of certain equitable remedies (such as specific performance) in certain
instances, and (iv) public policy considerations with respect to the
enforceability of rights of indemnification.

3.6 Noncontravention. The execution, delivery, and performance, as the case
may be, by the Company or the Company Subsidiaries of this Agreement and the
Ancillary Documents to which it is a party and the consummation by it of the
transactions contemplated hereby and thereby do not and will not, subject to
any consents, waivers or approvals to be effective at the Closing Date and as
may be listed on Schedule 3.6, (i) conflict with or result in a violation of
any provision of the charter or bylaws of the Company or any Company
Subsidiary, (ii) conflict with or result in a violation of any provision of,
or constitute (with or without the giving of notice or the passage of time or
both) a default under, or give rise (with or without the giving of notice or
the passage of time or both) to any right of termination, cancellation, or
acceleration under, or require any consent, approval, authorization or waiver
of, or notice to, any party to, any material bond, debenture, note, mortgage,
indenture, lease, contract, agreement, or other instrument or obligation to
which the Company or any Company Subsidiary is a party or by which the Company
or any Company Subsidiary or any of their respective properties may be bound
or any material Permit held by the Company or any Company Subsidiary, (iii)
result in the creation or imposition of any Encumbrance upon the properties of
the Company or any Company Subsidiary, or (iv) assuming compliance with the
matters referred to in Section 3.7, violate any Applicable Law binding upon
the Company or any Company Subsidiary.

3.7 Governmental Approvals. No consent, approval, order, or authorization
of, or declaration, filing, or registration with, any Governmental Entity is
required to be obtained or made by the Company or any Subsidiary in connection
with the execution, delivery, or performance by the Company of this Agreement
and the Ancillary Documents to which it is a party or the consummation by it
of the transactions contemplated hereby or thereby, other than (i) compliance
with any applicable requirements of the HSR Act; (ii) compliance with any
applicable requirements of the Securities Act; (iii) compliance with any
applicable requirements of the Exchange Act; (iv) compliance with any
applicable state securities laws; (v) filings with Governmental Entities to
occur in the ordinary course following the consummation of the transactions
contemplated hereby, including without limitation the filing of a Certificate
of Merger with the Secretary of State of Delaware; (vi) any approvals of
Governmental Entities; and (vii) such consents, approvals, orders, or
authorizations which, if not obtained, and such declarations, filings, or
registrations which, if not made, would not, individually or in the aggregate,
have a Company Material Adverse Effect.

3.8 Company Subsidiaries.

(a) Except as set forth on Schedule 3.8, the Company does not own, directly
or indirectly, any capital stock or other securities of any corporation or
have any direct or indirect equity or ownership interest in any other

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person, other than the Company Subsidiaries, excluding for this purpose mutual
funds. Schedule 3.8 lists each Company Subsidiary, the jurisdiction of
incorporation of each Company Subsidiary, and the authorized and outstanding
capital stock of each Company Subsidiary. Each Company Subsidiary is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation. Each Company Subsidiary has all
requisite corporate power and corporate authority to own, lease, and operate
its properties and to carry on its business as now being conducted. No actions
or proceedings to dissolve any Company Subsidiary are pending.

(b) Except as otherwise indicated on Schedule 3.8, all the outstanding
capital stock of each Company Subsidiary is owned directly by the Company,
free and clear of all Encumbrances. All outstanding shares of capital stock of
each Company Subsidiary have been validly issued and are fully paid and
nonassessable. No shares of capital stock of any Company Subsidiary are
subject to, nor have any been issued in violation of, preemptive or similar
rights.

(c) Except as set forth on Schedule 3.8, there are (and as of the Closing
Date there will be) outstanding (i) no shares of capital stock or other voting
securities of any Company Subsidiary, (ii) no securities of the Company or any
Company Subsidiary convertible into or exchangeable for shares of capital
stock or other voting securities of any Company Subsidiary, (iii) no options,
warrants or other rights (including preemptive rights) to acquire from the
Company or any Company Subsidiary, and no obligation of the Company or any
Company Subsidiary to issue or sell, any shares of capital stock or other
voting securities of any Company Subsidiary or any securities convertible into
or exchangeable for such capital stock or voting securities, and (iv) no
equity equivalents, interests in the ownership or earnings, or other similar
rights of or with respect to any Company Subsidiary. There are (and as of the
Closing Date there will be) no outstanding obligations of the Company or any
Company Subsidiary to repurchase, redeem, or otherwise acquire any of the
foregoing shares, securities, options, equity equivalents, interests, or
rights.

3.9 Inapplicability of Section 203. The Board of Directors of the Company
has taken all actions so that the restrictions contained in Section 203 of the
State Law applicable to a "business combination" (as defined therein) will not
apply to the execution, delivery or performance of this Agreement or the
consummation of the Merger or the other transactions contemplated by this
Agreement.

3.10 SEC Filings. The Company has filed with the Securities and Exchange
Commission all forms, reports, schedules, statements, and other documents
required to be filed by it under the Securities Act, the Exchange Act, and all
other federal securities laws. All such forms, reports, schedules, statements,
and other documents (including all amendments thereto) filed by the Company
with the Securities and Exchange Commission are herein collectively referred
to as the "SEC Filings". The Company has delivered to or made available for
inspection by Bionova U.S. accurate and complete copies of all the SEC Filings
in the form filed by the Company with the Securities and Exchange Commission
since December 31, 1992. The SEC Filings, including, without limitation, the
financial statements, financial statement footnotes and financial statement
schedules included or incorporated by reference therein, at the time filed,
complied in all material respects with all applicable requirements of federal
securities laws. None of the SEC Filings, including, without limitation, any
financial statements or schedules included therein, at the time filed,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading. All material contracts of the Company and the
Subsidiaries required to be filed in the Company's filings with the SEC under
Item 601 of Regulation S-K promulgated by the SEC have been included in the
SEC Filings. The audited consolidated financial statements and unaudited
consolidated interim financial statements of the Company included in the SEC
Filings present fairly, in conformity with generally accepted accounting
principles applied on a consistent basis (except as may be indicated in the
notes thereto), the consolidated financial position of the Company as of the
dates thereof and its consolidated results of operations and cash flows for
the periods then ended (subject to normal year-end audit adjustments in the
case of any unaudited interim financial statements). The Company shall deliver
to Bionova U.S. as soon as they become available accurate and complete

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<PAGE>

copies of all forms, reports, and other documents furnished by it to its
stockholders generally or filed by it with the Securities and Exchange
Commission subsequent to the date hereof and prior to the Closing Date.

3.11 Absence of Undisclosed Liabilities. Except as and to the extent
disclosed in the SEC Filings filed prior to the date hereof, as of September
30, 1995, neither the Company nor any Subsidiary had any liabilities or
obligations (whether accrued, absolute, contingent, unliquidated, or
otherwise, whether or not known to the Company or any Subsidiary, and whether
due or to become due) material to the Company and the Company's Subsidiaries
taken as a whole. Since September 30, 1995, neither the Company nor any
Subsidiary has incurred any such material liabilities or obligations, other
than those incurred in the ordinary course of business consistent with past
practice or pursuant to or as contemplated by this Agreement.

3.12 Absence of Certain Changes. Except as disclosed in the SEC Filings
filed prior to the date hereof or as disclosed on Schedule 3.12, since
September 30, 1995, (i) there has not been any change, development, or effect,
individually or in the aggregate, that has had, or might reasonably be
expected to have, a Company Material Adverse Effect; (ii) the businesses of
each of the Company and each of the Subsidiaries have been conducted only in
the ordinary course consistent with past practice; (iii) neither the Company
nor any Subsidiary has incurred any material liability, engaged in any
material transaction, or entered into any material agreement outside the
ordinary course of business consistent with past practice; (iv) neither the
Company nor any Subsidiary has suffered any material loss, damage,
destruction, or other casualty to any of its assets (whether or not covered by
insurance); and (v) neither the Company nor any Subsidiary has taken any of
the actions set forth in Section 6.2 except as permitted thereunder.

3.13 Tax Matters.

(a) Except as disclosed on Schedule 3.13:

(i) the Company and each Company Subsidiary have (and as of the Closing
Date will have) duly filed all material federal, state, local, and foreign
Tax Returns required to be filed by or with respect to them with the IRS or
other applicable Taxing authority, and no extensions with respect to such
Tax Returns have (or as of the Closing Date will have) been requested or
granted;

(ii) the Company and each Company Subsidiary have (and as of the Closing
Date will have) paid, or adequately reserved against in its financial
statements included as part of its SEC Filings, all Taxes due, or claimed
by any Taxing authority to be due, from or with respect to them, except
Taxes that are being contested in good faith by appropriate legal
proceedings and for which adequate reserves have been set aside as
disclosed on Schedule 3.13;

(iii) there has been no issue raised or adjustment proposed (and none is
pending) by the IRS or any other Taxing authority in connection with any of
such Tax Returns;

(iv) the Company and each Company Subsidiary have (and as of the Closing
Date will have) made all deposits required with respect to Taxes;

(v) the federal income Tax Returns of the Company and the Subsidiaries
have not been audited by the IRS; and

(vi) no waiver or extension of any statute of limitations as to any
federal, state, local, or foreign Tax matter has been given by or requested
from the Company or any Company Subsidiary.

3.14 Compliance With Laws. Except as disclosed in the SEC Filings filed
prior to the date hereof, the Company and the Company Subsidiaries have
complied in all material respects with all Applicable Laws (including without
limitation Applicable Laws relating to securities, properties, business
products, manufacturing processes, advertising and sales practices, employment
practices, terms and conditions of employment, wages and hours, safety,
occupational safety, health, environmental protection, product safety, and
civil rights) relating to any material aspect of the Company's or a Company
Subsidiary's business. Neither the Company nor any Company Subsidiary has
received any written notice, which has not been dismissed or otherwise
disposed of, that the Company or any Company Subsidiary has not so complied.
Neither the Company nor any Company

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<PAGE>

Subsidiary is charged or, to the best knowledge of the Company, threatened
with, or, to the best knowledge of the Company, under investigation with
respect to, any violation of any Applicable Law relating to any aspect of the
business of the Company or any Company Subsidiary.

3.15 Legal Proceedings. Except as disclosed on Schedule 3.15, there are no
Proceedings pending or, to the best knowledge of the Company, threatened
against or involving the Company or any Company Subsidiary (or, to the
Company's knowledge, any of their respective directors or officers in
connection with the business or affairs of the Company or any Company
Subsidiary) or any properties or rights of the Company or any Company
Subsidiary except (i) as disclosed in the SEC Filings filed prior to the date
hereof, (ii) for any Proceedings that pertain to routine claims by persons
other than Governmental Entities that are covered by insurance (subject to
applicable insurance deductibles), and (iii) for Proceedings which,
individually or in the aggregate, if prosecuted to judgment, would not have a
Company Material Adverse Effect. Neither the Company nor any Company
Subsidiary is subject to any judgment, order, writ, injunction, or decree of
any Governmental Entity which has had or is reasonably likely to have a
Company Material Adverse Effect. There are no Proceedings pending or, to the
best knowledge of the Company, threatened seeking to restrain, prohibit, or
obtain damages or other relief in connection with this Agreement or the
transactions contemplated hereby.

3.16 Title to Properties. Each of the Company and the Company Subsidiaries
has good and indefeasible title, and in the case of real property insurable
title, to all material properties (real, personal, and mixed, tangible and
intangible) it owns or purports to own, including without limitation the
properties reflected in its books and records and in the latest balance sheet
of the Company included in the SEC Filings filed prior to the date hereof,
other than those disposed of after the date of such balance sheet in the
ordinary course of business consistent with past practice, free and clear of
all Encumbrances, except (i) as disclosed in the SEC Filings filed prior to
the date hereof, and (ii) liens for Taxes not yet due and payable. Except as
disclosed on Schedule 3.16, no financing statement (or other instrument
sufficient or effective as a financing statement) under the Uniform Commercial
Code with respect to any properties of the Company or any Company Subsidiary
has been filed and is effective in any jurisdiction, and the Company and the
Company Subsidiaries have not signed any such financing statement (or other
instrument) or any mortgage or security agreement authorizing any secured
party thereunder to file any such financing statement (or other instrument).
Neither the whole nor any part of the Company's or any Company Subsidiary's
property is subject to any pending or, to the Company's knowledge, threatened
condemnation or similar proceeding.

3.17 Sufficiency and Condition of Properties. The material properties owned,
leased, or used by the Company and the Company Subsidiaries are (i) in the
case of tangible properties, in good operating condition and repair (ordinary
wear and tear excepted) and have been maintained in accordance with standard
industry practice, (ii) suitable for the purposes used, and (iii) adequate and
sufficient for the normal operation of the Company's and the Company
Subsidiaries' businesses, as presently conducted. The Company and the Company
Subsidiaries own or have a valid leasehold interest in, or otherwise have a
valid right to use, all such properties. The lessee under each such lease is
not in breach of or in default under such lease. Such properties and their
uses conform in all material respects to all Applicable Laws, except for such
minor variations as do not impair or interfere with the use of such properties
for the purposes for which they are employed and the Company and the Company
Subsidiaries have not received any notice to the contrary. All such tangible
properties are in the Company's or a Company Subsidiary's possession or under
their control.

3.18 Intellectual Property.

(a) Set forth on Schedule 3.18 is a list of all Intellectual Property owned,
held, or used by the Company or any Company Subsidiary. Schedule 3.18
specifies, as applicable: (i) the nature of such Intellectual Property; (ii)
the owner of such Intellectual Property; (iii) the jurisdictions by or in
which such Intellectual Property is recognized without regard to registration
or has been issued or registered or in which an application for such issuance
or registration has been filed, including the respective registration or
application numbers; and (iv) all licenses, sublicenses, and other agreements
to which the Company or any Company Subsidiary is a party and pursuant to
which the Company, any Company Subsidiary, or any other person is authorized
to use such

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<PAGE>

Intellectual Property, including the identity of all parties thereto, a
description of the nature and subject matter thereof, the applicable royalty,
and the term thereof. Except as noted in Schedule 3.18, all maintenance
fees/annuities have been paid and renewals thereof have been duly made with
respect to such applications, patents and registrations.

(b) The listed Intellectual Property constitutes all Intellectual Property
necessary for the operation of the Company's business and that of the
Subsidiaries as presently conducted. The Company or a Company Subsidiary has
good and indefeasible title to or is validly licensed to use all such
Intellectual Property. Except as noted in Schedule 3.18, each item of such
Intellectual Property is in full force and effect, the Company or such Company
Subsidiary is in compliance with all its obligations with respect thereto,
and, to the best knowledge of the Company, no event has occurred which
permits, or upon the giving of notice or the passage of time or otherwise
would permit, revocation or termination of any thereof. During the prosecution
of the U.S. patents listed in Schedule 3.18, the Company complied with its
Rule 56 disclosure obligations. Other than as identified in Schedule 3.15
hereto, there are no (i) Proceedings pending, (ii) to the best knowledge of
the Company, Proceedings threatened against the Company or any Company
Subsidiary, or (iii) to the best knowledge of the Company, notices received by
the Company or any Company Subsidiary from another person, asserting that
(x) use by the Company or a Company Subsidiary of any of such Intellectual
Property (y) the making, producing, using or selling of any commercial product
of the Company or any Company Subsidiary, or (z) the making, producing, using
or selling of any experimental product of the Company or any Company
Subsidiary, infringes the rights of any other person. To the best of the
knowledge of the Company, the (x) use by the Company or a Company Subsidiary
of any of such Intellectual Property (y) the making, producing, using or
selling of any commercial product of the Company or any Company Subsidiary, or
(z) the making, producing, using or selling of any experimental product of the
Company or any Company Subsidiary, does not infringe the rights of any other
person. To the best knowledge of the Company, none of such Intellectual
Property is being infringed upon by any other person. None of such
Intellectual Property owned by the Company or any Company Subsidiary and, to
the best of Company's knowledge, none of such Intellectual Property held or
used by the Company or any Company Subsidiary is subject to any outstanding
judgment, order, writ, injunction, or decree of any Governmental Entity, or
any agreement, arrangement, or understanding, written or oral, restricting the
scope or use thereof. To the best knowledge of the Company, other than as
identified on Schedule 3.15 the conduct of the Company's and the Subsidiaries'
businesses at any time prior to the Closing Date did not, and the conduct of
such businesses on a basis consistent with past practice as of the Closing
Date will not, infringe upon or otherwise misappropriate any Intellectual
Property of any other person.

(c) The Company has provided Parent with a complete copy of the
option/license agreement (the "Option/License Agreement") between Advanced
Genetic Sciences, Inc. ("AGS") and Garching Instruments ("Garching"), which
has not been amended or supplemented except to the extent indicated in the
correspondence identified in Schedule 3.18-1. Schedule 3.18-1 is a complete
list of all correspondence between the Company and Garching defining royalty
rates under the Option/License Agreement. To the best of the Company's
knowledge, the Option/License Agreement is in full force and effect, and is
enforceable by the Company. To the best of the Company's knowledge and belief,
Garching was duly authorized by the Max-Planck Institute to enter the
Option/License Agreement on Max-Planck's behalf with AGS. The Company has made
all required royalty payments in a timely manner to Garching pursuant to the
Option/License Agreement. The Company exercised its option under the
Option/License Agreement by providing Garching with written notice of same,
and now is licensed under that agreement. The Company has made available to
Parent's counsel copies of all correspondence between Max-Planck or Garching
on the one hand, and the Company or AGS on the other. To the best of the
Company's knowledge and belief, there exist only five licenses under the Max-
Planck technology that is the subject of the Option/License Agreement. To the
best of the Company's knowledge and belief, the licensees are Hoechst, Bayer,
Plant Genetic Systems, Keygene and the Company. The only sublicensee under the
Company's Option/License Agreement is Hilleshog. To the best of the Company's
knowledge and belief, there are no patents or patent applications owned by
Max-Planck which dominate the patents or patent applications licensed to AGS
in the Option/License Agreement. AGS is a wholly owned subsidiary of the
Company. By change of name AGS is now known as DNA Plant Technologies, Inc.,
which name has been

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<PAGE>

changed to DNAP Technologies, Inc. To the best of the Company's knowledge and
belief, none of the motions filed by the parties to the interference
proceedings involving the Max-Planck transformation technology has yet been
decided by the United States Patent and Trademark Office. To the best of the
Company's knowledge and belief, Max-Planck has a priority position in
connection with Max-Planck's transformation technology patent filings
(corresponding to the filings that are the subject of the interference
proceedings referenced in the preceding sentence) in Europe, Australia, Israel
and Japan. To the best of the Company's knowledge and belief, the contract
between Gent University and Monsanto provided to Bionova U.S. or its counsel
by the Company, which contract was filed in the above-referenced interference
proceedings, does not in any way reduce the rights of the Company pursuant to
the Option/License Agreement.

(d) Schedule 3.18-2 is a complete list of all of the Company's research or
license agreements in which the Company is the licensee. To the best of the
Company's knowledge, each of the agreements listed in Schedule 3.18-2 is valid
and subsisting and is enforceable by the Company (except as the enforceability
thereof may be limited by bankruptcy, insolvency, bank moratorium or similar
laws affecting creditors' rights generally and laws restricting the
availability of equitable remedies and may be subject to general principles of
equity whether or not such enforceability is considered in a proceeding at law
or equity), and none of these agreements has been amended or supplemented to
include terms or conditions not disclosed to Bionova U.S. To the best of the
Company's knowledge, the Company is not in material breach of the agreements
identified in Schedule 3.18-2 except as noted in Schedule 3.15.

(e) Schedule 3.18-3 is a complete list of all license agreements of the
Company's Transwitch Technology. The Company's Transwitch patents were
developed without the use of any government grant, and the Company has no
obligation to assign or license the Transwitch technology to any governmental
entity. To the best of the Company's knowledge and belief, Townsend & Townsend
has no documents relating to the Transwitch patents and pending patent
applications other than documents that are part of the U.S. Patent and
Trademark Office file histories, or correspondence with the Company. To the
best of the Company's knowledge and belief, all of the Company's patents are
valid, and the Company's Transwitch patents cover sense suppression technology
as claimed in the patents.

(f) The Confidential Settlement Agreement between the Company and Monsanto
relating to the suit brought by Monsanto against the Company in the District
of Delaware, C.A. No. 95-278 LON, does not change or alter any of the material
terms of the Consent Judgment entered in that action except as noted in
Schedule 3.18-4, which schedule will be prepared in a manner consistent with
the requirements of such Confidential Settlement Agreement.

3.19 Permits. Except as set forth in Schedule 3.19, (i) the Company and the
Company Subsidiaries hold all the Permits materially necessary or required for
the conduct of the business of the Company and the Company Subsidiaries as
currently conducted; (ii) each of such Permits is in full force and effect,
the Company and the Company Subsidiaries are in compliance with all their
obligations with respect thereto, and, to the best knowledge of the Company,
no event has occurred which permits, or with or without the giving of notice
or the passage of time or both would permit, the revocation or termination of
any thereof; and (iii) no notice has been issued by any Governmental Entity
and no Proceeding is pending or, to the best knowledge of the Company,
threatened with respect to any alleged failure by the Company and the Company
Subsidiaries to have any Permit the absence of which would have a Company
Material Adverse Effect.

3.20 Agreements.

(a) All agreements, arrangements, and understandings of any nature (written
or oral, formal or informal) (collectively, for purposes of this Section,
"agreements") to which the Company or any Company Subsidiary is a party or by
which the Company or any Company Subsidiary or any of their respective
properties is otherwise bound, that are material to the business, assets,
results of operations, condition (financial or otherwise), or prospects of the
Company and the Company Subsidiaries considered as a whole, and that provide
for annual payments or receipts in excess of $100,000, are listed either in
Part IV of the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 included in the SEC Filings or on Schedule 3.20.

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<PAGE>

(b) The Company has made available to Bionova U.S. accurate and complete
copies of the agreements listed in Part IV of the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994 and on Schedule 3.20.
Each of such agreements is a valid and binding agreement of the Company and
the Company Subsidiaries (to the extent each is a party thereto) and (to the
best knowledge of the Company) the other party or parties thereto, enforceable
against the Company and the Company Subsidiaries (to the extent each is a
party thereto) and (to the best knowledge of the Company) such other party or
parties in accordance with its terms, except that such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium,
and similar laws affecting creditors' rights generally, (ii) fiduciary
obligations under the laws of the jurisdiction of its incorporation, (iii)
equitable principles which may limit the availability of certain equitable
remedies (such as specific performance) in certain instances, and (iv) public
policy considerations with respect to the enforceability of rights of
indemnification. Neither the Company nor any Company Subsidiary is in breach
of or in default under, nor has any event occurred which (with or without the
giving of notice or the passage of time or both) would constitute a default by
the Company or any Company Subsidiary under, any material provision of any of
such agreements, and neither the Company nor any Company Subsidiary has
received any notice from, or given any notice to, any other party indicating
that the Company or any Company Subsidiary is in breach of or in default under
any of such agreements. To the best knowledge of the Company, no other party
to any of such agreements is in material breach of or in material default
under such agreements, nor has any assertion been made by the Company or any
Company Subsidiary of any such breach or default.

(c) Neither the Company nor any Company Subsidiary has received notice of
any plan or intention of any other party to any agreement to exercise any
right of offset with respect to, or any right to cancel or terminate, any
agreement, and neither the Company nor any Company Subsidiary knows of any
fact or circumstance that would justify the exercise by any such other party
of such a right other than the automatic termination of such agreement in
accordance with its terms. Neither the Company nor any Company Subsidiary
currently contemplates, or has reason to believe any other person currently
contemplates, any amendment or change to any agreement, which amendment or
change could have a Company Material Adverse Effect.

3.21 ERISA.

(a) Set forth on Schedule 3.21 is a list identifying each "employee benefit
plan", as defined in Section 3(3) of ERISA, (i) which is subject to any
provision of ERISA, (ii) which is maintained, administered, or contributed to
by the Company or any affiliate of the Company, and (iii) which covers any
employee or former employee of the Company or any affiliate of the Company or
under which the Company or any affiliate of the Company has any liability. The
Company has delivered to Bionova U.S. accurate and complete copies of such
plans (and, if applicable, the related trust agreements) and all amendments
thereto and written interpretations thereof, together with (i) the three most
recent annual reports (Form 5500 including, if applicable, Schedule B thereto)
prepared in connection with any such plan and (ii) the most recent actuarial
valuation report prepared in connection with any such plan. Such plans are
referred to in this Section as the "Employee Plans". For purposes of this
Section only, an "affiliate" of any person means any other person which,
together with such person, would be treated as a single employer under Section
414 of the Code. The only Employee Plans which individually or collectively
would constitute an "employee pension benefit plan" as defined in Section 3(2)
of ERISA are identified as such on Schedule 3.21.

(b) Except as otherwise identified on Schedule 3.21, (i) no Employee Plan
constitutes a "multiemployer plan", as defined in Section 3(37) of ERISA (for
purposes of this Section, a "Multiemployer Plan"), (ii) no Employee Plan is
maintained in connection with any trust described in Section 501(c)(9) of the
Code, (iii) no Employee Plan is subject to Title IV of ERISA or to the minimum
funding standards of ERISA and the Code, and (iv) during the past five years,
neither the Company nor any of its affiliates have made or been required to
make contributions to any Multiemployer Plan. There are no accumulated funding
deficiencies as defined in Section 412 of the Code (whether or not waived)
with respect to any Employee Plan. The fair market value of the assets held
with respect to each Employee Plan that is a defined benefit plan and employee
pension benefit plan, as defined in Section 3(2) of ERISA, exceeds the
actuarially determined present value of all benefit liabilities accrued under
such Employee Plan (whether or not vested) determined using reasonable
actuarial

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<PAGE>

assumptions. Neither the Company nor any affiliate of the Company has incurred
any material liability under Title IV of ERISA arising in connection with the
termination of, or complete or partial withdrawal from, any plan covered or
previously covered by Title IV of ERISA. The Company and all of the affiliates
of the Company have paid and discharged promptly when due all liabilities and
obligations arising under ERISA or the Code of a character which if unpaid or
unperformed might result in the imposition of a lien against any of the assets
of the Company or any Subsidiary. To the knowledge of the Company, nothing
done or omitted to be done and no transaction or holding of any asset under or
in connection with any Employee Plan has or will make the Company or any
Subsidiary or any director or officer of the Company or any Subsidiary subject
to any liability under Title I of ERISA or liable for any Tax pursuant to
Section 4975 of the Code that could have a Company Material Adverse Effect. To
the knowledge of the Company, there are no threatened or pending claims by or
on behalf of the Employee Plans, or by any participant therein, alleging a
breach or breaches of fiduciary duties or violations of Applicable Laws which
could result in liability on the part of the Company, its officers or
directors, or such Employee Plans, under ERISA or any other Applicable Law and
there is no basis for any such claim.

(c) Each Employee Plan which is intended to be qualified under Section
401(a) of the Code is so qualified and has been so qualified since the date of
its adoption, and each trust forming a part thereof is exempt from Tax
pursuant to Section 501(a) of the Code. Set forth on Schedule 3.21 is a list
of the most recent IRS determination letters with respect to any such Plans,
accurate and complete copies of which letters have been delivered to Bionova
U.S. To the best of the Company's knowledge, each Employee Plan has been
maintained in compliance with its terms and with the requirements prescribed
by all Applicable Laws, including but not limited to ERISA and the Code, which
are applicable to such Plans.

(d) There is set forth on Schedule 3.21 a list of each employment,
severance, or other similar contract, arrangement, or policy and each plan or
arrangement (written or oral) providing for insurance coverage (including any
self-insured arrangements), workers' compensation, disability benefits,
supplemental unemployment benefits, vacation benefits, retirement benefits,
deferred compensation, profit-sharing, bonuses, stock options, stock
appreciation rights, or other forms of incentive compensation or post-
retirement insurance, compensation, or benefits which (i) is not an Employee
Plan, (ii) is entered into, maintained, or contributed to, as the case may be,
by the Company or any affiliate of the Company, and (iii) covers any employee
or former employee of the Company or any affiliate of the Company or under
which the Company or any affiliate of the Company has any liability. Such
contracts, plans, and arrangements as are described in the preceding sentence
are referred to for purposes of this Section as the "Benefit Arrangements".
Each Benefit Arrangement has been maintained in substantial compliance with
its terms and with the requirements prescribed by Applicable Laws.

(e) To the best of the Company's knowledge, neither the Company nor any
affiliate of the Company has performed any act or failed to perform any act,
and there is no contract, agreement, plan, or arrangement covering any
employee or former employee of the Company or any affiliate of the Company,
that, individually or collectively, could give rise to the payment of any
amount that would not be deductible pursuant to the terms of Section 162(a)(1)
or 280G of the Code, or could give rise to any penalty or excise Tax pursuant
to Section 4980B or 4999 of the Code.

(f) Except as disclosed on Schedule 3.21, there has been no amendment,
written interpretation, or announcement (whether or not written) by the
Company or any affiliate of the Company of or relating to, or change in
employee participation or coverage under, any Employee Plan or Benefit
Arrangement which would increase materially the expense of maintaining such
Employee Plan or Benefit Arrangement above the level of the expense incurred
in respect thereof for the fiscal year ended December 31, 1994.

3.22 Environmental Matters.

(a) Except as disclosed in the SEC Filings filed prior to the date hereof or
as previously disclosed on Schedule 3.22 and except for matters that in the
aggregate would not have a Company Material Adverse Effect:

(i) the properties, operations, and activities of the Company and the
Company Subsidiaries comply with all Applicable Environmental Laws (as
defined below);

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<PAGE>

(ii) the Company and the Company Subsidiaries and the properties,
operations, and activities of the Company and the Company Subsidiaries are
not subject to any existing, pending, or, to the best knowledge of the
Company, threatened Proceeding under, or to any remedial obligations under,
any Applicable Environmental Laws;

(iii) all Permits, if any, required to be obtained by the Company or any
Company Subsidiary under any Applicable Environmental Laws in connection
with any aspect of the business of the Company or the Company Subsidiaries,
including without limitation those relating to the treatment, storage,
disposal, or release of a hazardous material (as defined below), have been
duly obtained and are in full force and effect, and the Company and the
Company Subsidiaries are in compliance with the terms and conditions of all
such Permits;

(iv) the Company and the Company Subsidiaries have satisfied and are
currently in compliance with all financial responsibility requirements
applicable to their respective operations and imposed by any Governmental
Entity under any Applicable Environmental Laws, and the Company and the
Company Subsidiaries have not received any notice of noncompliance with any
such financial responsibility requirements;

(v) to the best knowledge of the Company, there are no physical or
environmental conditions existing on any property owned or leased by the
Company or any Company Subsidiary or resulting from the Company's or any
Company Subsidiary's operations or activities, past or present, at any
location, that would give rise to any on-site or off-site remedial
obligations under any Applicable Environmental Laws;

(vi) to the best knowledge of the Company, since the effective date of
the relative requirements of Applicable Environmental Laws, all hazardous
materials generated by the Company or any Company Subsidiary or used in
connection with their respective properties, operations, or activities have
been transported only by carriers authorized under Applicable Environmental
Laws to transport such materials, and have been disposed of only at
treatment, storage, and disposal facilities authorized under Applicable
Environmental Laws to treat, store, or dispose of such materials, and, to
the best knowledge of the Company, such carriers and facilities have been
and are operating in compliance with such authorizations and are not the
subject of any existing, pending, or threatened Proceeding in connection
with any Applicable Environmental Laws;

(vii) there has been no exposure of any person or property to hazardous
materials, nor has there been any release of hazardous materials into the
environment, by the Company or any Company Subsidiary or in connection with
their respective properties, operations, or activities that could
reasonably be expected to give rise to any claim for damages or
compensation; and

(viii) the Company and the Company Subsidiaries shall make available to
Bionova U.S. all internal and external environmental audits and studies and
all correspondence on substantial environmental matters in the possession
of the Company and the Company Subsidiaries relating to any of the current
or former properties, operations, or activities of the Company and the
Company Subsidiaries, provided that the Company and the Company
Subsidiaries shall not be required to make available any such audits,
studies, or correspondence that may be subject to the attorney-client
privilege or similar privilege.

(b) For purposes of this Agreement, "Applicable Environmental Laws" means
any and all Applicable Laws pertaining to health, safety, or the environment
in effect in any and all jurisdictions in which the Company or any Company
Subsidiary has conducted operations or activities or owned or leased property,
including, without limitation, the Clear Air Act, as amended, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, the Rivers and Harbors Act of 1899, as amended, the Federal Water
Pollution Control Act, as amended, the Occupational Safety and Health Act of
1970, as amended, the Resource Conservation and Recovery Act of 1976, as
amended, the Safe Drinking Water Act, as amended, the Toxic Substances Control
Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as
amended, the Hazardous Materials Transportation Act, as amended, and other
environmental conservation or protection laws. For purposes of this Agreement,
the term "hazardous material" means (i) any substance that now or in the
future is defined as a hazardous or toxic material, waste or substance or
solid waste or is regulated, governed by,

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or the Handling (defined below) of which requires investigation, removal,
remediation or cleanup by any Governmental Entity or under any Applicable
Environmental Laws, or any amendment thereto, (ii) any substance which is
listed or defined as a hazardous substance, hazardous constituent, or solid
waste pursuant to any Applicable Environmental Laws, (iii) petroleum
(including crude oil and any fraction thereof), natural gas, and natural gas
liquids, and (iv) any substance that is otherwise toxic, explosive, ignitable,
corrosive, reactive, flammable, infectious, mutagenic, radioactive,
carcinogenic, a pollutant or contaminant, dangerous or otherwise hazardous,
including polychlorinated biphenyls (PCBs), asbestos, radon or urea
formaldehyde. For purposes of this Agreement, the term "Handle," "Handled," or
"Handling" shall mean any installation, handling, generation, storing,
treatment, use, disposal, discharge, release, manufacture, refinement,
processing, production, presence, migration, emission, abatement, removal,
remediation, transportation, or any other activity of any type in connection
with or involving Hazardous Materials. For purposes of this Agreement, the
term "Remedial Obligations" shall mean any and all remedial obligations,
whether on-site or off-site, incurred in connection with the Handling of
Hazardous Materials, including without limitation, the obligations to monitor,
investigate, remediate, remove, abate and cleanup.

(c) The representations and warranties contained in this Section would
continue to be true and correct following disclosure to the applicable
Governmental Entities of all relevant facts, conditions, and circumstances, if
any, pertaining to the properties, operations, and activities of the Company
and the Company Subsidiaries.

3.23 Labor Relations.

(a) Except as disclosed on Schedule 3.23, (i) there are no collective
bargaining agreements or other labor union contracts applicable to any
employees to or by which the Company or any Company Subsidiary is a party or
is bound, no such agreement or contract has been requested by any employee or
group of employees of the Company or any Company Subsidiary, and no
discussions have occurred with respect thereto by management of the Company or
any Company Subsidiary with any such employees; (ii) no employees of the
Company or any Company Subsidiary are represented by any labor organization,
collective bargaining representative, or group of employees; (iii) no labor
organization, collective bargaining representative, or group of employees
claims to represent a majority of the employees of the Company or any Company
Subsidiary in an appropriate unit of the Company or any Company Subsidiary;
(iv) neither the Company nor any Company Subsidiary is aware of or involved
with any representational campaign or other organizing activities by any union
or other organization or group seeking to become the collective bargaining
representative of any of its employees; (v) neither the Company nor any
Company Subsidiary is obligated to bargain collectively with respect to wages,
hours, and other terms and conditions of employment with any recognized or
certified labor organization, collective bargaining representative, or group
of employees; and (vi) neither the Company nor any Company Subsidiary is aware
of any strikes, work stoppages, work slowdowns, or lockouts or any threats
thereof by or with respect to any of its employees, and since December 31,
1990, there have been no labor disputes, strikes, work stoppages, work
slowdowns, lockouts, or similar matters involving any such employees.

(b) The Company and the Company Subsidiaries are in compliance with all
Applicable Laws pertaining to employment and employment practices and wages,
hours, and other terms and conditions of employment in respect of their
respective employees, except for noncompliance with such Applicable Laws which
does not and will not have a Company Material Adverse Effect, and have no
accrued liability for any arrears of wages or any Taxes or penalties for
failure to comply with any thereof. The Company and the Company Subsidiaries
are not engaged in any unfair labor practices or unlawful employment
practices. There is no pending or, to the best knowledge of the Company,
threatened Proceeding against or involving the Company or any Company
Subsidiary by or before, and neither the Company nor any Company Subsidiary is
subject to any judgment, order, writ, injunction, or decree of or inquiry
from, the National Labor Relations Board, the Equal Employment Opportunity
Commission, the Department of Labor, or any other Governmental Entity in
connection with any current, former, or prospective employee of the Company or
any Company Subsidiary.

3.24 Employees. Set forth on Schedule 3.24 is a list of:

(a) all directors and officers of the Company and the Company
Subsidiaries, and

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<PAGE>

(b) the name, social security number, and dates of employment by the
Company and the Company Subsidiaries of each employee, and consultant of
the Company and the Company Subsidiaries, whose annual rate of cash
compensation in the 1995 fiscal year will equal or exceed $50,000, together
with the total amounts of salary, bonuses, and other cash compensation paid
or payable by the Company and the Company Subsidiaries to each such person
for such fiscal year. Except as set forth on Schedule 3.24, the Company has
not materially altered any such compensation arrangements since the end of
the 1995 fiscal year, and the Company does not have any material non-cash
compensation arrangements in favor of its employees.

Except as disclosed on Schedule 3.24, no severance payment, stay-on or
incentive payment, or similar obligation will be owed by the Company and the
Company Subsidiaries to any of their respective directors, officers, or
employees upon consummation of, or as a result of, the transactions
contemplated by this Agreement, nor will any such director, officer, or
employee be entitled to an increase in severance payments or other benefits as
a result of the transactions contemplated by this Agreement in the event of
the subsequent termination of his or her employment.

3.25 Confidentiality Matters. Each of the Company and the Company
Subsidiaries has taken reasonable measures to maintain the confidentiality of
any secret, confidential, or proprietary information relating to the Company
or any Company Subsidiary or its business including written confidentiality
agreements with their respective employees.

3.26 Insurance. Listed on Schedule 3.26 are the policies of insurance
maintained by the Company and the Company Subsidiaries with respect to their
respective assets and operations. All premiums due and payable with respect to
such policies have been timely paid. No notice of cancellation of, or
indication of an intention not to renew, any such policy has been received by
the Company or its Subsidiaries. During the past three years, no application
by the Company and its Subsidiaries for insurance with respect to their assets
or operations has been denied for any reason.

3.27 Insider Interests. Except as disclosed in the SEC Filings, no event has
occurred that would be required to be reported by the Company as a Certain
Relationship or Related Transaction pursuant to Item 404 of Regulation S-K
promulgated by the Securities and Exchange Commission.

3.28 Offerings of Securities. All securities which have been offered or sold
by the Company or any Subsidiary have been registered pursuant to the
Securities Act and applicable state securities laws or were offered and sold
pursuant to valid exemptions therefrom. No registration statement, prospectus,
private offering memorandum, or other information furnished (whether in
writing or orally) to any offeree or purchaser of such securities, at the time
such registration statement became effective (in the case of a registered
offering) or at the time of delivery of such registration statement,
prospectus, private offering memorandum, or other information, contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
contained therein, in light of the circumstances under which they were made,
not misleading. To the extent that any such securities were registered under
the Securities Act, the applicable registration statements and prospectuses
filed with the Securities and Exchange Commission pursuant to the Securities
Act, at the time each such registration statement became effective, and at all
times when delivery of a prospectus was required pursuant to the Securities
Act, complied in all material respects with the requirements of the Securities
Act and the rules and regulations thereunder.

3.29 Brokerage Fees. Neither the Company nor any of its affiliates has
retained any financial advisor, broker, agent, or finder or paid or agreed to
pay any financial advisor, broker, agent, or finder on account of this
Agreement or any transaction contemplated hereby except that Piper Jaffray,
Inc. and BioScience Securities have been retained as the Company's financial
advisors in connection with the transactions contemplated hereby. The Company
shall indemnify and hold harmless Bionova U.S. from and against any and all
losses, claims, damages, and liabilities (including legal and other expenses
reasonably incurred in connection with investigating or defending any claims
or actions) with respect to any finder's fee, brokerage commission, or similar
payment in

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<PAGE>

connection with any transaction contemplated hereby asserted by any person on
the basis of any act or statement made or alleged to have been made by the
Company or any of its affiliates.

3.30 Disclosure. No representation or warranty made by the Company in this
Agreement, and no statement of the Company contained in any document,
certificate, or other writing furnished or to be furnished by the Company
pursuant hereto or in connection herewith, contains or will contain, at the
time of delivery, any untrue statement of a material fact or omits or will
omit, at the time of delivery, to state any material fact necessary in order
to make the statements contained therein, in light of the circumstances under
which they are made, not misleading.

3.31 Disclosure Documents. None of the information relating to the Company
or its subsidiaries, this Agreement, or the transactions contemplated by this
Agreement which has been or is to be supplied by the Company for inclusion in,
or which has been or is to be incorporated by reference from SEC Filings of
the Company in, (a) the Registration Statement, (b) the Proxy Statement, and
(c) any other documents to be filed with any regulatory authority by the
Company, Parent or their respective subsidiaries in connection with the
transactions contemplated by this Agreement, at the respective time such
document is filed, becomes effective, or is first mailed to stockholders, or
at the Effective Time, as the case may be, will be false or misleading with
respect to any material fact, or will omit to state any material fact
necessary in order to make the statements therein not misleading, or, in the
case of the Proxy Statement, at the time of the Special Meeting, will be false
or misleading with respect to any material fact, or will omit to state any
material fact necessary in order to make the statements therein not misleading
or necessary to correct any statement in any earlier communication with
respect to the solicitation of any proxy for the Special Meeting. All
documents required to be filed by the Company and its subsidiaries in
connection with the Merger will comply as to form in all material respects
with the applicable requirements of the statutes, rules, and regulations
pursuant to which they are filed. No representations are made in this Section
with respect to any information included or incorporated by reference in the
Registration Statement, the Proxy Statement, or any other document referred to
in clause (c) of the first sentence of this Section which relates to Parent or
its subsidiaries.

3.32 Representations and Warranties on Closing Date. The representations and
warranties made in this Article III will be true and correct on and as of the
Closing Date with the same force and effect as if such representations and
warranties had been made on and as of the Closing Date, except that any such
representations and warranties which expressly relate only to an earlier date
shall be true and correct on the Closing Date as of such earlier date.

3.33 Receivables. All receivables (including accounts and notes receivable,
employee advances, and accrued receivables) of the Company as reflected in the
Company's most recent consolidated financial statements presented in the SEC
Filings or arising since the date thereof are, to the best of the Company's
knowledge, valid obligations of the respective makers thereof, have arisen in
the ordinary course of business for goods and services delivered or rendered,
are not subject to any valid defenses, counterclaims, or set offs, and have
been collected or are, to the best of the Company's knowledge, collectible in
full at their recorded amounts in the ordinary course of business, net of
doubtful accounts reserved for in such financial statements.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES
REGARDING PARENT, BIONOVA MEXICO, BIONOVA U.S. AND SUB

Each of Parent, Bionova Mexico, Bionova U.S., and Sub represent and warrant
to the Company that:

4.1 Corporate Organization.

(a) Parent is a corporation duly organized and validly existing under the
laws of the jurisdiction of its incorporation and has all requisite corporate
power and corporate authority to own, lease, and operate its

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<PAGE>

properties and to carry on its business as now being conducted. No actions or
proceedings to dissolve Parent are pending or, to the best knowledge of
Parent, threatened.

(b) Bionova Mexico is a corporation duly organized and validly existing
under the laws of the jurisdiction of its incorporation and has all requisite
corporate power and corporate authority to own, lease, and operate its
properties and to carry on its business as now being conducted. No actions or
proceedings to dissolve Bionova Mexico are pending or, to the best knowledge
of Bionova Mexico, threatened.

(c) Bionova U.S. is a corporation duly organized, validly existing, and in
good standing under the laws of the jurisdiction of its incorporation and has
all requisite corporate power and corporate authority to own, lease, and
operate its properties and to carry on its business as now being conducted. No
actions or proceedings to dissolve Bionova U.S. are pending or, to the best
knowledge of Bionova U.S., threatened.

(d) Sub is a corporation duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its incorporation and has all
requisite corporate power and corporate authority to own, lease, and operate
its properties and to carry on its business as now being conducted. Other than
as contemplated by this Agreement and the Ancillary Documents, no actions or
proceedings to dissolve Sub are pending or, to the best knowledge of Sub,
threatened.

4.2 Qualification. Each of Parent, Bionova Mexico, Bionova U.S. and Sub is
duly qualified or licensed to do business as a foreign corporation and each of
Parent, Bionova U.S. and Sub is in good standing in each of the jurisdictions
set forth opposite its name on Schedule 4.2, which are all the jurisdictions
in which the property owned, leased, or operated by it or the conduct of its
business requires such qualification or licensing, except jurisdictions in
which the failure to be so qualified or licensed would not, individually or in
the aggregate, have a Bionova Group Material Adverse Effect.

4.3 Charter and Bylaws. Bionova U.S. has delivered to the Company accurate
and complete copies of (i) the estatutos sociales of each of Parent and
Bionova Mexico as currently in effect and (ii) the charter and bylaws of each
of Bionova U.S. and Sub as currently in effect, which charter and bylaws are
attached hereto as Schedule 4.3. Neither Parent, Bionova Mexico, Bionova U.S.
nor Sub is in violation of any provisions of its organizational documents.

4.4 Authority Relative to This Agreement. Each of Parent, Bionova Mexico,
Bionova U.S., and Sub has full corporate power and corporate authority to
execute, deliver, and perform this Agreement and the Ancillary Documents to
which it is a party and to consummate the transactions contemplated hereby and
thereby. The execution, delivery, and performance by each of them of this
Agreement and the Ancillary Documents to which it is a party, and the
consummation by it of the transactions contemplated hereby and thereby, have
been duly authorized by all necessary corporate action of Parent, Bionova
Mexico, Bionova U.S., and Sub, as the case may be. This Agreement has been
duly executed and delivered by each of Parent, Bionova Mexico, Bionova U.S.,
and Sub and constitutes, and each Ancillary Document executed or to be
executed by each of them has been, or when executed will be, duly executed and
delivered by each of them and constitutes, or when executed and delivered will
constitute, a valid and legally binding obligation of each of them,
enforceable against each of them in accordance with their respective terms,
except that such enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium, and similar laws affecting creditors'
rights generally, (ii) fiduciary obligations under the laws of its
jurisdiction of incorporation, (iii) equitable principles which may limit the
availability of certain equitable remedies (such as specific performance) in
certain instances, (iv) public policy considerations with respect to the
enforceability of rights of indemnification, and (v) priority claims under
Mexican law with respect to labor claims, taxes, social security payments,
retirement funds, housing funds and similar items.

4.5 Noncontravention. The execution, delivery, and performance, as the case
may be, by each of Parent, Bionova Mexico, Bionova U.S., and Sub of this
Agreement and the Ancillary Documents to which it is a party and the
consummation by it of the transactions contemplated hereby and thereby do not
and will not, subject to

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<PAGE>

any consents, waivers or approvals to be effective at the Closing Date and as
may be listed on Schedule 4.5, (i) conflict with or result in a violation of
any provision of the organizational documents of such company or any member of
the Bionova Group, (ii) conflict with or result in a violation of any
provision of, or constitute (with or without the giving of notice or the
passage of time or both) a default under, or give rise (with or without the
giving of notice or the passage of time or both) to any right of termination,
cancellation, or acceleration under, or require any consent, approval,
authorization, or waiver of any party to, any material bond, debenture, note,
mortgage, indenture, lease, contract, agreement, or other instrument or
obligation to which such company or any member of the Bionova Group is a party
or by which such companies or any of their respective properties may be bound,
(iii) result in the creation or imposition of any Encumbrance upon the
properties of Parent, Bionova Mexico, Bionova U.S., Sub or any member of the
Bionova Group, or (iv) assuming compliance with the matters referred to in
Section 4.6, violate any Applicable Law binding upon Parent, Bionova Mexico,
Bionova U.S., Sub or any member of the Bionova Group.

4.6 Governmental Approvals. No consent, approval, order, or authorization
of, or declaration, filing, or registration with, any Governmental Entity is
required to be obtained or made by Parent, Bionova Mexico, Bionova U.S., or
Sub in connection with the execution, delivery, or performance by Parent,
Bionova Mexico, Bionova U.S. or Sub of this Agreement and the Ancillary
Documents to which it is a party or the consummation by it of the transactions
contemplated hereby or thereby, other than (i) compliance with any applicable
requirements of the HSR Act and necessary filings with the Mexican Competition
Commission; (ii) compliance with any applicable requirements of the Securities
Act; (iii) compliance with any applicable requirements of the Exchange Act;
(iv) compliance with any applicable state securities laws; (v) filings with
Governmental Entities to occur in the ordinary course following the
consummation of the transactions contemplated hereby, including without
limitation the filing of a Certificate of Merger with the Secretary of State
of Delaware, the filing of a notice with the Mexican Foreign Investment
Registry, the filing of a notice with the Mexican Agrarian Registry, and the
filing of a notice with the Mexican Tax authorities; and (vi) such consents,
approvals, orders, or authorizations which, if not obtained, and such
declarations, filings, or registrations which, if not made, would not,
individually or in the aggregate, have a Bionova Group Material Adverse
Effect.

4.7 Legal Proceedings. There are no Proceedings pending or, to the best
knowledge of Parent, Bionova Mexico, Bionova U.S. or Sub, threatened seeking
to restrain, prohibit, or obtain damages or other relief in connection with
this Agreement or the transactions contemplated hereby.

4.8 Brokerage Fees. Neither Parent, Bionova Mexico, Bionova U.S. nor Sub nor
any of their affiliates has retained any financial advisor, broker, agent, or
finder or paid or agreed to pay any financial advisor, broker, agent, or
finder on account of this Agreement or any transaction contemplated hereby
except that J.P. Morgan Securities, Inc. has been retained as Parent's
financial advisor in connection with the transactions contemplated hereby.
Parent shall indemnify and hold harmless the Company from and against any and
all losses, claims, damages, and liabilities (including legal and other
expenses reasonably incurred in connection with investigating or defending any
claims or actions) with respect to any finder's fee, brokerage commission, or
similar payment in connection with any transaction contemplated hereby
asserted by any person on the basis of any act or statement made or alleged to
have been made by Bionova U.S. or any of its affiliates.

4.9 Stock Ownership of Bionova Mexico, Bionova U.S. and Sub.

(a) All the outstanding capital stock of Bionova Mexico (except for four
shares owned by affiliates of Parent) is owned directly by Parent.

(b) The authorized capital stock of Bionova U.S. is reflected in the charter
thereof attached as part of Schedule 4.3. As of the date hereof, 25,000 shares
of Common Stock, $.01 par value, of Bionova U.S. are issued and outstanding.
All of such shares are owned directly by Bionova Mexico, free and clear of all
Encumbrances. All of such shares have been validly issued and are fully paid
and nonassessable. No shares of capital stock of Bionova U.S. are subject to,
nor have any been issued in violation of, preemptive or similar rights. Except
(w) for the 25,000 shares outstanding as of the date hereof as set forth in
this Section 4.9(b), (x) such shares as shall

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<PAGE>

be issued to Bionova Mexico on the Closing Date as contemplated by Section
1.11(d), (y) such shares as shall be issued as a result of the Merger as
contemplated by Section 2.1, and (z) such shares as may be issued in
connection with the exercise of those options and warrants to be assumed by
Bionova U.S. as contemplated by Section 2.5 and Section 2.6, there are (and as
of the Closing Date there will be) outstanding (i) no shares of capital stock
or other voting securities of Bionova U.S., (ii) no securities of Bionova U.S.
convertible into or exchangeable for shares of capital stock or other voting
securities of Bionova U.S., (iii) no options, warrants or other rights
(including preemptive rights) to acquire from Bionova U.S., and no obligation
of Bionova U.S. to issue or sell, any shares of capital stock or other voting
securities of Bionova U.S. or any securities of Bionova U.S. convertible into
or exchangeable for such capital stock or voting securities, and (iv) no
equity equivalents, interests in the ownership or earnings, or other similar
rights of or with respect to Bionova U.S.

(c) The authorized capital stock of Sub is reflected in the charter thereof
attached as part of Schedule 4.3. As of the date hereof, 1,000 shares of
Common Stock, $.01 par value, of Sub are issued and outstanding. All of such
shares are owned directly by Bionova U.S., free and clear of all Encumbrances.
All of such shares have been validly issued and are fully paid and
nonassessable. No shares of capital stock of Sub are subject to, nor have any
been issued in violation of, preemptive or similar rights. Except (x) for the
1,000 shares outstanding as of the date hereof as set forth in this Section
4.9(c), and (y) as provided in Section 2.1(e), there are (and as of the
Closing Date there will be) outstanding (i) no shares of capital stock or
other voting securities of Sub, (ii) no securities of Sub convertible into or
exchangeable for shares of capital stock or other voting securities of Sub,
(iii) no options, warrants or other rights (including preemptive rights) to
acquire from Sub, and no obligation of Sub to issue or sell, any shares of
capital stock or other voting securities of Sub or any securities of Sub
convertible into or exchangeable for such capital stock or voting securities,
and (iv) no equity equivalents, interests in the ownership or earnings, or
other similar rights of or with respect to Sub.

4.10 Parent Securities Filings.

(a) Parent has filed with the Securities and Exchange Commission and the
Comision Nacional Bancaria y de Valores, as the case may be, all forms,
reports, schedules, statements, and other documents required to be filed by it
under the Securities Act, the Exchange Act, and all other U.S. federal and
Mexican securities laws. All such forms, reports, schedules, statements, and
other documents (including all amendments thereto) filed by Parent with the
Securities and Exchange Commission or the Comision Nacional Bancaria y de
Valores are herein collectively referred to as the "Filings." Parent has
delivered to or made available for inspection by the Company accurate and
complete copies of all the Filings in the form filed by Parent with the
Securities and Exchange Commission or the Comision Nacional Bancaria y de
Valores since December 31, 1992. The Filings, at the time filed, complied in
all material respects with all applicable requirements of United States or
Mexican securities laws, as the case may be. None of the Filings, including,
without limitation, any financial statements or schedules included therein, at
the time filed, contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary in order
to make the statements contained therein, in light of the circumstances under
which they were made, not misleading. All material contracts of Parent have
been included in the Filings, except for those contracts not required to be
filed pursuant to the rules and regulations of the Securities and Exchange
Commission or the Comision Nacional Bancaria y de Valores.

(b) The audited consolidated financial statements and unaudited consolidated
interim financial statements of Parent included in the Filings present fairly,
in conformity with generally accepted accounting principles in effect in
Mexico or the United States (as specified therein) applied on a consistent
basis (except as may be indicated in the notes thereto), the consolidated
financial position of Parent as of the dates thereof and its consolidated
results of operations and cash flows for the periods then ended (subject to
normal year-end audit adjustments in the case of any unaudited interim
financial statements). Parent shall deliver to the Company as soon as they
become available accurate and complete copies of all forms, reports, and other
documents furnished by it to its stockholders generally or filed by it with
the Securities and Exchange Commission or the Comision Nacional Bancaria y de
Valores subsequent to the date hereof and prior to the Closing Date.

4.11 Control. Except as set forth on Schedule 4.11, Bionova Mexico controls
each other member of the Bionova Group as of the date of this Agreement (which
includes the power on its own, without the joinder of

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any other person, to direct all material decisions) and, assuming the
effectiveness of this Agreement and the transactions contemplated by it,
Bionova U.S. will so control such Bionova Group members after the Effective
Time.

ARTICLE V

REPRESENTATIONS AND WARRANTIES REGARDING THE BIONOVA GROUP

Parent, Bionova Mexico, Bionova U.S. and Sub represent and warrant to the
Company that:

5.1 Corporate Organization. Each member of the Bionova Group is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation and has all requisite corporate
power and corporate authority to own, lease, and operate its properties and to
carry on its business as now being conducted. No actions or proceedings to
dissolve any member of the Bionova Group are pending or, to the best knowledge
of Bionova U.S., threatened except as set forth on Schedule 5.1.

5.2 Qualification. Each member of the Bionova Group is duly qualified or
licensed to do business as a foreign corporation, and is in good standing, in
each of the jurisdictions set forth opposite its name on Schedule 5.2, which
are all the jurisdictions in which the property owned, leased, or operated by
it or the conduct of its business requires such qualification or licensing,
except jurisdictions in which the failure to be so qualified or licensed would
not, individually or in the aggregate, have a Bionova Group Material Adverse
Effect.

5.3 Charter and Bylaws. Bionova U.S. has delivered to the Company accurate
and complete copies of (i) the charter and bylaws (or other organizational
documents) of each member of the Bionova Group as currently in effect, (ii)
the stock records of each member of the Bionova Group, and (iii) the minutes
of all meetings of the respective Boards of Directors of each member of the
Bionova Group, any committees of such Boards, and the stockholders of such
companies (and all consents in lieu of such meetings). Such records, minutes,
and consents accurately reflect the stock ownership of the Bionova Group and
all actions taken by such Boards of Directors, committees, and stockholders.
As of the Closing Date, no member of the Bionova Group will be in violation of
any provision of its organizational documents.

5.4 Capitalization of the Bionova Group. Except as set forth on Schedule
5.4, no member of the Bionova Group owns, directly or indirectly, any capital
stock or other securities of any corporation or has any direct or indirect
equity or ownership interest in any other person, other than another member of
the Bionova Group. The jurisdiction of incorporation and authorized and
outstanding capital stock of each member of the Bionova Group is set forth on
Schedule 5.4. The ownership of the outstanding capital stock of each member of
the Bionova Group is also set forth on Schedule 5.4. All outstanding shares of
capital stock of the Bionova Group have been validly issued and are fully paid
and nonassessable, and no shares of capital stock of the Bionova Group are
subject to, nor have any been issued in violation of, preemptive or similar
rights. All issuances, sales, and repurchases by the Bionova Group of shares
of its capital stock have been effected in compliance with all Applicable
Laws, including without limitation applicable securities laws. Except as set
forth above in this Section and set forth on Schedule 5.4, there are (and as
of the Closing Date there will be) outstanding (i) no shares of capital stock
or other voting securities of the Bionova Group, (ii) no securities of the
Bionova Group convertible into or exchangeable for shares of capital stock or
other voting securities of the Bionova Group, (iii) no options, warrants or
other rights (including preemptive rights, except to the extent such
preemptive rights exist under Applicable Law) to acquire from the Bionova
Group, and no obligation of the Bionova Group to issue or sell, any shares of
capital stock or other voting securities of the Bionova Group or any
securities of the Bionova Group convertible into or exchangeable for such
capital stock or voting securities, and (iv) no equity equivalents, interests
in the ownership or earnings, or other similar rights of or with respect to
the Bionova Group. Except as set forth on Schedule 5.4, there are (and as of
the Closing Date there will be) no outstanding obligations of the Bionova
Group to repurchase, redeem, or otherwise acquire any of the foregoing shares,
securities, options, equity equivalents, interests, or rights. Except as set
forth on Schedule 5.4, no member of the Bionova Group is

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a party to, or is aware of, any voting agreement, voting trust, or similar
agreement or arrangement relating to any class or series of its capital stock.

5.5 Financial Statements. Bionova Mexico has delivered to the Company
accurate and complete copies of the Bionova Group's consolidated balance sheet
as of September 30, 1995, and the related consolidated statement of income for
the nine-month period then ended, as well as, for each material member of the
Bionova Group, such entity's consolidating balance sheet as of September 30,
1995, and the related consolidating statements of income and cash flow for the
nine-month period then ended (the "Bionova Group Financial Statements"). The
Bionova Group Financial Statements (i) represent actual bona fide
transactions, (ii) have been prepared from the books and records of the
Bionova Group in conformity with generally accepted accounting principles in
effect in Mexico or the United States, as the case may be, applied on a basis
consistent with preceding years throughout the periods involved, and (iii)
accurately, completely, and fairly present in all material respects the
Bionova Group's consolidated or consolidating financial position, as the case
may be, as of the date thereof and its consolidated or consolidating results
of operations and cash flows for the period then ended, as the case may be.

5.6 Absence of Undisclosed Liabilities. No member of the Bionova Group has
any material liability or obligation (whether accrued, absolute, contingent,
unliquidated, or otherwise, whether or not known to it, and whether due or to
become due), except (i) liabilities reflected on the Bionova Group Financial
Statements, (ii) liabilities which have arisen since the date of the Bionova
Group Financial Statements in the ordinary course of business (none of which
is a material liability for breach of contract, breach of warranty, tort, or
infringement), (iii) liabilities arising under executory contracts entered
into in the ordinary course of business (none of which is a material liability
for breach of contract), (iv) liabilities specifically set forth on Schedule
5.6, and (v) other liabilities which, in the aggregate, are not material to
the Bionova Group considered as a whole.

5.7 Absence of Certain Changes. Except as disclosed on Schedule 5.7, since
September 30, 1995, (i) there has not been any change, development, or effect,
individually or in the aggregate, that has had, or might reasonably be
expected to have, a Bionova Group Material Adverse Effect; (ii) the business
of the Bionova Group has been conducted only in the ordinary course consistent
with past practice; (iii) no member of the Bionova Group has incurred any
material liability, engaged in any material transaction, or entered into any
material agreement outside the ordinary course of business consistent with
past practice; (iv) no member of the Bionova Group has suffered any material
loss, damage, destruction, or other casualty to any of its assets (whether or
not covered by insurance); and (v) no member of the Bionova Group has taken
any of the actions set forth in Section 6.2 except as permitted thereunder.

5.8 Tax Matters.

(a) Except as disclosed on Schedule 5.8:

(i) the Bionova Group has (and as of the Closing Date will have) duly
filed all material federal, state, local, and foreign Tax Returns required
to be filed by or with respect to it with the IRS or other applicable
Taxing authority, and no extensions with respect to such Tax Returns have
(or as of the Closing Date will have) been requested or granted;

(ii) the Bionova Group has (and as of the Closing Date will have) paid,
or adequately reserved against in the Bionova Group Financial Statements,
all Taxes due, or claimed by any Taxing authority to be due, from or with
respect to it, except Taxes that are being contested in good faith by
appropriate legal proceedings and for which adequate reserves have been set
aside as disclosed on Schedule 5.8;

(iii) there has been no issue raised or adjustment proposed (and none is
pending) by the IRS or any other Taxing authority in connection with any of
such Tax Returns;

(iv) the Bionova Group has (and as of the Closing Date will have) made
all deposits required with respect to Taxes;

(v) the federal income Tax Returns of the Bionova Group have not been
audited by the IRS; and

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(vi) no waiver or extension of any statute of limitations as to any
federal, state, local, or foreign Tax matter has been given by or requested
from the Bionova Group.

5.9 Compliance With Laws. Except as disclosed on Schedule 5.9, Bionova
Mexico and the Bionova Group has complied in all material respects with all
Applicable Laws (including without limitation Applicable Laws relating to
securities, properties, business products, manufacturing processes,
advertising and sales practices, employment practices, terms and conditions of
employment, wages and hours, safety, occupational safety, health,
environmental protection, product safety, and civil rights) relating to any
material aspect of the Bionova Group's business. Neither Bionova Mexico nor
any member of the Bionova Group has received any written notice, which has not
been dismissed or otherwise disposed of, that it has not so complied. Neither
Bionova Mexico nor any member of the Bionova Group is charged or, to the best
knowledge of Bionova U.S., threatened with, or, to the best knowledge of
Bionova U.S., under investigation with respect to, any violation of any
Applicable Law relating to any aspect of the business of Bionova Mexico or the
Bionova Group.

5.10 Legal Proceedings. There are no Proceedings pending or, to the best
knowledge of Bionova Mexico and Bionova U.S., threatened against or involving
Bionova Mexico or the Bionova Group (or any of their respective directors or
officers in connection with the business or affairs of Bionova Mexico or the
Bionova Group) or any properties or rights of Bionova Mexico or the Bionova
Group except (i) as disclosed on Schedule 5.10, (ii) for any Proceedings that
pertain to routine claims by persons other than Governmental Entities that are
covered by insurance (subject to applicable insurance deductibles), and (iii)
for Proceedings which, individually or in the aggregate, if prosecuted to
judgment, would not have a Bionova Group Material Adverse Effect. Neither
Bionova Mexico nor any member of the Bionova Group is subject to any judgment,
order, writ, injunction, or decree of any Governmental Entity which has had or
is reasonably likely to have a Bionova Group Material Adverse Effect. There
are no Proceedings pending or, to the best knowledge of Bionova Mexico or
Bionova U.S., threatened seeking to restrain, prohibit, or obtain damages or
other relief in connection with this Agreement or the transactions
contemplated hereby.

5.11 Title to Properties. Each member of the Bionova Group has good and
indefeasible title, and in the case of real property located in the United
States of America insurable title, to all material properties (real, personal,
and mixed, tangible and intangible) it owns or purports to own, including
without limitation the properties reflected in its books and records and in
the Bionova U.S. Financial Statements, other than those disposed of after the
date of such balance sheet in the ordinary course of business consistent with
past practice, free and clear of all Encumbrances, except (i) as disclosed on
Schedule 5.11, and (ii) liens for Taxes not yet due and payable and (iii) such
imperfections or irregularities of title, if any, as (A) are not substantial
in character, amount, or extent and do not materially detract from the value
of the property subject thereto, (B) do not materially interfere with either
the present or intended use of such property, and (C) do not, individually or
in the aggregate, materially interfere with the conduct of the Bionova Group's
normal operations. Except as disclosed on Schedule 5.11, no financing
statement (or other instrument sufficient or effective as a financing
statement) under the Uniform Commercial Code or other comparable statute with
respect to any properties of the Bionova Group has been filed and is effective
in any jurisdiction, and no member of the Bionova Group has signed any such
financing statement (or other instrument) or any mortgage or security
agreement authorizing any secured party thereunder to file any such financing
statement (or other instrument).

5.12 Sufficiency and Condition of Properties. The material properties owned,
leased, or used by the Bionova Group's business are (i) in the case of
tangible properties, in good operating condition and repair (ordinary wear and
tear excepted) and have been maintained in accordance with standard industry
practice, (ii) suitable for the purposes used, and (iii) adequate and
sufficient for the normal operation of the Bionova Group's business, as
presently conducted. The members of the Bionova Group own or have a valid
leasehold interest in, or otherwise have a valid right to use, all such
properties. Such properties and their uses conform in all material respects to
all Applicable Laws, except for such minor variations as do not impair or
interfere with the use of such properties for the purposes for which they are
employed and Bionova U.S. has not, nor has any member of the Bionova Group,
received any notice to the contrary. All such tangible properties are in the
Bionova Group's possession or under their control.

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5.13 Intellectual Property.

(a) Set forth on Schedule 5.13 is a list of all Intellectual Property owned,
held, or used by the Bionova Group. Schedule 5.13 specifies, as applicable:
(i) the nature of such Intellectual Property; (ii) the owner of such
Intellectual Property; (iii) the jurisdictions by or in which such
Intellectual Property is recognized without regard to registration or has been
issued or registered or in which an application for such issuance or
registration has been filed, including the respective registration or
application numbers; and (iv) all licenses, sublicenses, and other agreements
to which any member of the Bionova Group is a party and pursuant to which any
member of the Bionova Group, or any other person is authorized to use such
Intellectual Property, including the identity of all parties thereto, a
description of the nature and subject matter thereof, the applicable royalty,
and the term thereof.

(b) The listed Intellectual Property constitutes all Intellectual Property
necessary for the operation of the Bionova Group's business as presently
conducted. The Bionova Group has good and indefeasible title to or is validly
licensed to use all such Intellectual Property, free from burdensome
restrictions. Except as noted in Schedule 5.13, each item of such Intellectual
Property is in full force and effect, the Bionova Group is in compliance with
all its obligations with respect thereto, and, to the best knowledge of
Bionova U.S., no event has occurred which permits, or upon the giving of
notice or the passage of time or otherwise would permit, revocation or
termination of any thereof. During the prosecution of the U.S. patents listed
on Schedule 5.13, the Bionova Group complied with its Rule 56 disclosure
obligations. Other than as identified on Schedule 5.10, there are no
Proceedings pending or, to the best knowledge of Bionova U.S., threatened
against the Bionova Group asserting that the use by the Bionova Group of any
of such Intellectual Property infringes the rights of any other person or
seeking revocation, termination, or concurrent use of any of such Intellectual
Property, and there is, to the best knowledge of the Bionova U.S., no basis
for any such Proceeding. To the best knowledge of the Bionova U.S., none of
such Intellectual Property is being infringed upon by any other person. None
of such Intellectual Property is subject to any outstanding judgment, order,
writ, injunction, or decree of any Governmental Entity, or any agreement,
arrangement, or understanding, written or oral, restricting the scope or use
thereof. Except as set forth on Schedule 5.13, to the best knowledge of
Bionova U.S., the conduct of the Bionova Group's business at any time prior to
the Closing Date did not, and the conduct of such business on a basis
consistent with past practice as of the Closing Date will not, infringe upon
or otherwise misappropriate any Intellectual Property of any other person.

(c) To the best knowledge of Bionova Mexico and Bionova U.S., none of the
Bionova Group's commercial products now in the marketplace infringes any
third-party utility patent, plant patent or plant protection certificate.
Schedule 5.13 sets forth a complete list of all of the Bionova Group's
research or license agreements in which a member of the Bionova Group is a
licensee. To the best knowledge of Bionova Mexico and Bionova U.S., each of
the agreements listed on Schedule 5.13 is valid and subsisting and is
enforceable by the Bionova Group (except as the enforceability thereof may be
limited by bankruptcy, insolvency, bank moratorium or similar laws affecting
creditors' rights generally and laws restricting the availability of equitable
remedies and may be subject to general principles of equity whether or not
such enforceability is considered in a proceeding at law or equity), and none
of these agreements has been amended or supplemented to include terms or
conditions not disclosed to the Company.

(d) As of the date of this Agreement, those members of the Bionova Group
using Parent's "Premier Selecion" and "Market Delight" trademarks or
tradenames have a royalty free arrangement from Parent pursuant to which such
members are permitted to utilize such trademarks or tradenames. Such
arrangement will not be cancelled or reconstituted as a royalty bearing
arrangement as a result of the consummation of the Merger. Not later than the
Effective Time of the Merger, such arrangement will be memorialized in a
written instrument granting to such members of the Bionova Group the right to
use all such trademarks or tradenames for a perpetual period of time and on a
royalty free basis.

5.14 Permits. Except as set forth on Schedule 5.14, (i) the Bionova Group
holds all the Permits materially necessary or required for the conduct of the
business of the Bionova Group as currently conducted; (ii) each of such
Permits is in full force and effect, the Bionova Group is in compliance with
all its obligations with respect

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<PAGE>

thereto, and, to the best knowledge of Bionova U.S., no event has occurred
which permits, or with or without the giving of notice or the passage of time
or both would permit, the revocation or termination of any thereof; and (iii)
no notice has been issued by any Governmental Entity and no Proceeding is
pending or, to the best knowledge of Bionova U.S., threatened with respect to
any alleged failure by the Bionova Group to have any Permit the absence of
which would have a Bionova Group Material Adverse Effect.

5.15 Agreements.

(a) All agreements, arrangements, and understandings of any nature (written
or oral, formal or informal) (collectively, for purposes of this Section,
"agreements") to which the Bionova Group is a party or by which the Bionova
Group or any of their respective properties is otherwise bound, that are
material to the business, assets, results of operations, condition (financial
or otherwise), or prospects of the Bionova Group considered as a whole, and
that provide for annual payments or receipts in excess of $100,000, are listed
on Schedule 5.15.

(b) Bionova U.S. has delivered to the Company accurate and complete copies
of the agreements listed on Schedule 5.15. Each of such agreements is a valid
and binding agreement of the Bionova Group (to the extent each is a party
thereto) and (to the best knowledge of Bionova U.S.) the other party or
parties thereto, enforceable against the Bionova Group (to the extent each is
a party thereto) and (to the best knowledge of Bionova U.S.) such other party
or parties in accordance with its terms, except that such enforceability may
be limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium, and similar laws affecting creditors' rights generally, (ii)
fiduciary obligations under the laws of its jurisdiction of incorporation,
(iii) equitable principles which may limit the availability of certain
equitable remedies (such as specific performance) in certain instances, (iv)
public policy considerations with respect to the enforceability of rights of
indemnification, and (v) priority claims under Mexican law with respect to
labor claims, taxes, social security payments, retirement funds, housing funds
and similar items. No member of the Bionova Group is in breach of or in
default under, nor has any event occurred which (with or without the giving of
notice or the passage of time or both) would constitute a default by the
Bionova Group under, any material provision of any of such agreements, and no
member of the Bionova Group has received any notice from, or given any notice
to, any other party indicating that the Bionova Group is in breach of or in
default under any of such agreements. To the best knowledge of Bionova U.S.,
no other party to any of such agreements is in material breach of or in
material default under such agreements, nor has any assertion been made by the
Bionova Group of any such breach or default.

(c) No member of the Bionova Group has received notice of any plan or
intention of any other party to any agreement to exercise any right of offset
with respect to, or any right to cancel or terminate, any agreement, and no
member of the Bionova Group knows of any fact or circumstance that would
justify the exercise by any such other party of such a right other than the
automatic termination of such agreement in accordance with its terms. No
member of the Bionova Group currently contemplates, or has reason to believe
any other person currently contemplates, any amendment or change to any
agreement, which amendment or change could have a Bionova Group Material
Adverse Effect.

5.16 ERISA.

(a) Set forth on Schedule 5.16 is a list identifying each "employee benefit
plan", as defined in Section 3(3) of ERISA, (i) which is subject to any
provision of ERISA, (ii) which is maintained, administered, or contributed to
by Bionova U.S. or any affiliate of Bionova U.S., and (iii) which covers any
employee or former employee of Bionova U.S. or any affiliate of Bionova U.S.
or under which Bionova U.S. or any affiliate of Bionova U.S. has any
liability. Bionova U.S. has delivered to the Company accurate and complete
copies of such plans (and, if applicable, the related trust agreements) and
all amendments thereto and written interpretations thereof, together with (i)
the three most recent annual reports (Form 5500 including, if applicable,
Schedule B thereto) prepared in connection with any such plan and (ii) the
most recent actuarial valuation report prepared in connection with any such
plan. Such plans are referred to in this Section as the "Employee Plans". For
purposes of this Section only, an "affiliate" of any person means any other
person which, together with such person, would be treated as a single employer
under Section 414 of the Code. The only Employee Plans which individually or
collectively

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<PAGE>

would constitute an "employee pension benefit plan" as defined in Section 3(2)
of ERISA are identified as such on Schedule 5.16.

(b) Except as otherwise identified on Schedule 5.16, (i) no Employee Plan
constitutes a "multiemployer plan", as defined in Section 3(37) of ERISA (for
purposes of this Section, a "Multiemployer Plan"), (ii) no Employee Plan is
maintained in connection with any trust described in Section 501(c)(9) of the
Code, (iii) no Employee Plan is subject to Title IV of ERISA or to the minimum
funding standards of ERISA and the Code, and (iv) during the past five years,
neither Bionova U.S. nor any of its affiliates have made or been required to
make contributions to any Multiemployer Plan. There are no accumulated funding
deficiencies as defined in Section 412 of the Code (whether or not waived)
with respect to any Employee Plan. The fair market value of the assets held
with respect to each Employee Plan that is a defined benefit plan and an
employee pension benefit plan, as defined in Section 3(2) of ERISA, exceeds
the actuarially determined present value of all benefit liabilities accrued
under such Employee Plan (whether or not vested) determined using reasonable
actuarial assumptions. Neither Bionova U.S. nor any affiliate of Bionova U.S.
has incurred any material liability under Title IV of ERISA arising in
connection with the termination of, or complete or partial withdrawal from,
any plan covered or previously covered by Title IV of ERISA. Bionova U.S. and
all of the affiliates of Bionova U.S. have paid and discharged promptly when
due all liabilities and obligations arising under ERISA or the Code of a
character which if unpaid or unperformed might result in the imposition of a
lien against any of the assets of the Bionova Group. To the knowledge of
Bionova Mexico or Bionova U.S., nothing done or omitted to be done and no
transaction or holding of any asset under or in connection with any Employee
Plan has or will make the Bionova Group or any director or officer of the
Bionova Group subject to any liability under Title I of ERISA or liable for
any Tax pursuant to Section 4975 of the Code that could have a Bionova Group
Material Adverse Effect. To the knowledge of Bionova Mexico or Bionova U.S.,
there are no threatened or pending claims by or on behalf of the Employee
Plans, or by any participant therein, alleging a breach or breaches of
fiduciary duties or violations of Applicable Laws which could result in
liability on the part of Bionova U.S., its officers or directors, or such
Employee Plans, under ERISA or any other Applicable Law and there is no basis
for any such claim.

(c) To the knowledge of Bionova Mexico or Bionova U.S., each Employee Plan
which is intended to be qualified under Section 401(a) of the Code is so
qualified and has been so qualified since the date of its adoption, and each
trust forming a part thereof is exempt from Tax pursuant to Section 501(a) of
the Code. Set forth on Schedule 5.16 is a list of the most recent IRS
determination letters with respect to any such Plans, accurate and complete
copies of which letters have been delivered to Bionova U.S. To the best of the
knowledge of Parent, Bionova Mexico, Bionova U.S. and Sub, each Employee Plan
has been maintained in compliance with its terms and with the requirements
prescribed by all Applicable Laws, including but not limited to ERISA and the
Code, which are applicable to such Plans.

(d) There is set forth on Schedule 5.16 a list of each employment,
severance, or other similar contract (including any non-competition
agreement), arrangement, or policy and each plan or arrangement (written or
oral) providing for insurance coverage (including any self-insured
arrangements), workers' compensation, disability benefits, supplemental
unemployment benefits, vacation benefits, retirement benefits, deferred
compensation, profit-sharing, bonuses, stock options, stock appreciation
rights, or other forms of incentive compensation or post-retirement insurance,
compensation, or benefits which (i) is not an Employee Plan, (ii) is entered
into, maintained, or contributed to, as the case may be, by the Bionova Group,
and (iii) covers any employee or former employee of the Bionova Group. Such
contracts, plans, and arrangements as are described in the preceding sentence
are referred to for purposes of this Section as the "Benefit Arrangements".
Each Benefit Arrangement has been maintained in substantial compliance with
its terms and with the requirements prescribed by Applicable Laws.

(e) To the knowledge of Bionova Mexico or Bionova U.S., neither Bionova U.S.
nor any affiliate of Bionova U.S. has performed any act or failed to perform
any act, and there is no contract, agreement, plan, or arrangement covering
any employee or former employee of Bionova U.S. or any affiliate of Bionova
U.S., that,

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<PAGE>

individually or collectively, could give rise to the payment of any amount
that would not be deductible pursuant to the terms of Section 162(a)(1) or
280G of the Code, or could give rise to any penalty or excise Tax pursuant to
Section 4980B or 4999 of the Code.

(f) Except as disclosed on Schedule 5.16, there has been no amendment,
written interpretation, or announcement (whether or not written) by Bionova
U.S. or any affiliate of Bionova U.S. of or relating to, or change in employee
participation or coverage under, any Employee Plan or Benefit Arrangement
which would increase materially the expense of maintaining such Employee Plan
or Benefit Arrangement above the level of the expense incurred in respect
thereof for the fiscal year ended December 31, 1994.

5.17 Environmental Matters.

(a) Except as disclosed on Schedule 5.17 and except for matters that in the
aggregate would not have a Bionova Group Material Adverse Effect:

(i) the properties, operations, and activities of the Bionova Group
comply with all Applicable Environmental Laws;

(ii) the Bionova Group and the properties, operations, and activities of
the Bionova Group are not subject to any existing, pending, or, to the best
knowledge of Bionova U.S., threatened Proceeding under, or to any remedial
obligations under, any Applicable Environmental Laws;

(iii) all Permits, if any, required to be obtained by the Bionova Group
under any Applicable Environmental Laws in connection with any aspect of
the business of the Bionova Group, including without limitation those
relating to the treatment, storage, disposal, or release of a hazardous
material, have been duly obtained and are in full force and effect, and the
Bionova Group is in compliance with the terms and conditions of all such
Permits;

(iv) the Bionova Group has satisfied and is currently in compliance with
all financial responsibility requirements applicable to their respective
operations and imposed by any Governmental Entity under any Applicable
Environmental Laws, and the Bionova Group has not received any notice of
noncompliance with any such financial responsibility requirements;

(v) to the best knowledge of Bionova U.S., there are no physical or
environmental conditions existing on any property owned or leased by the
Bionova Group or resulting from the Bionova Group's operations or
activities, past or present, at any location, that would give rise to any
on-site or off-site remedial obligations under any Applicable Environmental
Laws;

(vi) to the best knowledge of Bionova U.S., since the effective date of
the relative requirements of Applicable Environmental Laws, all hazardous
materials generated by the Bionova Group or used in connection with their
respective properties, operations, or activities have been transported only
by carriers authorized under Applicable Environmental Laws to transport
such materials, and have been disposed of only at treatment, storage, and
disposal facilities authorized under Applicable Environmental Laws to
treat, store, or dispose of such materials, and, to the best knowledge of
Bionova U.S., such carriers and facilities have been and are operating in
compliance with such authorizations and are not the subject of any
existing, pending, or threatened Proceeding in connection with any
Applicable Environmental Laws;

(vii) there has been no exposure of any person or property to hazardous
materials, nor has there been any release of hazardous materials into the
environment, by the Bionova Group or in connection with their respective
properties, operations, or activities that could reasonably be expected to
give rise to any claim for damages or compensation; and

(viii) the Bionova Group shall make available to the Company all internal
and external environmental audits and studies and all correspondence on
substantial environmental matters in the possession of the Bionova Group
relating to any of the current or former properties, operations, or
activities of the Bionova Group, provided that the Bionova Group shall not
be required to make available any such audits, studies, or correspondence
that may be subject to the attorney-client privilege or similar privilege.

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(b) The representations and warranties contained in this Section would
continue to be true and correct following disclosure to the applicable
Governmental Entities of all relevant facts, conditions, and circumstances, if
any, pertaining to the properties, operations, and activities of the Bionova
Group.

5.18 Labor Relations.

(a) Except as disclosed on Schedule 5.18, (i) there are no collective
bargaining agreements or other labor union contracts applicable to any
employees to or by which the Bionova Group is a party or is bound, no such
agreement or contract has been requested by any employee or group of employees
of the Bionova Group, and no discussions have occurred with respect thereto by
management of the Bionova Group with any such employees; (ii) no employee of
the Bionova Group is represented by any labor organization, collective
bargaining representative, or group of employees; (iii) no labor organization,
collective bargaining representative, or group of employees claims to
represent a majority of the employees of the Bionova Group in an appropriate
unit of the Bionova Group; (iv) no member of the Bionova Group is aware of or
involved with any representational campaign or other organizing activities by
any union or other organization or group seeking to become the collective
bargaining representative of any of its employees; (v) no member of the
Bionova Group is obligated to bargain collectively with respect to wages,
hours, and other terms and conditions of employment with any recognized or
certified labor organization, collective bargaining representative, or group
of employees; and (vi) no member of the Bionova Group is aware of any strikes,
work stoppages, work slowdowns, or lockouts or any threats thereof by or with
respect to any of its employees, and since December 31, 1993, there have been
no labor disputes, strikes, work stoppages, work slowdowns, lockouts, or
similar matters involving any such employees.

(b) The Bionova Group is in compliance with all Applicable Laws pertaining
to employment and employment practices and wages, hours, and other terms and
conditions of employment in respect of their respective employees, except for
noncompliance with such Applicable Laws which does not and will not have a
Bionova Group Material Adverse Effect, and has no accrued liability for any
arrears of wages or any Taxes or penalties for failure to comply with any
thereof. The Bionova Group is not engaged in any unfair labor practices or
unlawful employment practices. There is no pending or, to the best knowledge
of Bionova U.S., threatened Proceeding against or involving the Bionova Group
by or before, and no member of the Bionova Group is subject to any judgment,
order, writ, injunction, or decree of or inquiry from, the National Labor
Relations Board, the Equal Employment Opportunity Commission, the Department
of Labor, the Immigration and Naturalization Service or any other Governmental
Entity in connection with any current, former, or prospective employee of the
Bionova Group.

(c) No service agreement entered into by any of the companies collectively
identified as the Bionova Group with any third party service company will
cause the Bionova Group member receiving such services to be deemed the
employer of such service company's employees.

5.19 Employees. Set forth on Schedule 5.19 is a list of:

(a) all directors and officers of the Bionova Group, and

(b) the name, social security number, and dates of employment by the
Bionova Group of each employee, and consultant of the Bionova Group, whose
annual rate of cash compensation in the 1995 fiscal year will equal or
exceed $50,000, together with the total amounts of salary, bonuses, and
other cash compensation paid or payable by the Bionova Group to each such
person for such fiscal year. Except as set forth in Schedule 5.19, the
Bionova Group has not materially altered any such compensation arrangement
since the end of the 1995 fiscal year, and the Bionova Group does not have
any material non-cash compensation arrangements in favor of its employees.

Except as disclosed on Schedule 5.19, no severance payment, stay-on or
incentive payment, or similar obligation will be owed by the Bionova Group to
any of their respective directors, officers, or employees upon consummation
of, or as a result of, the transactions contemplated by this Agreement, nor
will any such director,

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officer, or employee be entitled to an increase in severance payments or other
benefits as a result of the transactions contemplated by this Agreement in the
event of the subsequent termination of his or her employment.

5.20 Insurance. Listed on Schedule 5.20 are the policies of insurance
maintained by the Bionova Group with respect to their respective assets and
operations. All premiums due and payable with respect to such policies have
been timely paid. No notice of cancellation of, or indication of an intention
not to renew, any such policy has been received by the Bionova Group. During
the past three years, no application by the Bionova Group for insurance with
respect to its assets or operations has been denied for any reason.

5.21 Insider Interests. Except as disclosed on Schedule 5.21, no
shareholder, director, officer, or employee of the Bionova Group or any
associate of any such shareholder, director, officer, or employee is
presently, directly or indirectly, a party to any material transaction
pertaining to Bionova U.S. or the Bionova Group, including, without
limitation, any agreement, arrangement, or understanding, written or oral,
providing for the employment of, furnishing of services by, rental of real or
personal property from, or otherwise requiring payments to any such
shareholder, director, officer, employee, or associate. To the best knowledge
of Bionova U.S., no shareholder, director, officer, or employee of the Bionova
Group or any associate of any such shareholder, director, officer, or employee
owns, directly or indirectly, any material interest in, or serves as a
director, officer, or employee of, any customer, supplier, or competitor of
Bionova U.S. or the Bionova Group. For purposes of this Section only, an
"associate" of any shareholder, director, officer, or employee means (i) a
spouse, parent, sibling, child, mother- or father-in-law, son- or daughter-in-
law, or brother- or sister-in-law of such shareholder, director, officer, or
employee or (ii) any corporation, partnership, trust, or other entity in which
such shareholder, director, officer, or employee or associate thereof has a
substantial ownership or beneficial interest (other than an interest in a
public corporation which does not exceed three percent of its outstanding
securities) or is a director, officer, partner, or trustee or person holding a
similar position.

5.22 Disclosure. No representation or warranty made by Parent, Bionova
Mexico, Bionova U.S., or Sub in this Agreement, and no statement of Parent,
Bionova Mexico, Bionova U.S., or Sub contained in any document, certificate,
or other writing furnished or to be furnished by Parent, Bionova Mexico,
Bionova U.S., or Sub pursuant hereto or in connection herewith, contains or
will contain, at the time of delivery, any untrue statement of a material fact
or omits, or will omit, at the time of delivery, to state any material fact
necessary in order to make the statements contained therein, in the light of
the circumstances under which they are made, not misleading.

5.23 Disclosure Documents. None of the information relating to Parent,
Bionova Mexico, Bionova U.S., Sub, the Bionova Group, this Agreement, or the
transactions contemplated by this Agreement which has been or is to be
supplied by Parent, Bionova Mexico, Bionova U.S. or the Bionova Group for
inclusion in (a) the Registration Statement, (b) the Proxy Statement, and (c)
any other documents to be filed with any regulatory authority by the Company,
Parent or their respective subsidiaries in connection with the transactions
contemplated by this Agreement, at the respective time such document is filed,
becomes effective, or is first mailed to stockholders, or at the Effective
Time, as the case may be, will be false or misleading with respect to any
material fact, or will omit to state any material fact necessary in order to
make the statements therein not misleading, or, in the case of the Proxy
Statement, at the time of the Special Meeting, will be false or misleading
with respect to any material fact, or will omit to state any material fact
necessary in order to make the statements therein not misleading or necessary
to correct any statement in any earlier communication with respect to the
solicitation of any proxy for the Special Meeting. All documents required to
be filed by Parent, Bionova Mexico, Bionova U.S., or the Bionova Group in
connection with the Merger will comply as to form in all material respects
with the applicable requirements of the statutes, rules, and regulations
pursuant to which they are filed. No representations are made in this Section
with respect to any information included or incorporated by reference in the
Registration Statement, the Proxy Statement, or any other document referred to
in clause (c) of the first sentence of this Section which relates to the
Company or its subsidiaries.

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5.24 Representations and Warranties on Closing Date. The representations and
warranties made in Article IV and this Article V will be true and correct on
and as of the Closing Date with the same force and effect as if such
representations and warranties had been made on and as of the Closing Date,
except that any such representations and warranties which expressly relate
only to an earlier date shall be true and correct on the Closing Date as of
such earlier date.

5.25 Confidentiality Matters. Each member of the Bionova Group have taken
reasonable measures to maintain the confidentiality of any secret,
confidential or proprietary information relating to the Bionova Group or its
business.

5.26 Offerings of Securities. All securities which have been offered or sold
by any member of the Bionova Group have been registered pursuant to Applicable
Laws or were offered and sold pursuant to valid exemptions therefrom. No
registration statement, prospectus, private offering memorandum, or other
information furnished (whether in writing or orally) to any offeree or
purchaser of such securities, at the time such registration statement became
effective (in the case of a registered offering) or at the time of delivery of
such registration statement, prospectus, private offering memorandum, or other
information, contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in order to
make the statements contained therein, in light of the circumstances under
which they were made, not misleading. To the extent that any such securities
were registered under the Securities Act or Mexican securities law, the
applicable registration statements and prospectuses filed with the Securities
and Exchange Commission pursuant to the Securities Act or Mexican securities
law, at the time each such registration statement became effective, and at all
times when delivery of a prospectus was required pursuant to the Securities
Act or Mexican securities law, complied in all material respects with the
requirements of the Securities Act and the rules and regulations thereunder or
Mexican securities law, as the case may be.

5.27 Customers and Suppliers. To Bionova Mexico's and Bionova U.S.'s
knowledge, none of the ten largest customers and none of the ten largest
suppliers of the Bionova Group taken as a whole for the most recent fiscal
year has materially reduced or terminated, or intends to materially reduce or
terminate its business with the Bionova Group.

5.28 No Prior Activities. Neither Bionova U.S. nor Sub has (i) incurred, nor
will it incur prior to and including the Closing Date, directly or indirectly,
any liabilities or obligations, (ii) engaged in any business activity or
transaction, or (iii) entered into any agreement or arrangement with any
person or entity, except in connection with its organization, negotiation,
execution and performance of this Agreement and the Ancillary Documents and
the consummation of the transactions contemplated hereby and thereby.

5.29 Holding Company. Except as set forth in Schedule 5.29, Bionova Mexico
has no material assets other than its direct ownership of shares of stock of
IPHC and ABSA and its indirect ownership of shares of each other member of the
Bionova Group. Except as set forth on Schedule 5.29, IPHC has no material
assets other than its direct and indirect ownership interests in its
subsidiaries.

5.30 Arm's Length Contracts. Except as disclosed on Schedule 5.30, each
contract or other agreement material to the business or the financial
condition of the Bionova Group is a commercially reasonable, arm's length
contract. Except as disclosed on Schedule 5.30, no stockholder, director or
officer of any member of the Bionova Group possesses, directly or indirectly,
any financial interest in, or is a director, officer or employee of, any
corporation, firm, association or business organization which is a client,
supplier, customer, lessor, lessee, or competitor or potential competitor of
any member of the Bionova Group. Except as referenced on Schedule 5.30, none
of the items disclosed thereon is reasonably anticipated to have a Bionova
Group Material Adverse Effect.

5.31 Real Property.

(a) Set forth on Schedule 5.31 is a list, by street address, of all material
real property owned or leased by the Bionova Group (for purposes of this
Section, the "Real Property"), a list of all material Encumbrances to

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which the Real Property is subject, and a summary description of the principal
facilities and structures (if any) located thereon. There are no persons
(other than the Bionova Group) in possession of any material portion of the
Real Property. There exists no Proceeding or court order, or building code
provision, deed restriction, or restrictive covenant (recorded or otherwise),
or other private or public limitation, which might in any way materially
impede or materially adversely affect the continued use of the Real Property
by the Bionova Group in the manner it is currently used.

(b) All material buildings, improvements, and fixtures situated on the Real
Property conform in all material respects to all Applicable Laws. All the Real
Property is zoned for the various purposes for which such Real Property is
being materially used, and there exists no pending or, to the best knowledge
of Bionova U.S., threatened Proceeding which might materially adversely affect
the validity of such zoning.

(c) Neither the whole nor any material part of the Real Property is subject
to any pending Proceeding for condemnation or other taking by any Governmental
Entity, and, to the best knowledge of Bionova U.S., no such condemnation or
other taking is contemplated or threatened.

5.32 Leased Property. Set forth on Schedule 5.32 is a list and summary
description of the material terms of all leases under which the Bionova Group
is the lessee of material real or personal property. The Bionova Group has
good and valid leasehold interests in all material properties held by it under
lease. The lessee under each such lease is not in breach of or in default
under such lease.

5.33 Receivables. All receivables (including accounts and notes receivable,
employee advances, and accrued interest receivables) of the Bionova Group as
reflected in the Bionova Group Financial Statements or arising since the date
thereof are, to the best of the knowledge of Parent, Bionova Mexico, Bionova
U.S. or Sub, valid obligations of the respective makers thereof, have arisen
in the ordinary course of business for goods or services delivered or
rendered, are not subject to any valid defenses, counterclaims, or set offs,
and have been collected or are, to the best of the knowledge of Parent,
Bionova Mexico, Bionova U.S. or Sub, collectible in full at their recorded
amounts in the ordinary course of business, net of doubtful accounts reserved
for in such financial statements.

5.34 Bionova U.S. Common Stock. The shares of Bionova U.S. Common Stock to
be issued pursuant to the Merger shall be duly authorized and, when issued in
accordance with the terms of this Agreement, shall be validly issued, fully
paid, nonassessable, free from preemptive rights, registered under United
States federal securities laws, qualified (or exempt from qualification) under
applicable state securities laws, and listed for trading on the NASDAQ NMS.

5.35 Capital Contribution. None of the transactions contemplated by Section
1.11 will, upon consummation thereof, result in a Bionova Group Material
Adverse Effect.

5.36 Inventory. To the best of the knowledge of Parent, Bionova Mexico,
Bionova U.S. and Sub, all inventory reflected in the Bionova Group Financial
Statements was, as of September 30, 1995, in good condition and was
merchantable for sale in the Bionova Group's ordinary course of business.

ARTICLE VI

CONDUCT OF PARTIES PENDING CLOSING

6.1 Conduct and Preservation of Business. Except as expressly provided in
this Agreement, during the period from the date hereof to the Closing, the
Company and the Company Subsidiaries, on the one hand, and Bionova U.S., Sub
and the Bionova Group, on the other hand, (i) shall each conduct its
operations according to its ordinary course of business consistent with past
practice and in compliance in all material respects with all Applicable Laws;
(ii) shall each use its reasonable best efforts to preserve, maintain, and
protect its properties; and (iii) shall each use its reasonable best efforts
to preserve intact its business organization, to keep available

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the services of its officers and employees, and to maintain existing
relationships with licensors, licensees, suppliers, contractors, distributors,
customers, and others having business relationships with it, provided,
however, that no person shall be required to make any payments or enter into
or amend any contractual agreements, arrangements, or understandings to
satisfy the foregoing obligation unless such payment or other action is
required or consistent with past practice.

6.2 Restrictions on Certain Actions. Without limiting the generality of the
foregoing, and except as otherwise expressly provided in this Agreement, prior
to the Closing, neither the Company nor the Company Subsidiaries, on the one
hand, nor Bionova Mexico, Bionova U.S., Sub or the Bionova Group, on the other
hand, shall, without the prior written consent of Bionova U.S. in the case of
the Company and the Company Subsidiaries, and the Company in the case of
Bionova Mexico, Bionova U.S., Sub and the Bionova Group, take any of the
following actions, except the actions set forth on Schedule 6.2A (in the case
of the Company and the Company Subsidiaries) and Schedule 6.2B (in the case of
Bionova Mexico, Bionova U.S., Sub or the Bionova Group), which are actions for
which each party hereto hereby gives its consent:

(a) amend its charter or bylaws or other governing instruments in effect
on the date of this Agreement;

(b) (i) issue, sell, or deliver (whether through the issuance or granting
of options, warrants, commitments, subscriptions, rights to purchase, or
otherwise) any shares of its capital stock of any class or any other
securities or equity equivalents; or (ii) amend in any respect any of the
terms of any such securities outstanding as of the date hereof;

(c) (i) split, combine, or reclassify any shares of its capital stock;
(ii) declare, set aside, or pay any dividend or other distribution (whether
in cash, stock, or property or any combination thereof) in respect of its
capital stock; (iii) repurchase, redeem, or otherwise acquire any of its
securities or any securities of any Subsidiary except pursuant to
contractual arrangements in effect on the date hereof which have been
disclosed to Bionova U.S.; or (iv) adopt a plan of complete or partial
liquidation or resolutions providing for or authorizing a liquidation,
dissolution, merger, consolidation, restructuring, recapitalization, or
other reorganization;

(d) (i) create, incur, guarantee, or assume any indebtedness for borrowed
money or otherwise become liable or responsible for the obligations of any
other person except for obligations of majority owned subsidiaries; (ii)
make any loans, advances, or capital contributions to, or investments in,
any other person (other than to majority owned subsidiaries and customary
loans or advances to employees in amounts not material to the maker of such
loan or advance); (iii) pledge or otherwise encumber shares of capital
stock; or (iv) mortgage or pledge any of its material assets, tangible or
intangible, or create or suffer to exist any material lien thereupon;

(e) (i) enter into, adopt, or (except as may be required by law) amend or
terminate any bonus, profit sharing, compensation, severance, termination,
stock option, stock appreciation right, restricted stock, performance unit,
stock equivalent, stock purchase, pension, retirement, deferred
compensation, employment, severance, or other employee benefit agreement,
trust, plan, fund, or other arrangement for the benefit or welfare of any
director, officer, or employee; (ii) increase in any manner the
compensation or fringe benefits of any director, officer, or employee; or
(iii) pay to any director, officer, or employee any benefit not required by
any employee benefit agreement, trust, plan, fund, or other arrangement as
in effect on the date hereof;

(f) acquire, sell, lease, transfer, or otherwise dispose of, directly or
indirectly, any assets outside the ordinary course of business consistent
with past practice or any amount of assets that in the aggregate is
material to its business;

(g) acquire (by merger, consolidation, or acquisition of stock or assets
or otherwise) any corporation, partnership, or other business organization
or division thereof;

(h) make any capital expenditure or expenditures which in the aggregate
are in excess of $1,000,000;

(i) amend any Tax Return or make any Tax election or settle or compromise
any material federal, state, local, or foreign Tax controversy;

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(j) pay, discharge, or satisfy any claims, liabilities, or obligations
(whether accrued, absolute, contingent, unliquidated, or otherwise, and
whether asserted or unasserted), other than the payment, discharge, or
satisfaction in the ordinary course of business consistent with past
practice, or in accordance with their terms, of liabilities reflected or
reserved against in its financial statements or incurred since September
30, 1995 in the ordinary course of business consistent with past practice;

(k) enter into any lease, contract, agreement, commitment, arrangement,
or transaction outside the ordinary course of business consistent with past
practice;

(l) amend, modify, or change in any material respect any existing lease,
contract, or agreement, other than in the ordinary course of business
consistent with past practice;

(m) waive, release, grant, or transfer any rights of value, other than in
the ordinary course of business consistent with past practice;

(n) change any of its banking or safe deposit arrangements;

(o) change any of the accounting principles or practices used by it;

(p) take any action which would or likely might make any of its
representations or warranties contained in this Agreement untrue or
inaccurate as of any time from the date of this Agreement to the Closing or
would or might likely result in any of the conditions set forth in this
Agreement not being satisfied;

(q) except as specifically permitted under the Sole Patent License,
separately license, sell or otherwise dispose of any patents, technology,
intellectual property or similar items to any third parties; or

(r) authorize or propose, or agree in writing or otherwise to take, any
of the actions described in this Section.

ARTICLE VII

ADDITIONAL AGREEMENTS

7.1 Access to Information; Confidentiality.

(a) Between the date hereof and the Closing, the Company (i) shall give each
of Parent, Bionova Mexico, Bionova U.S. and Sub and their authorized
representatives reasonable access to all employees, all plants, offices,
warehouses, and other facilities, and all books and records, including work
papers and other materials prepared by the Company's independent public
accountants, of the Company and the Company Subsidiaries, (ii) shall permit
each of Parent, Bionova Mexico, Bionova U.S. and Sub and their authorized
representatives to make such inspections as they may reasonably require, and
(iii) shall cause the Company's officers and those of the Company Subsidiaries
to furnish each of Parent, Bionova Mexico, Bionova U.S. and Sub and their
authorized representatives with such financial and operating data and other
information with respect to the Company and the Company Subsidiaries as they
may from time to time reasonably request; provided, however, that no
investigation pursuant to this Section shall affect any representation or
warranty of the Company contained in this Agreement or in any agreement,
instrument, or document delivered pursuant hereto or in connection herewith;
and provided further that the Company shall have the right to have a
representative present at all times of any such inspections, interviews, and
examinations conducted at or on the offices or other facilities or properties
of the Company or its affiliates or representatives. Each of Parent, Bionova
Mexico, Bionova U.S. and Sub and their authorized representatives shall hold
in confidence all such information on the terms and subject to the conditions
contained in the Confidentiality Agreement dated July 12, 1995, between the
Company and Bionova U.S., as amended and supplemented (the "Confidentiality
Agreement").

(b) Between the date hereof and the Closing, Parent, Bionova Mexico, Bionova
U.S., Sub and the Bionova Group (i) shall give the Company and its authorized
representatives reasonable access to all employees, all plants, offices,
warehouses, and other facilities, and all books and records, including work
papers and other materials prepared by Bionova Mexico, Bionova U.S., Sub and
the Bionova Group's independent public accountants, (ii) shall permit the
Company and its authorized representatives to make such inspections as they

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may reasonably require, and (iii) shall cause Bionova Mexico, Bionova U.S.,
Sub and the Bionova Group's officers to furnish the Company and its authorized
representatives with such financial and operating data and other information
with respect to Bionova Mexico, Bionova U.S., Sub and the Bionova Group as the
Company may from time to time reasonably request; provided, however, that no
investigation pursuant to this Section shall affect any representation or
warranty of Parent, Bionova Mexico, Bionova U.S. or Sub contained in this
Agreement or in any agreement, instrument, or document delivered pursuant
hereto or in connection herewith; and provided further that Parent, Bionova
Mexico, Bionova U.S. or Sub shall have the right to have a representative
present at all times of any such inspections, interviews, and examinations
conducted at or on the offices or other facilities or properties of Bionova
Mexico, Bionova U.S., Sub or the Bionova Group or its affiliates or
representatives. The Company and its authorized representatives shall hold in
confidence all such information on the terms and subject to the conditions
contained in the Confidentiality Agreement.

7.2 Acquisition Proposals.

(a) Except as provided in Section 7.2(b), none of the Company or any
affiliate, director, officer, employee, or representative of the Company shall
(i) directly or indirectly, solicit or initiate discussions or negotiations
with any person (other than Parent) concerning any merger, consolidation, sale
of assets, tender offer, sale of shares of capital stock, or similar
transaction involving the Company or any Subsidiary, the securities of the
Company, or any significant assets of the Company or any Subsidiary (each an
"Acquisition Proposal"), or (ii) disclose directly or indirectly to any person
preparing to make an Acquisition Proposal any confidential information
regarding the Company or any Subsidiary, or (iii) enter into any agreement,
arrangement, understanding, or commitment regarding any Acquisition Proposal.
Notwithstanding the immediately preceding sentence, the Board of Directors,
officers, employees and representatives of the Company may (a) take the
actions described in clauses (ii) and (iii) of the immediately preceding
sentence in response to solicitations and transactions which may, in the
reasonable judgement of the Board of Directors of the Company, ultimately
result, directly or indirectly, in ultimate consideration or value more
favorable to the stockholders of the Company than the consideration payable
under (or value represented by) this Agreement, and (b) under the
circumstances described in clause (a) above, provide confidential information
to a potential purchaser upon the prior written request of such purchaser who
the Board of Directors of the Company reasonably believes is qualified and is
credit worthy. Any disclosure made under this Section 7.2 shall be made
subject to an appropriate confidentiality agreement, and shall be made only if
the request for such disclosure did not arise as a result of any solicitation
for expression of interest made in violation of this Section by the Company or
its affiliates, directors, officers, employees, or representatives. The
Company shall notify Bionova U.S. promptly if it discloses any confidential
information to a potential purchaser as provided in this Section. The Company
shall also notify Bionova U.S. promptly of the receipt of any Acquisition
Proposal after the date of this Agreement. The Company shall also notify
Bionova U.S. promptly of its determination to accept any Acquisition Proposal.

(b) Notwithstanding the provisions of Section 7.2(a), the Company shall be
permitted, subject to the provisions of Section 7.7, within ten days of the
date of this Agreement to issue a press release announcing the Merger and its
material terms and stating that the Company's management and financial
advisors would be available to receive inquiries from any other parties
interested in the possible acquisition of the Company and, as appropriate, to
provide information and enter into discussions and negotiations with such
parties in connection with such indicated interest.

7.3 Special Meeting; Proxy Statement. The Company shall take all action
necessary in accordance with State Law and the Company's Certificate of
Incorporation and Bylaws to duly call, give notice of, convene, and hold a
special meeting of its stockholders (the "Special Meeting") as promptly as
practicable after the date hereof to consider and vote upon the adoption and
approval of this Agreement and the Merger. The Board of Directors of the
Company shall, subject to its fiduciary obligations to the Company's
stockholders under Applicable Law as advised by counsel, (i) recommend to the
stockholders of the Company that they vote in favor of the adoption and
approval of this Agreement and the Merger, (ii) use its reasonable best
efforts to solicit from the stockholders of the Company proxies in favor of
such adoption and approval, and (iii) take all other action reasonably
necessary to secure a vote of the stockholders of the Company in favor of such
adoption and approval.

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7.4 Proxy Statement/Registration Statement. As promptly as practicable after
the date hereof, the Company shall prepare and file, or cause to be prepared
and filed, with the assistance and consent of Bionova U.S., a proxy statement
with the SEC under the Exchange Act. The term "Proxy Statement," as used
herein means such proxy statement and all amendments and supplements thereto,
if any. The Company shall use all reasonable best efforts to have the proxy
statement cleared with the SEC as promptly as practicable after the filing
thereof. As promptly as practicable after the date hereof, Bionova U.S., with
the assistance and consent of the Company, shall prepare and file with the
Securities and Exchange Commission a registration statement on an appropriate
form (which will contain a prospectus to be used by the Company as the Proxy
Statement) for the purpose of registering under the Securities Act the
offering, sale, and delivery of the Bionova U.S. Common Stock to be issued to
the stockholders of the Company pursuant to the Merger. The term "Registration
Statement", as used herein, means such registration statement and all
amendments and supplements thereto, if any. Bionova U.S. shall use all
reasonable best efforts to have the Registration Statement declared effective
under the Securities Act as promptly as practicable after the filing thereof.
Bionova U.S. or the Company, as the case may be, shall notify the other
promptly of the receipt of any comments on, or any requests for amendments or
supplements to, the Proxy Statement or the Registration Statement by the
Securities and Exchange Commission, and each shall supply the other with
copies of all correspondence between it and its representatives, on the one
hand, and the Securities and Exchange Commission or members of its staff, on
the other, with respect to the Proxy Statement or the Registration Statement.
Bionova U.S. or the Company, as the case may be, after consultation with and
the consent of the other, shall use its reasonable best efforts to respond
promptly to any comments made by the Securities and Exchange Commission with
respect to the Proxy Statement or the Registration Statement. The Company
shall obtain the approval of Bionova U.S. and Bionova U.S. shall obtain the
approval of the Company, before making any filings with the Securities and
Exchange Commission pertaining to the Proxy Statement or the Registration
Statement or any matter pertaining to this Agreement.

Parent, Bionova U.S., Sub, and the Company each agrees promptly to correct
any information provided by it for use in the Proxy Statement or the
Registration Statement if and to the extent that such information shall have
become false or misleading in any material respect, and Bionova U.S. further
agrees to take all steps necessary to cause the Proxy Statement or the
Registration Statement (or the prospectus contained therein) as so corrected
to be filed with the Securities and Exchange Commission and to be disseminated
promptly to holders of shares of Company Stock, in each case as and to the
extent required by Applicable Law. Bionova U.S. shall also take any action
reasonably required to be taken under any applicable state securities laws in
connection with the issuance of Bionova U.S. Common Stock pursuant to the
Merger, and the Company shall furnish all information concerning the Company
and its stockholders as may be reasonably requested in connection with any
such action.

Bionova U.S. shall prepare and file with the SEC a registration statement on
Form 8-A registering the Bionova U.S. Common Stock as a class of "equity
securities" under the Exchange Act prior to effectiveness of the Registration
Statement.

7.5 Reasonable Best Efforts. Each party hereto agrees that it will not
voluntarily undertake any course of action inconsistent with the provisions or
intent of this Agreement and will use its reasonable best efforts to take, or
cause to be taken, all action and to do, or cause to be done, all things
reasonably necessary, proper, or advisable under Applicable Laws to consummate
the transactions contemplated by this Agreement, including, without
limitation, (i) cooperation in the preparation and filing of the Registration
Statement; (ii) reasonable best efforts to have the Registration Statement
cleared and declared effective by the Securities and Exchange Commission as
promptly as practicable after filing; (iii) cooperation in determining whether
any consents, approvals, orders, authorizations, waivers, declarations,
filings, or registrations of or with any Governmental Entity or third party
are required in connection with the consummation of the transactions
contemplated hereby; (iv) reasonable best efforts to obtain any such consents,
approvals, orders, authorizations, and waivers and to effect any such
declarations, filings, and registrations; (v) reasonable best efforts to cause
to be lifted or rescinded any injunction or restraining order or other order
adversely affecting the ability of the parties to consummate the transactions
contemplated hereby; (vi) reasonable best efforts to defend, and cooperation
in defending, all

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lawsuits or other legal proceedings challenging this Agreement or the
consummation of the transactions contemplated hereby; and (vii) the execution
of any additional instruments necessary to consummate the transactions
contemplated hereby.

7.6 HSR Act Notification. To the extent required by the HSR Act, each of the
parties hereto shall (i) file or cause to be filed, as promptly as practicable
after the execution and delivery of this Agreement, with the Federal Trade
Commission and the United States Department of Justice, all reports and other
documents required to be filed by such party under the HSR Act concerning the
transactions contemplated hereby and (ii) promptly comply with or cause to be
complied with any requests by the Federal Trade Commission or the United
States Department of Justice for additional information concerning such
transactions, in each case so that the waiting period applicable to this
Agreement and the transactions contemplated hereby under the HSR Act shall
expire as soon as practicable after the execution and delivery of this
Agreement. Prior to making any filing under the HSR Act, each party will
obtain the consent of the other party to the content of such filing, which
consent shall not be unreasonably withheld. Each party hereto agrees to
request, and to cooperate with the other party or parties in requesting, early
termination of any applicable waiting period under the HSR Act. The filing
fees and other costs of compliance with the HSR Act (other than each party's
attorneys' and accountant's fees and other third party expenses) shall be
borne equally by Bionova U.S. and the Company.

7.7 Public Announcements. Except as may be required by Applicable Law or the
National Association of Securities Dealers, Inc., neither Parent, Bionova U.S.
or any member of the Bionova Group, on the one hand, nor the Company or the
Company Subsidiaries, on the other, shall issue any press release or otherwise
make any public statement with respect to this Agreement or the transactions
contemplated hereby without the prior written consent of the other party
(which consent shall not be unreasonably withheld or delayed). Any such press
release or public statement required by Applicable Law or by the National
Association of Securities Dealers, Inc. shall only be made after reasonable
notice to the other party.

7.8 Delivery and Amendment of Schedules. Each of Bionova U.S. and the
Company shall deliver all Schedules relating to the representations and
warranties of such party contained in this Agreement to the other party
simultaneously with the execution of this Agreement, except that (i) the
following schedules may be delivered up to thirty days after the date this
Agreement is signed: Schedules 7.8A, 7.8B, 7.8C, 9.5 and 10.4; and (ii)
Schedules 7.9A and 7.9B may be delivered on February 28, 1996. Any date on
which a party delivers any such Schedule is referred to as a "Schedule
Delivery Date" for such party. Each party hereto agrees that, with respect to
the representations and warranties of such party contained in this Agreement,
such party shall have the continuing obligation until the Closing to
supplement or amend promptly the Schedules hereto with respect to any matter
hereafter arising or discovered which, if existing or known on a Schedule
Delivery Date, would have been required to be set forth or described in the
Schedules, including, without limitation, any material development with
respect to any pending on threatened litigation or governmental proceeding
previously disclosed in the Schedules. For all purposes of this Agreement,
including without limitation for purposes of determining whether the
conditions set forth in Sections 9.1 and 10.1 have been fulfilled, the
Schedules hereto shall be deemed to include only that information contained
therein on a Schedule Delivery Date and shall be deemed to exclude all
information contained in any supplement or amendment thereto; provided,
however, that if the Closing shall occur, then all matters disclosed pursuant
to any such supplement or amendment at or prior to the Closing shall be waived
and no party shall be entitled to make a claim thereon pursuant to the terms
of this Agreement. In addition to those schedules specifically referenced in
any other section of this Agreement, each of the parties hereto shall be
entitled to deliver to the other as provided in clause (i) above an omnibus
disclosure schedule through which they shall be entitled to supplement any of
the representations and warranties set forth in Articles III, IV and V hereof.
Any such omnibus disclosure schedule shall be delivered as Schedule 7.8A in
the case of the Company and Schedule 7.8B in the case of Parent, Bionova
Mexico, Bionova U.S. or Sub. Any documents referred to in either such Schedule
shall be delivered to the other party by the disclosing party simultaneously
with the delivery of Schedule 7.8A or 7.8B, as the case may be. Schedule 7.8C
referred to above shall consist of documents referenced in the Schedules to
the representations set forth in Articles IV and V together with certain other
documents requested by the Company in a written document request to Bionova

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U.S. from the Company (or its counsel) dated January 25, 1996. The failure to
timely deliver any schedule required to be delivered after the date hereof
shall be deemed a material breach for all purposes hereof.

7.9 Delivery of 1995 Audited Financial Statements.

(a) On or before February 28, 1996, Bionova U.S. shall deliver to the
Company copies of the Bionova Group's audited consolidated balance sheet as of
December 31, 1995, and the related consolidated statements of income,
stockholders' equity, and cash flows for the year then ended, and the notes
and schedules thereto, prepared in accordance with United States generally
accepted accounting principles, which financial statements shall be delivered
as Schedule 7.9A hereto. Such financial statements shall be accompanied by the
audit report of a nationally recognized "Big Six" accounting firm.

(b) On or before February 28, 1996, the Company shall deliver to Bionova
U.S. copies of the Company's audited consolidated balance sheet as of December
31, 1995, and the related consolidated statements of income, stockholders'
equity, and cash flows for the year then ended, and the notes and schedules
thereto, prepared in accordance with United States generally accepted
accounting principles, which financial statements shall be delivered as
Schedule 7.9B hereto. Such financial statements shall be accompanied by the
audit report of a nationally recognized "Big Six" accounting firm.

7.10 Notice of Litigation. Until the Closing, (i) Parent, Bionova Mexico,
Bionova U.S., and Sub upon learning of the same, shall promptly notify the
Company of any Proceeding which is commenced or threatened against Parent
(pertaining solely to the transactions contemplated by this Agreement),
Bionova Mexico, Bionova U.S., or the Bionova Group and (ii) the Company, upon
learning of the same, shall promptly notify Bionova U.S. of any Proceeding
which is commenced or threatened against the Company or a Company Subsidiary.

7.11 Notification of Certain Matters. The Company shall give prompt notice
to Bionova U.S. of the occurrence or nonoccurrence of any event the occurrence
or nonoccurrence of which would be likely to cause any representation or
warranty contained in Article III to be untrue or inaccurate in any material
respect at or prior to the Closing. Parent, Bionova Mexico, Bionova U.S. and
Sub shall give prompt notice to the Company of the occurrence or nonoccurrence
of any event the occurrence or nonoccurrence of which would be likely to cause
any representation or warranty contained in Article IV or Article V to be
untrue or inaccurate in any material respect at or prior to the Closing. The
delivery of any notice pursuant to this Section shall not be deemed to
(i) modify the representations or warranties hereunder of the party delivering
such notice, (ii) modify the conditions set forth in Articles IX and X, or
(iii) limit or otherwise affect the remedies available hereunder to the party
receiving such notice.

7.12 Bionova U.S. Standstill. Prior to the earlier of the Closing or the
termination of this Agreement, none of Parent, Bionova Mexico, the Bionova
Group, or any affiliate, director, officer, employee, or representative of
Parent, Bionova Mexico or the Bionova Group shall (i) directly or indirectly,
solicit, initiate, or conduct discussions or negotiations with any person
(other than the Company) concerning any merger, consolidation, sale of assets,
tender offer, sale of shares of capital stock, or similar transaction
involving Bionova Mexico or the Bionova Group, the securities of the Bionova
Group, or any significant assets of Bionova Mexico or the Bionova Group which
would result in a change in control of Bionova Mexico or the Bionova Group
other than as contemplated by this Agreement (each a "Bionova Acquisition
Proposal"), or (ii) disclose directly or indirectly to any person preparing to
make a Bionova Acquisition Proposal any confidential information regarding the
Bionova Group, or (iii) enter into any agreement, arrangement, understanding,
or commitment regarding any Bionova Acquisition Proposal. Notwithstanding the
immediately preceding sentence, the Boards of Directors of Parent, Bionova
Mexico, Bionova U.S., Sub and the Bionova Group may take any of the actions
described in the preceding sentence where they have been advised by legal
counsel that taking such actions is advisable in order to fulfill their
fiduciary duties. Bionova U.S. shall notify the Company promptly of any
Bionova Acquisition Proposal that is received after the date of this Agreement
and which a related party desires to accept and shall inform the Company if
the Board of Directors of any such party has been advised by counsel to
consider such

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Bionova Acquisition Proposal in order to fulfill the directors' fiduciary
duties and shall provide to the Company such information regarding the Bionova
Acquisition Proposal as the Company may reasonably request.

7.13 Indemnification and Insurance. To the full extent permitted by
Applicable Law, and subject to the limitations contained in Applicable Law,
all rights to indemnification now existing in favor of the directors of the
Company as provided in its Certificate of Incorporation or Bylaws in effect on
the date of this Agreement shall survive the Merger and shall continue in full
force and effect for such period as shall be permitted by Applicable Law and
shall be deemed to cover and constitute indemnification obligations of the
Surviving Corporation with respect to acts or omissions by such directors
through and including the Effective Time of the Merger (but not thereafter).
The Surviving Corporation shall cause to be maintained for a period of three
years from the Effective Time of the Merger for the benefit of such directors,
policies of directors' and officers' liability insurance providing coverage no
less favorable than the policies currently maintained by the Company with
respect to matters occurring through and including the Effective Time of the
Merger (but not thereafter) and with aggregate limits equal to not less than
three times the aggregate limits of such currently maintained policies. During
such three year period, Bionova U.S. will fund any "deductible" amount
specified in any such policies in the event that a claim is asserted which
implicates such policies and then only to the extent that the Surviving
Corporation is permitted to do so under such policies and Applicable Law but
is unable to do so because of its financial condition. In the event that
Bionova U.S. or the Surviving Corporation or any of its successors and assigns
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger
or transfers and conveys all or substantially all of its property and assets
to any person, then, and in each case, proper provisions shall be made so that
the successor and assigns of Bionova U.S. or the Surviving Corporation, as the
case may be, assume the obligations set forth in this Section 7.13.

The provisions of this Section 7.13 are intended to be for the benefit of,
and shall be enforceable by, each aforementioned indemnified party, his heirs
and representatives, and may not be amended, altered or repealed without the
written consent of any such indemnified party.

7.14 Limited Guaranty of Parent. For a period of three years from the
Effective Time of the Merger, Parent covenants to provide when requested by
Bionova U.S. a guarantee in a form reasonably acceptable to the applicable
financial institution of Bionova U.S.'s obligations to such financial
institution pursuant to a loan or line of credit (a "Loan") if and only if (i)
Parent's maximum exposure under the guaranty is limited to $20 million, and
(ii) the documents evidencing the Loan provide that the amounts loaned to
Bionova U.S. from time to time will not exceed the sum of 80% of its and its
consolidated subsidiaries' accounts receivable from time to time plus 50% of
its and its consolidated subsidiaries' inventory from time to time and will be
secured by both such accounts and inventory.

7.15 Governing Documents. Prior to the Closing, Parent shall (i) cause the
governing documents of each of ABSA, Interfruver S.A. de C.V., Asesoria y
Servicios del Noreste, S.A. de C.V., Excelencia en Frutas y Verduras, S.A. de
C.V., Premier del Pacifico, S.A. de C.V. and Comercializadora Premier S.A. de
C.V. to be amended to permit the foreign ownership of such entities capital
stock to the maximum extent permitted by Mexican law, and (ii) cause the
governing documents of ABSA to be amended to reduce the quorum required to
conduct ordinary meetings of the equity owners to a simple majority of the
outstanding capital stock of ABSA and to provide that a concurring vote of a
simple majority of the present and voted capital stock of ABSA is sufficient
to validly pass resolutions at such meetings on such matters that do not
require a higher vote under Applicable Law or other governing documents. Such
amendments shall be in the form set forth in Schedule 7.15.

7.16 Fairness Opinion. The Company shall use its best efforts to obtain the
fairness opinion referenced in Section 9.4 not later than the date set forth
therein.

7.17 Bionova U.S. Organizational Documents. Not later than the Closing Date,
Parent shall cause the certificate of incorporation and bylaws of Bionova
U.S., copies of which are included in Schedule 4.3, to be

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amended if necessary under State Law, in the reasonable judgment of the
parties hereto, to accomplish the purpose, and to carry out the intent, of the
Governance Agreement.

7.18 Notices. To the extent that the Company and the Company Subsidiaries,
on the one hand, and Parent, Bionova Mexico, Bionova U.S., Sub or any member
of the Bionova Group, on the other hand, are required under the terms of any
agreement or arrangement, whether written or oral, to notify any third party
or to take any other action as a result of the transactions contemplated
hereby or the Ancillary Documents, they will effect any such notice or action
not later than the date specified in any such agreement or arrangement.

ARTICLE VIII

CONDITIONS TO OBLIGATIONS OF THE PARTIES

The obligations of Parent, Bionova Mexico, Bionova U.S., Sub, and the
Company to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment on or prior to the Closing Date of each of the
following conditions:

8.1 HSR Act. All waiting periods (and any extensions thereof) applicable to
this Agreement and the transactions contemplated hereby under the HSR Act
shall have expired or been terminated.

8.2 Stockholder Approval. This Agreement and the Merger shall have been duly
and validly adopted and approved by the requisite vote of the holders of
Company Common Stock in accordance with the Certificate of Incorporation and
Bylaws of the Company, the rules of the NASDAQ NMS, and Applicable Law.

8.3 Legal Proceedings. No Proceeding shall, on the Closing Date, be pending
seeking to restrain, prohibit, or obtain damages or other relief in connection
with this Agreement or the consummation of the transactions contemplated
hereby.

8.4 Registration Statement. The Registration Statement shall have been
declared effective, and no stop order suspending the effectiveness of the
Registration Statement shall be in effect and no proceedings for such purpose
shall be pending before or threatened by the Securities and Exchange
Commission.

8.5 Bionova U.S. Common Stock. The Bionova U.S. Common Stock to be issued in
connection with the Merger shall have been authorized for quotation on the
NASDAQ NMS.

ARTICLE IX

CONDITIONS TO OBLIGATIONS OF THE COMPANY

The obligations of the Company to consummate the transactions contemplated
by this Agreement shall be subject to the fulfillment on or prior to the
Closing Date of each of the following conditions:

9.1 Representations and Warranties True. All the representations and
warranties of Parent, Bionova Mexico, Bionova U.S. and Sub contained in this
Agreement, and in any agreement, instrument, or document delivered pursuant
hereto or in connection herewith on or prior to the Closing Date, shall be
true and correct in all material respects as of the date made and (having been
deemed to have been made again on and as of the Closing Date in the same
language) shall be true and correct in all material respects on and as of the
Closing Date, except as affected by transactions permitted by this Agreement
and except to the extent that any such representation or warranty is made as
of a specified date, in which case such representation or warranty shall have
been true and correct in all material respects as of such specified date.

9.2 Covenants and Agreements Performed. Parent, Bionova Mexico, Bionova U.S.
and Sub shall have performed and complied with in all material respects all
covenants and agreements required by this Agreement and the Auxiliary
Agreements to be performed or complied with by it on or prior to the Closing
Date.

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9.3 Certificate. The Company shall have received a certificate executed on
behalf of Parent, Bionova Mexico, Bionova U.S. and Sub by the duly authorized
chief executive officer or chief financial officer and the secretary of
Parent, Bionova Mexico, Bionova U.S. and Sub, dated the Closing Date,
representing and certifying, in such detail as the Company may reasonably
request, that the conditions set forth in this Article IX have been fulfilled
and that Parent, Bionova Mexico, Bionova U.S. and Sub are not in breach of any
provision of this Agreement.

9.4 Fairness Opinion. The Board of Directors of the Company shall have
received a written opinion, in form and substance reasonably satisfactory to
the Board, of a nationally recognized investment banking firm, dated the date
of this Agreement, to the effect that the consideration to be received by the
stockholders of the Company pursuant to the Merger is fair, from a financial
point of view, to the stockholders of the Company, and such opinion shall not
have been amended in a manner adverse to the Company or its stockholders or
withdrawn.

9.5 Legal Opinion. The Company shall have been provided with a legal opinion
of Thompson & Knight, P.C., in form and substance reasonably satisfactory to
the Company, as to the matters specified in Schedule 9.5. In rendering such
legal opinion, such counsel may rely on the opinions of other acceptable legal
counsel as to matters not covered by U.S. or Texas laws or as otherwise agreed
to by the Company.

9.6 No Material Adverse Change. Since December 31, 1995, there shall not
have occurred any Bionova Group Material Adverse Effect.

9.7 Phase I Environmental. The Company shall have been provided not later
than the date on which the Company's preliminary Proxy Statement is first
transmitted to the Securities and Exchange Commission with a Phase I
environmental review (or its equivalent according to the applicable standards
in the country where the property is located), in form and content reasonably
satisfactory to the Company, with respect to all material real estate owned,
leased or operated by the Bionova Group (other than leased real estate used
exclusively for executive office purposes); provided that to the extent that
the Bionova Group has obtained a Phase I environmental review (or its
equivalent) on any such material property in the 18-month period prior to the
date of this Agreement, it shall not be required to obtain an updated version
thereof, subject to the reasonable acceptability of the form and content
thereof to the Company.

9.8 Governance Agreement. The Governance Agreement in the form attached
hereto as Schedule 9.8 shall have been executed and delivered by Parent and
Bionova U.S.

9.9 Long-Term Funded Research Agreement. The Long-Term Funded Research
Agreement in the form attached hereto as Schedule 9.9 shall have been executed
and delivered by the Company and Parent.

9.10 Severance Agreements. Severance agreements containing the provision set
forth in Schedule 9.10, together with such other terms and conditions as shall
be mutually satisfactory to the parties hereto, shall have been executed by
the Company and delivered to each of the Company's officers and senior
management specified in Schedule 9.10.

ARTICLE X

CONDITIONS TO OBLIGATIONS OF PARENT,
BIONOVA MEXICO, BIONOVA U.S. AND SUB

The obligations of Parent, Bionova Mexico, Bionova U.S., and Sub to
consummate the transactions contemplated by this Agreement shall be subject to
the fulfillment on or prior to the Closing Date of each of the following
conditions:

10.1 Representations and Warranties True. All the representations and
warranties of the Company contained in this Agreement, and in any agreement,
instrument, or document delivered pursuant hereto or in connection herewith on
or prior to the Closing Date, shall be true and correct in all material
respects as of the

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date made and (having been deemed to have been made again on and as of the
Closing Date in the same language) shall be true and correct in all material
respects on and as of the Closing Date, except as affected by transactions
permitted by this Agreement and except to the extent that any such
representation or warranty is made as of a specified date, in which case such
representation or warranty shall have been true and correct in all material
respects as of such specified date.

10.2 Covenants and Agreements Performed. The Company shall have performed
and complied with in all material respects all covenants and agreements
required by this Agreement to be performed or complied with by it on or prior
to the Closing Date.

10.3 Certificate. Bionova U.S. shall have received a certificate executed on
behalf of the Company by the president and the vice president-finance of the
Company, dated the Closing Date, representing and certifying, in such detail
as Bionova U.S. may reasonably request, that the conditions set forth in this
Article X have been fulfilled and that the Company is not in breach of any
provision of this Agreement.

10.4 Legal Opinion. Bionova U.S. shall have been provided with a legal
opinion of Farella, Braun & Martel and/or Proskauer, Rose, Goetz & Mendelsohn,
LLP, in form and substance reasonably satisfactory to Bionova U.S., as to the
matters specified in Schedule 10.5. In rendering such legal opinion, such
counsel may rely on the opinions of other acceptable legal counsel as to
matters not covered by U.S., California or New York laws, as the case may be,
or as otherwise agreed to by Bionova U.S.

10.5 No Material Adverse Change. Since December 31, 1995, there shall not
have occurred any Company Material Adverse Effect.

10.6 Preemptive Rights. No party, if any, holding preemptive rights to
acquire capital stock or any other security of the Company or a Company
Subsidiary shall have notified the Company or the Company Subsidiary, as the
case may be, of the exercise of any such rights.

10.7 Phase I Environmental. Bionova U.S. shall have been provided not later
than the date on which the Company's preliminary Proxy Statement is first
transmitted to the Securities and Exchange Commission with a Phase I
environmental review (or its equivalent according to the applicable standards
in the country where the property is located), in form and content reasonably
satisfactory to Bionova U.S., with respect to all material real estate owned,
leased or operated by the Company or any Company Subsidiary (other than leased
real estate used exclusively for executive office purposes); provided that to
the extent that the Company or any Company Subsidiary has obtained a Phase I
environmental review (or its equivalent) on any such material property in the
18-month period prior to the date of this Agreement, it shall not be required
to obtain an updated version thereof, subject to the reasonable acceptability
of the form and content thereof to Bionova U.S.

10.8 Authorized Shares. Prior to June 30, 1996, the Company shall have
reserved sufficient authorized shares of Company Common Stock to meet its
contractual obligations to the holders of the options and/or warrants listed
on Schedule 10.8. Bionova U.S. acknowledges that in order to accomplish this,
the Company may be required to take action for which Bionova U.S.'s consent is
required pursuant to Section 6.2. If such consent is required, Bionova U.S.
agrees it shall not be unreasonably withheld or delayed.

ARTICLE XI

TERMINATION, AMENDMENT, AND WAIVER

11.1 Termination. With Bionova U.S. acting for such purpose on behalf of
itself and on behalf of Parent, Bionova Mexico and Sub, this Agreement may be
terminated and the transactions contemplated hereby abandoned at any time
prior to the Closing (notwithstanding any approval of this Agreement by the
stockholders of the Company) in the following manner:

(a) by mutual written consent of the Company and Bionova U.S.; or

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<PAGE>

(b) by either the Company or Bionova U.S., if the Closing shall not have
occurred on or before July 31, 1996, unless such failure to close shall be
due to a breach of this Agreement by the party seeking to terminate this
Agreement pursuant to this clause (b); or

(c) by either the Company or Bionova U.S., if there shall be any statute,
rule, or regulation that makes consummation of the transactions
contemplated hereby illegal or otherwise prohibited or a Governmental
Entity shall have issued an order, decree, or ruling or taken any other
action permanently restraining, enjoining, or otherwise prohibiting the
consummation of the transactions contemplated hereby, and such order,
decree, ruling, or other action shall have become final and nonappealable;
or

(d) by either the Company or Bionova U.S., if the stockholders of the
Company shall have failed to approve this Agreement and the Merger at a
special meeting called for such purpose; or

(e) by the Company no later than fifteen days after a Schedule Delivery
Date for Bionova U.S. if, as a result of the delivery of any such schedule
on such date, the Company shall have become aware of material facts
relating to the business, assets, results of operations, condition
(financial or otherwise), or prospects of the Bionova Group which, in the
good faith judgment of the Company, make it inadvisable for the Company to
proceed with the consummation of the transactions contemplated hereby; or

(f) by Bionova U.S. no later than fifteen days after a Schedule Delivery
Date for the Company if, as a result of the delivery of any such schedule
on such date, Bionova U.S. shall have become aware of material facts
relating to the business, assets, results of operations, condition
(financial or otherwise), or prospects of the Company or any Company
Subsidiary which, in the good faith judgment of Bionova U.S., make it
inadvisable for Bionova U.S. to proceed with the consummation of the
transactions contemplated hereby; or

(g) by the Company, in the event of a material breach by Parent, Bionova
U.S., or Sub of any representation, warranty, covenant or agreement
contained herein which is not curable or has not been cured, in the case of
a representation or warranty, prior to the Closing or, in the case of a
covenant or agreement, within thirty days following receipt by Bionova U.S.
of written notice of such breach from the Company; or

(h) by Bionova U.S., in the event of a material breach by the Company of
any representation, warranty, covenant or agreement contained herein which
is not curable or has not been cured, in the case of a representation or
warranty, prior to the Closing or, in the case of a covenant or agreement,
within thirty days following receipt by the Company of written notice of
such breach from Bionova U.S.; or

(i) by the Company, if, for the twelve month period ended December 31,
1995, the Earnings Before Interest and Tax (net of minority interests) of
the entities that will constitute the Bionova Group as of the Closing as
set forth in the financial statements of the Bionova Group delivered
pursuant to Section 7.9(a) (Delivery of 1995 Audited Financial Statements)
are less than $6 million; or

(j) by either the Company or Bionova U.S., if the Board of Directors of
the Company shall have approved and/or recommended to the stockholders of
the Company an Alternative Transaction (as defined in Section 11.3(e)).

11.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 11.1 by the Company, on the one hand, or Bionova
U.S., on the other, written notice thereof shall forthwith be given to the
other party specifying the provision hereof pursuant to which such termination
is made, and this Agreement shall become void and have no effect, except that
the agreements contained in this Section, in Sections 7.7 and 11.3, in Article
XII, and in applicable provisions of Article XIII shall survive the
termination hereof. Nothing contained in this Section shall relieve any party
from liability for damages actually incurred as a result of any breach of this
Agreement. No termination of this Agreement shall affect the obligations of
the parties pursuant to the Confidentiality Agreement referred to in Section
7.1, except to the extent specified in such agreement.

11.3 Expenses.

(a) Except as otherwise expressly provided in this Agreement, all fees and
expenses, including fees and expenses of counsel, financial advisors, and
accountants, incurred in connection with this Agreement and the

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<PAGE>

transactions contemplated hereby shall be paid by the party incurring such fee
or expense, whether or not the transactions contemplated hereby are
consummated; provided, that all such fees and expenses incurred by any of
Bionova Mexico, Bionova U.S. or Sub shall be paid by Parent (other than the
expenses pertaining to compliance with the HSR Act and the expenses associated
with the printing and filing of the Registration Statement, all of which shall
be funded by Bionova U.S.); and provided further, that Bionova U.S. and the
Company shall share equally all fees and expenses, other than attorney's fees,
incurred in relation to the printing and filing of the Registration Statement
(including any related preliminary materials) and any amendments or
supplements.

(b) The Company shall pay Bionova U.S. up to $1,500,000 as reimbursement for
expenses of Parent, Bionova Mexico, Bionova U.S., Sub and the Bionova Group
actually incurred relating to the transactions contemplated by this Agreement
prior to termination (including without limitation fees and expenses of
Bionova U.S.'s counsel, accountants and financial advisers) upon the earliest
to occur of the following:

(i) the termination of this Agreement by Bionova U.S. pursuant to Section
11.1(f); or

(ii) the termination of this Agreement by Bionova U.S. pursuant to
Section 11.1(h) after a breach by the Company of this Agreement; or

(iii) the termination of this Agreement pursuant to Section 11.1(j); or

(iv) the termination of the Agreement by the Company pursuant to Section
11.1(b) at a time when Bionova U.S. could have terminated the Agreement
pursuant to Section 11.1(h).

(c) Parent or Bionova U.S. shall pay the Company up to $1,500,000 as
reimbursement for expenses of the Company actually incurred relating to the
transactions contemplated by this Agreement prior to termination (including
without limitation fees and expenses of the Company's counsel, accountants and
financial advisers) upon the earliest to occur of the following:

(i) the termination of this Agreement by the Company pursuant to Section
11.1(e); or

(ii) the termination of this Agreement by the Company pursuant to Section
11.1(g) after a breach by Parent, Bionova Mexico, Bionova U.S., or Sub of
this Agreement; or

(iii) the termination of the Agreement by Bionova U.S. pursuant to
Section 11.1(b) at a time when the Company could have terminated the
Agreement pursuant to Section 11.1(g).

(d) In addition to any amounts required to be paid by the Company pursuant
to Section 11.3(b), the Company shall pay Bionova U.S. (or any person
designated by Bionova U.S. for such purpose) a fee equal to the excess of
$2,000,000 over the amount paid by the Company pursuant to Section 11.3(b) if,
within one year from the date of termination of this Agreement for any of the
reasons set forth in Section 11.3(b), an Alternative Transaction occurs, the
Company announces publicly its intention to enter into an Alternative
Transaction, or the Company enters into an agreement contemplating an
Alternative Transaction. Such payment shall be made upon the earlier to occur
of the events described in the preceding sentence.

(e) As used in this Agreement, "Alternative Transaction" means (i) a
transaction pursuant to which any person (or group of persons) other than
Bionova U.S. or its affiliates (a "Third Party") acquires capital stock (or
other securities which are convertible, exchangeable or exercisable into
voting capital stock) of the Company representing more than 15% (for purposes
of Section 11.1(j)) or 35% (for purposes of Section 11.3(d)) of the
outstanding voting power of the Company, whether from the Company, pursuant to
a tender offer or exchange offer, or otherwise; (ii) a merger or other
business combination involving the Company pursuant to which any Third Party
acquires capital stock (or other securities which are convertible,
exchangeable or exercisable into voting capital stock) of the Company
representing more than 15% (for purposes of Section 11.1(j)) or 35% (for
purposes of Section 11.3(d)) of the outstanding voting power of the Company or
the entity surviving such merger or business combination; or (iii) any other
transaction pursuant to which any Third Party acquires control of assets
(including for this purpose the outstanding equity securities of Subsidiaries
of the Company, and the entity surviving any merger or business combination
including any of them) of the Company having a fair market value equal to more
than 15% (for purposes of Section 11.1(j)) or 35% (for purposes of Section
11.3(d)) of the fair market value of all the assets of the Company immediately
prior to such transaction.

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<PAGE>

11.4 Amendment. This Agreement may not be amended except by an instrument in
writing signed by or on behalf of all the parties hereto.

11.5 Waiver. Each of the Company and Bionova U.S. may (i) waive any
inaccuracies in the representations and warranties of the other contained
herein or in any document, certificate, or writing delivered pursuant hereto
or (ii) waive compliance by the other with any of the other's agreements or
fulfillment of any conditions to its own obligations contained herein. Any
agreement on the part of a party hereto to any such waiver shall be valid only
if set forth in an instrument in writing signed by or on behalf of such party.
No failure or delay by a party hereto in exercising any right, power, or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege.

ARTICLE XII

MISCELLANEOUS

12.1 Nonsurvival of Representations, Warranties, and Agreements. None of the
representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Closing and
the Effective Time, except for the agreements contained in Article I, Article
II, Article XII, and Sections 7.1, 7.5, 7.13, 7.14, 11.3, 12.2, 12.3, 12.5,
12.6 and 12.14.

12.2 Indemnification.

(a) Subject to the terms and conditions of this Section 12.2, Parent shall
indemnify and hold harmless Bionova U.S. from and against any and all losses,
damages, liabilities, judgments, settlements, penalties, costs, and expenses
(including reasonable attorneys' fees and expenses), of any nature whatsoever
(collectively, "Losses"), incurred by Bionova U.S. or any member of the
Bionova Group, directly or indirectly, by reason of, relating to, or resulting
from any of the events ("Triggering Events") described on Schedule 12.2-1
(collectively, "Company Claims").

(b) Parent shall not have any indemnification obligation pursuant to this
Section 12.2 or otherwise in respect of this Agreement unless before the Claim
Limitation Date it shall have received from Bionova U.S. written notice that a
Triggering Event has occurred (a "Claim Notice"). The Claim Notice shall set
forth with reasonable specificity (i) the factual basis for asserting that a
Triggering Event has occurred and (ii) an estimate of the amount of Losses to
be incurred as a direct or indirect result of such Triggering Event (which
estimate shall not be conclusive of the final amount of indemnification) and
an explanation of the calculation of such estimate, including a statement of
any significant assumptions employed therein. The decision to deliver a Claim
Notice shall be in the sole discretion of the DNAP Independent Directors as
such term is defined in the Governance Agreement. The "Claim Limitation Date"
shall be the first anniversary of the Closing Date (except for matters
identified in items 1 and 4 of Schedule 12.2-1, in which case the Claim
Limitation Date shall be the Final Claim Date, as defined below).

(c) The indemnification obligations of Parent pursuant to this Section 12.2
shall be subject to the following limitations and other provisions:

1. No indemnification shall be required to be made by Parent with respect
to any Company Claims unless the aggregate amount of Losses incurred by
Bionova U.S. and the Bionova Group with respect to all Company Claims, less
all reductions and other adjustments provided for in this Section 12.2(c),
exceeds $300,000, in which event indemnification will relate back to the
first dollar of Loss.

2. Parent's indemnification obligation hereunder shall in no event exceed
$1,500,000.

3. Any indemnity payments owed by Parent to Bionova U.S. pursuant to this
Section 12.2 shall be reduced by the amount of the Indemnity Offset, if
any, provided that Parent has delivered an Offset Notice

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<PAGE>

to Bionova U.S. before the first anniversary of the Closing Date. The
"Indemnity Offset" shall be the aggregate Losses incurred by Bionova U.S.
and the Surviving Corporation by reason of, relating to, or resulting from
any of the events described on Schedule 12.2-2 ("Offset Events"). "Offset
Notice" means a written notice setting forth with reasonable specificity
(i) the factual basis for asserting that an Offset Event has occurred and
(ii) an estimate of the amount of Losses to be incurred as a direct or
indirect result of such Offset Event (which estimate shall not be
conclusive of the final amount of offset) and an explanation of the
calculation of such estimate, including a statement of any significant
assumptions employed therein.

4. Any indemnity payments owed by Parent to Bionova U.S. pursuant to this
Section 12.2 arising from Losses incurred by a company of the Bionova Group
shall be reduced to the product of (x) the amount of such Losses multiplied
by (y) the percentage of the equity of such company owned directly or
indirectly by Bionova U.S.

5. Any indemnity payments owed by Parent to Bionova U.S. pursuant to this
Section 12.2 as a result of any Company Claim shall be reduced to the
extent of any amounts actually received by Bionova U.S. or any other member
of the Bionova Group pursuant to the terms of any insurance policies or
contractual indemnities covering such claim. The amount of the Indemnity
Offset shall likewise be reduced to the extent of any amounts actually
received by Bionova U.S. or the Surviving Corporation pursuant to the terms
of any insurance policies or contractual indemnities covering such matters.

6. Notwithstanding any other provision of this Section 12.2, Parent will
have no obligation to make any payment to Bionova U.S. relating to a matter
described on Schedule 12.2-1 unless, prior to the date of the 1999 annual
meeting of shareholders of Bionova U.S. (the "Final Claim Date"), (i) a
Governmental Entity has issued an order or assessment against a member of
the Bionova Group with respect to that matter, (ii) Bionova U.S. or a
member of the Bionova Group has agreed to make a payment in settlement of
that matter, or (iii) Parent has become obligated to make such payment
pursuant to Section 12.2(d).

(d) With respect to any Company Claim for which a Claim Notice was delivered
to Parent prior to the applicable Claim Limitation Date, Parent will pay
Bionova U.S. the amount required to be paid by it hereunder no later than ten
days after receiving from Bionova U.S. evidence of the actual payment by
Bionova U.S. or a member of the Bionova Group of the relevant Losses. If (i)
an Offset Notice was delivered to Bionova U.S. before the first anniversary of
the Closing Date, and (ii) Parent has made an indemnity payment to Bionova
U.S. under this Section 12.2, and (iii) thereafter, Bionova U.S. or the
Surviving Corporation incurs Losses constituting an Indemnity Offset, then
Bionova U.S. will pay Parent the amount of the Indemnity Offset no later than
ten days after receiving from Parent evidence of the actual payment by Bionova
U.S. or the Surviving Corporation of the Losses constituting the Indemnity
Offset; provided that in no event shall Bionova U.S. be required to pay to
Parent more than it has received from Parent pursuant to this Section 12.2.

12.3 Notices. All notices, requests, demands, and other communications
required or permitted to be given or made hereunder by any party hereto shall
be in writing and shall be deemed to have been duly given or made if (i)
delivered personally, (ii) sent by prepaid overnight courier service, or (iii)
sent by telecopy or facsimile transmission, answer back requested, to the
parties at the following addresses (or at such other addresses as shall be
specified by the parties by like notice):

If to Parent, Bionova Mexico, Bionova U.S., or Sub:

c/o Pulsar Internacional, S.A. de C.V.
Edificio Torrealta
Av. Roble 300 Mezzanine
66265 Garza Garcia, N.L.
Mexico
Attention: Lic. Alejandro Sanchez
Telefax: 011-528-335-6993

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<PAGE>

with a copy to:

Joe A. Rudberg
Thompson & Knight, P.C.
1700 Pacific Avenue, Suite 3300
Dallas, Texas 75201
Telefax: (214) 969-1751

If to the Company:

DNA Plant Technology Corporation
6701 San Pablo Avenue
Oakland, California 94608
Attention: Robert Serenbetz, Chief Executive Officer and Legal
Department
Telefax: (510) 450-9395

with a copy to:

Farella, Braun & Martel
235 Montgomery Street
San Francisco, California 94104
Attention: M. Greg Allio
Telefax: (415) 954-4480

Such notices, requests, demands, and other communications shall be effective
upon actual receipt by the intended recipient.

12.4 Entire Agreement. This Agreement, together with the Schedules,
Ancillary Documents, Agreements, and other writings referred to herein or
delivered pursuant hereto, constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and thereof and
supersede all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof and thereof.

12.5 Binding Effect; Assignment; No Third Party Benefit. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Except as otherwise expressly
provided in this Agreement, neither this Agreement nor any of the rights,
interests, or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties. Except as
provided in Section 12.1, nothing in this Agreement, express or implied, is
intended to or shall confer upon any person other than the parties hereto, and
their respective successors and permitted assigns, any rights, benefits, or
remedies of any nature whatsoever under or by reason of this Agreement.

12.6 Severability. If any provision of this Agreement is held to be
unenforceable, this Agreement shall be considered divisible and such provision
shall be deemed inoperative to the extent it is deemed unenforceable, and in
all other respects this Agreement shall remain in full force and effect;
provided, however, that if any such provision may be made enforceable by
limitation thereof, then such provision shall be deemed to be so limited and
shall be enforceable to the maximum extent permitted by Applicable Law.

12.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

12.8 Further Assurances. From time to time following the Closing, at the
request of any party hereto and without further consideration, the other party
or parties hereto shall execute and deliver to such requesting party such
instruments and documents and take such other action (but without incurring
any financial obligation) as such requesting party may reasonably request in
order to consummate more fully and effectively the transactions contemplated
hereby.

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<PAGE>

12.9 Descriptive Headings. The descriptive headings herein are inserted for
convenience of reference only, do not constitute a part of this Agreement, and
shall not affect in any manner the meaning or interpretation of this
Agreement.

12.10 Gender. Pronouns in masculine, feminine, and neuter genders shall be
construed to include any other gender, and words in the singular form shall be
construed to include the plural and vice versa, unless the context otherwise
requires.

12.11 References. All references in this Agreement to Articles, Sections,
and other subdivisions refer to the Articles, Sections, and other subdivisions
of this Agreement unless expressly provided otherwise. The words "this
Agreement", "herein", "hereof", "hereby", "hereunder", and words of similar
import refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited. Whenever the words "include",
"includes", and "including" are used in this Agreement, such words shall be
deemed to be followed by the words "without limitation". Unless the context
otherwise requires, each reference herein to a Schedule refers to the item
identified separately in writing by the parties hereto as the described
Schedule to this Agreement. All Schedules are hereby incorporated in and made
a part of this Agreement as if set forth in full herein.

12.12 Counterparts. This Agreement may be executed by the parties hereto in
any number of counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same agreement. Each counterpart may
consist of a number of copies hereof each signed by less than all, but
together signed by all, the parties hereto.

12.13 Assignment. Notwithstanding anything to the contrary set forth herein
and provided that Seminis, Inc. executes and delivers a written instrument
assuming all of Parent's obligations hereunder under such circumstances, not
later than the date on which the Proxy Statement is first transmitted in
preliminary form to the Securities and Exchange Commission, Bionova Mexico
shall be entitled to transfer its ownership interest in Bionova U.S. to
Seminis, Inc., a majority owned subsidiary of Parent, so that Bionova U.S.
then becomes a direct wholly-owned subsidiary of Seminis, Inc. Parent shall
notify the Company in writing of any such transfer and shall provide a
counterpart original of such instrument of assumption to the Company, which
instrument shall be in a form reasonably acceptable to the Company. After any
such transfer and upon the Effective Time of the Merger, Parent shall be
released from any further obligations hereunder (except for its obligations
under Sections 7.14, 11.3 and 12.2 and under the Governance Agreement and the
Long-Term Funded Research Agreement) and any representation and warranty or
other reference herein as to the ownership of the capital stock of Bionova
U.S. shall be deemed to have been amended to reflect such new ownership. Any
such transfer shall not affect the obligations of Bionova Mexico, Bionova U.S.
or Sub hereunder.

12.14 Confidentiality Agreement and Standstill. The Confidentiality
Agreement, including the standstill provisions included therein, shall survive
the execution and delivery of this Agreement and shall automatically
terminate, expire and be of no further force and effect upon the first to
occur of (i) the Effective Time of the Merger or (ii) the expiration date, if
any, set forth therein.

ARTICLE XIII

DEFINITIONS

13.1 Certain Defined Terms. As used in this Agreement, each of the following
terms has the meaning given it below:

"affiliate" has the meaning specified in Rule 12b-2 promulgated under the
Exchange Act (except as otherwise provided in Section 3.21 and Section
5.16).

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<PAGE>

"Ancillary Documents" means each agreement, instrument, and document
(other than this Agreement) executed or to be executed by the Company,
Parent, Bionova Mexico, Sub or Bionova U.S. in connection with the
execution of this Agreement or the transactions contemplated hereby.

"Applicable Law" means any statute, law, rule, or regulation or any
judgment, order, writ, injunction, or decree of any Governmental Entity to
which a specified person or property is subject.

"Bionova Group" means Bionova, S.A. de C.V., a corporation organized
under the laws of the United Mexican States, International Produce Holding
Company, a Delaware corporation; R.B. Packing, Inc., an Arizona
corporation; Batiz and Sons, Inc., an Arizona corporation; R.B. Packing of
California, Inc., a California corporation; Tanimura Distributing Inc., a
California corporation; Premier Fruits and Vegetables BBL Ltd., a Quebec
corporation; Agricola Batiz, S.A. de C.V., a corporation organized under
the laws of the United Mexican States; Comercializadora Premier, S.A. de
C.V., a corporation organized under the laws of the United Mexican States;
Interfruver, S.A. de C.V., a corporation organized under the laws of the
United Mexican States; Premier del Pacifico, S.A. de C.V., a corporation
organized under the laws of the United Mexican States; Excelencia en Frutas
y Verduras, S.A. de C.V., a corporation organized under the laws of the
United Mexican States; Asesoria y Servicios del Noreste, S.A. de C.V., a
corporation organized under the laws of the United Mexican States; and R.B.
Packing of Texas, Inc., a Texas corporation.

"Bionova Group Material Adverse Effect" means a material adverse effect
on the business, assets, results of operations, condition (financial or
otherwise), or prospects of Bionova Mexico, Bionova U.S., Sub, and the
Bionova Group considered as a whole or on the ability of Parent, Bionova
Mexico, Bionova U.S., or Sub to perform on a timely basis any material
obligation of Bionova Mexico, Bionova U.S., Parent or Sub under this
Agreement or any agreement, instrument, or document entered into or
delivered in connection herewith.

"Code" means the Internal Revenue Code of 1986, as amended.

"Company Material Adverse Effect" means a material adverse effect on the
business, assets, results of operations, condition (financial or
otherwise), or prospects of the Company and the Company Subsidiaries
considered as a whole or on the ability of the Company to perform on a
timely basis any material obligation of the Company under this Agreement or
any agreement, instrument, or document entered into or delivered in
connection herewith.

"Encumbrances" means liens, charges, pledges, options, mortgages, deeds
of trust, security interests, claims, restrictions (whether on voting,
sale, transfer, disposition, or otherwise), easements, and other
encumbrances of every type and description, whether imposed by law,
agreement, understanding, or otherwise.

"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Governmental Entity" means any court or tribunal in any jurisdiction
(domestic or foreign) or any federal, state, municipal, or other
governmental body, agency, authority, department, commission, board,
bureau, or instrumentality (domestic or foreign).

"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.

"independent director" means a person serving as a director of a company
other than an officer or employee of such company or its subsidiaries or
any other individual having a relationship which, in the opinion of the
board of directors of such company, would interfere with the exercise by
that person of independent judgment in carrying out the responsibilities of
a director.

"Intellectual Property" means patents, plant variety protection
certificate rights, breeders' rights, trademarks, service marks, trade
names, service names, brand names, copyrights, trade secrets, know-how,
technology, inventions, computer software (including documentation and
object and source codes), and similar rights, and all registrations,
applications, licenses, and rights with respect to any of the foregoing.

"IRS" means the Internal Revenue Service.

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<PAGE>

"Loan Agreement" means that certain Loan Agreement of even date herewith
between Bionova U.S. and the Company as well as the "Loan Documents"
referred to in Section 1.21 of such Loan Agreement.

"Non-Exclusive Patent License Agreement" means that certain Non-Exclusive
Patent License Agreement of even date herewith between the Company and
Bionova U.S.

"Permits" means licenses, permits, franchises, consents, approvals,
variances, exemptions, and other authorizations of or from Governmental
Entities.

"person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, enterprise, unincorporated
organization, or Governmental Entity.

"Proceedings" means all proceedings, actions, claims, suits,
investigations, and inquiries by or before any arbitrator or Governmental
Entity.

"reasonable best efforts" means a party's reasonable best efforts in
accordance with reasonable commercial practice and without the incurrence
of unreasonable expense.

"Securities Act" means the Securities Act of 1933, as amended.

"Sole Patent License" means that certain Sole Patent License executed by
Bionova U.S. and the Company as of the date of this Agreement as required
under the Loan Agreement.

"Subsidiary" means any corporation more than 50% of whose outstanding
voting securities, or any general partnership, joint venture, or similar
entity more than 50% of whose total equity interests, is owned, directly or
indirectly, by the relevant entity, or any limited partnership of which the
relevant entity or any Subsidiary is a general partner. Subsidiaries of the
Company are sometimes referred to herein as "Company Subsidiaries."

"Tax" or "Taxes" means any income taxes or similar assessments or any
sales, excise, occupation, use, ad valorem, property, production,
severance, transportation, employment, payroll, franchise, or other tax
imposed by any United States federal, state, or local (or any foreign or
provincial) taxing authority, including any interest, penalties, or
additions attributable thereto.

"Tax Return" means any return or report, including any related or
supporting information, with respect to Taxes.

"to the best knowledge of the Company" (or similar references to the
Company's knowledge) means the knowledge of any of the Company's officers,
as such knowledge has been obtained in the normal conduct of the business
of the Company or in connection with the preparation of the Schedules to
this Agreement and the furnishing of information to Bionova U.S. as
contemplated by this Agreement, after having made a reasonable
investigation of the accuracy of the representations and warranties made by
the Company in this Agreement or in any document, certificate, or other
writing furnished by the Company to Bionova U.S. pursuant hereto or in
connection herewith.

"to the best knowledge of Bionova U.S." (or similar references to Bionova
U.S.'s knowledge) means the knowledge of any of Parent's, Bionova Mexico,
Bionova U.S.'s or Sub's officers, as such knowledge has been obtained in
the normal conduct of the business of the Bionova Group or in connection
with the preparation of the Schedules to this Agreement and the furnishing
of information to the Company as contemplated by this Agreement, after
having made a reasonable investigation of the accuracy of the
representations and warranties made by Parent, Bionova Mexico, Bionova U.S.
and Sub in this Agreement or in any document, certificate, or other writing
furnished by Parent, Bionova Mexico, Bionova U.S. and Sub to the Company
pursuant hereto or in connection herewith.

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<PAGE>

13.2 Certain Additional Defined Terms. In addition to such terms as are
defined in the opening paragraph of and the recitals to this Agreement and in
Section 13.1, the following terms are used in this Agreement as defined in the
Sections set forth opposite such terms:

<TABLE>
<CAPTION>
SECTION
DEFINED TERM REFERENCE
------------ -----------
<S> <C>
Acquisition Proposal............................................ 7.2
agreements...................................................... 3.24; 5.19
AGS............................................................. 3.22
Alternative Transaction......................................... 11.3
Applicable Environmental Laws................................... 3.26
associate....................................................... 5.25
Benefit Arrangements............................................ 3.25; 5.20
Bionova Group Financial Statements.............................. 5.5
Bionova U.S. Acquisition Proposal............................... 7.12
Bionova U.S. Common Stock....................................... 2.1
Certificate..................................................... 2.3
Claim Limitation Date........................................... 12.2
Claim Notice.................................................... 12.2
Closing......................................................... 1.3
Closing Date.................................................... 1.3
Company Claims.................................................. 12.2
Company Common Stock............................................ 2.1
Company Convertible Exchangeable Preferred Stock................ 2.1
Company Series A Preferred Stock................................ 2.1
Company Stock................................................... 2.1
Company Stock Option............................................ 2.5
Confidential Information........................................ 7.1
Confidentiality Agreement....................................... 7.1
Dissenting Shares............................................... 2.2
Effective Time.................................................. 1.2
Employee Plans.................................................. 3.25; 5.16
Exchange Agent.................................................. 2.3
Final Claim Date................................................ 12.2
Garching........................................................ 3.22
hazardous material.............................................. 3.26
Indemnity Offset................................................ 12.2
Losses.......................................................... 12.2
Merger.......................................................... 1.1
Merger Consideration............................................ 2.1
Multiemployer Plan.............................................. 3.25; 5.20
NASDAQ NMS...................................................... 2.3
Offset Events................................................... 12.2
Offset Notice................................................... 12.2
Option/License Agreement........................................ 3.22
Parent Directors................................................ 7.16
Payment Fund.................................................... 2.3
Proxy Statement................................................. 7.3
Real Property................................................... 3.18; 5.13
Registration Statement.......................................... 7.4
Schedule Delivery Date.......................................... 7.8
SEC Filings..................................................... 3.10
</TABLE>

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<PAGE>

<TABLE>
<CAPTION>
SECTION
DEFINED TERM REFERENCE
------------ ---------
<S> <C>
Special Meeting................................................... 7.3
State Law......................................................... 1.1
Surviving Corporation............................................. 1.1
Third Party....................................................... 11.3
Triggering Event.................................................. 12.2
</TABLE>

13.3 Construction. Unless herein otherwise provided, or unless the context
shall otherwise require, words importing the singular number shall include the
plural number, and vice versa; the terms "herein", "hereof", "hereby", and
"hereunder", or other similar terms, refer to this Agreement as a whole and
not only to the particular Article, Section, or other subdivision in which any
such terms may be employed; and references to Articles, Sections, and other
subdivisions refer to the Articles, Sections, and other subdivisions of this
Agreement.

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<PAGE>

IN WITNESS WHEREOF, the parties have executed this Agreement, or caused this
Agreement to be executed by their duly authorized representatives, all as of
the day and year first above written.

Empresas La Moderna, S.A. de C.V.

DNA Plant Technology Corporation

/s/ Carlos Herrera /s/ Robert Serenbetz
By: _________________________________ By: _________________________________
Name: Carlos Herrera Name: Robert Serenbetz
Title: Director Title: Chief Executive Officer

/s/ Erik Jurgensen
By: _________________________________
Name: Erik Jurgensen
Title: Attorney-in-Fact

Bionova, S.A. de C.V.

/s/ Carlos Herrera
By: _________________________________
Name: Carlos Herrera
Title: Director General

/s/ Erik Jurgensen
By: _________________________________
Name: Erik Jurgensen
Title: Attorney-in-Fact

Bionova U.S. Inc.

/s/ Carlos Herrera
By: _________________________________
Name: Carlos Herrera
Title: Chairman of the Board and Chief Executive
Officer

Bionova Acquisition, Inc.

/s/ Carlos Herrera
By: _________________________________
Name: Carlos Herrera
Title: Chairman of the Board and Chief Executive
Officer

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<PAGE>

AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER

AMENDMENT NO. 1, dated as of May 16, 1996, to the Agreement and Plan of
Merger, dated January 26, 1996, among Empresas La Moderna, S.A. de C.V.,
Bionova, S.A. de C.V., Bionova U.S. Inc., Bionova Acquisition, Inc. and DNA
Plant Technology Corporation (the "Agreement"). Terms defined in the Agreement
shall have their defined meanings herein, unless otherwise defined herein. The
undersigned hereby agree that: (i) Bionova U.S. shall deliver to the Company,
as soon as practicable, the unaudited consolidated financial statements, as of
and for the quarter ended March 31, 1996, of the entities that will constitute
the Bionova Group as of the Closing (the "Quarterly Financial Statements");
(ii) the date of such delivery of the Quarterly Financial Statements shall be
deemed to be a Schedule Delivery Date for the purposes of the Agreement,
including Section 11.1(e) thereof; (iii) notwithstanding the delivery by
Bionova U.S. to the Company on May 3, 1996 of the consolidated financial
statements, as of and for the year ended December 31, 1995, of the entities
that will constitute the Bionova Group as of the Closing (the "Annual
Financial Statements" and, together with the Quarterly Financial Statements,
the "Financial Statements"), the Schedule Delivery Date of the Annual
Financial Statements shall be deemed to be the date of delivery of the
Quarterly Financial Statements for the purposes of the Agreement, including
Section 11.1(e) thereof; (iv) the Company shall have until seven days after
the delivery date of the Quarterly Financial Statements, to determine whether
or not to terminate the Agreement pursuant to Section 11.1(e) of the Agreement
as a result of the delivery of the Financial Statements; and (v)
notwithstanding Section 11.3(c)(1) of the Agreement, if the Company terminates
the Agreement pursuant to Section 11.1(e) thereof as a result of the delivery
of the Financial Statements, the Company shall not be entitled to any
reimbursement of expenses under Section 11.3(c)(1) of the Agreement. Except to
the extent amended hereby, the Agreement shall remain in full force and effect
and nothing herein shall affect, or be deemed to be a waiver of, the other
terms and provisions of the Agreement, including without limitation the other
termination provisions thereof.

IN WITNESS WHEREOF, the undersigned have caused this Amendment No. 1 to the
Agreement to be executed as of the date set forth above.

Bionova U.S. Inc.
Empresas La Moderna, S.A. de C.V.

/s/ Carlos Herrera
/s/ Carlos Herrera By: _________________________________
By: _________________________________ Name: Carlos Herrera
Name: Carlos Herrera Title: Chairman of the Board and
Title: Director Chief Executive Officer

Bionova, S.A. de C.V. DNA Plant Technology Corporation

/s/ Carlos Herrera /s/ Willem Spiegel
By: _________________________________ By: _________________________________
Name: Carlos Herrera Name: Willem Spiegel
Title: Director General Title: CFO

Bionova Acquisition, Inc.

/s/ Carlos Herrera
By: _________________________________
Name: Carlos Herrera
Title: Chairman of the Board and
Chief Executive Officer

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<PAGE>

AMENDMENT NO. 2 TO AGREEMENT AND PLAN OF MERGER

This Amendment No. 2 To Agreement and Plan of Merger (this "Amendment") is
entered into as of the 30th day of July, 1996, among Empresas La Moderna, S.A.
de C.V., a corporation organized under the laws of the United Mexican States
("Parent"), Bionova, S.A. de C.V., a corporation organized under the laws of
the United Mexican States ("Bionova Mexico"), Bionova U.S. Inc., a Delaware
corporation ("Bionova U.S."), Bionova Acquisition, Inc., a Delaware
corporation ("Sub"), and DNA Plant Technology Corporation, a Delaware
corporation (the "Company").

WITNESSETH:

WHEREAS, Parent, Bionova Mexico, Bionova U.S., Sub and the Company entered
into an Agreement and Plan of Merger on January 26, 1996 (as amended, the
"Agreement"), providing for, among other things, the merger of Sub with and
into the Company; and

WHEREAS, Parent, Bionova Mexico, Bionova U.S., Sub and the Company desire to
amend certain provisions of the Agreement; and

WHEREAS, Section 11.4 of the Agreement requires that all amendments to the
Agreement be made by an instrument in writing signed by or on behalf of all
the parties;

NOW, THEREFORE, Parent, Bionova Mexico, Bionova U.S., Sub and the Company
hereby agree as follows:

1. Defined Terms. All capitalized terms used but not defined in this
Amendment have the respective meanings ascribed to such terms in the
Agreement. All references in this Amendment to Sections are references to
Sections of the Agreement.

2. Capitalization of Bionova U.S. and Surviving Corporation.

(a) The following is inserted as a new Section 1.11(d):

On or before the Closing Date, Parent shall cause $8 million in cash
to be contributed to the capital of Bionova U.S.

(b) Section 1.11(d) is redesignated as Section 1.11(e) and the first
sentence of that section is amended to read as follows:

In consideration of the transactions specified in Sections 1.11(b),
1.11(c) and 1.11(d) (which transactions, notwithstanding the terms of
those sections, may be effected at any time on or before the Closing
Date), Bionova U.S. shall issue to Bionova Mexico or its designee, on
or before the Closing Date, such number of shares of Bionova U.S.
Common Stock as shall represent (when added to the 25,000 shares of
Bionova U.S. Common Stock outstanding as of the date of this Agreement)
70% (assuming no exercise of appraisal rights under State Law) of the
issued and outstanding shares thereof as of the Effective Time of the
Merger.

3. Conversion of Securities.

(a) The first sentence of Section 2.1(a) is amended to read as follows:

Each then outstanding share of Common Stock, par value $0.01 per
share, of the Company ("Company Common Stock") (other than the shares
of Company Common Stock referred to in Section 2.1(d)) shall be
converted into the right to receive 0.10 fully paid and nonassessable
shares of Common Stock, par value $0.01 per share, of Bionova U.S.
("Bionova U.S. Common Stock"), provided, however, that no fractional
shares of Bionova U.S. Common Stock shall be issued, and, in lieu
thereof, a cash payment shall be made in accordance with Section
2.3(d).

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<PAGE>

(b) The first sentence of Section 2.1(b) is amended to read as follows:

Each then outstanding share of $2.25 Convertible Exchangeable
Preferred Stock, par value $0.01 per share, of the Company ("Company
Convertible Exchangeable Preferred Stock") (other than the shares of
such stock referred to in Section 2.1(d)) shall be converted into the
right to receive 0.68375 fully paid and nonassessable shares of Bionova
U.S. Common Stock, provided, however, that no fractional shares of
Bionova U.S. Common Stock shall be issued, and, in lieu thereof, a cash
payment shall be made in accordance with Section 2.3(d).

4. Termination. Section 11.1(b) is amended by deleting "July 31, 1996" and
inserting in its place "October 31, 1996".

5. Severance. Schedule 9.10 is amended by (i) deleting the references to
"July 1, 1997" and inserting in their place "the first anniversary of the
Closing Date" and (ii) deleting the name "Clinton Neagley" from the list of
senior management.

6. Indemnification. Schedule 12.2-1 is amended by deleting paragraph 3
thereof.

7. Effect. Except as amended by this Amendment, the Agreement remains in
full force and effect and nothing herein shall affect, or be deemed to be a
waiver of, the other terms and provisions of the Agreement.

IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
executed by their duly authorized representatives as of the date set forth
above.

Empresas la Moderna, S.A. de C.V.

/s/ Carlos Herrera
By: _________________________________
Ing. Carlos Herrera, Director

Bionova, S.A. de C.V.

/s/ Carlos Herrera
By: _________________________________
Ing. Carlos Herrera, Director
General

Bionova U.S. Inc.

/s/ Carlos Herrera
By: _________________________________
Ing. Carlos Herrera, Chairman of
theBoard and Chief Executive
Officer

Bionova Acquisition, Inc.

/s/ Carlos Herrera
By: _________________________________
Ing. Carlos Herrera, Chairman of
theBoard and Chief Executive
Officer

DNA Plant Technology Corporation

/s/ Willem Spiegel
By: _________________________________
Willem Spiegel, Chief Financial
Officer

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<PAGE>

ANNEX II

GOVERNANCE AGREEMENT

THIS GOVERNANCE AGREEMENT, dated as of , 1996 (the "AGREEMENT"), is
entered into by and among Empresas La Moderna, S.A. de C.V., a corporation
organized under the laws of the United Mexican States ("ELM"), and DNAP
Holding Corporation (formerly known as Bionova U.S. Inc.), a Delaware
corporation (the "COMPANY").

BACKGROUND

WHEREAS, the Company, a subsidiary of the Company (the "SUBSIDIARY"), ELM,
Bionova, S.A. de C.V. and DNA Plant Technology Corporation ("DNAP") have
entered into an Agreement and Plan of Merger, dated as of January 26, 1996
(the "MERGER AGREEMENT"), pursuant to which (i) the Subsidiary is being merged
with and into DNAP on the date of this Agreement (the "MERGER"), and (ii) the
issued and outstanding shares of capital stock of DNAP (except for shares held
by DNAP in its treasury, which shares shall be cancelled, and shares as to
which appraisal rights have been perfected) are being converted in the Merger
into shares of common stock, $.01 par value, of the Company (the "COMMON
STOCK") at various rates provided in the Merger Agreement;

WHEREAS, the parties to this Agreement recognize the need to protect the
public shareholders (because of their status as minority shareholders) of the
Company subsequent to the Merger and intend that such shareholders as a group
be deemed third-party beneficiaries of this Agreement whose rights will be
protected by certain independent directors of the Company;

WHEREAS, the parties to this Agreement desire to establish certain terms and
conditions concerning the corporate governance of the Company including the
composition of the board of the Company (the "BOARD"); and

WHEREAS, the parties to this Agreement also desire to establish certain
terms and conditions concerning the acquisition and disposition of securities
of the Company by ELM and its affiliates;

NOW, THEREFORE, in consideration of the foregoing and the mutual promises
and agreements contained herein, the parties hereto agree as follows:

ARTICLE I--BOARD OF DIRECTORS

1.01 Independent Directors. From and after the effective time of the Merger
("EFFECTIVE TIME") and until this Agreement is terminated in accordance with
its terms, the number of directors comprising the Board shall be not less than
eleven. Of those eleven directors, four directors shall (subject to the
adjustment pursuant to (S)1.02 hereof) be independent directors, each of whom
shall be deemed independent (each of these four directors being an
"INDEPENDENT DIRECTOR") if: (i) other than acting as a director of DNAP at any
time or of the Company or a subsidiary of the Company after the date of this
Agreement, such director is not an employee or an Affiliate (as defined below)
of the Company, ELM or any Affiliate of ELM, and (ii) such director is an
"independent director" for purposes of Rule 4460 of the Rules of the Nasdaq
Stock Market. "AFFILIATE" means, with respect to any person, any other person
controlling, controlled by or under direct or indirect common control with
such person. For the purposes of this definition, "control," when used with
respect to any specified person, shall mean the power to direct the management
and policies of such person, directly or indirectly, whether through ownership
of voting securities, by contract or otherwise. Three of the initial
Independent Directors shall be current DNAP Independent Directors (the "DNAP
INDEPENDENT DIRECTORS") designated by the DNAP board of directors prior to the
Merger and one shall be designated by ELM (the "ELM INDEPENDENT DIRECTOR"),
with the consent of DNAP, which consent shall not be unreasonably withheld or
delayed, prior to the Merger.

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<PAGE>

Notwithstanding the foregoing and any other provision of this Agreement, upon
the occurrence of the first DNAP Independent Director to resign or die after
the date of this Agreement, the number of Company directors shall be reduced
to not less than nine. Of those nine directors, three directors (subject to
adjustment pursuant to (S)1.02 hereof) shall be Independent Directors. Under
such circumstances, two of such Independent Directors shall be DNAP
Independent Directors and one such Independent Director shall be an ELM
Independent Director. The reduction from eleven to nine directors as
hereinabove provided shall not have the effect of shortening the term of any
director in office at the time of such reduction, but such reduction will be
effected in connection with the next succeeding annual meeting of Company
stockholders.

1.02 ELM Directors. The other seven (six in the event of a reduction of the
type contemplated in (S)1.01) directors shall be designated by ELM and may be
Affiliates or employees of either the Company or ELM, but shall not be
considered "Independent Directors" for purposes of this Agreement. If the
Common Stock beneficially owned, directly or indirectly, by ELM and its
Affiliates is 80% or more, ELM may designate nine (seven in the event of a
reduction of the type contemplated in (S)1.01) directors, and the number of
DNAP Independent Directors shall be reduced to two. All such adjustments are
intended to be made at the next annual meeting of the Company after a change
in stock ownership.

1.03 Initial Nomination. In accordance with this Agreement, ELM and DNAP
shall designate the eleven director nominees prior to the mailing of the Proxy
Statement (as defined in the Merger Agreement), to serve from the Effective
Time until the next annual meeting of stockholders of the Company.

1.04 Continued Independent Director Representation. Each year the proxy
statement for the Company's annual meeting as approved by the Board (each an
"ANNUAL PROXY STATEMENT") shall include as nominees for election to the Board
the Independent Directors who then currently sit on the Board. If any of the
DNAP Independent Directors resigns from, or otherwise leaves, the Board, the
remaining Independent Directors shall by majority vote select a replacement
Independent Director for the departing DNAP Independent Director, subject to
the consent of ELM which shall not be unreasonably withheld or delayed, and
upon the receipt of such consent such individual shall immediately assume the
remaining term of the departing Independent Director. If the ELM Independent
Director resigns, or otherwise leaves, the Board, ELM shall select a
replacement Independent Director for the departing ELM Independent Director,
subject to the consent of a majority of the DNAP Independent Directors which
consent shall not be unreasonably withheld or delayed, and upon the receipt of
such consent such individual shall immediately assume the remaining term of
the departing ELM Independent Director. To the extent permitted by the
certificate of incorporation and the bylaws of the Company, the Board shall
elect each person so designated or nominated, and shall include such
individual in the next Annual Proxy Statement as a nominee for election to the
Board. Notwithstanding the foregoing, the Company shall not be required in the
Annual Proxy Statement for the Company's 1999 annual meeting of stockholders
to include as nominees for election as directors at such meeting any DNAP
Independent Directors then in office, which annual meeting shall be held no
earlier than May 1, 1999.

1.05 ELM Vote. Whenever an election of the directors of the Company is held,
ELM shall vote, or cause to be voted, all shares of the Common Stock that it
directly or indirectly beneficially owns for the incumbent DNAP Independent
Directors (and any replacement Independent Director(s) nominated by the
Independent Directors). In addition, ELM shall not vote its shares in a manner
that contravenes the terms and intentions of this Agreement.

1.06 Removal of Independent Directors. A DNAP Independent Director may be
removed from office only with the unanimous vote of the other DNAP Independent
Directors. An ELM Independent Director may be removed from office only with
the consent of ELM.

1.07 Non-Independent Directors. Other than Robert Serenbetz whom ELM shall
cause to continue as a director so long as he remains an employee of the
Company or any of its Affiliates, ELM (subject to the requirements of (S)1.01
and subject to the adjustment in (S)1.02 (ELM Directors)) and any nominating
or proxy

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<PAGE>

committee of the Company shall have the right to designate or nominate any
replacement director who is not a DNAP Independent Director at the termination
of such director's term or upon death, resignation, retirement,
disqualification, removal from office or other cause. To the extent permitted
by the certificate of incorporation or bylaws of the Company, the Board shall
elect each person so designated or nominated.

1.08 Committees. Each committee which may be established by the Board (other
than a committee of Independent Directors constituted for the purposes of
making any determination under the terms of this Agreement or otherwise) shall
at all times include at least one DNAP Independent Director (in each case
designated by a majority of the Independent Directors), and no action by any
such committee shall be valid unless taken at a meeting for which adequate
notice has been duly given to or waived by the members of such committee. Any
committee member unable to participate in person at any meeting shall be given
the opportunity to participate by telephone. Any DNAP Independent Director
designated by the Independent Directors to serve on any committee may
designate as his or her alternate another DNAP Independent Director.

1.09 Independent Director Approval Required for Certain Actions. In addition
to such other approvals as may be required under applicable law, the approval
of a majority of the Independent Directors then in office shall be required to
approve any of the following:

(a) the sale, lease, license, transfer or other disposal of, including
any pledge or other grant of a security interest in all or a substantial
portion of the business or assets of the Company or any merger or
consolidation of any kind involving the Company in one or in a series of
transactions. (For purposes of this clause, a "SUBSTANTIAL PORTION OF THE
BUSINESS OR ASSETS OF THE COMPANY" shall mean either substantially all of
the assets that constitute the assets of DNAP as of the date of this
Agreement or a portion of the business or assets of the Company accounting
for 51% of the consolidated total assets, contribution to net income or
revenues of the Company and its subsidiaries taken as a whole, and shall
include any intellectual property that is material to the business of the
Company and its subsidiaries taken as a whole, and "MATERIAL INTELLECTUAL
PROPERTY" shall mean any intellectual property that is required in any
process resulting in or independently results in 51% of the revenues of the
Company and its subsidiaries taken as a whole);

(b) any material transaction or activities (including, without
limitation, any repurchase, redemption or issuance of any capital stock or
equity including any Equity Securities of the Company) by the Company or
one of its subsidiaries with or for the benefit of ELM or an ELM Affiliate
(other than any benefit that derives as a result of its or its Affiliate's
ownership interest in the Company) other than as expressly permitted by the
Ancillary Documents (as defined in the Merger Agreement), except that any
amendment to the Ancillary Documents or any waiver by the Company of any
covenant or other provision under them or the Merger Agreement requires
approval under this (S)1.09. For purposes of this (S)1.09(b) "MATERIAL"
transactions and activities shall not include the following so long as the
terms thereof are commercially reasonable and entered on terms that are no
less favorable than could be obtained in a similar transaction with an
independent third party: (i) a transaction or activity, or series of
related transactions or activities not involving the repurchase, redemption
or issuance of any capital stock or equity including any Equity Security,
not reasonably anticipated to result in annual expenditures or annual
revenue in excess of $1,000,000 in any of the first five years after such
transaction occurs or activity begins; (ii) any renewal on substantially
the same terms of an existing agreement other than an Ancillary Agreement
or (iii) an inter-company transfer involving the purchase or sale of goods
or services available in the ordinary course from third party providers on
substantially the same terms. "EQUITY SECURITY" shall mean any (x) voting
stock of the Company (other than shares of voting stock not having the
right to vote generally in any election of directors of the Company), (y)
securities of the Company convertible into or exchangeable for such stock,
and (z) options, rights and warrants issued by the Company to acquire such
stock;

(c) the repurchase or redemption of any Equity Securities or other
capital stock of the Company, other than redemptions required by the terms
thereof and purchases made at fair market value in connection with any
deferred compensation plan maintained by the Company;

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<PAGE>

(d) the creation of any committee of the Board with power to approve any
matter that is the subject of this Agreement;

(e) a tender offer, directly or indirectly, by ELM for Equity Securities
of the Company, as provided in (S)2.01 (Purchase Limitation);

(f) the amendment or the waiver by the Company of a provision of this
Agreement, as provided in (S)6.02 to this Agreement (Amendments; No
Waivers);

(g) any amendment to the certificate of incorporation or bylaws of the
Company which would have a direct adverse effect on the rights or
protections provided to those holders of Common Stock other than ELM and
its Affiliates under this Agreement; or

(h) any attempt to effect or any action that reasonably could be
anticipated to result in the delisting or deregistering of the Company's
Common Stock from the Nasdaq National Market or from any other national
securities exchange on which such Common Stock may then be listed.

1.10 Indemnification and Insurance for Independent Directors.

(a) After the Effective Time, ELM shall cause the Company, to the full
extent permitted, but subject to the limitations of, applicable law, to
indemnify, defend and hold harmless each person who is at any time after
the date of this agreement an Independent Director (for the purposes of
this section, the "INDEMNIFIED PARTIES") against all losses, claims,
damages, costs, expenses, liabilities or judgments or amounts that are paid
in settlement with the approval of the Company (which approval shall not be
unreasonably withheld) of or in connection with any claim, action, suit,
proceeding or investigation based in whole or in part on or arising in
whole or in part out of the fact that such person is or was after the
Effective Time an Independent Director ("INDEMNIFIED LIABILITIES")
including, without limitation, all losses, claims, damages, costs,
expenses, liabilities or judgments based in whole or in part on, or arising
in whole or in part out of, or pertaining to this Agreement or any
transaction contemplated hereby. The Company will pay expenses in advance
of the final disposition of any such action or proceeding to each
Indemnified Party to the full extent permitted by law upon receipt of any
undertaking contemplated by Section 145(e) of the Delaware General
Corporation Law ("DGCL"). Without limiting the foregoing, in the event of
any such claim, action, suit, proceeding or investigation is brought
against any Indemnified Party, (i) the Indemnified Parties may retain
counsel satisfactory to them and the Company, (ii) the Company shall pay
all reasonable fees and expenses of such counsel for the Indemnified
Parties promptly as statements therefor are received, and (iii) the Company
will use all reasonable efforts to assist in the defense of any such
matter, provided that the Company shall not be liable for any settlement or
any claim effected without such party's written consent, which consent,
however, shall not be unreasonably withheld. Any Indemnified Party wishing
to claim indemnification under this (S)1.10, upon learning of any such
claim, action, suit, proceeding or investigation, shall promptly notify the
Company (but the failure so to notify the Company shall not relieve it from
any liability which it may have under this (S)1.10 except to the extent
such failure prejudices such party), and shall deliver to the Company the
undertaking contemplated by Section 145(e) of the DGCL. The Indemnified
Parties as a group shall retain only one law firm to represent them with
respect to each such matter unless there is, under applicable standards of
professional conduct, a conflict on any significant issue between the
positions of any two or more Indemnified Parties.

(b) For a period of five years after the Effective Time, the Company
shall use its best efforts to contract and maintain in effect directors'
and officers' liability insurance covering equally all directors, including
the Independent Directors, on terms and in an amount not less than that
provided to the directors of DNAP prior to the Effective Time (which policy
may take the form of a policy covering the directors of ELM and majority
owned subsidiaries thereof).

(c) In the event that any of the Company or any of its successors and
assigns consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger or transfers and conveys all or substantially all of its property
and assets to any person, then, and in each case, proper provisions shall
be made so that the successor and assigns of such Indemnifying Parties
assume the obligations set forth in this (S)1.10.

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<PAGE>

(d) The provisions of this (S)1.10 are intended to be for the benefit of,
and shall be enforceable by, each Indemnified Party, his or her heirs and
representatives, and may not be amended, altered or repealed without the
written consent of any affected Indemnified Party.

(e) Other than to cause the Company to carry out the terms of this
(S)1.10, ELM shall have no liability or obligation under this (S)1.10,
including, without limitation, any obligation to advance funds to the
Company for the purpose of enabling the Company to pay or satisfy any
obligations arising under this (S)1.10.

ARTICLE II--FURTHER ACQUISITIONS OF COMPANY SECURITIES BY ELM

2.01 Purchase Limitation. Prior to the third anniversary of the date of this
Agreement, ELM and its Affiliates shall not, directly or indirectly, purchase
or otherwise acquire, or propose or offer to purchase or acquire, any Equity
Security of the Company, whether by tender offer, market purchase, privately
negotiated purchase, merger or otherwise. In addition, except as specifically
provided in this Agreement, ELM and its Affiliates shall not solicit any
proxies or form a "group" with any third party as such term is defined in
(S)13(d) of the Securities Exchange Act of 1934, as amended (the "1934 ACT").

2.02 "Top Up" Rights. Notwithstanding the restrictions in (S)2.01 (Purchase
Limitation), when any holder as of the Effective Time (not affiliated with
ELM) of warrants or options to purchase capital stock of DNAP which have been
assumed by the Company pursuant to Sections 2.5 and 2.6 of the Merger
Agreement exercises such warrants or options and is issued shares of the
Common Stock, ELM may make purchases in the open market or in privately
negotiated transactions of such number of shares ("TOP-UP RIGHT") required to
maintain its Voting Interest at the level held immediately prior to the
exercise of the warrants or options referred to in this sentence. ELM's
"VOTING INTEREST" means the percentage of votes for election of directors of
the Company generally controlled directly or indirectly by ELM.

2.03 Subscription Right. Notwithstanding the restrictions in (S)2.01
(Purchase Limitation), upon any issuance (except upon the exercise of warrants
or options creating a Top-Up Right) by the Company (except to a person who is
an Affiliate of ELM), by direct sale or as a result of a merger or otherwise,
ELM has a right to purchase directly from the Company such amount of shares
required to maintain its Voting Interest at the level held immediately before
the issuance referred to in this sentence.

2.04 Subscription Procedure. Any offer of securities required to be made to
ELM pursuant to (S) 2.03 (Subscription Right) shall be made by notice in
writing at least thirty (30) days prior to the date on which the Company
intends to issue and sell such securities (the "SUBSCRIPTION NOTICE"). Such
Subscription Notice shall set forth (i) the approximate number and type of
securities proposed to be issued and sold to persons other than ELM and ELM
Affiliates and the material terms of such securities, (ii) the proposed price
or range of prices at which such securities are proposed to be sold and the
terms of payment, (iii) the number of securities offered to ELM in compliance
with the provisions of (S) 2.03, and (iv) the proposed date of issuance and
sale of such securities. Not later than ten (10) days after receipt of such
notice, ELM shall notify the Company in writing whether it elects to purchase
all or any portion of the securities offered to ELM pursuant to such
Subscription Notice. If ELM elects to purchase any such securities, it shall
be obligated to do so, and the securities that it shall have so elected to
purchase shall be issued and sold to ELM by the Company at the same time and
on the same terms and conditions as the securities that are issued and sold to
third parties. If, for any reason, the sale of securities to the third parties
is not consummated, ELM's election with regard solely to the issuance
referenced in the Subscription Notice shall lapse.

2.05 Termination of Top-Up and Subscription Rights. Both the Top-Up Right
pursuant to (S)2.02 ("Top-Up" Rights) and the Subscription Right pursuant to
(S)2.03 (Subscription Right) shall terminate upon the sale or any other
transfer of shares of Common Stock such that ELM in combination with its
Affiliates no longer beneficially owns more than 50% of the Common Stock on a
fully diluted basis.

2.06 Tender Offer Exception. Notwithstanding the restrictions in (S)2.01
(Purchase Limitation), ELM or an ELM Affiliate may make a tender offer for
100% of the outstanding Common Stock; provided, however, that the majority of
Independent Directors then in office make a determination that the tender
offer is fair to the holders of the Company's Common Stock other than ELM and
its Affiliates from a financial point of view.

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<PAGE>

2.07 Acquisitions of 80.1%. Notwithstanding the restrictions in (S)2.01
(Purchase Limitation), ELM or an ELM Affiliate can acquire additional shares
of the outstanding Common Stock so long as their aggregate beneficial
ownership of Common Stock shall not exceed 80.1%.

ARTICLE III--RESTRICTIONS ON TRANSFER OF COMMON STOCK

3.01 Restrictions on Transfer of Common Stock. Until the third anniversary
of the date of this Agreement, ELM agrees that it will not sell or otherwise
transfer (for the purposes of this section, "TRANSFER" is intended in the
broadest sense and specifically includes, without limitation, a pledge of such
shares (other than a pledge of shares to secure ordinary course loan(s) from
unaffiliated commercial lender(s) or other unaffiliated financing source(s))
and any assignment by operation of law, but shall not include a change-in-
control of ELM) any shares of Common Stock except (i) a transfer to any entity
that is directly or indirectly 51% or more owned and controlled by ELM,
provided that such entity agrees in writing to assume all of ELM's obligations
under this Agreement and performs such obligations, (ii) if it shall have
become illegal for ELM to own its shares of Common Stock directly or
indirectly or exercise fully its rights of ownership with respect to its
shares of Common Stock, ELM may sell such shares as applicable law requires,
(iii) pursuant to an unsolicited tender offer by a non-Affiliate of ELM, (iv)
any sale or other transfer of Common Stock by ELM or an Affiliate of ELM which
results in ELM together with its Affiliates beneficially owning less than 51%
of the outstanding Common Stock (on a fully diluted basis) and all holders of
Common Stock (other than ELM and its Affiliates) are given the opportunity to
sell all of their Common Stock in the transaction on substantially the same
terms per share as ELM (provided, that such holders have the opportunity to
receive all of their consideration in cash), and (v) any sale so long as,
after giving effect to such sale, ELM and its Affiliates shall beneficially
own 51% or more of the outstanding Common Stock on a fully diluted basis.

ARTICLE IV--REGISTRATION RIGHTS

4.01 Registration.

(a) The Company agrees that, at any time after the third anniversary of
the date of this Agreement (or such earlier date as it shall have become
illegal for ELM to own Common Stock directly or indirectly or to exercise
fully all rights of ownership with respect to its shares) and until the
tenth anniversary of the date of this Agreement, upon the request of ELM,
the Company will file a registration statement (a "REGISTRATION STATEMENT")
under the 1933 Act as to the number of shares specified in such request
(the "REGISTERED SHARES"); provided that, subject to (S)4.04 of this
Agreement (Additional Conditions), the Company shall not be required to
file more than two Registration Statements that become effective and remain
effective for the period referred to in (S)4.01(b).

(b) The Company agrees to use its best efforts (i) to have any
registration of the Registered Shares declared effective as promptly as
practicable after the filing thereof, and (ii) to keep such registration
statement effective for a period (up to three months) sufficient to
complete the distribution of the Registered Shares. The Company further
agrees to supplement or make amendments to the Registration Statement, if
required (w) to respond to the comments of the Securities and Exchange
Commission, (x) by the registration form utilized by the Company for such
registration or by the instructions applicable to such registration form,
(y) by the 1933 Act or the rules and regulations thereunder, or (z) by ELM
(or any underwriter for ELM) with respect to information concerning ELM or
such underwriter or the plan of distribution to be utilized with respect to
the Registered Shares. The Company agrees to furnish to ELM copies of any
such supplement or amendment prior to its being used or filed with the
Securities and Exchange Commission (the "SEC").

4.02 Registration Procedures. Subject to the provisions of (S)4.01 of this
Agreement (Registration) in connection with the registration of shares
hereunder, the Company will as expeditiously as possible:

(a) furnish to ELM, prior to filing of a Registration Statement, copies
of such Registration Statement as is proposed to be filed, and thereafter
such number of copies of such Registration Statement, each amendment and
supplement thereto (in each case including all exhibits thereto), the
prospectus included in

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such Registration Statement (including each preliminary thereto), the
prospectus included in such Registration Statement (including each
preliminary prospectus) and such other documents in such quantities as ELM
may reasonably request from time to time in order to facilitate the
disposition of the Registered Shares:

(b) use all reasonable efforts to register or qualify the Registered
Shares under such other securities or Blue Sky laws of such jurisdiction as
ELM reasonably requests and of any and all other acts and things as may be
reasonably necessary or advisable to enable ELM to consummate the
disposition in such jurisdictions of the Shares owned by ELM; provided that
the Company will not be required to qualify but for this subsection (b),
(ii) subject itself to taxation in any such jurisdiction, or (iii) consent
to general service of process in any such jurisdiction;

(c) use all reasonable efforts to cause the Registered Shares to be
registered with or approved by such other governmental agencies or
authorities as may be necessary by virtue of the business and operations of
the Company to enable ELM to consummate the disposition of such Shares;

(d) notify ELM, at any time when a prospectus relating thereto is
required to be delivered under the 1933 Act, of the happening of any event
as a result of which the prospectus included in such Registration Statement
or amendment contains an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading, and the Company will prepare a
supplement or amendment to such prospectus so that, as thereafter delivered
to the purchasers of the Registered Shares, such prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading;

(e) enter into customary agreements (including an underwriting agreement
in customary form) and take such other actions as are reasonably required
in order to expedite or facilitate the disposition of the Registered
Shares;

(f) make available for inspection by ELM, any underwriter participating
in any disposition pursuant to such registration, and any attorney,
accountant or other agent retained by any ELM or any such underwriter
(collectively, the "INSPECTORS"), all financial and other records,
pertinent corporate documents and properties of the Company (collectively,
the "RECORDS") as shall be reasonably necessary to enable them to exercise
their due diligence responsibility, and cause the officers, directors and
employees of the Company to supply all information reasonably requested by
any such Inspector in connection with such registration; provided that (i)
records and information obtained hereunder shall be used by such persons
only to exercise their due diligence responsibility, and (ii) records or
information which the Company determines, in good faith, to be confidential
shall not be disclosed by the Inspectors unless (x) the disclosure of such
Records or information is necessary to avoid or correct a misstatement or
omission in the Registration Statement, or (y) the release of such Records
or information is ordered pursuant to a subpoena or other order from a
court or governmental authority of competent jurisdiction. ELM shall use
reasonable efforts, prior to any such disclosure, to inform the Company
that such disclosure is necessary to avoid or correct a misstatement or
omission in the Registration Statement. ELM further agrees that it will,
upon learning that disclosure of such Records or information is sought in a
court of governmental authority, give notice to the Company and allow the
Company, at the expense of the Company, to undertake appropriate action to
prevent disclosure of the Records or information deemed confidential;

(g) use all reasonable efforts to obtain a comfort letter from the
independent public accountants for the Company in customary form and
covering such matters of the type customarily covered by comfort letters as
ELM reasonably requests;

(h) otherwise use all reasonable efforts to comply with all applicable
rules and regulations of the SEC, and make generally available to its
security holders, as soon as reasonably practicable, an earnings statement
covering a period of twelve months, beginning within three months after the
effective date of the registration, which earnings statement shall satisfy
the provisions of (S)11(a) of the 1933 Act and Rule 158 thereunder; and

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<PAGE>

(i) use all reasonable efforts to cause all Registered Shares to be
listed on each securities exchange on which similar securities issued by
the Company are listed.

4.03 Conditions to Offerings. The obligations of the Company to take the
actions contemplated by (S)4.01 (Registration) with respect to an offering of
Shares shall be subject to the following conditions:

(i) The Registered Shares shall constitute at least 10% of the
outstanding Common Stock. If Registered Shares are to be distributed in an
underwritten firm commitment offering, ELM shall have the right to select
the investment banker or bankers and lead manager or managers to administer
the offering and its or their counsel; provided that such lead manager or
managers and such counsel must be reasonably satisfactory to the Company.

(ii) There shall not have been an offering registered pursuant to (S)4.01
(Registration) within the immediately preceding twelve months and if such
earlier offering was completed or is continuing.

(iii) ELM shall conform to all applicable requirements of the 1933 Act
and the 1934 Act with respect to the offering and sale of securities and
advise each underwriter, broker or dealer through which any of the
Registered Shares are offered that the Registered Shares are part of a
distribution that is subject to the prospectus delivery requirements of the
1933 Act.

The Company may require ELM to furnish to the Company such information
regarding ELM or the distribution of the Registered Shares as the Company may
from time to time reasonably request in writing, in each case only as required
by the 1933 Act or the rules and regulations thereunder or under state
securities or Blue Sky laws.

ELM agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in (S)4.02(d) hereof, such holder
will forthwith discontinue disposition of Registered Shares pursuant to the
registration covering such Shares until ELM's receipt of the copies of the
supplemented or amended prospectus contemplated by (S)4.02(d) hereof.

4.04 Additional Conditions. The Company's obligations pursuant to (S)4.01
(Registration) shall be suspended if (i) the fulfillment of such obligations
would require the Company to make a disclosure that would, in the reasonable
good faith judgment of the Board, be detrimental to the Company because it is
premature, (ii) the Company has filed a registration statement with respect to
securities to be distributed in an underwritten public offering and it is
advised by its lead or managing underwriter that an offering by ELM of the
Registered Shares would materially adversely affect the distribution of such
equity securities, or (iii) the fulfillment of such obligations would require
the Company to prepare audited financial statements not required to be
prepared for the Company to comply with its obligations under the 1934 Act as
of any date not coincident with the last day of any fiscal year of the
Company. Such obligations shall be reinstated (x) in the case of clause (i)
above, upon the making of such disclosure by the Company (or, if earlier, when
such disclosure would either no longer be necessary for the fulfillment of
such obligations or no longer be detrimental, (y) in the case of clause (ii)
above, upon the conclusion of any period during which the Company would not,
pursuant to the terms of its underwriting arrangements, be permitted to sell
the Registered Securities for its own account, and (z) in the case of clause
(iii) above, as soon as it would no longer be necessary to prepare such
financial statements to comply with the 1933 Act. The period during which ELM
is required to sell its shares pursuant to (S)4.05 (Registration Expenses)
shall be tolled for the duration of any suspension pursuant to this paragraph.

4.05 Registration Expenses. All expenses incident to the performance of or
compliance with this Article IV by the Company, including, without limitation,
all fees and expenses of compliance with securities or Blue Sky laws
(including reasonable fees and disbursements of counsel in connection with
Blue Sky qualifications of the Registered Shares), rating agency fees,
printing expenses, messenger and delivery expenses, internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the fees and expenses
incurred in connection with the listing of the securities to be registered on
each securities exchange on which similar securities issued by the Company are
then listed, fees and

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<PAGE>

disbursements of counsel for the Company and its independent certified public
accounts (including the expenses of any comfort letters required by or
incident to such performance), securities acts liability insurance (if the
Company elects to obtain such insurance), the reasonable fees and expenses of
any special experts retained by the Company in connection with such
registration and the fees and expenses of other persons retained by the
Company (all such expenses being herein called "REGISTRATION EXPENSES"), will
be borne by the Company. The Company will not have any responsibility for any
registration or filing fees payable under any federal or state securities or
Blue Sky laws or for any of the expenses of the holders of Registrable
Securities incurred in connection with any registration hereunder including,
without limitation, underwriting fees, discounts and commissions and transfer
taxes, if any, attributable to the sale of Registrable Securities, counsel
fees of such holders and travel costs.

4.06 Indemnification Contribution.

(a) Indemnification by the Company. The Company agrees to indemnify, to
the fullest extent permitted by law, ELM, its directors and officers and
each person who controls ELM (within the meaning of either the 1933 Act or
the 1934 Act) against any and all losses, claims, damages, liabilities and
expenses (including attorneys' fees) caused by any untrue or alleged untrue
statement of material fact contained in any Registration Statement,
prospectus or preliminary prospectus (each as amended and or supplemented,
if the Company shall have furnished any amendments or supplements thereto),
or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
(in the case of a prospectus, in the light of the circumstances, under
which they were made) not misleading, provided that the Company shall not
be required to indemnify ELM or its officers, directors or controlling
persons for any losses, claims, damages, liabilities or expenses resulting
from any such untrue statement or omission if such untrue statement or
omission is made in reliance on and conformity with any information with
respect to such ELM or such other parties furnished to the Company by ELM
or such other parties expressly for use therein. In connection with an
underwritten offering, the Company will indemnify each underwriter thereof,
the officers and directors of such underwriter, and each person who
controls such underwriter (within the meaning of either the 1933 Act or
1934 Act) to the same extent as provided above with respect to the
indemnification of ELM.

(b) Indemnification by ELM. In connection with any registration in which
ELM is participating, ELM will furnish to the Company in writing such
information and affidavits with respect to ELM as the Company reasonably
requests for use in connection with any such registration, prospectus, or
preliminary prospectus and agrees to indemnify the Company, its directors,
its officers who sign the Registration Statement and each person, if any,
who controls the Company (within the meaning of either the 1933 Act or the
1934 Act) to the same extent as the foregoing indemnity from the Company to
such holder, but only with respect to information relating to such holder
furnished to the Company in writing by ELM expressly for use in the
Registration Statement, the prospectus, any amendment or supplement
thereto, or any preliminary prospectus.

(c) Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving
any person in respect of which indemnity may be sought pursuant to
(S)4.07(a) or (S)4.07(b), such person (hereinafter called the indemnified
party) in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees
and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such
counsel, or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and the indemnified party shall have been advised by counsel that
representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for
the fees and expenses of more

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<PAGE>

than one separate firm (in addition to any local counsel) for all such
indemnified parties, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm for
the indemnified parties, such firm shall be designated in writing by the
indemnified parties. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel as contemplated by
the third sentence of this (S)4.07(c), the indemnifying party agrees that
it shall be liable for any settlement of any proceeding affected without
its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request, and
(ii) such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request or reasonably objected in writing, on
the basis of the standards set forth herein, to the propriety of such
reimbursement prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which
any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.

(d) Contribution. If the indemnification provided for in this (S)4.07
from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities or
expenses referred to in this (S)4.07, then the indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and indemnified
parties in connection with the actions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged
untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied
by, such indemnifying party or indemnified parties, and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
(S)4.07(c), any legal or other fees or expenses reasonably incurred by such
party in connection with any investigation or proceeding.

The parties hereto agree that it would not be just and equitable if
contribution pursuant to this (S)4.07(d) were determined by pro rata
allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in the immediately
preceding paragraph. No person guilty of fraudulent misrepresentation
(within the meaning of(S)11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

If indemnification is available under this (S)4.07, the indemnifying
parties shall indemnify each indemnified party to the full extent provided
in (S)(S)4.06(a) and (b) without regard to the relative fault of said
indemnifying party or indemnified party or any other equitable
consideration provided for in this (S)4.06(d).

4.07 Rule 144. The Company covenants that it will file the reports required
to be filed by it under the 1933 Act and the 1934 Act and the rules and
regulations adopted by the SEC thereunder, and it will take such further
action as ELM may reasonably request, all to the extent required from time to
time to enable ELM to sell Shares without registration under the 1933 Act
within the limitation of the exemptions provided by (i) Rule 144 under the
1933 Act, as such Rule may be amended from time to time, or (ii) any similar
rule or regulation hereafter adopted by the SEC. Upon the request of ELM, the
Company will deliver to ELM a written statement as to whether it has complied
with such requirements.

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4.08 No Inconsistent Agreements. The Company will not hereafter enter into
any agreement with respect to its securities which is inconsistent with the
rights granted to ELM in this Agreement.

4.09 Determination by Independent Directors. Any determination required to
be made by the Company under this Article IV shall be made by a majority of
the Independent Directors then in office.

ARTICLE V--REPRESENTATIONS AND WARRANTIES

5.01 Representations of the Company.

(a) The execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the transactions
contemplated hereby are within the Company's corporate powers and have been
duly authorized by all necessary corporate action. This Agreement
constitutes a valid and binding agreement of the Company.

(b) The execution, delivery and performance by the Company of this
Agreement require no action by or in respect of, or filing with, any
governmental body, agency, official or authority, other than (i) compliance
with any applicable requirements of the 1934 Act; (ii) compliance with any
applicable requirements of the 1933 Act; and (iii) compliance with any
applicable foreign or state securities or Blue Sky laws.

(c) The execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the transactions
contemplated hereby do not and will not (i) contravene or conflict with the
certificate of incorporation or bylaws of the Company, and (ii) assuming
compliance with the matters referred to in (S)4.01(b), contravene or
conflict with or constitute a violation of any provision of any law,
regulation, judgment, injunction, order or decree binding upon or
applicable to the company.

5.02 Representations of ELM.

(a) The execution, delivery and performance by ELM of this Agreement and
the consummation by ELM of the transactions contemplated hereby are within
ELM's corporate powers and have been duly authorized by all necessary
corporate action. This Agreement constitutes a valid and binding agreement
of ELM.

(b) The execution, delivery and performance by ELM of this Agreement
require no action by or in respect of, or filing with, any governmental
body, agency, official or authority, other than (i) compliance with any
applicable requirements of the 1934 Act; (ii) compliance with any
applicable requirements of the 1933 Act; and (iii) compliance with any
applicable foreign or state securities or Blue Sky laws.

(c) The execution, delivery and performance by ELM of this Agreement and
the consummation by ELM of the transactions contemplated hereby do not and
will not (i) contravene or conflict with the certificate of incorporation
or bylaws of ELM, and (ii) assuming compliance with the matters referred to
in (S)4.01(b), contravene or conflict with or constitute a violation of any
provision of any law, regulation, judgment, injunction, order or decree
binding upon or applicable to ELM.

ARTICLE VI--MISCELLANEOUS

6.01 Notices. All notices, requests, demands, and other communications
required or permitted to be given or made hereunder by any party hereto shall
be in writing and shall be deemed to have been duly given or made if (i)
delivered personally, (ii) sent by prepaid overnight courier service, or (iii)
sent by telecopy or facsimile transmission, answer back requested, to the
parties at the following addresses (or at such other addresses as shall be
specified by the parties by like notice:

if to ELM:
c/o Pulsar Internacional, S.A. de C.V.
Edificio Torrealta
Av. Roble 300 Mezzanine
66265 Garza Garcia, N.L.
Mexico
Attention: Lic. Alejandro Sanchez
Telefax: 011-528-335-6993

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if to the Company:
DNAP Holding Corporation
6701 San Pablo Avenue
Oakland, California 94608
Attention: Carlos Herrera, Chairman and Chief Executive Officer
Telefax:

in each case, with a copy to each Independent Director at their address as
reflected in the Company's records.

Such notices, requests, demands, and other communications shall be effective
upon actual receipt by the intended recipient.

6.02 Amendments; No Waivers.

(a) Any provision of this Agreement may be amended or waived if, and only
if, such amendment or waiver is in writing and signed, in the case of an
amendment, by ELM and Company, or in the case of a waiver, by the party
against whom the waiver is to be effective; provided that no such amendment
or waiver shall be effective without the approval of a majority of the
Independent Directors.

(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single
or partial exercise thereof preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.

6.03 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other party hereto except that, ELM may assign its
rights to any transferee of its shares permitted under clauses (i) and (iii)
of (S)3.01 (Restrictions on Transfer of Common Stock).

6.04 Governing Law. This Agreement shall be construed in accordance with and
governed by the law of the State of Delaware.

6.05 Counterparts; Effectiveness. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument. This
Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by the other party hereto.

6.06 Specific Performance. The Company acknowledges and agrees that ELM's
and the Company's respective remedies at law for a breach or threatened breach
of any of the provisions of this Agreement would be inadequate and, in
recognition of that fact, agrees that, in the event of a breach or threatened
breach by the Company or ELM of the provisions of this Agreement, in addition
to any remedies at law, ELM and the Company, respectively, without posting any
bond shall be entitled to obtain equitable relief in the form of specific
performance, a temporary restraining order, a temporary or permanent
injunction or any other equitable remedy which may then be available.

6.07 Termination. Except for the provisions of Article V, the provisions of
(S)1.07 pertaining to Robert Serenbetz and the provisions of (S)1.10, which
provisions shall survive for the periods set forth therein, this Agreement
shall terminate upon the first to occur of (i) ELM and its Affiliates becoming
the beneficial owner of 100% of the voting stock of the Company, and (ii) the
day immediately preceding the 1999 annual meeting of Company stockholders,
which annual meeting shall be held no earlier than May 1, 1999.

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<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

Empresas La Moderna, S.A. DE C.V.

By:__________________________________
Name:
Title:

DNAP Holding Corporation

By:__________________________________
Name:
Title:

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ANNEX III [LOGO APPEARS HERE]

July 30, 1996

Board of Directors
DNA Plant Technology Corporation
6701 San Pablo Avenue
Oakland, California 94608

Gentlemen:

We have acted as financial advisor to you in connection with the proposed
merger transaction ("Merger") whereby Bionova Acquisition, Inc. ("Merger
Sub"), a wholly owned subsidiary of Bionova U.S., Inc. ("Bionova"), will be
merged with and into DNA Plant Technology Corporation (the "Company"),
pursuant to an Agreement and Plan of Merger, dated as of January 26, 1996, as
amended (the "Merger Agreement"), among Empresas La Moderna, S.A. de C.V.
("Parent"), Bionova, S.A. de C.V. ("Bionova Mexico"), Bionova, Merger Sub and
the Company. Capitalized terms not otherwise defined herein shall have the
meaning set forth in the Merger Agreement.

As more specifically set forth in the Merger Agreement, as a condition to
the Merger, Parent shall cause the transfer directly and indirectly to Bionova
of its interest in the various affiliated entities referred to in the Merger
Agreement as the "Bionova Group." Upon consummation of the Merger, among other
things, the issued and outstanding shares of common stock of the Company
("Company Common Stock") and the issued and outstanding shares of $2.25
Convertible Exchangeable Preferred Stock of the Company (the "Company
Convertible Exchangeable Preferred Stock") will be converted into the right to
receive an aggregate of approximately 5.502 million shares of Bionova Common
Stock (the "Aggregate Merger Consideration"). Company Common Stock and Company
Convertible Exchangeable Preferred Stock are herein referred to collectively
as "Company Stock." You have requested our opinion with respect to the
fairness, from a financial point of view, as of the date hereof, of the
Aggregate Merger Consideration to the holders of Company Stock as a group.

Piper Jaffray Inc., as a customary part of its investment banking business,
is engaged in the valuation of businesses and their securities in connection
with mergers and acquisitions, underwriting and secondary distributions of
securities, private placements, and valuation for estate, corporate and other
purposes. Piper Jaffray has performed financial advisory services for the
Company in the past for which it has received customary fees, including 30,000
shares of Company Common Stock held by Piper Jaffray. For our services in
rendering this opinion, the Company will pay a fee and indemnify us against
certain liabilities. In addition, the Company has agreed to pay us a fee when
the Merger is consummated.

In arriving at our opinion, we have undertaken such review, analyses and
inquiries as we deemed necessary and appropriate under the circumstances.
Included in our review were (i) the Merger Agreement, (ii) the Non-Exclusive
Patent License Agreement, the Loan Agreement and the Sole Patent License
Agreement, each dated as of January 26, 1996, (iii) the forms of the Long-Term
Funded Research and Development Agreement and Governance Agreement, each as
attached to the Merger Agreement, (iv) certain information relating to the
business, financial condition and operations of Parent and the Bionova Group
and certain other financial and operating data of the Bionova Group prepared
for financial planning purposes and furnished by the management of Bionova
Group, (v) certain financial and securities data of companies deemed similar
to the Bionova Group, (vi) to the extent publicly available, the financial
terms of certain acquisition transactions involving companies operating in
industries deemed similar to those in which the Company and the Bionova Group
operate, (vii) publicly available information relative to the Company, (viii)
certain other financial and operating data of the Company prepared for
financial planning purposes and furnished by the management of the Company,
(ix) certain financial and operating data of the combined company resulting
from the Merger (the "Combined
<PAGE>

Company") furnished by the management of the Company, and (x) certain
financial and securities data of the Company and companies deemed similar to
the Company. We have visited the headquarters of the Company in California and
have had discussions with members of its management concerning the Company's
financial condition and current operating results and the business outlook for
the Company and the Combined Company. We have also visited the headquarters
and principal facilities of Parent and the Bionova Group and have had
discussions with members of its management concerning the Bionova Group's
financial condition and current operating results, the business outlook for
the Bionova Group and the Combined Company and Parent's plans relating to the
Combined Company.

We have relied upon and assumed the accuracy, completeness and fairness of
the financial statements and other information provided to us by the Company,
Parent and the Bionova Group or otherwise made available to us, and have not
attempted independently to verify such information. We have further relied
upon the assurances of the managements of the Company, Parent and the Bionova
Group that the information provided to us by the Company, Parent and the
Bionova Group has been prepared on a reasonable basis, and, with respect to
financial planning data, products and technologies under development, and
other business outlook information, reflects the best currently available
estimates, and that they are not aware of any information or facts that would
make the information provided to us incomplete or misleading. Upon the advice
of the Company, Parent and the Bionova Group and their legal and accounting
advisors, we have assumed (i) the Merger will be treated as a purchase for
accounting purposes; and (ii) the Merger will qualify as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended. We have not received advice from legal counsel to the Company or
Bionova Group concerning the probable outcome of, or estimated damages which
might arise from, any pending or threatened litigation, possible unasserted
claims or other contingent liabilities, to which either the Company or Bionova
Group or their affiliates is a party or may be subject and have undertaken no
analysis thereof independently. Accordingly, at the Company's direction and
with its consent, our opinion makes no assumption concerning, and therefore
does not consider, the possible assertion of claims, outcomes or damages
arising out of any such matters.

In arriving at our opinion, we have not performed any appraisals or
valuations of specific assets of the Company or the Bionova Group, including
without limitation, intellectual property, and we express no opinion regarding
the liquidation value of any entity. Our opinion expressed herein relates
solely to the fairness, from a financial point of view, as of the date hereof,
of the Aggregate Merger Consideration to the holders of Company Stock as a
whole, and not the division thereof among the holders of classes of Company
Stock. We were not requested to opine as to, and this opinion does not in any
manner address the Company's underlying decision to proceed with or effect the
Merger.

This opinion is based upon the information available to us and facts and
circumstances as they exist and are subject to evaluation on the date hereof;
events occurring after the date hereof could materially affect the facts and
assumptions used in preparing this opinion. We are not expressing any opinion
herein as to the prices at which shares of Company Stock have traded or shares
of Bionova Common Stock may trade at any future time.

This opinion is for the benefit of the Board of Directors of the Company and
shall not be relied upon, published or otherwise used, nor shall any public
references to us be made without our written consent. This letter may be
included in the proxy statement/prospectus mailed to the Company's
stockholders in connection with the Merger. This opinion is not intended to be
and does not constitute a recommendation to any stockholder as to how such
stockholder should vote with respect to the Merger.

Based upon and subject to the foregoing and based upon such other factors as
we consider relevant, it is our opinion that the Aggregate Merger
Consideration proposed to be received by the holders of Company Stock in the
Merger is fair in the aggregate, from a financial point of view, as of the
date hereof, to the holders of Company Stock as a group.

Sincerely,

Piper Jaffray Inc.

2
<PAGE>
- -------------------------------------------------------------------------------
/ /

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR.

PROPOSAL TO ADOPT THE MERGER AGREEMENT.

FOR /X/ AGAINST /X/ ABSTAIN /X/

Change of Address and
or Comments Mark Here /X/

Note: Please sign exactly as shown at left.
If stock is jointly held, each owner should
sign. Executors, administrators, trustees,
guardians, attorneys and corporate officers
should indicate their fiduciary capacity or
full title when signing.

| Dated:_______________________________, 1996
| ___________________________________________
______| ___________________________________________
Signature(s) of Stockholder(s)

Sign, Date, and Return the Votes MUST be indicated
Proxy Card Promptly Using (x) in Black or Blue ink. /X/
the Enclosed Envelope.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

DNA PLANT TECHNOLOGY CORPORATION

SPECIAL MEETING OF STOCKHOLDERS

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Robert Serenbetz, Willem F. O. Spiegel
and Stephen M. Prichard, and each of them, with power of substitution, as
proxies and authorizes them to represent and to vote, as designated below, all
the common stock, par value $.01 per share, of DNA PLANT TECHNOLOGY CORPORATION
that the undersigned is entitled to vote at the Special Meeting of Stockholders
of DNA PLANT TECHNOLOGY CORPORATION to be held on September 26, 1996 at 10:00
a.m., local time, at the Berkeley Marina Marriott, 200 Marina Boulevard,
Berkeley, California 94710, and at any adjournment or postponement thereof.

This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder(s).

If no direction is made, this proxy will be voted FOR the adoption of
the Merger Agreement, and in the discretion of the proxy holders for all
procedural matters that come before the Special Meeting.

(Continued and to be Completed on Reverse Side.)

DNA PLANT TECHNOLOGY CORPORATION
P.O. BOX 11076
NEW YORK, N.Y. 10203-0076
- --------------------------------------------------------------------------------

<PAGE>

PART II INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The General Corporation Law of the State of Delaware (the "DGCL") permits
Bionova U.S. Inc. ("Bionova") and its stockholders to limit directors'
exposure to liability for certain breaches of the directors' fiduciary duty,
either in a suit on behalf of Bionova or in an action by stockholders of
Bionova.

Bionova's Certificate of Incorporation eliminates the liability of directors
to stockholders or Bionova for monetary damages arising out of the directors'
breach of their fiduciary duty of care. The Certificate of Incorporation also
authorizes Bionova to indemnify its directors, officers, incorporators,
employees, and agents with respect to certain costs, expenses and amounts
incurred in connection with an action, suit or proceeding by reason of the
fact that such person was serving as a director, officer, incorporator,
employee or agent of Bionova. In addition, Bionova's Certificate of
Incorporation permits Bionova to provide additional indemnification rights to
its officers and directors and to indemnify them to the greatest extent
possible under the DGCL.

Pursuant to the Governance Agreement to be entered into upon the
consummation of the proposed merger transaction, Empresas La Moderna, S.A. de
C.V., an affiliate of Bionova ("ELM"), has agreed to cause Bionova to
indemnify each Independent Director (as defined in such Governance Agreement)
against all losses, claims, damages, costs, expenses, liabilities or judgments
or amounts that are paid in settlement with Bionova's consent of or in
connection with any claim, action, suit, proceeding or investigation based in
whole or in part on, or arising in whole or in part out of the fact that such
person as or was an Independent Director, subject to the terms and conditions
of such Governance Agreement.

ELM maintains a standard form of officer's and directors' liability
insurance policy which provides coverage to the officers and directors of
Bionova for certain liabilities, including certain liabilities which may arise
out of this Registration Statement.

The foregoing summaries are necessarily subject to the text of the statute,
bylaws, certificate of incorporation and insurance policy referenced above and
are qualified in their entirety by reference thereto.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(A) EXHIBITS

<TABLE>
<C> <S>
2.1 Agreement and Plan of Merger (Annex I to the Proxy Statement/Prospectus)
Amendment No. 1 to Agreement and Plan of Merger (Annex I to the Proxy
2.2 Statement/Prospectus)
Amendment No. 2 to Agreement and Plan of Merger (Annex I to the Proxy
2.3 Statement/Prospectus)
3.1 Certificate of Incorporation of Bionova
3.2 Bylaws of Bionova
5.1 Opinion of Thompson & Knight, P.C., regarding legality of securities
8.1 Opinion of Thompson & Knight, P.C., regarding federal tax matters
10.1 Loan Agreement dated as of January 26, 1996 between Bionova and DNAP
Assignment of Patents dated as of January 26, 1996 made by DNAP in favor
10.2 of ELM
Sole Patent License Agreement dated as of January 26, 1996 between DNAP
10.3 and Bionova
Non-Exclusive Patent License Agreement dated as of January 26, 1996
10.4 between DNAP and Bionova
10.5 Form of Governance Agreement between ELM and Bionova (Annex II to the
Proxy Statement/Prospectus)
10.6 Form of Long Term Funded Research Agreement between ELM and DNAP
10.7 Promissory Note dated January 26, 1996
</TABLE>

II-1
<PAGE>

<TABLE>
<C> <S>
21.1 Subsidiaries of the Registrant
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Price Waterhouse
23.3 Consents of Thompson & Knight, P.C. (included in Exhibits 5.1 and 8.1)
23.4 Consent of Piper Jaffray Inc.
23.5 Consent of Price Waterhouse LLP
24.1 Power of Attorney (included on page II-4 of this Registration Statement)
99.1 Consent of Robert Serenbetz to become a Director
99.2 Consent of Dr. Nam-Hai Chua to become a Director
99.3 Consent of Dr. Gerald Laubach to become a Director
99.4 Consent of Evelyn Berezin to become a Director
99.5 Consent of Douglas Luke, Jr. to become a Director
99.6 Consent of Bernardo Jimenez to become a Director
</TABLE>

(B) FINANCIAL STATEMENT SCHEDULES

DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES

II Valuation and qualifying accounts and reserves (included on page F-21 of
the Proxy Statement/Prospectus constituting Part I hereof).

All other schedules are omitted as the required information is presented in
the consolidated financial statements or related notes or is not applicable.

ITEM 22. UNDERTAKINGS.

(1) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer, or
controlling person of the registrant in the successful defense of any action,
suit, or proceeding) is asserted by such director, officer, or controlling
person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification is against public policy as expressed in
the Securities Act of 1933 and will be governed by the final adjudication of
such issue.

(2) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of Form S-4, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in the
documents filed subsequent to the effective date of the Registration Statement
through the date of responding to the request.

(3) The undersigned registrant hereby undertakes to supply by means of post-
effective amendment all information concerning a transaction, and the company
being acquired involved therein, that was not the subject of and included in
the Registration Statement when it became effective.

(4) The undersigned registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this Registration Statement, by any

II-2
<PAGE>

person or party who is deemed to be an underwriter within the meaning of Rule
145(c), the issuer undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other Items of the applicable form.

(5) The registrant undertakes that every prospectus (i) that is filed
pursuant to paragraph (4) immediately preceding or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Securities Act of 1933 and is used
in connection with an offering of securities subject to Rule 415, will be
filed as a part of an amendment to the Registration Statement and will not be
used until such amendment is effective, and that, for purposes of determining
any liability under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

II-3
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF MONTERREY AND STATE OF
NUEVO LEON, MEXICO ON THE 9TH DAY OF AUGUST, 1996.

Bionova U.S. Inc.

/s/ Carlos Herrera
By: _________________________________
CARLOS HERRERA CHAIRMAN OF THE
BOARD AND CHIEF EXECUTIVE OFFICER

The persons whose signatures appear below hereby severally constitute and
appoint Carlos Herrera and Arthur H. Finnel, and each of them, his true and
lawful attorneys-in-fact and agents, with full powers of substitution and
resubstitution, for him and in his name, place, and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact and agents or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED:

SIGNATURE TITLE DATE

/s/ Carlos Herrera Chairman of the August 9th,
- ------------------------------------- Board and Chief 1996
CARLOS HERRERA Executive Officer
and Director
(Principal
Executive Officer)

/s/ Arthur H. Finnel Treasurer and Chief August 9th,
- ------------------------------------- Financial Officer 1996
ARTHUR H. FINNEL (Principal
Financial Officer
and Principal
Accounting Officer)

/s/ Peter Davis Director August 9th,
- ------------------------------------- 1996
PETER DAVIS

/s/ Francisco Gonzalez Director August 9th,
- ------------------------------------- 1996
FRANCISCO GONZALEZ

/s/ Erik Jurgensen Director August 9th,
- ------------------------------------- 1996
ERIK JURGENSEN

/s/ Alejandro Rodriguez Director August 9th,
- ------------------------------------- 1996
ALEJANDRO RODRIGUEZ

II-4

<PAGE>

EXHIBIT 3.1

CERTIFICATE OF INCORPORATION
OF
BIONOVA U.S. INC.

ARTICLE I

The name of the Corporation is BIONOVA U.S. INC.

ARTICLE II

The address of the Corporation's registered office in the State of Delaware
is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle 19801, and the name of the Corporation's registered agent
at such address is The Corporation Trust Company.

ARTICLE III

The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of the
State of Delaware.

ARTICLE IV

Section 1. The total number of shares of all classes of stock which the
Corporation shall have authority to issue is Two Hundred Fifty-Five Million
(255,000,000) consisting of (1) Two Hundred Fifty Million (250,000,000) shares
of Common Stock, par value $.01 per share ("Common Stock"), and (2) Five Million
(5,000,000) shares of Preferred Stock, par value $.01 per share ("Preferred
Stock").

Section 2. The Board of Directors is hereby expressly authorized, by
resolution or resolutions, to provide, out of the unissued shares of Preferred
Stock, for series of Preferred Stock. Before any shares of any such series are
issued, the Board of Directors shall fix, and hereby is expressly empowered to
fix, by resolution or resolutions, the following provisions of the shares
thereof:

(a) the designation of such series, the number of shares to
constitute such series and the stated value thereof if different
from the par value thereof;

(b) whether the shares of such series shall have voting rights, in
addition to any voting rights provided by law, and, if so, the
terms of such voting rights, which may be general or limited;

(c) the dividends, if any, payable on such series, whether any such
dividends shall be cumulative, and, if so, from what dates, the
conditions and dates upon which such dividends shall be payable,
and the preference or relation
<PAGE>

which such dividends shall bear to the dividends payable on any
shares of stock of any other class or any other series of this
class;

(d) whether the shares of such series shall be subject to redemption
by the Corporation, and, if so, the times, prices and other
conditions of such redemption;

(e) the amount or amounts payable upon shares of such series upon,
and the rights of the holders of such series in, the voluntary or
involuntary liquidation, dissolution or winding up, or upon any
distribution of the assets, of the Corporation;

(f) whether the shares of such series shall be subject to the
operation of a retirement or sinking fund and, if so, the extent
to and manner in which any such retirement or sinking fund shall
be applied to the purchase or redemption of the shares of such
series for retirement or other corporate purposes and the terms
and provisions relative to the operation thereof;

(g) whether the shares of such series shall be convertible into, or
exchangeable for, shares of stock of any other class or any other
series of this class or any other securities and, if so, the
price or prices or the rate or rates of conversion or exchange
and the method, if any, of adjusting the same, and any other
terms and conditions of conversion or exchange;

(h) the limitations and restrictions, if any, to be effective while
any shares of such series are outstanding upon the payment of
dividends or the making of other distributions on, and upon the
purchase, redemption or other acquisition by the Corporation of,
the Common Stock or shares of stock of any other class or any
other series of this class;

(i) the conditions or restrictions, if any, upon the creation of
indebtedness of the Corporation or upon the issue of any
additional stock, including additional shares of such series or
of any other series of this class or of any other class; and

(j) any other powers, preferences and relative, participating,
optional and other special rights, and any qualifications,
limitations and restrictions thereof.

Without limiting the foregoing, the voting powers of any series of
Preferred Stock may include the right, in the circumstances specified in the
resolution or resolutions providing for the issuance of such stock, to elect one
or more directors who shall be in addition to the number of directors of the
Corporation fixed pursuant to Article IX hereof and who shall serve for such
term and have such voting powers as shall be stated in the resolution or
resolutions providing for the issuance of such stock. The term of office and
voting powers of any director elected in

-2-
<PAGE>

the manner provided in the immediately preceding sentence of this Section 2 may
be greater than or less than those of any other director or class of directors.

The powers, preferences and relative, participating, optional and other
special rights of each series of Preferred Stock, and the qualifications,
limitations or restrictions thereof, if any, may differ from those of any and
all other series at any time outstanding. All shares of any one series of
Preferred Stock shall be identical in all respects with all other shares of such
series, except that shares of any one series issued at different times may
differ as to the dates from which dividends thereon shall be cumulative.

Section 3. Each holder of Common Stock shall be entitled to one vote for
each share of Common Stock held of record on all matters on which stockholders
generally are entitled to vote. Cumulative voting for the election of directors
of the Corporation shall not be permitted. Subject to the provisions of law and
the rights of the holders of any class or series of stock having a preference as
to dividends over the Common Stock then outstanding, dividends may be paid on
the Common Stock at such times and in such amounts as the Board of Directors
shall determine. Upon the dissolution, liquidation or winding up of the
Corporation, after any preferential amounts to be distributed to the holders of
any class or series of stock having a preference over the Common Stock then
outstanding have been paid or declared and set apart for payment, the holders of
the Common Stock shall be entitled to receive all the remaining assets of the
Corporation available for distribution to its stockholders ratably in proportion
to the number of shares held by them, respectively.

ARTICLE V

No director of the Corporation shall be personally liable to the
Corporation or any of its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (a) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (b) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (c) under Section 174 of the Delaware General
Corporation Law, or (d) for any transaction from which the director derived any
improper personal benefit. Neither the amendment nor repeal of this Article V,
nor the adoption of any provision of the Corporation's Certificate of
Incorporation inconsistent with this Article V, shall eliminate or reduce the
effect of this Article V in respect of any matter occurring, or any cause of
action, suit or claim that, but for this Article V, would accrue or arise, prior
to such amendment, repeal or adoption of an inconsistent provision.

ARTICLE VI

To the fullest extent permitted by applicable law, the Corporation shall
indemnify any officer or director as set forth in the Bylaws of the Corporation,
pursuant to Section 145 of the Delaware General Corporation Law.

-3-
<PAGE>

ARTICLE VII

The Board of Directors is hereby expressly authorized, by resolution
or resolutions, to amend the Bylaws of the Corporation.

ARTICLE VIII

The name of the incorporator of the corporation is C. Neel Lemon, and
his mailing address is 1700 Pacific Avenue, Suite 3300, Dallas, Texas 75201.

ARTICLE IX

The name and address of the persons who are to serve as directors of
the Corporation until the expiration of their initial term, as set forth in the
Bylaws of the Corporation, and until their respective successors are duly
elected and qualified, are as follows:

Name Mailing Address
---- ---------------

Francisco Gonzalez Av. Roble No. 300 Mezzanine
Garza Garcia, Nuevo Leon, Mexico 66265

Carlos Herrera Av. Roble No. 300 Mezzanine
Garza Garcia, Nuevo Leon, Mexico 66265

Erik Jurgensen Av. Roble No. 300 Mezzanine
Garza Garcia, Nuevo Leon, Mexico 66265

Peter Davis One Tower Bridge, Suite 1430
West Conshocken, Pennsylvania 19428

Alejandro Rodriguez Av. Roble No. 300 Mezzanine
Garza Garcia, Nuevo Leon, Mexico 66265

THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose
of forming a corporation pursuant to the General Corporation Law of the State of
Delaware, does make this Certificate, hereby declaring and certifying that this
is his act and deed and that the facts herein stated are true, and accordingly
has hereunto set his hand as of the 11th day of January, 1996.

_______________________________
C. Neel Lemon

-4-

<PAGE>

EXHIBIT 3.2
- --------------------------------------------------------------------------------

CORPORATE BYLAWS OF

BIONOVA U.S. INC.

(A DELAWARE CORPORATION)

- --------------------------------------------------------------------------------
<PAGE>

TABLE OF CONTENTS

CORPORATE BYLAWS OF
BIONOVA U.S. INC.
(a Delaware corporation)
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I OFFICES................................................................... 1
Section 1. Registered Office...................................................... 1
Section 2. Other Offices......................................................... 1

ARTICLE II MEETINGS OF STOCKHOLDERS................................................... 1
Section 1. Place of Meeting....................................................... 1
Section 2. Annual Meetings........................................................ 1
Section 3. Special Meetings....................................................... 2
Section 4. Notice of Meetings..................................................... 2
Section 5. Quorum................................................................. 2
Section 6. Adjournments........................................................... 2
Section 7. Order of Business...................................................... 2
Section 8. List of Stockholders................................................... 2
Section 9. Voting................................................................. 3
Section 10. Inspectors of Election................................................ 3

ARTICLE III BOARD OF DIRECTORS......................................................... 4
Section 1. General Powers......................................................... 4
Section 2. Number, Qualification and Election..................................... 4
Section 3. Notification of Nominations............................................ 4
Section 4. Quorum and Manner of Acting............................................ 5
Section 5. Place of Meeting....................................................... 5
Section 6. Regular Meetings....................................................... 5
Section 7. Special Meetings....................................................... 5
Section 8. Notice of Meetings..................................................... 5
Section 9. Rules and Regulations.................................................. 5
Section 10. Participation in Meeting by Means of Communication Equipment.......... 5
Section 11. Action Without Meeting................................................ 5
Section 12. Resignations......................................................... 6
Section 13. Removal of Directors................................................. 6
Section 14. Vacancies............................................................ 6
Section 15. Compensation......................................................... 6
Section 16. Directors Emeritus................................................... 6

ARTICLE IV EXECUTIVE AND OTHER COMMITTEES............................................. 7
Section 1. Executive Committee.................................................... 7
Section 2. Other Committees....................................................... 7
Section 3. Procedure; Meetings; Quorum............................................ 7

ARTICLE V OFFICERS................................................................... 8
Section 1. Number; Term of Office................................................. 8
</TABLE>

(i)
<PAGE>

<TABLE>
<CAPTION>
<S> <C> <C>
Section 2. Removal................................................................ 8
Section 3. Resignation............................................................ 8
Section 4. Vacancies.............................................................. 8
Section 5. The Chief Executive Officer............................................ 8
Section 6. The Chairman of the Board.............................................. 8
Section 7. Vice Presidents........................................................ 9
Section 8. Treasurer.............................................................. 9
Section 9. Secretary.............................................................. 9
Section 10. Assistant Treasurers and Secretaries.................................. 9

ARTICLE VI INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS............... 9
Section 1. Third Party Actions.................................................... 9
Section 2. Derivative Actions..................................................... 10
Section 3. Determination of Indemnification....................................... 10
Section 4. Right to Indemnification............................................... 10
Section 5. Advancement of Expenses................................................ 10
Section 6. Indemnification and Advancement of Expenses Not Exclusive.............. 10
Section 7. Insurance.............................................................. 10
Section 8. Definitions of Certain Terms........................................... 11
Section 9. Continuation and Successors............................................ 11
Section 10. Exclusive Jurisdiction................................................ 11

ARTICLE VII CAPITAL STOCK.............................................................. 11
Section 1. Certificates for Shares................................................ 11
Section 2. Transfer of Shares..................................................... 12
Section 3. Address of Stockholders................................................ 12
Section 4. Lost, Destroyed and Mutilated Certificates............................. 12
Section 5. Regulations............................................................ 12
Section 6. Fixing Date for Determination of Stockholders of Record................ 12

ARTICLE VIII SEAL........................................................................ 13

ARTICLE IX FISCAL YEAR................................................................. 13

ARTICLE X WAIVER OF NOTICE............................................................ 13

ARTICLE XI AMENDMENTS.................................................................. 13

ARTICLE XII MISCELLANEOUS............................................................... 13
Section 1. Execution of Documents.................................................. 13
Section 2. Deposits................................................................ 14
Section 3. Checks.................................................................. 14
Section 4. Proxies in Respect of Stock or Other Securities of Other Corporations... 14
</TABLE>

(ii)
<PAGE>

BYLAWS

BIONOVA U.S. INC.

ARTICLE I

OFFICES

Section 1. Registered Office. The registered office of Bionova U.S.
Inc. (hereinafter called the "Corporation") in the State of Delaware shall be at
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County
of New Castle 19801, and the registered agent in charge thereof shall be The
Corporation Trust Company.

Section 2. Other Offices. The Corporation may also have an office or
offices, and keep the books and records of the Corporation, except as may
otherwise be required by law, at such other place or places, either within or
without the State of Delaware, as the Board of Directors may from time to time
determine or the business of the Corporation require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting. All meetings of the stockholders of the
Corporation shall be held at the office of the Corporation or at such other
places, within or without the State of Delaware, as may from time to time be
fixed by the Board of Directors, the Chairman of the Board or the Chief
Executive Officer.

Section 2. Annual Meetings. The annual meeting of the stockholders
of the Corporation for the election of directors and for the transaction of such
other business as may properly come before the meeting shall be held on the
second Thursday in May in each year, if not a legal holiday under the laws of
the place where the meeting is to be held, and, if a legal holiday, then on the
next succeeding day not a legal holiday under the laws of such place, or on such
other date and at such hour as may from time to time be fixed by the Board of
Directors, the Chairman of the Board or the Chief Executive Officer.

In order for business to be properly brought before the meeting by a
stockholder, the business must be legally proper and written notice thereof must
have been filed with the Secretary of the Corporation not less than 60 nor more
than 120 days prior to the meeting. Each such notice shall set forth: (a) the
name and address of the stockholder who intends to make the proposal as the same
appear in the Corporation's records; (b) the class and number of shares of stock
of the Corporation that are beneficially owned, directly or indirectly, by such
stockholder; and (c) a clear and concise statement of the proposal and the
stockholder's reasons for supporting it.

The filing of a stockholder notice as required above shall not, in and
of itself, constitute the making of the proposal described therein.

If the chairman of the meeting determines that any proposed business
has not been properly brought before the meeting, he shall declare such business
out of order; and such business shall not be conducted at the meeting.

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Section 3. Special Meetings. Except as otherwise required by law and
subject to the rights of the holders of any class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation, special
meetings of the stockholders for any purpose or purposes may be called only by
(i) the Chairman of the Board, (ii) the Chief Executive Officer or (iii) a
majority of the entire Board of Directors. Only such business as is specified
in the notice of any special meeting of the stockholders shall come before such
meeting.

Section 4. Notice of Meetings. Except as otherwise provided by law,
written notice of each meeting of the stockholders, whether annual or special,
shall be given, either by personal delivery or by mail, not less than 10 nor
more than 60 days before the date of the meeting to each stockholder of record
entitled to notice of the meeting. If mailed, such notice shall be deemed given
when deposited in the United States mail, postage prepaid, directed to the
stockholder at such stockholder's address as it appears on the records of the
Corporation. Each such notice shall state the place, date and hour of the
meeting, and the purpose or purposes for which the meeting is called. Notice of
any meeting of stockholders shall not be required to be given to any stockholder
who shall attend such meeting in person or by proxy without protesting, prior to
or at the commencement of the meeting, the lack of proper notice to such
stockholder, or who shall waive notice thereof as provided in Article X of these
Bylaws. Notice of adjournment of a meeting of stockholders need not be given if
the time and place to which it is adjourned are announced at such meeting,
unless the adjournment is for more than 30 days or, after adjournment, a new
record date is fixed for the adjourned meeting.

Section 5. Quorum. Except as otherwise provided by law or by the
Certificate of Incorporation of the Corporation, the holders of a majority of
the votes entitled to be cast by the stockholders entitled to vote, which if any
vote is to be taken by classes shall mean the holders of a majority of the votes
entitled to be cast by the stockholders of each such class, present in person or
represented by proxy, shall constitute a quorum for the transaction of business
at any meeting of the stockholders.

Section 6. Adjournments. In the absence of a quorum, the holders of
a majority of the votes entitled to be cast by the stockholders, present in
person or represented by proxy, may adjourn the meeting from time to time. At
any such adjourned meeting at which a quorum may be present, any business may be
transacted which might have been transacted at the meeting as originally called.

Section 7. Order of Business. At each meeting of the stockholders,
the Chairman of the Board, or, in the absence of the Chairman of the Board, the
Chief Executive Officer, shall act as chairman. The order of business at each
such meeting shall be as determined by the chairman of the meeting. The
chairman of the meeting shall have the right and authority to prescribe such
rules, regulations and procedures and to do all such acts and things as are
necessary or desirable for the proper conduct of the meeting, including, without
limitation, the establishment of procedures for the maintenance of order and
safety, limitations on the time allotted to questions or comments on the affairs
of the Corporation, restrictions on entry to such meeting after the time
prescribed for the commencement thereof, and the opening and closing of the
voting polls. The chairman of the meeting shall announce at each such meeting
the date and time of the opening and the closing of the voting polls for each
matter upon which the stockholders will vote at such meeting.

Section 8. List of Stockholders. It shall be the duty of the
Secretary or other officer of the Corporation who has charge of the stock ledger
to prepare and make, at least 10 days before each meeting of the stockholders, a
complete list of the stockholders entitled to vote thereat, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in such stockholder's name. Such list shall be produced
and kept available at the times and places required by law.

Section 9. Voting. Except as otherwise provided by law or by the
Certificate of Incorporation of the Corporation, each stockholder of record of
any class or series of stock having a preference over the Common

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Stock of the Corporation as to dividends or upon liquidation shall be entitled
at each meeting of stockholders to such number of votes for each share of such
stock as may be fixed in the Certificate of Incorporation or in the resolution
or resolutions adopted by the Board of Directors providing for the issuance of
such stock, and each stockholder of record of Common Stock shall be entitled at
each meeting of stockholders to one vote for each share of such stock, in each
case, registered in such stockholder's name on the books of the Corporation:

(a) on the date fixed pursuant to Section 6 of Article VII of these
Bylaws as the record date for the determination of stockholders entitled to
notice of and to vote at such meeting; or

(b) if no such record date shall have been so fixed, then at the close
of business on the day next preceding the date on which notice of such
meeting is given, or, if notice is waived, at the close of business on the
day next preceding the day on which the meeting is held.

Each stockholder entitled to vote at any meeting of stockholders may
authorize not in excess of three persons to act for such stockholder by a proxy
signed by such stockholder or such stockholder's attorney-in-fact. Any such
proxy shall be delivered to the secretary of such meeting at or prior to the
time designated for holding such meeting but, in any event, not later than the
time designated in the order of business for so delivering such proxies. No
such proxy shall be voted or acted upon after three years from its date, unless
the proxy provides for a longer period.

At each meeting of the stockholders, all corporate actions, other than the
election of directors, to be taken by vote of the stockholders (except as
otherwise required by law and except as otherwise provided in the Certificate of
Incorporation) shall be authorized by a majority of the votes cast by the
stockholders entitled to vote thereon, present in person or represented by
proxy. Directors shall be elected by a plurality of the votes of the shares
present in person or represented by proxy at the meeting and entitled to vote on
the election of the directors. Where a separate vote by a class or classes is
required, the affirmative vote of the majority of shares of such class or
classes present in person or represented by proxy at the meeting shall be the
act of such class.

Unless required by law or determined by the chairman of the meeting to be
advisable, the vote on any matter, including the election of directors, need not
be by written ballot. In the case of a vote by written ballot, each ballot
shall be signed by the stockholder voting, or by such stockholder's proxy, and
shall state the number of shares voted.

Section 10. Inspectors of Election. Either the Board of Directors or, in
the absence of an appointment of inspectors by the Board, the Chairman of the
Board or the Chief Executive Officer shall, in advance of each meeting of the
stockholders, appoint one or more inspectors to act at such meeting and make a
written report thereof. In connection with any such appointment, one or more
persons may, in the discretion of the body or person making such appointment, be
designated as alternate inspectors to replace any inspector who fails to act.
If no inspector or alternate is able to act at any meeting of stockholders, the
chairman of such meeting shall appoint one or more inspectors to act at such
meeting. Each such inspector shall perform such duties as are required by law
and as shall be specified by the Board, the Chairman of the Board, the Chief
Executive Officer or the chairman of the meeting. Each such inspector, before
entering upon the discharge of his duties, shall take and sign an oath
faithfully to execute the duties of inspector with strict impartiality and
according to the best of his ability. Inspectors need not be stockholders. No
director or nominee for the office of director shall be appointed such an
inspector.

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ARTICLE III

BOARD OF DIRECTORS

Section 1. General Powers. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of
Directors, which may exercise all such powers of the Corporation and do all such
lawful acts and things as are not by law or by the Certificate of Incorporation
of the Corporation directed or required to be exercised or done by the
stockholders.

Section 2. Number, Qualification and Election. Except as otherwise
provided for in any resolution or resolutions adopted by the Board of Directors
pursuant to the provisions of Article IV of the Certificate of Incorporation of
the Corporation relating to the rights of the holders of any class or series of
stock having a preference over the Common Stock as to dividends or upon
liquidation, the number of directors of the Corporation shall be fixed from time
to time by resolution adopted by vote of a majority of the entire Board of
Directors, provided that the number so fixed shall not be less than five.

The directors, other than those who may be elected by the holders of
shares of any class or series of stock having a preference over the Common Stock
as to dividends or upon liquidation pursuant to the terms of any resolution or
resolutions providing for the issuance of such stock adopted by the Board, shall
hold office until the annual meeting of the stockholders of the Corporation and
until their successors shall have been elected and qualified. At each annual
meeting of the stockholders, the stockholders entitled to vote in an election of
the directors shall elect directors to hold office until the next succeeding
annual meeting of the stockholders. Subject to the rights of the holders of any
class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation, each director shall hold office for the term for
which he is elected, and until his successor shall be elected and qualified or
until his death, resignation or removal if earlier.

Each director shall be at least 21 years of age. A person shall be
eligible to be elected a director of the Corporation until the annual meeting of
stockholders of the Corporation next succeeding such person's 70th birthday, and
any person serving as a director on such director's 70th birthday shall be
eligible to complete such director's term as such. Directors need not be
stockholders of the Corporation.

In any election of directors, the persons receiving a plurality of the
votes cast, up to the number of directors to be elected in such election, shall
be deemed elected.

Section 3. Notification of Nominations. Subject to the rights of the
holders of any class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation, nominations for the

election of directors may be made by the Board of Directors or by any
stockholder entitled to vote for the election of directors. Any stockholder
entitled to vote for the election of directors at a meeting may nominate persons
for election as directors only if written notice of such stockholder's intent to
make such nomination is given, either by personal delivery or by United States
mail, postage prepaid, to the Secretary of the Corporation not later than (i)
with respect to an election to be held at an annual meeting of stockholders, 90
days in advance of such meeting, and (ii) with respect to an election to be held
at a special meeting of stockholders for the election of directors, the close of
business on the seventh day following the date on which notice of such meeting
is first given to stockholders. Each such notice shall set forth: (a) the name
and address of the stockholder who intends to make the nomination of the person
or persons to be nominated; (b) a representation that the stockholder is a
holder of record of stock of the Corporation entitled to vote at such meeting
and intends to appear in person or by proxy at the meeting to nominate the
person or persons specified in the notice; (c) a description of all arrangements
or understandings between the stockholder and each nominee and any other person
or persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder; (d) such other information
regarding each

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nominee proposed by such stockholder as would have been required to be included
in a proxy statement filed pursuant to the proxy rules of the Securities and
Exchange Commission had each nominee been nominated, or intended to be
nominated, by the Board of Directors; and (e) the consent of each nominee to
serve as a director of the Corporation if so elected. The chairman of the
meeting may refuse to acknowledge the nomination of any person not made in
compliance with the foregoing procedure.

Section 4. Quorum and Manner of Acting. Except as otherwise provided
by law, the Certificate of Incorporation of the Corporation or these Bylaws, a
majority of the entire Board of Directors shall constitute a quorum for the
transaction of business at any meeting of the Board, and, except as so provided,
the vote of a majority of the directors present at any meeting at which a quorum
is present shall be the act of the Board. In the absence of a quorum, a
majority of the directors present may adjourn the meeting to another time and
place. At any adjourned meeting at which a quorum is present, any business that
might have been transacted at the meeting as originally called may be
transacted.

Section 5. Place of Meeting. The Board of Directors may hold its
meetings at such place or places within or without the State of Delaware as the
Board may from time to time determine or as shall be specified or fixed in the
respective notices or waivers of notice thereof.

Section 6. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such times and places as the Board shall from time to
time by resolution determine. If any day fixed for a regular meeting shall be a
legal holiday under the laws of the place where the meeting is to be held, the
meeting that would otherwise be held on that day shall be held at the same hour
on the next succeeding business day.

Section 7. Special Meetings. Special meetings of the Board of
Directors shall be held whenever called by the Chairman of the Board, the Chief
Executive Officer or by a majority of the directors.

Section 8. Notice of Meetings. Notice of regular meetings of the
Board of Directors or of any adjourned meeting thereof need not be given.
Notice of each special meeting of the Board shall be mailed or transmitted by
delivery service to each director, addressed to such director at such director's
residence or usual place of business, at least two days before the day on which
the meeting is to be held or shall be sent to such director at such place by
telegraph or facsimile telecommunication or be given personally or by telephone,
not later than the day before the meeting is to be held, but notice need not be
given to any director who shall, either before or after the meeting, submit a
signed waiver of such notice or who shall attend such meeting without
protesting, prior to or at its commencement, the lack of notice to such
director. Every such notice shall state the time and place but need not state
the purpose of the meeting.

Section 9. Rules and Regulations. The Board of Directors may adopt
such rules and regulations not inconsistent with the provisions of law, the
Certificate of Incorporation of the Corporation or these Bylaws for the conduct
of its meetings and management of the affairs of the Corporation as the Board
may deem proper.

Section 10. Participation in Meeting by Means of Communication
Equipment. Any one or more members of the Board of Directors or any committee
thereof may participate in any meeting of the Board or of any such committee by
means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at such meeting.

Section 11. Action Without Meeting. Any action required or permitted
to be taken at any meeting of the Board of Directors or any committee thereof
may be taken without a meeting if all of the members of the Board or of any such
committee consent thereto in writing and the writing or writings are filed with
the minutes of proceedings of the Board or of such committee.

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Section 12. Resignations. Any director of the Corporation may at any
time resign by giving written notice to the Board of Directors, the Chairman of
the Board, the Chief Executive Officer or the Secretary of the Corporation.
Such resignation shall take effect at the time specified therein or, if the time
be not specified, upon receipt thereof; and unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it effective.

Section 13. Removal of Directors. Unless otherwise restricted by the
Certificate of Incorporation of the Corporation or Bylaw, any director or the
entire Board of Directors may be removed, with or without cause, by the holders
of a majority of shares entitled to vote at an election of directors. In the
case of a director who is elected by the holders of any class or series of stock
having a preference over the Common Stock as to dividends or upon liquidation,
the removal without cause of such director so elected is subject to the vote of
the holders of the outstanding shares of that class or series and not the vote
of the outstanding shares as a whole.

Section 14. Vacancies. Subject to the rights of the holders of any
class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation, any vacancies on the Board of Directors resulting
from death, resignation, removal or other cause shall be filled by the Board of
Directors, or if not so filled, by the stockholders at the next annual meeting
thereof or at a special meeting called for that purpose in accordance with
Section 3 of Article II of these Bylaws.

Section 15. Compensation. Each director who shall not at the time
also be a salaried officer or employee of the Corporation or any of its
subsidiaries (hereinafter referred to as an "outside director"), in
consideration of such person serving as a director, shall be entitled to receive
from the Corporation such amount per annum and such fees for attendance at
meetings of the Board of Directors or of committees of the Board, or both, as
the Board shall from time to time determine. In addition, each director,
whether or not an outside director, shall be entitled to receive from the
Corporation reimbursement for the reasonable expenses incurred by such person in
connection with the performance of such person's duties as a director. Nothing
contained in this Section 15 shall preclude any director from serving the
Corporation or any of its subsidiaries in any other capacity and receiving
proper compensation therefor.

Section 16. Directors Emeritus. The Board of Directors may appoint
one or more directors emeritus as it shall from time to time determine. Each
director emeritus appointed shall hold office at the pleasure of the Board of
Directors. A director emeritus shall be entitled, but shall have no obligation,
to attend and be present at the meetings of the Board of Directors, although a
meeting of the Board of Directors may be held without notice to any director
emeritus and no director emeritus shall be considered in determining whether a
quorum of the Board of Directors is present. A director emeritus shall advise
and counsel the Board of Directors on the business and operations of the
Corporation as requested by the Board of Directors; however, a director emeritus
shall not be entitled to vote on any matter presented to the Board of Directors.
A director emeritus, in consideration of such person serving as a director
emeritus, shall be entitled to receive from the Corporation such fees for
attendance at meetings of the Board of Directors as the Board shall from time to
time determine. In addition, a director emeritus shall be entitled to receive
from the Corporation reimbursement for the reasonable expenses incurred by such
person in connection with the performance of such person's duties as a director
emeritus.

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ARTICLE IV

EXECUTIVE AND OTHER COMMITTEES

Section 1. Executive Committee. The Board of Directors may, by
resolution adopted by a majority of the entire Board, designate annually three
or more of its members to constitute members or alternate members of an
Executive Committee, which Committee shall have and may exercise, between
meetings of the Board, all the powers and authority of the Board in the
management of the business affairs of the Corporation, including, if such
Committee is so empowered and authorized by resolution adopted by a majority of
the entire Board, the power and authority to declare a dividend and to authorize
the issuance of stock, and may authorize the seal of the Corporation to be
affixed to all papers that may require it, except that the Executive Committee
shall not have such power or authority in reference to:

(a) amending the Certificate of Incorporation of the Corporation;

(b) adopting an agreement of merger or consolidation involving the
Corporation;

(c) recommending to the stockholders the sale, lease or exchange of
all or substantially all of the property and assets of the Corporation;

(d) recommending to the stockholders a dissolution of the Corporation
or a revocation of a dissolution;

(e) amending any Bylaw;

The Board shall have power at any time to change the membership of the Executive
Committee, to fill all vacancies in it and to discharge it, either with or
without cause.

Section 2. Other Committees. The Board of Directors may, by resolution
adopted by a majority of the entire Board, designate from among its members one
or more other committees, each of which shall, except as otherwise prescribed by
law, have such authority of the Board as may be specified in the resolution of
the Board designating such committee. A majority of all the members of such
committee may determine its action and fix the time and place of its meetings,
unless the Board shall otherwise provide. The Board shall have power at any
time to change the membership of, to fill all vacancies in and to discharge any
such committee, either with or without cause.

Section 3. Procedure; Meetings; Quorum. Regular meetings of the Executive
Committee or any other committee of the Board of Directors, of which no notice
shall be necessary, may be held at such times and places as shall be fixed by
resolution adopted by a majority of the members thereof. Special meetings of
the Executive Committee or any other committee of the Board shall be called at
the request of any member thereof. Notice of each special meeting of the
Executive Committee or any other committee of the Board shall be sent by mail,
delivery service, facsimile telecommunication, telegraph or telephone, or be
delivered personally to each member thereof not later than the day before the
day on which the meeting is to be held, but notice need not be given to any
member who shall, either before or after the meeting, submit a signed waiver of
such notice or who shall attend such meeting without protesting, prior to or at
its commencement, the lack of such notice to such member. Any special meeting
of the Executive Committee or any other committee of the Board shall be a legal
meeting without any notice thereof having been given, if all the members thereof
shall be present thereat. Notice of any adjourned meeting of any committee of
the Board need not be given. The Executive Committee or any other committee of
the Board may adopt such rules and regulations not inconsistent with the
provisions of law, the Certificate of Incorporation of the Corporation or these
Bylaws for the conduct of its meetings as the Executive Committee or any other
committee of the Board

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may deem proper. A majority of the Executive Committee or any other committee
of the Board shall constitute a quorum for the transaction of business at any
meeting, and the vote of a majority of the members thereof present at any
meeting at which a quorum is present shall be the act of such committee. The
Executive Committee or any other committee of the Board of Directors shall keep
written minutes of its proceedings and shall report on such proceedings to the
Board.

ARTICLE V

OFFICERS

Section 1. Number; Term of Office. The officers of the Corporation shall
be a Chairman of the Board, a Chief Executive Officer, one or more Vice
Presidents, a Treasurer, a Secretary and such other officers or agents with such
titles and such duties as the Board of Directors may from time to time
determine, each to have such authority, functions or duties as in these Bylaws
provided or as the Board may from time to time determine, and each to hold
office for such term as may be prescribed by the Board and until such person's
successor shall have been chosen and shall qualify, or until such person's death
or resignation, or until such person's removal in the manner hereinafter
provided. The Chairman of the Board and the Chief Executive Officer shall be
elected from among the directors. One person may hold the offices and perform
the duties of any two or more of said officers; provided, however, that no
officer shall execute, acknowledge or verify any instrument in more than one
capacity if such instrument is required by law, the Certificate of Incorporation
of the Corporation or these Bylaws to be executed, acknowledged or verified by
two or more officers. The Board may from time to time authorize any officer to
appoint and remove any such other officers and agents and to prescribe their
powers and duties. The Board may require any officer or agent to give security
for the faithful performance of such person's duties.

Section 2. Removal. Any officer may be removed, either with or without
cause, by the Board of Directors at any meeting thereof called for that purpose,
or, except in the case of any officer elected by the Board, by any committee or
superior officer upon whom such power may be conferred by the Board.

Section 3. Resignation. Any officer may resign at any time by giving
notice to the Board of Directors, the Chairman of the Board, the Chief Executive
Officer or the Secretary of the Corporation. Any such resignation shall take
effect at the date of receipt of such notice or at any later date specified
therein; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.

Section 4. Vacancies. A vacancy in any office because of death,
resignation, removal or any other cause may be filled for the unexpired portion
of the term in the manner prescribed in these Bylaws for election to such
office.

Section 5. The Chief Executive Officer. The Chief Executive Officer shall
be the chief executive officer of the Corporation and as such shall have general
supervision and direction of the business and affairs of the Corporation,
subject to the control of the Board of Directors. The Chief Executive Officer
shall, if present and in the absence of the Chairman of the Board, preside at
meetings of the stockholders, meetings of the Board and meetings of the
Executive Committee. The Chief Executive Officer shall perform such other
duties as the Board may from time to time determine. The Chief Executive
Officer may sign and execute in the name of the Corporation deeds, mortgages,
bonds, contracts or other instruments authorized by the Board or any committee
thereof empowered to authorize the same.

Section 6. The Chairman of the Board. The Chairman of the Board shall, if
present, preside at meetings of the stockholders, meetings of the Board and
meetings of the Executive Committee. The Chairman

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of the Board shall counsel with and advise the Chief Executive Officer and
perform such other duties as the Chief Executive Officer or the Board or the
Executive Committee may from time to time determine.

Section 7. Vice Presidents. Each Vice President shall have such powers
and duties as shall be prescribed by the Chief Executive Officer, the Chairman
of the Board or the Board of Directors. Any Vice President may sign and execute
in the name of the Corporation deeds, mortgages, bonds, contracts or other
instruments authorized by the Board or any committee thereof empowered to
authorize the same.

Section 8. Treasurer. The Treasurer shall perform all duties incident to
the office of Treasurer and such other duties as from time to time may be
assigned to the Treasurer by the Chief Executive Officer, the Chairman of the
Board or the Board of Directors.

Section 9. Secretary. It shall be the duty of the Secretary to act as
secretary at all meetings of the Board of Directors, of the Executive Committee
and of the stockholders and to record the proceedings of such meetings in a book
or books to be kept for that purpose; the Secretary shall see that all notices
required to be given by the Corporation are duly given and served; the Secretary
shall be custodian of the seal of the Corporation and shall affix the seal or
cause it to be affixed to all certificates of stock of the Corporation (unless
the seal of the Corporation on such certificates shall be a facsimile, as
hereinafter provided) and to all documents, the execution of which on behalf of
the Corporation under its seal is duly authorized in accordance with the
provisions of these Bylaws. The Secretary shall have charge of the stock ledger
and also of the other books, records and papers of the Corporation and shall see
that the reports, statements and other documents required by law are properly
kept and filed; and the Secretary shall in general perform all the duties
incident to the office of Secretary and such other duties as from time to time
may be assigned to such person by the Chairman of the Board and Chief Executive
Officer or the Board of Directors.

Section 10. Assistant Treasurers and Secretaries. The Assistant
Treasurers and the Assistant Secretaries shall perform such duties as shall be
assigned to them by the Treasurer or Secretary, respectively, or by the Chief
Executive Officer, the Chairman of the Board or the Board of Directors.

ARTICLE VI

INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS

Section 1. Third Party Actions. The Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Corporation), by reason of the fact that such person is or was a
director, officer, employee or agent of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which such person reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his or her
conduct was unlawful.

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Section 2. Derivative Actions. The Corporation shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that such person is or was
a director, officer, employee or agent of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees) actually and reasonably incurred by
such person in connection with the defense or settlement of such action or suit
if such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the Corporation,
except that no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
Corporation unless and only to the extent that the Court of Chancery of Delaware
or the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery of Delaware or such
other court shall deem proper.

Section 3. Determination of Indemnification. Any indemnification under
Section 1 or 2 of this Article VI (unless ordered by a court) shall be made by
the Corporation only as authorized in the specific case upon a determination
that indemnification of the director, officer, employee or agent is proper in
the circumstances because such person has met the applicable standard of conduct
set forth in Section 1 or 2 of this Article VI. Such determination shall be
made (i) by a majority vote of the directors who are not parties to such action,
suit or proceeding, even though less than a quorum, or (ii) if there are no such
directors, or if such directors so direct, by independent legal counsel in a
written opinion, or (iii) by the stockholders.

Section 4. Right to Indemnification. Notwithstanding the other provisions
of this Article VI, to the extent that a director, officer, employee or agent of
the Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Section 1 or 2 of this Article VI, or
in defense of any claim, issue or matter therein, such person shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by such person in connection therewith.

Section 5. Advancement of Expenses. The Corporation shall pay the
expenses (including attorneys' fees) incurred in defending any civil, criminal,
administrative or investigative action, suit or proceeding in advance of the
final disposition of such action, suit or proceeding, provided, however, that
the payment of expenses incurred by a director, officer, employee or agent in
advance of the final disposition of the action, suit or proceeding shall be made
only upon receipt of an undertaking by or on behalf of the director, officer,
employee or agent to repay all amounts advanced if it should be ultimately
determined that such person is not entitled to be indemnified under this Article
VI or otherwise.

Section 6. Indemnification and Advancement of Expenses Not Exclusive. The
indemnification and advancement of expenses provided by, or granted pursuant to
the other Sections of this Article VI shall not be deemed exclusive of any other
rights to which any person seeking indemnification may be entitled under any
law, agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in such person's official capacity and as to action in another
capacity while holding such office. All rights to indemnification under this
Article VI shall be deemed to be provided by a contract between the Corporation
and the director, officer, employee or agent who served in such capacity at any
time while these Bylaws and other relevant provisions of the Delaware General
Corporation Law and other applicable law, if any, are in effect. Any repeal or
modification thereof shall not affect any rights or obligations then existing.

Section 7. Insurance. The Corporation may purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against any liability asserted against such
person and incurred by such person in any

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such capacity, or arising out of such person's status as such, whether or not
the Corporation would have the power to indemnify such person against such
liability under the applicable provisions of the Delaware General Corporation
Law.

Section 8. Definitions of Certain Terms. For purposes of this Article VI,
references to "the Corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under the provisions
of this Article VI with respect to the resulting or surviving corporation as
such person would have with respect to such constituent corporation if its
separate existence had continued.

For purposes of this Article VI, references to "other enterprise" shall
include employee benefit plans; references to "fines" shall include any excise
tax assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of the Corporation that
imposes duties on, or involves services by, such director, officer, employee or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner such person
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this Article
VI.

Section 9. Continuation and Successors. The indemnification and
advancement of expenses provided by, or granted pursuant to, this Article VI
shall, unless otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person.

Section 10. Exclusive Jurisdiction. The Delaware Court of Chancery is
vested with exclusive jurisdiction to hear and determine all actions for
advancement of expenses or indemnification brought under this Article VI or
under any statute, agreement, vote of stockholders or disinterested directors,
or otherwise. The Delaware Court of Chancery may summarily determine the
Corporation's obligation to advance expenses (including attorneys' fees).

ARTICLE VII

CAPITAL STOCK

Section 1. Certificates for Shares. Certificates representing shares of
stock of each class of the Corporation, whenever authorized by the Board of
Directors, shall be in such form as shall be approved by the Board. The
certificates representing shares of stock of each class shall be signed by, or
in the name of, the Corporation by the Chairman of the Board and by the
Treasurer of the Corporation, and sealed with the seal of the Corporation, which
may be by a facsimile thereof. Any or all such signatures may be facsimiles if
countersigned by a transfer agent or registrar. Although any officer, transfer
agent or registrar whose manual or facsimile signature is affixed to such a
certificate ceases to be such officer, transfer agent or registrar before such
certificate has been issued, it may nevertheless be issued by the Corporation
with the same effect as if such officer, transfer agent or registrar were still
such at the date of its issue.

The stock ledger and blank share certificates shall be kept by the
Secretary or by a transfer agent or by a registrar or by any other officer or
agent designated by the Board.

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<PAGE>

Section 2. Transfer of Shares. Transfer of shares of stock of each class
of the Corporation shall be made only on the books of the Corporation by the
holder thereof, or by such holder's attorney thereunto authorized by a power of
attorney duly executed and filed with the Secretary of the Corporation or a
transfer agent for such stock, if any, and on surrender of the certificate or
certificates for such shares properly endorsed or accompanied by a duly executed
stock transfer power and the payment of all taxes thereon. The person in whose
name shares stand on the books of the Corporation shall be deemed the owner
thereof for all purposes as regards the Corporation; provided, however, that
whenever any transfer of shares shall be made for collateral security and not
absolutely, and written notice thereof shall be given to the Secretary or to
such transfer agent, such fact shall be stated in the entry of the transfer. No
transfer of shares shall be valid as against the Corporation, its stockholders
and creditors for any purpose, except to render the transferee liable for the
debts of the Corporation to the extent provided by law, until it shall have been
entered in the stock records of the Corporation by an entry showing from and to
whom transferred.

Section 3. Address of Stockholders. Each stockholder shall designate to
the Secretary or transfer agent of the Corporation an address at which notices
of meetings and all other corporate notices may be served or mailed to such
person, and, if any stockholder shall fail to designate such address, corporate
notices may be served upon such person by mail directed to such person at such
person's post office address, if any, as the same appears on the share record
books of the Corporation or at such person's last known post office address.

Section 4. Lost, Destroyed and Mutilated Certificates. The holder of any
share of stock of the Corporation shall immediately notify the Corporation of
any loss, theft, destruction or mutilation of the certificate therefor; the
Corporation may issue to such holder a new certificate or certificates for
shares, upon the surrender of the mutilated certificate or, in the case of loss,
theft or destruction of the certificate, upon satisfactory proof of such loss,
theft or destruction; the Board of Directors, or a committee designated thereby,
or the transfer agents and registrars for the stock, may, in their discretion,
require the owner of the lost, stolen or destroyed certificate, or such person's
legal representative, to give the Corporation a bond in such sum and with such
surety or sureties as they may direct to indemnify the Corporation and said
transfer agents and registrars against any claim that may be made on account of
the alleged loss, theft or destruction of any such certificate or the issuance
of such new certificate.

Section 5. Regulations. The Board of Directors may make such additional
rules and regulations as it may deem expedient concerning the issue and transfer
of certificates representing shares of stock of each class of the Corporation
and may make such rules and take such action as it may deem expedient concerning
the issue of certificates in lieu of certificates claimed to have been lost,
destroyed, stolen or mutilated.

Section 6. Fixing Date for Determination of Stockholders of Record. In
order that the Corporation may determine the stockholders entitled to notice of
or to vote at any meeting of stockholders or any adjournment thereof, or
entitled to receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted by
the Board of Directors, and which record date shall not be more than 60 nor less
than 10 days before the date of such meeting, nor more than 60 days prior to any
other action. A determination of stockholders entitled to notice of or to vote
at a meeting of the stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.

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<PAGE>

ARTICLE VIII

SEAL

The Board of Directors shall provide a corporate seal, which shall be
in the form of a circle and shall bear the full name of the Corporation and the
words and figures "Corporate Seal Delaware 1939", or such other words or figures
as the Board of Directors may approve and adopt. The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in any other
manner reproduced.

ARTICLE IX

FISCAL YEAR

The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.

ARTICLE X

WAIVER OF NOTICE

Whenever any notice whatsoever is required to be given by these
Bylaws, by the Certificate of Incorporation of the Corporation or by law, the
person entitled thereto may, either before or after the meeting or other matter
in respect of which such notice is to be given, waive such notice in writing,
which writing shall be filed with or entered upon the records of the meeting or
the records kept with respect to such other matter, as the case may be, and in
such event such notice need not be given to such person and such waiver shall be
deemed equivalent to such notice.

ARTICLE XI

AMENDMENTS

Any Bylaw may be adopted, repealed, altered or amended by a majority
of the entire Board of Directors at any meeting thereof, provided that such
proposed action in respect thereof shall be stated in the notice of such
meeting. The stockholders of the Corporation shall have the power to adopt,
repeal, alter or amend any provision of these Bylaws only to the extent and in
the manner provided in the Certificate of Incorporation of the Corporation.

ARTICLE XII

MISCELLANEOUS

Section 1. Execution of Documents. The Board of Directors or any
committee thereof shall designate the officers, employees and agents of the
Corporation who shall have power to execute and deliver deeds, contracts,
mortgages, bonds, debentures, notes, checks, drafts and other orders for the
payment of money and other documents for and in the name of the Corporation and
may authorize such officers, employees and agents to delegate such power
(including authority to redelegate) by written instrument to other officers,
employees or agents of the Corporation. Such delegation may be by resolution or
otherwise and the authority granted shall be general or confined to specific
matters, all as the Board or any such committee may

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<PAGE>

determine. In the absence of such designation referred to in the first sentence
of this Section 1, the officers of the Corporation shall have such power so
referred to, to the extent incident to the normal performance of their duties.

Section 2. Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
or otherwise as the Board of Directors or any committee thereof or any officer
of the Corporation to whom power in that respect shall have been delegated by
the Board or any such committee shall select.

Section 3. Checks. All checks, drafts and other orders for the
payment of money out of the funds of the Corporation, and all notes or other
evidence of indebtedness of the Corporation, shall be signed on behalf of the
Corporation in such manner as shall from time to time be determined by
resolution of the Board of Directors or of any committee thereof.

Section 4. Proxies in Respect of Stock or Other Securities of Other
Corporations. The Board of Directors or any committee thereof shall designate
the officers of the Corporation who shall have authority from time to time to
appoint an agent or agents of the Corporation to exercise in the name and on
behalf of the Corporation the powers and rights that the Corporation may have as
the holder of stock or other securities in any other corporation, and to vote or
consent in respect of such stock or securities; such designated officers may
instruct the person or persons so appointed as to the manner of exercising such
powers and rights; and such designated officers may execute or cause to be
executed in the name and on behalf of the Corporation and under its corporate
seal, or otherwise, such written proxies, powers of attorney or other
instruments as they may deem necessary or proper in order that the Corporation
may exercise its said powers and rights.

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EXHIBIT 5.1

August 12, 1996

Bionova U.S. Inc.
6701 San Pablo Avenue
Oakland, California 94608

Ladies and Gentlemen:

We have acted as counsel for Bionova U.S. Inc., a Delaware corporation (the
"Company"), in connection with the preparation of the Company's Registration
Statement on Form S-4 (the "Registration Statement"), filed with the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"), for the purpose of registering under the
Securities Act 5,511,192 shares of common stock of the Company, par value $.01
per share (the "Shares") to be issued in connection with the merger of DNA Plant
Technology Corporation, a Delaware corporation ("DNAP"), with and into Bionova
Acquisition, Inc., a wholly-owned subsidiary of the Company ("Bionova Sub"), to
the holders of DNAP common stock and DNAP preferred stock. The Shares are to be
issued by the Company in accordance with the terms and subject to the conditions
set forth in the Agreement and Plan of Merger dated January 26, 1996, as
amended, among Empresas La Moderna, S.A. de C.V., a corporation organized under
the laws of the United Mexican States, Bionova, S.A. de C.V., a corporation
organized under the laws of the United Mexican States, the Company, Bionova Sub
and DNAP (the "Agreement").

In connection with the foregoing, we have researched such questions of law
and examined the originals or copies (certified or otherwise authenticated to
our satisfaction) of the Registration Statement, such corporate records of the
Company, certificates of public officials and of officers of the Company, and
other agreements, instruments and documents as we have deemed necessary to
require as a basis for the opinions hereinafter expressed. Where facts material
to the opinions hereinafter expressed were not independently established by us,
we have relied upon the statements of officers of the Company, where we deemed
such reliance appropriate under the circumstances.

Based upon the foregoing and in reliance thereon, and subject to the
assumptions and qualifications hereinafter specified, it is our opinion that the
Shares to be issued by the Company pursuant to the Merger and in accordance
with the Agreement have been duly authorized by the Company and when (i) the
Registration Statement has become effective under the Securities Act, (ii) state
securities laws have been fully complied with and (iii) the Shares are issued
and delivered pursuant to the Agreement as described in the Proxy
<PAGE>
Bionova U.S. Inc.
August 12, 1996
Page 2

Statement/Prospectus forming a part of the Registration Statement, the Shares
will be validly issued, fully paid and nonassessable.

The opinions expressed above are limited by and subject to the following
qualifications:

(a) We are members of the Bar of the State of Texas only and do not purport
to be experts on the laws of any state or jurisdiction other than the State
of Texas and the United States. Insofar as the opinions expressed herein
relate to matters governed by the law of any other jurisdiction, we have
relied solely upon a reading of the applicable corporate law statutes
thereof, corporate records of the Company and certificates of public
officials and officers of the Company referenced above with respect to the
opinions given herein.

(b) In rendering the opinions expressed herein, we have assumed that no
action heretofore taken by the Board of Directors of the Company in
connection with the matters described or referred to herein will be
modified, rescinded or withdrawn after the date hereof.

We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement and to the reference to us under the
caption "Legal Opinion" in the Proxy Statement/Prospectus forming a part of the
Registration Statement. In giving this consent, we do not thereby admit that we
are within the category of persons whose consent is required under Section 7 of
the Securities Act or the rules or regulations of the Commission thereunder.

Respectfully submitted,

THOMPSON & KNIGHT,
A Professional Corporation

By: /S/ MICHAEL C. TITENS
-------------------------------------------
Michael C. Titens,
Attorney

<PAGE>
EXHIBIT 8.1

August 12, 1996

Bionova U.S. Inc.
6701 San Pablo Avenue
Oakland, California 94608

Re: Merger of Bionova Acquisition, Inc., a subsidiary of Bionova U.S.
Inc., into DNA Plant Technology Corporation under Agreement and Plan
of Merger, dated January 26, 1996, as amended

Gentlemen:

This firm has acted as counsel to Bionova U.S. Inc., a corporation
organized and existing under the laws of the State of Delaware ("Bionova"), in
connection with the merger of Bionova Acquisition, Inc., a corporation organized
under the laws of the State of Delaware and a wholly-owned subsidiary of Bionova
("Merger Sub"), with and into DNA Plant Technology Corporation, a Delaware
corporation ("DNAP") (the "Merger"), pursuant to an Agreement and Plan of
Merger, dated January 26, 1996, as amended, by and among Empresas La Moderna,
S.A. de C.V., Bionova, S.A. de C.V., Bionova, Merger Sub and DNAP, as amended to
date (the "Agreement"). We have also acted as counsel for Bionova in connection
with the preparation of the Proxy Statement/Prospectus (the "Proxy Statement")
contained in the Registration Statement on Form S-4 (the "Registration
Statement"), to be filed by Bionova with the Securities and Exchange Commission
(the "SEC") under the Securities Act of 1933, as amended (the "Securities Act"),
in connection with the issuance of an aggregate of up to 5,511,192 shares of
voting common stock of Bionova, par value $.01 per share (the "Bionova Common
Stock").

Except as expressly provided otherwise, capitalized terms used herein shall
have the same meanings assigned to them in the Agreement.

You have requested that we render our opinion as to the material federal
income tax consequences which are expected to result from the Merger and the
issuance of the Bionova Common Stock under the applicable provisions of the
Internal Revenue Code of 1986, as amended (the "Code"). In connection with such
opinions, we have reviewed the Agreement and the Proxy Statement; we have
investigated such law and other authorities as we have deemed appropriate; and
we have relied upon such additional facts, representations and assumptions as
are discussed herein. In rendering the opinions expressed below, we have
assumed that the Bionova Common Stock will be issued in accordance with the
terms and provisions of the Agreement, that the rights of the holders thereof
will be as described therein and in the Proxy Statement, and that there are no
changes in the facts, representations and assumptions stated herein or in the
Registration Statement. Our opinion is based upon existing provisions of the
<PAGE>
Bionova U.S. Inc.
August 12, 1996
Page 2

Code, regulations promulgated thereunder, interpretations of the Code and such
regulations published by the Internal Revenue Service (the "IRS"), and existing
court decisions, any of which could be changed at any time. Our opinion is
limited to the tax matters specifically covered hereby, and we have not been
asked to address, nor have we addressed, any other tax consequences of the
proposed Merger, including, but not limited to, the tax consequences of the
assumption by Bionova of any options which were not issued by DNAP in connection
with the performance of services and of any warrants.

The following will occur pursuant to the Agreement:

(1) Subject to the terms and conditions of the Agreement, at the effective
time of the Merger, Merger Sub shall be merged with and into DNAP in accordance
with the laws of the State of Delaware. DNAP shall be the surviving corporation
resulting from the Merger and shall become a wholly-owned subsidiary of Bionova
and shall continue to be governed by the laws of the State of Delaware.

(2) Upon consummation of the Merger, and without any action on the part of
DNAP, Bionova, Merger Sub or the stockholders of any of the foregoing, the
shares of the constituent corporations shall be converted as follows:

(a) Each share of DNAP common stock, par value $.01 per share (the
"DNAP Common Stock"), outstanding at the effective time of the Merger (other
than any shares held in the treasury of DNAP or by any subsidiary of DNAP) will
be converted into and represent the right to receive 0.10 shares of Bionova
Common Stock.

(b) Each share of DNAP $2.25 Convertible Exchangeable Preferred Stock,
par value $.01 per share ("DNAP Convertible Exchangeable Preferred Stock"; the
DNAP Common Stock and the DNAP Convertible Exchangeable Preferred Stock is
hereinafter collectively referred to as the "DNAP Securities"), outstanding at
the effective time of the Merger (other than any shares held in the treasury of
DNAP or by any subsidiary of DNAP) will be converted into and represent the
right to receive 0.68375 shares of Bionova Common Stock.

(c) Options and warrants to acquire shares of DNAP Common Stock
outstanding at the effective time of the Merger will be assumed by Bionova and
become corresponding rights (adjusted in accordance with the exchange ratio set
forth above) to acquire shares of Bionova Common Stock.

(d) Cash payments will be made to holders of DNAP Common Stock and
DNAP Convertible Exchangeable Preferred Stock in lieu of issuing fractional
shares of Bionova Common Stock.

(e) After the Merger, Bionova will be known as DNAP Holding
Corporation.

In analyzing the tax consequences of the Merger, we have made the following
assumptions which are based upon representations made to us by Bionova and DNAP:
<PAGE>
Bionova U.S. Inc.
August 12, 1996
Page 3

(a) The aggregate fair market value of the shares of Bionova Common Stock
and cash, if any, received by each stockholder of DNAP will, in each
instance, be approximately equal to the aggregate fair market value of the
DNAP Securities surrendered in the Merger.

(b) There is no plan or intention by the stockholders of DNAP who own five
percent (5%) or more of DNAP Securities, and to the best of the knowledge
of the management of DNAP, there is no plan or intention on the part of the
remaining stockholders of DNAP to sell, exchange or otherwise dispose of a
number of shares of Bionova Common Stock received in the transaction that
would reduce the DNAP stockholders' ownership of Bionova Common Stock to a
number of shares having a value, as of the date of the Merger, of less than
fifty percent (50%) of the value of all of the formerly outstanding shares
of DNAP Securities immediately prior to the Merger. For purposes of this
assumption, shares of DNAP Securities exchanged for cash or other property,
surrendered by dissenters, if any, or exchanged for cash in lieu of
fractional shares of Bionova Common Stock, will be treated as outstanding
Bionova Common Stock on the date of the Merger. Moreover, shares of Bionova
Common Stock and DNAP Securities presently held by the DNAP stockholders
and otherwise sold, redeemed, or disposed of prior or subsequent to the
Merger will be considered as outstanding.

(c) Following the Merger, DNAP will hold (1) at least ninety percent
(90%) of the fair market value of its net assets and at least seventy
percent (70%) of the fair market value of its gross assets it held
immediately prior to the Merger, and (2) at least ninety percent (90%) of
the fair market value of the net assets of, and at least seventy percent
(70%) of the fair market value of the gross assets of, Merger Sub held by
Merger Sub immediately prior to the Merger. For purposes of this
assumption, amounts paid by DNAP or Merger Sub to dissenters, if any,
amounts paid by DNAP or Merger Sub to stockholders who receive cash or
other property, amounts used by DNAP or Merger Sub to pay Merger expenses,
and all redemptions and distributions (except for regular, normal
dividends) made by DNAP will be included as assets of DNAP or Merger Sub,
respectively, immediately prior to the Merger.

(d) Prior to the Merger, Bionova will be in control of Merger Sub
within the meaning of Section 368(c) of the Code.

(e) DNAP has no plan or intention to issue additional shares of its
stock following the Merger that would result in Bionova losing control of
DNAP within the meaning of Section 368(c) of the Code.

(f) Bionova has no plan or intention to redeem or otherwise reacquire
any of its Bionova Common Stock issued in the Merger.

(g) Bionova has no plan or intention to (1) liquidate DNAP following
the Merger, (2) merge DNAP with or into another corporation following the
Merger, (3) sell or otherwise dispose of the stock of DNAP following the
Merger, or (4) cause or permit
<PAGE>
Bionova U.S. Inc.
August 12, 1996
Page 4

DNAP to sell or otherwise dispose of any of the assets owned by DNAP or
Merger Sub prior to the Merger, except for dispositions made in the
ordinary course of business or transfers described in Section 368(a)(2)(C)
of the Code.

(h) Merger Sub will have no liabilities assumed by DNAP, and will not
transfer to DNAP any assets subject to liabilities in the Merger.

(i) Following the Merger, DNAP will continue its historic business or
use a significant portion of its historic business assets in a business.

(j) Bionova, Merger Sub, DNAP and the stockholders of DNAP will pay
their respective expenses incurred in connection with the Merger, except
those expenses incurred in connection with the printing and distributing of
the Registration Statement and the Proxy Statement will be shared equally
by Bionova and DNAP.

(k) Bionova has loaned the sum of $10 million to DNAP pursuant to the
Agreement and the Loan Agreement, and such loan represents a bona fide,
arm's-length debt of DNAP; however, there is no intercorporate indebtedness
between Bionova and DNAP or between Merger Sub and DNAP that was or will be
issued, acquired or settled at a discount in connection with the Merger.

(l) In connection with the Merger, DNAP Securities representing
control of DNAP, as defined in Section 368(c) of the Code, will be
exchanged solely for Bionova Common Stock. For purposes of this
representation, DNAP Securities exchanged for cash or other property
originating with Bionova will be treated as outstanding DNAP Securities on
the date of the Merger.

(m) At the time of the Merger, DNAP will not have outstanding any
warrants, options, convertible securities or any other type of right
pursuant to which any person could acquire DNAP Securities that, if
exercised or converted, would affect Bionova's acquisition or retention of
control of DNAP, as defined in Section 368(c) of the Code.

(n) Bionova does not own, nor has it owned during the past five years,
any shares of DNAP Securities.

(o) None of Bionova, Merger Sub or DNAP is an investment company as
defined in Section 368(a)(2)(F)(iii) and (iv) of the Code.

(p) At the time of the Merger, the fair market value of the assets of
DNAP will exceed the sum of its liabilities, plus the amount of
liabilities, if any, to which the assets are subject.

(q) None of Bionova, Merger Sub or DNAP is under the jurisdiction of a
court in a Title 11 or similar case within the meaning of Section
368(a)(3)(A) of the Code.
<PAGE>
Bionova U.S. Inc.
August 12, 1996
Page 5

(r) The Proxy Statement accurately states Bionova's business purposes
and reasons for the Merger.

(s) The Proxy Statement accurately states DNAP's business purposes and
reasons for the Merger.

(t) The payment of cash in lieu of fractional shares of Bionova Common
Stock is solely for the purpose of avoiding the expense and inconvenience
of issuing and transferring the fractional share interests in Bionova and
is not separately bargained for consideration. The total cash paid to the
holders of DNAP Securities in lieu of fractional share interests in Bionova
Common Stock will not exceed one percent (1%) of the aggregate
consideration received by the holders of DNAP Securities in exchange for
their DNAP Securities pursuant to the Merger; provided, however, that if a
holder of DNAP Securities holds both one or more shares of the DNAP Common
Stock and one or more shares of the DNAP Convertible Exchangeable Preferred
Stock, such holder will not receive cash in an amount equal to or greater
than the sum of the value of one full share of DNAP Common Stock and the
value of one full share of DNAP Convertible Exchangeable Preferred Stock.
The fractional share interests of each holder of DNAP Securities will be
aggregated, and no holder of DNAP Securities will receive cash in an amount
equal to or greater than the value of one full share of DNAP Securities.
The consideration paid for the fractional shares will be paid by Bionova.

(u) None of the compensation received by any holder of DNAP Securities
that is an employee of DNAP will be separate consideration for, or
allocable to, any of their DNAP Securities; none of the Bionova Common
Stock received by any holder of DNAP Securities that is an employee of DNAP
will be separate consideration for, or allocable to, any employment
agreement; and the compensation paid to any holder of DNAP Securities that
is an employee of DNAP will be for services actually rendered and will be
commensurate with amounts paid to third parties bargaining at arm's-length
for similar services.

(v) The consideration paid to dissenters to surrender their DNAP
Securities, if any, will be paid by DNAP.

(w) None of the shares of Bionova Common Stock and cash to be received
by holders of DNAP Securities in the Merger is separate consideration for
or otherwise allocable to anything other than shares of DNAP Securities.

(x) Options to acquire shares of DNAP Securities outstanding at the
effective time of the Merger will be assumed by Bionova and become
corresponding rights (adjusted in accordance with the exchange ratio set
forth above) to acquire shares of Bionova Common Stock.

(y) The excess of the aggregate fair market value of the shares of
Bionova Common Stock subject to each of the options immediately after the
assumption over the
<PAGE>
Bionova U.S. Inc.
August 12, 1996
Page 6

aggregate exercise price of such shares in each instance will not be more
than the excess of the aggregate fair market value of the shares of DNAP
Securities subject to such respective options immediately before such
assumption over the aggregate exercise price of such shares.

(z) The assumption of the DNAP options by Bionova will not give the
holders of the respective options additional benefits that they did not
have under the old options.

(aa) On a share-by-share comparison, the ratio of the respective
exercise price to the fair market value of the Bionova Common Stock subject
to such option immediately after the assumption will not be more favorable
to the holder of the respective option than the ratio of the respective
exercise price to the fair market value of the DNAP Securities subject to
the old option immediately before the assumption.

(bb) The DNAP options issued by DNAP in connection with the
performance of services do not have a readily ascertainable fair market
value, are not actively traded on an established market and are not
transferable by the holder other than by will or the laws of descent and
distribution.

(cc) Upon the assumption of the DNAP options issued by DNAP in
connection with the performance of services, the corresponding options to
acquire shares of Bionova Common Stock shall not have a readily
ascertainable fair market value, shall not be actively traded on an
established market and shall not be transferable by the holder other than
by will or the laws of descent and distribution.

(dd) During the three-year period ending prior to the Merger, DNAP has
not undergone an ownership change as such term is defined in Section 382(g)
of the Code.

(ee) The capital stock of International Produce Holding Company, a
corporation organized and existing under the laws of the State of Delaware
("IPHC"), is not a United States real property interest as such term is
defined in Section 897(c) of the Code.

(ff) The Agreement and the Ancillary Agreements represent the entire
understanding of Bionova, DNAP and Merger Sub with respect to the Merger.

The tax consequences of the Merger will depend primarily upon whether the
Merger qualifies for tax purposes as a "reorganization" under the provisions of
Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code. If it does qualify as a
reorganization under such provisions, (1) no gain or loss should be recognized
by Bionova, Merger Sub or DNAP as a result of the Merger; and (2) no gain or
loss should be recognized by a stockholder of DNAP as a result of the Merger,
except to the extent that cash or property other than the stock of Bionova is
received.

Further, if DNAP undergoes an "ownership change" as a result of the Merger,
Section 382 of the Code would limit the amount of the taxable income of DNAP for
any post-Merger
<PAGE>
Bionova U.S. Inc.
August 12, 1996
Page 7

period that it may offset by pre-Merger losses for both regular tax and
alternative minimum tax purposes to an amount equal to the fair market value of
DNAP immediately before the Merger multiplied by the long-term tax-exempt rate
as determined under Section 382(b) of the Code (the "Section 382 Limitation").

Further, under Section 1445 of the Code, if a foreign person disposes of a
United States real property interest, the transferee generally is required to
deduct and withhold a tax equal to ten percent (10%) of the amount realized on
the disposition. Pursuant to Section 1445(b) of the Code and the regulations
promulgated thereunder, the transferee of the stock of a domestic corporation is
not required to deduct and withhold any amount under this provision if certain
procedural measures are taken, including the domestic corporation furnishing to
the transferee an affidavit by the domestic corporation stating that (1) it is
not and has not been a United States real property holding corporation during
the applicable period and (2) as of the date of the disposition, interests in
such corporation are not United States real property interests.

Based upon the foregoing discussion and subject to the qualifications
stated therein, it is our opinion that the Merger will have the following tax
consequences:

(a) The Merger will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code.

(b) Bionova, Merger Sub and DNAP will each be a party to the
reorganization within the meaning of Section 368(b) of the Code.

(d) The stockholders of DNAP will not recognize any gain or loss upon
the exchange of their DNAP Securities for Bionova Common Stock pursuant to
the terms of the Agreement (except for gain on cash received in lieu of
fractional shares, as described in (e) below).

(e) DNAP stockholders receiving cash in lieu of fractional shares will
be treated as if such fractional shares had been received in the Merger and
redeemed by Bionova for cash. Unless the redemption is found to be
essentially equivalent to a dividend, the stockholder will recognize gain
or loss measured by the difference between the stockholder's basis in the
fractional share surrendered and the amount of cash received.

(f) The aggregate basis of the shares of Bionova Common Stock received
by stockholders of DNAP pursuant to the Merger will be the same as the
aggregate basis of the DNAP Securities exchanged therefor (less basis
attributable to fractional shares surrendered for cash).
<PAGE>
Bionova U.S. Inc.
August 12, 1996
Page 8

(g) The holding period of Bionova Common Stock will include the period
during which the DNAP Securities exchanged therefor were held, provided
such DNAP Securities were held as a capital asset at the time of the
Merger.

(h) The assumption by Bionova of options to acquire shares of DNAP
Common Stock issued by DNAP in connection with the performance of services
and which are outstanding at the effective time of the Merger (as described
above) should not cause the recognition of income, gain or loss to the
option holders.

(i) The Merger will result in an ownership change for DNAP and,
therefore, the use by DNAP after the Merger of the pre-Merger losses of
DNAP will be subject to the Section 382 Limitation.

(j) Provided that IPHC, Bionova and the transferor of the capital
stock of IPHC comply with the requirements of Section 1445 of the Code and
the regulations thereunder, Bionova will not be required to deduct and
withhold any tax pursuant to Section 1445 of the Code.

As stated above, we have assisted in the preparation of the Proxy Statement and,
in particular, the section of the Proxy Statement entitled "Certain Federal
Income Tax Consequences." It is our opinion that this section, to the extent it
contains statements of legal conclusions, includes a summary of the material
federal income tax consequences which are expected to result from the Merger and
the issuance of the Bionova Common Stock.

This opinion is being provided solely for the use of DNAP, Bionova and the
stockholders of DNAP.

We hereby consent to the filing of this opinion with the SEC as an exhibit
to the Registration Statement and to the reference to us under "Summary - The
Merger and Related Transactions - Federal Income Tax Consequences," "The Merger
and Related Tansactions - Certain Federal Income Tax Consequences" and "Legal
Opinion" in the Proxy Statement forming a part of the Registration Statement. In
giving this consent, we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the Securities Act or the
rules or regulations of the SEC thereunder.

THOMPSON & KNIGHT
A Professional Corporation

By: /s/ J.Y. ROBB III
-------------------------------------
J.Y. Robb III
Shareholder
JYR/JRC

<PAGE>

EXHIBIT 10.1
- -----------------------------------------------------------------------------
LOAN AGREEMENT

BETWEEN

BIONOVA U.S. INC., A DELAWARE CORPORATION,

AND

DNA PLANT TECHNOLOGY CORPORATION, A DELAWARE CORPORATION

January 26, 1996

- --------------------------------------------------------------------------------
<PAGE>

LOAN AGREEMENT
--------------

THIS LOAN AGREEMENT dated January 26, 1996, is made by and between BIONOVA
U.S. INC., a Delaware corporation ("Lender"), whose address for notices
hereunder is 1700 Pacific, Suite 3300, Dallas, Texas 75201 (Attention: Joe A.
Rudberg), and DNA PLANT TECHNOLOGY CORPORATION, a Delaware corporation
("Borrower"), whose address is 6701 San Pablo Avenue, Oakland, California 94608-
1239 in respect of a loan by Lender to Borrower in the principal sum of up to
Ten Million Dollars ($10,000,000.00).

ARTICLE I
---------

Definitions
-----------

For purposes of this Loan Agreement, the following terms shall have the
respective meanings assigned to them.

1.01 Advance. The term "Advance" shall mean a disbursement by Lender of
-------
any of the proceeds of the Loan.

1.02 Affiliates. The term "affiliates" shall mean as to any person or
----------
entity, each other person or entity that directly or indirectly (through one or
more intermediaries or otherwise) controls, is controlled by, or is under common
control with, such person or entity. A person or entity shall be deemed to be
"controlled by" any other person or entity if such other person or entity
possesses, directly or indirectly, power to direct or cause the direction of the
management and policies of such person or entity whether by contract or
otherwise.

1.03 Assignment of Patents. The term "Assignment of Patents" shall mean
---------------------
the Assignment of Patents in the form attached hereto as Schedule 1, which
----------
assignment has been executed and delivered by Borrower to Lender as of the date
hereof in order to assign to Lender Borrower's interest in the Patents.

1.04 Borrower. The term "Borrower" shall mean the party named as such in
--------
the first paragraph of this Loan Agreement.

1.05 Closing. The term "Closing" shall mean the initial funding by Lender
-------
of an Advance to Borrower in the principal amount of $5,000,000.00, which
funding has occurred on the date first set forth above.

1.06 Collateral. The term "Collateral" shall mean Lender's interest in
----------
Borrower's interest in the Patents and any other property in which Borrower
grants to Lender a valid Lien.

1.07 Collateral Value. The term "Collateral Value" shall mean, as of any
----------------
date, the value of the Collateral established by a Qualified Professional.

-1-
<PAGE>

1.08 Collateral Value Deficiency. The term "Collateral Value Deficiency"
---------------------------
shall mean, as of any date, the amount, as determined by Lender in its sole
discretion, by which the sum of (i) the outstanding Loan Indebtedness and (ii)
$3,000,000.00 exceeds the Collateral Value.

1.09 Collateral Value Deficiency Notification Date. The term "Collateral
---------------------------------------------
Value Deficiency Notification Date" shall mean the date on which any notice of a
Collateral Value Deficiency is received by Borrower.

1.10 Code . The term "Code" shall mean the Uniform Commercial Code in
-----
effect from time to time in the State of Delaware.

1.11 Debtor Relief Laws. The term "Debtor Relief Laws" shall mean any
------------------
applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
insolvency, reorganization, or similar laws affecting the rights or remedies of
creditors generally, as in effect from time to time.

1.12 Event of Default. The term "Event of Default" shall mean:
----------------

(a) A failure by Borrower to make any payment of principal or interest on
the Note when due, which such failure remains unremedied by Borrower for
five business days after receipt of notice from Lender of such failure;

(b) A failure by Borrower to comply with any of the other terms or
conditions specified herein or in any other Loan Document and such failure
remains unremedied for sixty days following receipt by Borrower of notice
from Lender of such failure;

(c) The appointment of a receiver, trustee, conservator, or liquidator of
Borrower, or for substantially all of the property of Borrower, and such
appointment remains undischarged for a period of thirty days;

(d) A filing by Borrower of a voluntary petition in bankruptcy, seeking
reorganization or rearrangement or taking advantage of any Debtor Relief
Laws, or an answer by Borrower admitting the material allegations of a
petition filed against Borrower, as the case may be, in any bankruptcy,
reorganization, insolvency, conservatorship, or similar proceeding;

(e) The making by Borrower of a general assignment for the benefit of
creditors;

(f) The entry of an order, judgment or decree by any court of competent
jurisdiction adjudicating Borrower as bankrupt or insolvent, or approving a
petition seeking reorganization of Borrower or an arrangement of its debts,
or appointing a receiver, trustee, conservator, or liquidator of Borrower,
or for substantially all of the property of Borrower, and such order,
judgment or decree remains undischarged or unstayed for a period of thirty
days;

-2-
<PAGE>

(g) The occurrence of any event or condition which results in a default in
the payment of any indebtedness or performance of any obligation of
Borrower to Lender under the Loan Documents;

(h) The liquidation, termination, or dissolution of Borrower;

(i) The occurrence of any event under any other material credit, loan or
similar agreement of Borrower or any subsidiary thereof which results in
the acceleration of the entire amount of the indebtedness or other amounts
owed thereunder; or

(j) The failure of Borrower to cure a Collateral Value Deficiency in
accordance with this Loan Agreement.

1.13 Financial Statements . The term "Financial Statements" shall mean
---------------------
such balance sheets, profit and loss statements, reconciliations of capital and
surplus, changes in financial condition, schedules of sources and applications
of funds and other financial information of Borrower and its subsidiaries, as
shall be required by Lender from time to time, which statements, if required by
Lender, shall be certified by an independent certified public accountant.

1.14 Financing Statements . The term "Financing Statements" shall mean
---------------------
with respect to the Loan any financing statement filed under the Code or any
similar law and any notices of recordation of assignment of patent or similar
filings in any jurisdiction for the perfection of a security interest or lien in
any property.

1.15 Governmental Authority . The term "Governmental Authority" shall
-----------------------
mean the United States, the State, the County, the City, or any other political
subdivision in which property of Borrower is located, and any other political
subdivision, agency, or instrumentality exercising jurisdiction over Borrower or
property of Borrower.

1.16 Governmental Requirements . The term "Governmental Requirements"
--------------------------
shall mean all laws, statutes, ordinances, rules, and regulations of any
Governmental Authority applicable to Borrower.

1.17 Indebtedness . The term "Indebtedness" shall mean all indebtedness,
-------------
obligations and liabilities of Borrower or its subsidiaries, including without
limitation:

(i) all "liabilities" which would be reflected on a balance sheet of
Borrower or its subsidiaries prepared in accordance with generally accepted
accounting principles;

(ii) all obligations of Borrower or its subsidiaries in respect of any
guaranty; and

(iii) all obligations, indebtedness and liabilities secured by a Lien on
any property or assets of Borrower or its subsidiaries.

-3-
<PAGE>

1.18 Lender. The term "Lender" shall mean the party named as such in the
------
first paragraph of this Loan Agreement.

1.19 Liens. The term "Liens" shall mean any lien, mortgage, security
-----
interest, tax lien, pledge, encumbrance, conditional sale or title retention
arrangement, or any other interest in property designed to secure the repayment
of Indebtedness, whether arising by agreement or under any statute or law, or
otherwise.

1.20 Loan. The term "Loan" shall mean the loan by Lender to Borrower of
----
the principal sum of up to Ten Million Dollars ($10,000,000.00), or such other
amount as shall be advanced by Lender to Borrower from time to time pursuant to
this Loan Agreement.

1.21 Loan Documents. The term "Loan Documents" shall include this Loan
--------------
Agreement, the Note, the Assignment of Patents, the Financing Statements, and
such other security or similar agreements or instruments evidencing or securing
the Loan as shall, from time to time, be executed and delivered by Borrower to
Lender pursuant to this Loan Agreement.

1.22 Loan Indebtedness. The term "Loan Indebtedness" shall mean all
-----------------
amounts due and owing under the Note, this Loan Agreement and the other Loan
Documents, including, without limitation, all principal, interest, costs, and
attorneys fees.

1.23 Merger Agreement. The term "Merger Agreement" shall mean that
----------------
certain Merger Agreement of even date herewith among Empresas La Moderna, S.A.
de C.V., Bionova, S.A. de C.V., Lender, Bionova Acquisition, Inc. and Borrower,
as such agreement may be amended from time to time.

1.24 Note. The term "Note" shall mean the promissory note in the form
----
attached hereto as Schedule 2 issued by Borrower to Lender as of the date hereof
----------
in the amount of and evidencing the Loan and shall include any promissory note
given in renewal or extension thereof or in substitution thereof, in whole or in
part.

1.25 Patents. The term "Patents" shall mean Borrower's interest, either
-------
existing or hereafter acquired, in the patents and applications therefor
identified on Schedule 4 attached hereto.
----------

1.26 Permitted Liens. The term "Permitted Liens" shall mean (i) Liens
---------------
granted to Lender to secure the repayment of the Note, (ii) Liens described on

Schedule 7 attached hereto, (iii) pledges or deposits made to secure payment of
- ----------
worker's compensation insurance, unemployment insurance, pensions or social
security programs, (iv) Liens imposed by mandatory provisions of law such as for
materialmen's, mechanics, warehousemen's and other like Liens arising in the
ordinary course of business, securing Indebtedness the payment of which is not
yet due, and (v) Liens for taxes, assessments and governmental charges or levies
imposed upon Borrower or upon Borrower's income or profits or property, if the
same are not yet due and payable or if the same are being contested in good
faith and as to which adequate cash reserves have been provided.

-4-
<PAGE>

1.27 Qualified Professional. The term "Qualified Professional" shall
----------------------
have the meaning ascribed to such term in Section 5.03.

1.28 Sole Patent License. The term "Sole Patent License" shall mean the
-------------------
Sole Patent License in the form attached hereto as Schedule 3, which license has
----------
been executed and delivered by Lender to Borrower as of the date hereof in order
to provide Borrower with a license in the Patents as provided therein.

ARTICLE II
----------

Agreements of Lender
--------------------

2.01 Commitment of Lender. Subject to the conditions hereof and the
--------------------
terms of the Note, and provided that an Event of Default has not occurred,
Lender will make Advances to Borrower (i) of $5,000,000.00 on the date of
Closing, and (ii) unless the "Closing Date" (as such term is defined in the
Merger Agreement) has occurred, of $5,000,000.00 on July 1, 1996.

2.02 Principal and Interest Payments. The Loan Indebtedness shall be
-------------------------------
payable by Borrower to Lender as provided in the Note. Interest on the Loan
Indebtedness, at the rate specified in the Note, shall be computed and payable
as provided in the Note.

2.03 Conditions to Funding. As conditions precedent to the Advance
---------------------
specified in Section 2.01(ii), no Event of Default (and no event which, if left
unchanged, would become an Event of Default through the mere passage of time)
shall exist hereunder.

2.04 Conditions Precedent for the Benefit of Lender. All conditions
----------------------------------------------
precedent to the obligation of Lender to fund are imposed hereby solely for the
benefit of Lender, and no other party may require satisfaction of any such
condition precedent or be entitled to assume that Lender will refuse to fund in
the absence of strict compliance with such conditions precedent. All
requirements of this Loan Agreement may be waived by Lender, in whole or in
part, at any time.

2.05 Prepayment of Loan Indebtedness. The Borrower may prepay the Loan
-------------------------------
Indebtedness in whole or in part at any time without bonus or penalty.

ARTICLE III
-----------

Agreements Regarding Patents
----------------------------

3.01 Assignment of Patents. On the date of Closing, Borrower shall
---------------------
execute and deliver to Lender the Assignment of Patents which assignment shall
be expressly subject to the rights of existing licensees as listed on Schedule 5
----------
attached hereto. Borrower shall have the right to offset any losses (including
reasonable attorneys' fees) arising from any claim by any such licensees that
the Assignment of Patents violates the terms of any of such existing licenses.

-5-
<PAGE>

Notwithstanding anything herein to the contrary, the occurrence of any such
claim or loss shall not be deemed a breach of any of Borrower's representations,
warranties or covenants hereunder or give rise to Borrower's indemnification
obligations under Section 5.17. Upon repayment in full of the Loan
Indebtedness, Lender shall execute and deliver to Borrower an assignment in
substantially the same form as Schedule 1, assigning Lender's interest in the
----------
Patents back to Borrower, along with such other documentation as may be
reasonably required by Borrower to evidence the termination of Lender's interest
in the Patents.

3.02 Sole Patent License. On the date of Closing, Lender shall execute
-------------------
and deliver to Borrower the Sole Patent License, which license shall continue
for the term specified therein.

ARTICLE IV
----------

Representations and Warranties of Borrower
------------------------------------------

Borrower hereby represents and warrants (except as may be otherwise
disclosed by Borrower to Lender in Schedule 8 attached hereto) as of the date of
----------
Closing as follows:

4.01 The Financial Statements. The Financial Statements are true,
------------------------
correct, and complete as of the dates specified therein and fully and accurately
present the financial condition of Borrower and its subsidiaries as of the dates
specified. No material adverse change has occurred in the financial condition
of Borrower since the dates of the Financial Statements.

4.02 Suits, Actions, Etc. There are no material actions, suits, or
--------------------
proceedings pending or, to the best knowledge of Borrower, threatened in any
court or before or by any Governmental Authority against or affecting Borrower
or its subsidiaries or involving the validity or enforceability of any of the
Patents, at law or in equity. The consummation of the transactions contemplated
hereby, and the performance of any of the terms and conditions hereof and of the
other Loan Documents, will not result in a breach of, or constitute a default
in, any mortgage, deed of trust, lease, promissory note, loan agreement, credit
agreement, partnership agreement, or other agreement to which Borrower or any of
its affiliates or subsidiaries is a party or by which Borrower or any of its
affiliates or subsidiaries may be bound or affected.

4.03 Valid and Binding Obligation. Each of the Loan Documents when duly
----------------------------
executed and delivered will be, legal, valid and binding obligations of
Borrower, enforceable in accordance with their terms except as such enforcement
may be limited by (i) Debtor Relief Laws, (ii) fiduciary obligations under the
laws of its jurisdiction of incorporation, (iii) equitable principles which may
limit the availability of certain equitable remedies (such as specific
performance) in certain instances and (iv) public policy considerations with
respect to the enforceability of rights of indemnification.

4.04 Title to the Patents. Immediately prior to Closing, Borrower holds
--------------------
full and complete legal and equitable title to the Patents free and clear of all
liens, encumbrances or adverse claims, subject only to the licenses identified
on Schedule 5 attached hereto.
----------

-6-
<PAGE>

4.05 Existing Patent Licenses. At the date of Closing, Schedule 5
------------------------ ----------
attached hereto contains a complete list of all existing license agreements with
respect to the Patents to which Borrower is a party.

4.06 Authorization. Borrower has duly taken all corporate action
-------------
necessary to authorize the execution and delivery by it of the Loan Documents to
which it is a party and to authorize the consummation of the transactions
contemplated thereby and the performance of its obligations thereunder.
Borrower is duly authorized to borrow funds hereunder.

4.07 No Conflicts or Consents. The execution and delivery by Borrower of
------------------------
the Loan Documents to which it is a party, the performance of its obligations
under such Loan Documents, and the consummation of the transactions contemplated
by the various Loan Documents, do not and will not (i) conflict with any
material provision of (1) any applicable domestic or foreign law, statute, rule
or regulation, (2) the articles or certificate of incorporation, bylaws,
charter, or partnership agreement or certificate of Borrower or any of its
affiliates or subsidiaries, or (3) any agreement, judgment, license, order or
permit applicable to or binding upon Borrower or any of its affiliates and
subsidiaries, (ii) result in the acceleration of any debt owed by Borrower or
any of its affiliates or subsidiaries, or (iii) result in or require the
creation of any material lien upon any assets or properties of Borrower or any
of its affiliates or subsidiaries, except as expressly contemplated in the Loan
Documents. Except as expressly contemplated in the Loan Documents no consent,
approval, authorization or order of, and no notice to or filing with, any court
or governmental authority or third party is required in connection with the
execution, delivery or performance by Borrower or any of its affiliates and
subsidiaries of any Loan Document or to consummate any transactions contemplated
by the Loan Documents.

4.08 Solvency. At the time of Closing, Borrower is not insolvent and
--------
will not be rendered insolvent after giving effect to the consummation of the
transactions contemplated by the Loan Documents. For purposes of this Section
4.08, "insolvent" means that (i) Borrower is unable to pay its debts and
liabilities as they become due and payable or (ii) Borrower's liabilities exceed
its assets.

ARTICLE V
---------

Covenants and Agreements of Borrower
------------------------------------

To conform with the terms and conditions under which Lender is willing to
have credit outstanding to Borrower, and to induce Lender to enter into this
Agreement and make the Loan, Borrower warrants, covenants and agrees as follows
until all of the Loan Indebtedness has been paid in full:

5.01 Use of Proceeds. Borrower shall use the proceeds of this Loan
---------------
Agreement solely for purposes of paying operating costs of the businesses of
Borrower and other general corporate purposes (including payment of costs
incurred in relation to the Merger Agreement and the Ancillary Documents (as
defined therein)), but not for any purposes prohibited by this Article

-7-
<PAGE>

V. In no event shall the proceeds of any Advance be used directly or indirectly
for personal, family, or household purposes.

5.02 Costs and Expenses. All reasonable costs and expenses associated
------------------
with collection under this Loan Agreement, including, without limitation, (a)
all fees for filing or recording any documents related to consummation of the
transactions contemplated by this Loan Agreement, (b) all reasonable fees and
expenses of counsel to Lender related to collection under this Loan Agreement,
and (c) all other reasonable costs and expenses payable to third parties
incurred by Lender in connection with the collection under this Loan Agreement,
including in connection with the defense of the Loan Documents or the defense of
Lender's exercise of its rights thereunder shall be added to and included as
Loan Indebtedness payable by Borrower to Lender in accordance with this Loan
Agreement.

5.03 Collateral Value Deficiencies. If at any time not earlier than 365
-----------------------------
days after July 1, 1996 and not later than 180 days prior to the scheduled
termination date of this Loan Agreement, Lender has received an opinion from any
of the qualified professionals listed in Schedule 6 to this Loan Agreement or
----------
such other professional as may be mutually agreed from time to time by the
parties (a "Qualified Professional") that a Collateral Value Deficiency exists,
Lender may notify Borrower of such Collateral Value Deficiency in writing, which
shall include the amount of such Collateral Value Deficiency; provided, that no
Collateral Value Deficiency Notice shall be delivered earlier than 180 days
following a prior Collateral Value Deficiency Notice Date. Within 30 days from
and after the Collateral Value Deficiency Notification Date, Borrower shall, at
its election, take one of the following actions:

(i) demonstrate to Lender's satisfaction that no such Collateral
Value Deficiency exists; provided that the delivery to Lender of a written
opinion from a Qualified Professional that no Collateral Value Deficiency exists
shall be deemed to have satisfied Lender. Such opinion of value may assume that
additional security is made available to Lender as provided in Section 5.03(ii)
below provided that such security is so provided to Lender;

(ii) execute and deliver to Lender additional security which may
include, without limitation, letters of credit, guaranties and supplemental or
additional documents, in each case in form and substance reasonably satisfactory
to Lender and its counsel, securing repayment of the Loan Indebtedness, covering
property owned by Borrower not currently covered by any Loan Document and which
property is of a type and nature, and having a value (determined by Lender and
its advisors using customary standards for lending) satisfactory to Lender;
provided, however, that Borrower shall not be required to provide an item of
additional collateral if the provision of such would cause Borrower, in the
reasonable opinion of Borrower's counsel, to materially breach any agreement
between Borrower and an unrelated third party; or

(iii) make a payment to Lender with respect to the Loan Indebtedness
in an amount sufficient to eliminate such Collateral Value Deficiency.

Borrower's obligations to cure a Collateral Value Deficiency shall be
limited to those assets (other than cash and marketable securities) available to
Borrower; provided, however, if a Collateral Value Deficiency Notice has been
sent and the Collateral Value is determined to be

-8-
<PAGE>

less than the Loan Indebtedness, then cash and marketable securities shall be
considered available assets to the extent they exceed the amount of $4,400,000.

5.04 Additional Documents. Borrower shall execute and deliver to Lender,
--------------------
from time to time as requested by Lender, such other documents as shall
reasonably be necessary to provide the rights and remedies to Lender granted or
provided for by the Loan Documents.

5.05 Inspection of Books and Records. Borrower shall permit Lender or
-------------------------------
its representatives, including independent accountants and agents, at all
reasonable times to examine and copy the books and records of Borrower
pertaining to the Loan.

5.06 Defense of Actions. Borrower shall retain all rights to commence,
------------------
appear in, or defend or make decisions concerning any action or proceeding or
prosecution (including any proceeding in the United States Patent and Trademark
Office) purporting to affect, the Patents or the respective rights and
obligations of Lender and Borrower with respect thereto pursuant to any Loan
Document; provided, however, if Lender requests that Borrower take any action
regarding the matters set forth in this Section 5.06 and Borrower refuses or
fails to take such action on a timely basis, then, prior to the repayment of the
Loan Indebtedness, Lender may (but shall not be obligated to) commence, appear
in, or defend any action or proceeding (including any proceeding in the United
States Patent and Trademark Office) purporting to affect the Patents or the
respective rights and obligations of Lender and Borrower with respect thereto
pursuant to any Loan Document. In the event Borrower refuses or fails to take
action on a timely basis reasonably requested by Lender, then Lender shall, at
its sole option, control any such action or proceeding and Borrower agrees to
appear as a party therein if requested by Lender, and to cooperate with Lender
in the conduct of such action or proceeding whether or not it is a party.
Lender may (but shall not be obligated to) pay all necessary expenses, including
reasonable attorneys' fees and expenses incurred in connection with such
proceedings or actions, which shall be added to and included as Loan
Indebtedness payable by Borrower to Lender in accordance with this Loan
Agreement. Any recovery obtained by either party in enforcing the Patents will
be applied first to the expenses incurred in obtaining such recovery and then to
the Loan Indebtedness.

5.07 Prohibition on Assignment. Borrower shall not assign or encumber
-------------------------
any interest of Borrower under this Loan Agreement without the prior written
consent of Lender.

5.08 Financial Statements. Within three business days of their filing
--------------------
with the Securities and Exchange Commission (the "SEC"), Borrower shall furnish
Lender copies of its annual report on Form 10-K, quarterly reports on form 10-Q
as well as such other reports and filings filed from time to time with the SEC.
Borrower shall provide to Lender any additional documents relating to, or
supporting, such filings or that otherwise relate to Borrower's ability to repay
the Loan Indebtedness that are reasonably requested by Lender within thirty days
of such request.

5.09 Notification of Adverse Changes. Borrower shall promptly notify
-------------------------------
Lender of the occurrence of any event or condition which, if not remedied, would
result in a material, adverse

-9-
<PAGE>

change to the financial condition of Borrower and its subsidiaries taken as a
whole or would materially and adversely affect the value of the Patents or any
portion thereof.

5.10 Limitation on Dividends and Redemptions. Without the prior written
---------------------------------------
consent of Lender, Borrower will not declare or pay any dividends on, or make
any other distribution in respect of, any class of its capital stock or its
other equity interests (whether such stock or interests are now or hereafter
issued, outstanding or created) while any part of the Loan Indebtedness is
unpaid. Without the written consent of Lender, Borrower will not directly or
indirectly make any capital contribution to or purchase, redeem, acquire or
retire any shares of its capital stock or its other equity interests (whether
such stock or interests are now or hereafter issued, outstanding or created), or
cause or permit any reduction or retirement of such capital stock or such other
equity interests.

5.11 Limitation on Sales of Property. Without the written consent of
-------------------------------
Lender, except as otherwise specifically permitted under the Sole Patent
License, Borrower and its subsidiaries will not, prior to July 1, 1996, sell,
transfer, lease, exchange, license, alienate or dispose of any of its material
assets or properties or any material interest therein except to the extent not
otherwise forbidden under the Sole Patent License:

a. equipment which is worthless or obsolete or which is replaced
by equipment of equal suitability and value;

b. inventory which is sold in the ordinary course of business on
ordinary trade terms; and

c. sales or other dispositions not otherwise permitted hereunder,
not to exceed $25,000 in any single transaction and $100,000
in the aggregate in any Fiscal Year.

5.12 Limitation on Investments and New Businesses. Without the prior
--------------------------------------------
written consent of Lender, Borrower and its subsidiaries will not, prior to July
1, 1996, make any material expenditure or commitment or incur any material
obligation or enter into or engage in any material transaction except in the
ordinary course of business.

5.13 Limitation on Capital Expenditures. Without the written prior
----------------------------------
consent of Lender, prior to July 1, 1996, Borrower and its subsidiaries will not
make any capital expenditures in an amount exceeding $250,000.00 for any single
expenditure or $1,000,000.00 on an annual aggregate basis.

5.14 Limitation on Credit Extensions. Borrower and its subsidiaries will
-------------------------------
not extend credit, make advances or make loans to any person, including any
stockholder, employee, officer or director of Borrower, other than normal
extensions of credit to customers buying goods and services in the ordinary
course of business, working capital advances to its subsidiaries and advances to
employees for travel, relocation and other expense advances in the ordinary
course of business.

-10-
<PAGE>

5.15 Limitation on Other Borrowings. Without the prior written consent
------------------------------
of Lender, Borrower and its subsidiaries shall not incur, create, contract,
waive, assume, have outstanding, guarantee or otherwise be or become, directly
or indirectly liable in respect of any Indebtedness, except (i) Indebtedness
arising out of this Loan Agreement, (ii) Indebtedness secured by Permitted
Liens, (iii) current liabilities for taxes and assessments incurred in the
ordinary course of business, (iv) Indebtedness in respect of current accounts
payable or accrued (other than for borrowed funds or purchase money obligations)
and incurred in the ordinary course of business, (v) Indebtedness of Borrower as
reflected in the financial statements of Borrower provided to Lender at the date
of Closing, (vi) Indebtedness secured by inventory and/or receivables for
working capital lines, and (vii) Indebtedness incurred to acquire property,
plant or equipment and secured by the acquired asset, and (viii) up to
$2,500,000.00 of other Indebtedness (e.g., letters of credit) incurred by
Borrower in the ordinary course of business; provided, however, Borrower shall
not, without the consent of Lender, be permitted to incur Indebtedness under
provisions (vi) or (viii) of this Section 5.15 if Borrower has received a Notice
of Collateral Value Deficiency and such Collateral Value Deficiency continues to
exist; and provided further, however, that the renewal of existing Indebtedness
in the amount then outstanding shall not constitute the incurrence of additional
Indebtedness under this provision.

5.16 Transactions with Affiliates. Neither Borrower nor any of its
----------------------------
subsidiaries will engage in any transaction with or pay any management or other
fees or compensation to any of its affiliates except transactions in the
ordinary course of business and transactions among Borrower and its subsidiaries
expressly permitted hereunder.

5.17 Indemnity. Borrower agrees to indemnify Lender, upon demand, from
---------
and against any and all liabilities, obligations, claims, losses, damages,
penalties, fines, actions, judgments, suits, settlements, costs, expenses or
disbursements (including reasonable fees of attorneys, accountants, experts and
advisors) of any kind or nature whatsoever (in this section collectively called
"liabilities and costs") which to any extent (in whole or in part) may be
imposed on, incurred by, or asserted against Lender growing out of, resulting
from or in any way associated with any of the Collateral, the Loan Documents, or
the transactions and events (including the enforcement or defense thereof) at
any time associated therewith or contemplated therein (including any violation
or noncompliance with any environmental or other applicable laws by Borrower or
any liabilities or duties of Borrower or Lender with respect to hazardous
materials found in or release into the environment). THE FOREGOING
INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND COSTS ARE IN ANY
WAY OR TO ANY EXTENT CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR
OMISSION OF ANY KIND BY LENDER, provided only that Lender shall be not entitled
under this section to receive indemnification for that portion, if any, of any
liabilities and costs which is proximately caused by its own individual gross
negligence or willful misconduct, as determined by a final judgment. If any
person (including Borrower or any of its affiliates) ever alleges such gross
negligence or willful misconduct by Lender, the indemnification provided for in
this section shall nonetheless by paid upon demand, subject to later adjustment
or reimbursement, until such time as a court of competent jurisdiction enters a
final judgment as to the extent and effect of the alleged gross negligence or
willful misconduct. As used in this section, the term "Lender" shall refer not
only to the person designated as such in the first paragraph of this Loan
Agreement, but also to each director, officer, agent, attorney, employee,

-11-
<PAGE>

representative, and affiliate of such Person. The term "Environmental Laws"
shall mean any and all federal, state, local and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or other governmental
restrictions relating to the environment or to emissions, discharges, releases
or threatened releases of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes into the environment including ambient
air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes.

5.18 Permitted Activities. Notwithstanding anything to the contrary set
--------------------
forth in this Article V, in the event that Borrower is permitted under Section
6.2 of the Merger Agreement to take or fail to take any action, it shall also be
permitted to take or fail to take such action hereunder.

ARTICLE VI
----------

Rights and Remedies of Lender
-----------------------------

6.01 Acceleration. Upon the occurrence of an Event of Default, Lender
------------
may, at its option, declare the entire outstanding amount of the Loan
Indebtedness to be immediately due and payable which such declaration shall take
affect five business days after notice from Lender to Borrower if such Event of
Default has not been fully cured.

6.02 Termination of Borrower's Assignment Rights. Upon acceleration under
-------------------------------------------
Section 6.02, Borrower's rights under Section 3.01 of this Loan Agreement to
require Lender to convey an assignment of Lender's interest in the Patents back
to Borrower shall immediately terminate and Lender shall have no obligation to
convey any interest in the Patents back to Borrower. In the event of such
termination of Borrower's assignment rights, Lender shall be entitled to (i)
dispose of the Patents (subject to such retained rights, if any, in the Patents
that may then be granted to Borrower by Lender under the Sole Patent License) in
a commercially reasonable manner (including, without limitation, a sale in which
Lender shall be entitled to "credit bid" the Loan Indebtedness and, if it is the
highest bidder for the Patents, retain title to the Patents) and the proceeds
therefrom shall be applied to the Loan Indebtedness, or (ii) if Lender can
demonstrate with a written opinion of a Qualified Professional that (a) the
value of the Patents is equal to or less than the amount of the Loan
Indebtedness or (b) the value of the Patents exceeds the Loan Indebtedness by an
amount which Lender agrees to pay to Borrower, retain the Patents in full and
complete satisfaction of the Loan Indebtedness by giving Borrower thirty days
prior written notice of such election.

6.03 No Waiver or Exhaustion. All of Lender's rights and remedies with
-----------------------
respect to any Loan Document or relating to the Patents shall be cumulative and
may be exercised singularly or concurrently. No waiver by Lender of any of its
rights or remedies hereunder, in the other Loan Documents, or otherwise, shall
be considered a waiver of any other or subsequent right or remedy of Lender; no
delay or omission in the exercise or enforcement by Lender of any rights or
remedies shall ever be construed as a waiver of any right or remedy of Lender;
and,

-12-
<PAGE>

no exercise or enforcement of any such rights or remedies shall ever be
held to exhaust any right or remedy of Lender.

ARTICLE VII
-----------

General Terms and Conditions
----------------------------

7.01 Notices. All notices, demands, requests, and other communications
-------
required or permitted hereunder shall be in writing and shall be deemed to have
been given when received by Borrower or Lender, as the case may be, at the
respective addresses set forth on the first page of this Loan Agreement, or such
other address as Borrower or Lender may from time to time designate by written
notice to the other as herein required.

7.02 Modifications. No provision of this Loan Agreement or the other
-------------
Loan Documents may be modified, waived, or terminated except by instrument in
writing executed by the party against whom a modification, waiver, or
termination is sought to be enforced.

7.03 Severability. In case any of the provisions of this Loan Agreement
------------
shall for any reason be held to be invalid, illegal, or unenforceable, such
invalidity, illegality, or unenforceability shall not affect any other provision
hereof, and this Loan Agreement shall be construed as if such invalid, illegal,
or unenforceable provision had never been contained herein.

7.04 Election of Remedies. Lender shall have all of the rights and
--------------------
remedies granted in the Loan Documents and available at law or in equity, and
these same rights and remedies shall be cumulative and may be pursued
separately, successively, or concurrently against Borrower, or the Patents at
the sole discretion of Lender. The exercise or failure to exercise any of the
same shall not constitute a waiver or release thereof or of any other right or
remedy, and the same shall be nonexclusive.

7.05 Form and Substance. All documents, certificates, and other items
------------------
required under this Loan Agreement to be executed and/or delivered to Lender
shall be in form and substance reasonably satisfactory to Lender.

7.06 Controlling Agreement. All agreements between Borrower and Lender,
---------------------
whether now existing or hereafter arising and whether written or oral, are
hereby limited so that in no event shall the interest paid, or agreed to be
paid, to Lender for the use, forbearance, or detention of the money to be loaned
pursuant to this Loan Agreement, or for the performance or payment of any
covenant or obligation contained herein, exceed the maximum amount permissible
under applicable law. If from any circumstances whatsoever fulfillment of any
provision hereof or of any other document evidencing, securing, or pertaining to
the Loan, at any time performance of such provision shall be due, shall involve
transcending the limit of validity prescribed by law, then ipso facto, the
----------
obligation to be fulfilled shall be reduced to the limit of such validity; and
if from any such circumstances Lender shall ever receive anything of value
deemed interest under applicable law which would exceed interest at the highest
lawful rate, the excessive interest shall be applied to the reduction of the
principal amount owing under the Note and not to the payment of interest, or if
the excessive interest exceeds the unpaid

-13-
<PAGE>

balance of principal of the Note, such excess shall be refunded to Borrower. All
sums paid or agreed to be paid to Lender for the use, forbearance, or detention
of the indebtedness evidenced hereby shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full term of such indebtedness until payment in full in such manner as is
permitted by law. This paragraph shall control all agreements between Borrower
and Lender.

7.07 No Third Party Beneficiary. This Loan Agreement is for the sole
--------------------------
benefit of Lender and Borrower and is not for the benefit of any third party.

7.08 Number and Gender. Whenever used herein, the singular number shall
-----------------
include the plural and the singular, and the use of any gender shall be
applicable to all genders.

7.09 Captions. The captions, headings, and arrangements used in this
--------
Loan Agreement are for convenience only and do not in any way affect, limit,
amplify, or modify the terms and provisions hereof.

7.10 Applicable Law. This Loan Agreement and the Loan Documents shall be
--------------
governed by and construed in accordance with the laws of the State of New York
and the laws of the United States applicable to Lender and transactions within
such State.

7.11 Entire Agreement. This Loan Agreement, the other Loan Documents and
----------------
the Sole Patent License shall constitute the entire agreement and understanding
between the parties and supersede all prior agreements and understandings with
respect to the subject matter of the aforementioned agreements, whether written
or oral.

-14-
<PAGE>

EXECUTED AND DELIVERED on the date first recited.

LENDER:

BIONOVA U.S. INC.

By:
-------------------------------
Name: Carlos Herrera
Title: Chairman of the Board and
Chief Executive Officer

BORROWER:

DNA PLANT TECHNOLOGY CORPORATION

By:
-------------------------------
Name: Robert Serenbetz
Title: Chief Executive Officer

-15-

<PAGE>

EXHIBIT 10.2

ASSIGNMENT OF PATENTS

ASSIGNMENT OF PATENTS MADE AS OF THE 26TH DAY OF JANUARY, 1996;

FOR VALUE RECEIVED, DNA Plant Technology Corporation
a Delaware corporation (hereinafter called the "Assignor")

having a place of business at 6701 San Pablo Avenue
Oakland, California 94608

hereby sells, assigns, transfers and conveys unto

Bionova U.S. Inc.

a Delaware corporation (hereinafter called the "Assignee")

having a place of business at c/o Thompson & Knight
(Attn: JAR)
1700 Pacific Ave., Suite 3300
Dallas, Texas 75201

its successors, assigns and legal representatives, Assignor's entire right,
title and interest, for the United States and for all other countries and
regions throughout the world in and to the utility patents and applications
therefor, identified in Schedule A attached hereto and hereby made a part hereof
----------
(collectively the "Patents"), owned by Assignor, subject to certain rights
retained by Assignor as defined in that certain Loan Agreement between Assignor
and Assignee of even date herewith; and including certain inventions described
and or claimed in those Patents; and in and to said applications, divisions,
continuations, continuations-in-part and all Letters Patent of the United States
which may be granted thereon; and all reissues, reexaminations, renewals and
extensions thereof; and all applications for Letters Patent or other grants of
protection of proprietary rights including, but not limited to, patents,
inventor's certificates, utility models, utility certificates, patents of
importation, registrations of patent and industrial design registrations which
may be filed, and which may be granted, upon said inventions in any counties or
regions of the world; and all reissues reexaminations, renewals and extensions
thereof.

AND Assignor hereby authorizes and requests the Commissioner of Patents and
Trademarks of the United States, and the Secretary of the Department of
Agriculture of the United States, or comparable authority in each country or
region to issue all Letters Patent or other grants of protection upon said
inventions to the Assignee or to such nominees as it may designate.
<PAGE>

AND Assignor authorizes and empowers said Assignee or its nominees to
invoke and claim for any application for such Letters Patent or other form of
protection for said inventions filed by it or them, the benefit of the right of
priority of Industrial Property, as amended, or by any convention which may
henceforth be substituted for it, and to invoke and claim such right of priority
without further written or oral authorization from Assignor.

AND Assignor hereby agrees and acknowledges that a copy of this assignment
shall be deemed a full legal and formal equivalent of any assignment, consent to
file or like document which may be required in any country or region for any
purpose and more particularly in proof of the right of said Assignee or its
nominees to claim the aforesaid benefit of the right of its priority provided by
the International Convention for the Protection of Industrial Property, as
amended, or by any convention which may henceforth be substituted for it.

DNA PLANT TECHNOLOGY CORPORATION

By:
-----------------------------
Robert Serenbetz
Chief Executive Officer

STATE OF TEXAS (S)
(S) ss.:
COUNTY OF DALLAS (S)

On this 26th day of January, 1996, before me personally appeared Robert
Serenbetz to me known and known to me to be the Chief Executive Officer of DNA
Plant Technology Corporation and who executed the foregoing instrument, and who
thereupon acknowledged to me that he was authorized by DNA Plant Technology
Corporation to execute the same on its behalf for the purposes therein set
forth.

(Seal)
--------------------------------
Notary Public
(Notary Stamp)

The foregoing assignment is hereby accepted by and on behalf of Bionova
U.S. Inc.

BIONOVA U.S. INC.

By:
-----------------------------
Carlos Herrera
Chairman of the Board and
Chief Executive Officer

-2-
<PAGE>

STATE OF TEXAS (S)
(S) ss.:
COUNTY OF DALLAS (S)

On this 26th day of January, 1996, before me personally appeared Carlos
Herrera to me known and known to me to be the Chairman of the Board and Chief
Executive Officer of Bionova U.S. Inc. and who executed the foregoing
instrument, and who thereupon acknowledged to me that he was authorized by
Bionova U.S. Inc. to execute the same on its behalf for the purposes therein set
forth.

(Seal)
---------------------------------
Notary Public
(Notary Stamp)

-3-
<PAGE>

SCHEDULE A

LIST OF PATENTS AND APPLICATIONS THEREFOR
-----------------------------------------

I. Issued U.S. Patents
-------------------

1. U.S. Patent No. 5,034,323 "Genetic Engineering of Novel Plant
Phenotypes"

2. U.S. Patent No. 5,231,020 "Genetic Engineering of Novel Plant
Phenotypes"

3. U.S. Patent No. 5,283,184 "Genetic Engineering of Novel Plant
Phenotypes"

II. Pending U.S. Patent Applications
--------------------------------

1. U.S. Serial No. 027,133 "Genetic Engineering of Novel Plant
Phenotypes"

2. U.S. Serial No. 557,373 "Genetic Engineering of Novel Plant
Phenotypes"

III. Foreign Filings
---------------

PCT Serial No. 90/01690 WO 90/12084
European Granted Patent No. 465,572 (issuing from Serial No. 90905970.1)
European Patent Application Serial No. 94203025.5
Japan Patent Application Serial No. 2-505875
Australia Patent No. 640,644 (issuing from Serial No. 54123/90)

-4-

<PAGE>

EXHIBIT 10.3

SOLE PATENT LICENSE AGREEMENT
-----------------------------

THIS AGREEMENT is made and entered into this 26th day of January, 1996, by
and between BIONOVA U.S. INC., a Delaware corporation (hereinafter BIONOVA) and
DNA PLANT TECHNOLOGY, a Delaware corporation (hereinafter DNAP).

WITNESSETH
----------

WHEREAS, BIONOVA, pursuant to the Loan Agreement dated as of even date
herewith ("Loan Agreement"), as the Lender, has agreed, subject to certain
conditions, to lend to DNAP, as the Borrower, $10,000,000 on a term loan basis;

WHEREAS, BIONOVA is willing to make the term loan under the Loan Agreement
only upon the condition, inter alia, that DNAP shall have executed and delivered
to BIONOVA an Assignment dated as of even date herewith of patents and patent
applications listed on the attached Schedule I;

WHEREAS, immediately prior to the execution of such Assignment, DNAP and
BIONOVA executed a Non-Exclusive Patent License Agreement (the "NON-EXCLUSIVE
LICENSE"), which the parties hereto acknowledge continues through and beyond the
term of this Agreement, unless such Non-Exclusive Patent License Agreement is
earlier terminated pursuant to its terms.

WHEREAS, BIONOVA, pursuant to the Loan Agreement and the Assignment, is the
owner of the right, title and interest in and to the patents and patent
applications listed on the attached Schedule I;

WHEREAS, DNAP desires to obtain a sole license under the patents and patent
applications listed on the attached Schedule I;

WHEREAS, BIONOVA is willing to grant such sole license to DNAP, for the
time and subject to the terms and conditions hereinafter set forth.

NOW THEREFORE, for and in consideration of the mutual promises contained
herein, and for other good and valuable consideration, the parties hereto agree
as follows:

1. Definitions. In this Agreement, the following terms shall have the
-----------
following meanings:

a. LICENSED PATENTS shall mean the patents and patent applications
listed on the attached Schedule I, patents to be issued pursuant
thereto,
<PAGE>

and all divisions, continuations, reissues, reexamination
certificates, substitutes, and extensions thereof.

b. LICENSED PRODUCTS shall mean any product or process covered by one or
more claims of the Licensed Patents.

c. COMMERCIALIZATION COLLABORATORS shall mean only those entities who,
from the Closing Date until the time of a termination under this
License Agreement, are in the chain of commercialization of the
products made, used or sold by DNAP or by Affiliates of the DNAP.

d. RESEARCH SPONSORS shall mean those entities (other than entities
listed on Schedule II with respect only to the Existing Licenses and
extensions thereof) who, from the date hereof until the time of
termination of this License Agreement shall fund research activities
of DNAP or Affiliates of DNAP under agreements requiring funding to
DNAP of at least $350,000 over a period not to exceed three years.

e. EXISTING LICENSES shall mean those license agreements with
respect to the LICENSED PATENTS that are set forth in Schedule II
hereto.

f. AFFILIATES means persons or entities controlling, controlled by or
under common control with the party, as well as any majority owned
entities of the party and of its other affiliates. "Control" of an
entity means either the power, directly or indirectly, to direct or
cause the direction of the management and policies of the entity,
whether by contract or otherwise, or the right to receive at least
50% of the profits from such entity.

6. License Grant to DNAP.
---------------------

a. Upon execution of this Agreement and until termination of DNAP's
rights to compel a reconveyance of the LICENSED PATENTS pursuant to Section 6.03
of the Loan Agreement, only for the Term indicated in Section 5(a) hereof, and
subject to the NON-EXCLUSIVE LICENSE, BIONOVA hereby grants to DNAP and its
Affiliates a fully paid up royalty free sole license under the LICENSED PATENTS
to (i) use the LICENSED PATENTS, (ii) together with its COMMERCIALIZATION
COLLABORATORS, to make, have made, use and sell throughout the world all
LICENSED PRODUCTS, and (iii) to meet its obligations under the Existing
Licenses.

b. Upon termination of DNAP's rights to compel a reconveyance of the
LICENSED PATENTS pursuant to Section 6.03 of the Loan Agreement, and for the
Term indicated in Section 5(b) hereof and subject to the NON-EXCLUSIVE LICENSE,
BIONOVA hereby grants to DNAP and its Affiliates a fully paid up, royalty free,
non-exclusive license under the LICENSED PATENTS to (i) use the LICENSED
PATENTS, (ii) together with its COMMERCIALIZATION COLLABORATORS, to make, have
made, use and sell throughout

-2-
<PAGE>

the world all LICENSED PRODUCTS, and (iii) to meet its obligations under the
Existing Licenses.

3. DNAP's Right to Sublicense. Except as specifically set forth herein,
--------------------------
during the term of this Agreement, DNAP shall not have a right to sublicense the
LICENSED PATENTS under this Agreement. BIONOVA shall be deemed to have
consented to the EXISTING LICENSES and the NON-EXCLUSIVE LICENSE (and to DNAP's
continuing ability to receive all royalties and license fees thereunder). DNAP
shall have the right to sublicense the LICENSED PATENTS to RESEARCH SPONSORS at
a commercially reasonable royalty rate acceptable to DNAP whereby 50% of such
royalties received by DNAP shall be paid, only if and to the extent that there
is any outstanding "Loan Indebtedness," as that term is defined in the Loan
Agreement, to BIONOVA within thirty (30) days of receipt by DNAP and applied to
such "Loan Indebtedness," and provided that the scope of any such sublicense
shall be (i) a non-exclusive license, and (ii) strictly limited to the
development and commercialization of the products and processes resulting from
the funded research program (collectively, the "Permitted Sublicenses").
Allocations of royalty value in agreements with RESEARCH SPONSORS between the
LICENSED PATENTS and other intellectual property or research services to be
provided by DNAP shall be commercially reasonable. Without the written consent
of BIONOVA, DNAP shall not be entitled to materially amend or modify any such
PERMITTED SUBLICENSE if such amendment or modification would cause the
sublicense to no longer meet the criteria for a Permitted Sublicense. Without
the written consent of BIONOVA, DNAP shall not be entitled to materially amend
or modify any of the EXISTING LICENSES, if such amendment or modification would
have a materially adverse affect on the value of the LICENSED PATENTS. Subject
to BIONOVA executing a Confidentiality Agreement, DNAP agrees to send BIONOVA a
complete and executed copy of each PERMITTED SUBLICENSE or any modification of
such PERMITTED SUBLICENSE or any of the EXISTING LICENSES modified hereunder
within 10 days of the final execution or modification.

4. Limitation of Rights of BIONOVA. While the sole license is in effect,
-------------------------------
and other than pursuant to the NON-EXCLUSIVE LICENSE, BIONOVA shall have no
rights, without the prior written consent of DNAP (i) to grant any licenses of
the LICENSED PATENTS; or (ii) to make any use on its own behalf of the LICENSED
PATENTS including without limitation the right to make, have made, use and sell
throughout the world all LICENSED PRODUCTS.

5. Term.
----

a. The term of the sole license granted to DNAP in section 2(a) shall be
the earlier of three years from the date of execution hereof or until
termination of DNAP's right to compel a reconveyance of the LICENSED PATENTS
pursuant to Section 6.03 of the Loan Agreement.

b. The term of the non-exclusive license granted to DNAP in section 2(b)
shall be until expiration of the last to expire of the LICENSED PATENTS.

6. Enforcement of LICENSED PATENTS. As long as its sole license remains in
-------------------------------
effect pursuant to Section 2(a) and subsequent to that time for the sole purpose
of meeting its

-3-
<PAGE>

obligations under the EXISTING LICENSES and the PERMITTED SUBLICENSES, DNAP
shall retain all rights to commence, appear in, or defend or make decisions
concerning any action or proceeding (including any proceeding or prosecution in
the United States Patent and Trademark Office) including the right to compel the
joinder of BIONOVA as a party, purporting to affect, the LICENSED PATENTS. If
BIONOVA requests that DNAP take any action regarding the matters set forth in
this Section 6 and DNAP refuses or fails to take such action on a timely basis,
then, while the sole license remains in effect, BIONOVA may (but shall not be
obligated to) commence, appear in, or defend any action or proceeding (including
any proceeding in the United States Patent and Trademark Office) purporting to
affect the LICENSED PATENTS or the respective rights and obligations of BIONOVA
and DNAP with respect thereto. In the event DNAP refuses or fails to take action
on a timely basis reasonably requested by BIONOVA, then BIONOVA shall, at its
sole option and expense, control any such action or proceeding and DNAP agrees
to appear as a party therein if requested by BIONOVA, and to cooperate with
BIONOVA in the conduct of such action or proceeding whether or not it is a
party. BIONOVA may (but shall not be obligated to) pay all necessary expenses,
including reasonable attorneys' fees and expenses incurred in connection with
such proceedings or actions, which DNAP agrees to repay to BIONOVA on the terms
set forth in the Loan Agreement.

7. Notices. All notices, demands, requests, and other communications
-------
required or permitted hereunder shall be in writing and shall be deemed to have
been given when received by BIONOVA or DNAP, as the case may be, at the
respective addresses set forth below or as BIONOVA or DNAP may from time to time
designate by written notice to the other.

BIONOVA U.S. INC.
c/o Thompson & Knight (attn: JAR)
1700 Pacific, Ste. 3300
Dallas, Texas 75201

With a copy to:

Lic. Alejandro Sanchez-Mujica
Edificio Torrealta
Av. Roble 300 Mezzzanine
66265 Garza Garcia, N.L.
Mexico

DNA PLANT TECHNOLOGY CORPORATION
6701 San Pablo Avenue
Oakland, CA 94608-1239
Attn.: Vice President, Business Development
(with copy to DNAP Legal Department, at the same address);

8. Modifications. No provision of this LICENSE AGREEMENT may be modified,
-------------
waiver, or terminated except by instrument in writing executed by the party
against whom a modification, waiver, or termination is sought to be enforced.

-4-
<PAGE>

9. Severability. In case any of the provisions of this LICENSE AGREEMENT
------------
shall for any reason be held to be invalid, illegal or unenforceable, such
invalidity, illegality, or unenforceability shall not affect any other provision
hereof, and this LICENSE AGREEMENT shall be construed as if such invalid,
illegal, or unenforceable provision had never been contained herein.

10. Election of Remedies. Each party shall have all of the rights and
--------------------
remedies granted herein and available at law or in equity, and these same rights
and remedies shall be cumulative and may be pursued separately, successively, or
concurrently against the other party, or the LICENSED PATENTS at the sole
discretion of the pursuing party. The exercise or failure to exercise any of
the same shall not constitute a waiver or release thereof or of any other right
or remedy, and the same shall be non-exclusive.

11. Form and Substance. All documents, certificates, and other items
------------------
required under this LICENSE AGREEMENT to be executed and/or delivered to a party
shall be in form and substance satisfactory to the receiving party.

12. No Third Party Beneficiary. This LICENSE AGREEMENT is for the sole
--------------------------
benefit of BIONOVA and DNAP and is not for the benefit of any third party.

13. Number and Gender. Whenever used herein, the singular number shall
-----------------
include the plural and the singular, and the use of any gender shall be
applicable to all genders.

14. Captions. The captions, headings, and arrangements used in this LICENSE
--------
AGREEMENT are for convenience only and do not in any way affect, limit, amplify,
or modify the terms and provisions hereof.

15. Applicable Law. This LICENSE AGREEMENT shall be governed by and
--------------
construed in accordance with the laws of the State of California and the laws of
the United States of America.

16. Assignability. Neither this LICENSE AGREEMENT nor any interest herein
-------------
may be assigned, in whole or in part, by a party without the prior written
consent of the other party. A party may assign this LICENSE AGREEMENT to a
successor of all or substantially all of its business without the prior written
consent of the other party; provided, however, that no such assignment shall be
valid unless the assignee assumes all of the duties and obligations of the
assigning party and provided further that the assigning party shall remain
liable and responsible to the other party for the performance and observance of
all such duties and obligations.

17. General Assurances. The parties hereto agree to execute, acknowledge
------------------
and deliver all such further instruments, and to do all such other acts, as may
be necessary or appropriate in order to carry out the intent and purposes of
this LICENSE AGREEMENT.

18. Negation Of Agency And Similar Relationships. Nothing contained herein
--------------------------------------------
shall be deemed to create any agency, joint venture or partnership relationship
between the parties hereto.

-5-
<PAGE>

19. Confidentiality.
---------------

a. Duties: DNAP and its PERMITTED SUBLICENSEES shall keep
confidential and not disclose to any third person or entity any information
regarding the Licensed Patents or the Licensed Products, except as provided in
subparagraph (b) below. Notwithstanding the foregoing, DNAP and its PERMITTED
SUBLICENSEES shall be free to use such information for purposes of exercising
its rights under this Agreement.

b. Exceptions: The duties of confidentiality, access restrictions and
non-use provided by subparagraph (a) above shall not apply to information
received by DNAP from BIONOVA if the information:

(1) is public information at the time of disclosure by BIONOVA
to DNAP;

(2) subsequently becomes public information other than by
act or omission of DNAP;

(3) is already in the lawful possession of DNAP, as can
reasonably be demonstrated by documentary evidence from DNAP, at the time of
first disclosure by BIONOVA to DNAP; or

(4) is independently developed by employees of DNAP who did
not have access to the information.

20. Termination. This Agreement will terminate upon the date of the last
-----------
to expire of the LICENSED PATENTS. In the event of a material breach of this
Agreement by either party and the failure to cure such breach within 30 days of
the receipt of written notice from the other party, this Agreement shall
terminate. In the event of such termination, the non-breaching party retains all
other rights and remedies available to it under law, including the right to
collect payments owed by not made.

21. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which will be deemed an original, but all of which will
constitute one and the same instrument.

-6-
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered on the date first above written.

BIONOVA U.S. INC.

By:
---------------------------------------------
Name: Carlos Herrera
Title: Chairman of the Board and Chief Executive
Officer

DNA PLANT TECHNOLOGY CORPORATION

By:
---------------------------------------------
Name: Robert Serenbetz
Title: Chief Executive Officer

-7-

<PAGE>

EXHIBIT 10.4

NON-EXCLUSIVE PATENT LICENSE AGREEMENT

THIS LICENSE AGREEMENT ("LICENSE AGREEMENT") is made and entered into this
26th day of January, 1996, by and between BIONOVA U.S. INC., a Delaware
corporation (hereinafter BIONOVA) and DNA PLANT TECHNOLOGY CORPORATION, a
Delaware corporation (hereinafter DNAP).

WITNESSETH
----------

WHEREAS, BIONOVA desires to have a non-exclusive license as recited herein
under the patent and patent applications listed in the attached Schedule 1; and

WHEREAS, DNAP is willing to grant such license to BIONOVA, subject to the
terms and conditions hereinafter set forth.

NOW THEREFORE, for and in consideration of the mutual promises contained
herein, and for other good and valuable consideration, the parties hereto agree
as follows:

1. Definitions. In this LICENSE AGREEMENT, the following terms shall have
-----------
the following meanings:

a. LICENSED PATENTS shall mean the patents and patent applications
listed on the attached Schedule 1, patents to be issued pursuant thereto, and
all divisions, continuations, reissues, reexamination certificates, substitutes,
and extensions thereof.

b. LICENSED PRODUCTS shall mean any product or process covered by one
or more claims of the LICENSED PATENTS.

c. ROYALTY BEARING PRODUCTS shall mean the LICENSED PRODUCTS that are
covered by one or more issued and not lapsed or expired claims of one or more of
the LICENSED PATENTS.

d. NET SALES shall mean the gross invoice price of ROYALTY BEARING
PRODUCTS sold by BIONOVA or its Sublicensees minus documented returns and
allowances for defective goods. The gross invoice price shall not include any
sales, use or value added taxes.

2. License Grant To BIONOVA. DNAP grants to BIONOVA for the term of this
------------------------
Agreement a non-exclusive license under LICENSED PATENTS to use the LICENSED
PATENTS and to make, have made, use and sell LICENSED PRODUCTS, except that such
license does not include rights in the areas listed in Schedule 2. The license
is non-transferable; provided, that DNAP consents to BIONOVA'S sublicense of its
rights hereunder to its Affiliates as of the date of this Agreement provided
that each such Sublicensee agrees to become bound by the terms and conditions of
this License (the
<PAGE>

"Sublicensees"). For purposes of this provision, "Affiliates" means persons or
entities controlling, controlled by or under common control with the party, as
well as any majority owned entities of the party and of its other affiliates,
and "control" of an entity means either the power, directly or indirectly, to
direct or cause the direction of the management and policies of the entity,
whether by contract or otherwise, or the right to receive at least 50% of the
profits from such entity.

3. Royalties.
---------

a. BIONOVA shall pay DNAP a running royalty fee of $250,000.00 for each
full quarter during which this LICENSE AGREEMENT is in effect; provided,
however, the fee for the calendar quarter ending March 31, 1996 shall be $50,000
and the fee for the calendar quarter ending June 30, 1996 shall be $125,000.00.
For any portion of a quarter during which this LICENSE AGREEMENT is in effect
BIONOVA shall pay DNAP a percentage of the applicable quarterly fee equal to the
number of days of such quarter divided by 91 days, multiplied by the applicable
quarterly fee.

b. BIONOVA may pay any royalty or other amounts due or payable under
this LICENSE AGREEMENT by crediting the amount of such royalty or other payment
against any indebtedness owed to BIONOVA by DNAP pursuant to that certain Loan
Agreement executed by and between DNAP and BIONOVA dated of even date herewith.

c. BIONOVA shall make the royalty payments set forth in subparagraphs
(a)and (b) hereof sixty (60) days after the close of each quarter.

d. With each royalty payment, BIONOVA will provide to DNAP a written
royalty statement verified by the President or Chief Financial Officer of
BIONOVA, setting forth the NET SALES identified by product designation upon
which royalties are calculated during the period covered by the statement. DNAP
shall have the right once per year to designate an independent certified public
accountant to inspect BIONOVA's books and records relating to NET SALES upon
which royalties are calculated.

4. BIONOVA's Option To Convert To Fully-Paid License. BIONOVA may, at any
-------------------------------------------------
time prior to September 30, 1996, notify DNAP that it is electing to convert to
a fully paid LICENSE with respect to the quarterly license fees owed by BIONOVA
under subparagraph 3(a) by paying the sum of $1,500,000 plus a royalty equal to
2.5% of the NET SALES of ROYALTY BEARING PRODUCTS sold by BIONOVA or its
Sublicensees during any quarter subsequent to the election during which this
LICENSE AGREEMENT is in effect, which fully paid LICENSE shall continue in full
force and effect and shall not terminate until the last to expire of the
LICENSED PATENTS. At any time subsequent to September 30, 1996, if BIONOVA has
not made the above described election, BIONOVA may upon thirty (30) days notice
to DNAP, convert to a fully paid royalty-free license by paying DNAP the
following sum as a lump sum payment for a fully paid up license to BIONOVA and
its Sublicensees: an amount when discounted, at a discount rate of ten percent
(10%), which, if added to the discounted stream of any and all

-2-
<PAGE>

royalty payments made pursuant to subparagraph 3(a) hereunder (with the
exception of the March 31, 1996 and June 30, 1996 payments), would yield a total
present value as of the date of this Agreement of $5,000,000.00.

5. Enforcement of LICENSED PATENTS. DNAP will be solely responsible at its
-------------------------------
own expense for using all reasonable efforts to prosecute and enforce LICENSED
PATENTS owned by DNAP; provided, however if BIONOVA requests that DNAP take any
reasonable action to prosecute and enforce the LICENSED PATENTS and DNAP
refuses or fails to take such action on a timely basis, BIONOVA shall be
permitted and authorized, in the name of DNAP or in the name of BIONOVA as
appropriate, to use all reasonable efforts to prosecute and enforce LICENSED
PATENTS. DNAP will provide BIONOVA with reasonable assistance in such
prosecution and enforcement. BIONOVA shall have no obligation to undertake any
such action, and if BIONOVA should do so, BIONOVA shall have no liability to
DNAP for the sufficiency or adequacy of any such actions taken by BIONOVA.

6. Notices. All notices, demands, requests, and other communications
-------
required or permitted hereunder shall be in writing and shall be deemed to have
been given when received by BIONOVA or DNAP, as the case may be, at the
respective addresses set forth below or as BIONOVA or DNAP may from time to time
designate by written notice to the other:

BIONOVA U.S. INC.
c/o Thompson & Knight, P.C. (Attn: JAR)
1700 Pacific Avenue, Suite 3300
Dallas, Texas 75201

With a copy to:

Lic. Alejandro Sanchez-Mujica
Edificio Torrealta
Av. Roble 300 Mezzanine
66265 Garza Garcia, N.L.
Mexico

DNA PLANT TECHNOLOGY CORPORATION
6701 San Pablo Avenue
Oakland, California 94608-1239
Attn: Vice President, Business Development (with copy to
DNAP Legal Department, at the same address)

7. Modifications. No provision of this LICENSE AGREEMENT may be modified,
-------------
waived, or terminated except by instrument in writing executed by the party
against whom a modification, waiver, or termination is sought to be enforced.

-3-
<PAGE>

8. Severability. In case any of the provisions of this LICENSE AGREEMENT
------------
shall for any reason be held to be invalid, illegal, or unenforceable, such
invalidity, illegality, or unenforceability shall not affect any other provision
hereof, and this LICENSE AGREEMENT shall be construed as if such invalid,
illegal, or unenforceable provision had never been contained herein.

9. Election of Remedies. Each party shall have all of the rights and
--------------------
remedies granted herein and available at law or in equity, and these same rights
and remedies shall be cumulative and may be pursued separately, successively, or
concurrently against the other party, or to the LICENSED PATENTS at the sole
discretion of the pursuing party. The exercise or failure to exercise any of
the same shall not constitute a waiver or release thereof or of any other right
or remedy, and the same shall be non-exclusive.

10. Form and Substance. All documents, certificates, and other items
------------------
required under this LICENSE AGREEMENT to be executed and/or delivered to a party
shall be in form and substance reasonably satisfactory to the receiving party.

11. No Third Party Beneficiary. This LICENSE AGREEMENT is for the sole
--------------------------
benefit of BIONOVA (and its Affiliates to the extent they become sublicensees
hereunder) and DNAP and is not for the benefit of any third party.

12. Number and Gender. Whenever used herein, the singular number shall
-----------------
include the plural and the singular, and the use of any gender shall be
applicable to all genders.

13. Captions. The captions, headings, and arrangements used in this LICENSE
--------
AGREEMENT are for convenience only and do not in any way affect, limit, amplify,
or modify the terms and provisions hereof.

14. Applicable Law. This LICENSE AGREEMENT shall be governed by and
--------------
construed in accordance with the laws of the State of California and the laws of
the United States of America.

15. Assignability. Except as provided in paragraph 2 hereof, neither this
-------------
LICENSE AGREEMENT nor any interest herein may be assigned, in whole or in part,
by a party without the prior written consent of the other party. The parties
hereto acknowledge that immediately subsequent to the execution of this LICENSE,
DNAP will be granting an Assignment of its ownership of the LICENSED PATENTS to
BIONOVA as security for repayment of its obligations under the Loan Agreement.
The Assignment shall not affect the rights or obligations of either party
hereunder. Notwithstanding the above, a party may assign this LICENSE AGREEMENT
to a successor of all or substantially all of its business without the prior
written consent of the other party, provided however, that no such assignment
shall be valid unless the assignee assumes all of the duties and obligations of
the assigning party.

-4-
<PAGE>

16. General Assurances. The parties hereto agree to execute, acknowledge
------------------
and deliver all such further instruments, and to do all such other acts, as may
be necessary or appropriate in order to carry out the intent and purposes of
this LICENSE AGREEMENT.

17. Negation Of Agency And Similar Relationships. Nothing contained herein
--------------------------------------------
shall be deemed to create any agency, joint venture or partnership relationship
between the parties hereto.

18. Confidentiality.
---------------

a. Duties: BIONOVA shall keep confidential and not disclose to any
third person or entity any information regarding the LICENSED PATENTS or the
LICENSED PRODUCTS received from DNAP under this LICENSE AGREEMENT, except as
provided in subparagraph (b) below. Notwithstanding the foregoing, BIONOVA and
any of its Sublicensees shall be free to use and disclose to their advisors and
consultants who agree to treat as confidential such information for purposes of
exercising its rights under this LICENSE AGREEMENT.

b. Exceptions: The duties of confidentiality, access restrictions and
non-use provided by subparagraph (a) above shall not apply to information
received by BIONOVA from DNAP if the information:

(i) is public information at the time of disclosure by DNAP
to BIONOVA;

(ii) subsequently becomes public information other than by act
or omission of BIONOVA;

(iii) is already in the lawful possession of BIONOVA, as can
reasonably be demonstrated by documentary evidence from BIONOVA, at the time of
first disclosure by DNAP to BIONOVA; or

(iv) is independently developed by employees of BIONOVA who did
not have access to the information.

19. Term and Termination. This Agreement shall continue until the date of
--------------------
the last to expire of the LICENSED PATENTS. In the event of a material breach
of this Agreement by either party and the failure to cure such breach within 30
days of the receipt of written notice from the other party, this Agreement shall
terminate. In the event of such termination, the non-breaching party retains
all other rights and remedies available to it under law, including the right to
collect payments owed but not made. BIONOVA shall have the unilateral right to
terminate this LICENSE AGREEMENT by giving DNAP thirty (30) days written notice
of such termination together with payment of all amounts due hereunder through
the date of termination; provided, however, upon termination BIONOVA and its
Affiliates shall be required (i) to return all materials regarding the LICENSED
PATENTS that it would be required to keep confidential under this Agreement
except that

-5-
<PAGE>

BIONOVA's outside counsel may retain a copy thereof to be held in confidence for
the sole purpose of preserving a record for any future litigation. and (ii) to
cease any and all use of the LICENSED PATENTS pursuant to this LICENSE
AGREEMENT. BIONOVA's obligation to pay royalties under this LICENSE AGREEMENT
shall cease upon such termination.

20. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which will be deemed an original, but all of which will
constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered on the date first above written.

BIONOVA U.S. INC.

By:
--------------------------------------------
Name: Carlos Herrera
Title: Chairman of the Board and Chief
Executive Officer

DNA PLANT TECHNOLOGY CORPORATION

By:
--------------------------------------------
Name: Robert Serenbetz
Title: Chief Executive Officer

-6-

<PAGE>

EXHIBIT 10.6
LONG TERM FUNDED RESEARCH AGREEMENT
-----------------------------------

This LONG TERM FUNDED RESEARCH AGREEMENT ("Agreement") is effective as of
the ___ day of ______, 1996, and is by and between DNA PLANT TECHNOLOGY
CORPORATION ("DNAP"), a corporation duly organized and existing under the laws
of the State of Delaware, and EMPRESAS LA MODERNA, S.A. de C.V., a corporation
organized under the laws of the United Mexican States, directly or through its
subsidiaries and/or its affiliates (collectively, "ELM").

W I T N E S S E T H:
- - - - - - - - - -

WHEREAS, DNAP has expertise, personnel, facilities, equipment, technology
and intellectual property useful in the development of improved plants using
biotechnological techniques; and

WHEREAS, ELM is, among other things, a leading developer and marketer of
improved varieties of fruits, vegetables and agronomic crops; and

WHEREAS, the parties desire to enter a long term relationship whereby the
parties will consult with each other regarding utilization of biotechnology in
the seed industry and ELM will fund research and development projects to be
conducted by DNAP;

NOW, THEREFORE, the parties hereto agree as follows:

Article I. Definitions

For the purposes of this Agreement, the following terms shall have
the following meanings:

1.1 "DNAP" means DNA Plant Technology Corporation, a Delaware
corporation, and its Affiliates.

1.2 "ELM", means EMPRESAS LA MODERNA, S.A. de C.V., a corporation
organized under the laws of the United Mexican States, and its subsidiaries
and/or its Affiliates including Agroindustrias Moderna, S.A. de C.V., a
corporation organized under the laws of the United Mexican States, Bionova, S.A.
de C.V., Seminis, Inc., an Illinois corporation and its Affiliates, which as of
the date of this Agreement include PetoSeed Company, Inc., Asgrow Seed Company,
and Royal Sluis.

1.3 "Affiliates" means, with respect to a particular party,
persons or entities controlling, controlled by or under common control with the
party, as well as any majority owned entities of the party and of its other
affiliates. "Control" of an entity means either the power, directly or
indirectly, to direct or cause the direction of the management

-1-
<PAGE>

and policies of the entity, whether by contract or otherwise, or the right to
receive at least 50% of the profits from such entity.

1.4 "Research Program" means the research and development program
described in Article II to this Agreement, and includes Projects.

1.5 "Project" means a particular research or development project
to be carried out by DNAP for ELM as approved and accepted by the parties
pursuant to paragraph 2.2.

1.6 "Developed Intellectual Property" or "Developed IP" means
inventions, discoveries, know-how, trade secrets, confidential information,
biomaterials, patents, plant variety protection act rights, breeders' rights, or
other intellectual or industrial property on a worldwide basis arising out of or
developed in the course of the Research Program or any Project.

1.7 "DNAP Intellectual Property" or "DNAP IP" shall mean the
intellectual property (including know how, trade secrets, confidential
information, biomaterials, patents, plant variety protection rights, breeders'
rights, and rights under licenses) owned in whole or in part, controlled or
licensable by DNAP from time to time. A listing of DNAP's patent portfolio of
issued patents, which is part of DNAP IP, as of the date of this Agreement is
set forth in Appendix A.

1.8 "ELM Intellectual Property" or "ELM IP" means the intellectual
property (including know how, trade secrets, confidential information,
biomaterials, patents, plant variety protection rights, breeders' rights, and
rights under licenses) owned in whole or in part, controlled or licensable by
ELM from time to time.

1.9 "Product" means any product or process which incorporates
DNAP IP.

Article II. Research Program

2.1 The Research Program

On the terms and conditions set forth in this Agreement, DNAP
shall conduct research and development on approved Projects for ELM and shall
consult with ELM regarding the application of biotechnology to products
manufactured and distributed by ELM from time to time, including, without
limitation, products of the agricultural seed industry. The Research Program
shall have a ten-year (10) term, commencing with the date of this Agreement.

-2-
<PAGE>

2.2 Research Projects

a. Projects. During the term of the Agreement, the parties
will discuss potential Projects. Either party may propose such Projects. ELM
will decide which particular Projects to undertake. The parties shall use their
best efforts to agree on reasonable terms for all Projects proposed, and DNAP
shall not unreasonably refuse to agree to the terms of any project proposed by
ELM, including any confidentiality restrictions regarding the subject matter and
scope of a Project.

b. Project Plan. Each such agreed Project shall have a
Project Plan, which shall include at least: (i) the goals of the Project, (ii)
research plan, including benchmarks to be used in judging the Project's progress
and timelines therefor, (iii) a budget and payment schedule, (iv) a listing
prepared by DNAP of the DNAP IP to be used in the Project, (v) a listing
prepared by ELM if the ELM IP is to be used in the Project, and (vi) a
definition of the "Field" for such project. For purposes of this Agreement,
"Field" means the intended market for commercialization of the Developed IP at
the time a Project is initiated but in no event shall the Field include a market
(which may be defined broadly to include, for example, all vegetables or
narrowly, to refer, for example, to a specific vegetable, depending on the
circumstances) that the entity proposing the Project does not actively
participate in or intend to participate in at the time the Project is initiated.

c. Project Termination. ELM may terminate any Project at
any time for any reason, upon payment of Project costs to date of termination
and reimbursement to DNAP of actual loss on account of commitments made (but no
consequential damages).

2.3 Reports

DNAP shall provide ELM with written reports on the progress
of each Project, on a quarterly basis or more often if requested by ELM.

2.4 Oversight

ELM shall have the right to oversee each Project, including
reasonable access to the DNAP employees and facilities being utilized in the
Project.

2.5 License to Existing IP

a. License. ELM shall have a worldwide royalty bearing
non-exclusive license under this Agreement with respect to DNAP IP solely to the
extent necessary or reasonably appropriate for ELM to commercialize the
Developed IP, including the right to make, have made, use and sell any Product
or technology resulting from a Project.

-3-
<PAGE>

b. Royalty.

(i) ELM shall pay a royalty to DNAP for the use of DNAP
IP which royalty shall be at standard industry rates, with the specific amount
to be negotiated as Projects are identified; provided that the royalty rate
shall be equitably adjusted to the extent that the Non-Exclusive Patent License
between DNAP and Bionova U.S. Inc. remains in full force and effect.

(ii) With each royalty payment, ELM will provide to DNAP
a written royalty statement verified by the President or Chief Financial Officer
of ELM, setting forth the total sales identified by Product designation or other
basis upon which royalties are calculated during the period covered by the
statement. DNAP shall have the right once per year to designate an independent
certified public accountant to inspect ELM's books and records relating to the
basis upon which royalties are calculated.

c. Exclusivity. DNAP agrees that it will not undertake to
perform substantially the same research and development program as any Project
without the prior written consent of ELM.

2.6 License to ELM IP

a. License. If ELM IP is utilized in a Project and
incorporated in Developed IP, unless otherwise agreed in a Project Plan, DNAP
shall have a royalty bearing non-exclusive license under this Agreement with
respect to ELM IP solely to the extent necessary or reasonably appropriate for
DNAP to exercise its rights with respect to the Developed IP pursuant to Section
4.2.

b. Royalty.

(i) DNAP shall pay a royalty to ELM for the use of ELM
IP which royalty shall be at standard industry rates, with the specific amount
to be negotiated as Projects are identified.

(ii) With each royalty payment, DNAP will provide to ELM
a written royalty statement verified by the President or Chief Financial Officer
of DNAP, setting forth the total sales identified by Product designation or
other basis upon which royalties are calculated during the period covered by the
statement. ELM shall have the right once per year to designate an independent
certified public accountant to inspect DNAP's books and records relating to the
basis upon which royalties are calculated.

2.7 Consultation. The parties specifically understand that the
modification of phenotypic traits through biotechnology and genetic engineering
is of potential significant competitive importance to the industry. The parties
need to work closely together to create and define appropriate Projects. DNAP
will use its reasonable best efforts to continually apprise ELM of scientific
developments relating to ELM's products, and ELM will apprise

-4-
<PAGE>

DNAP of those aspects of its competitive strategy and development plans for its
products which are necessary or useful to DNAP with respect to its obligations
hereunder.

Article III. Research Program Funding

3.1 Payment by ELM

ELM shall pay DNAP in accordance with the payment schedule
established for each Project in the Project Plan, provided that if DNAP fails to
provide the resources it is committed to provide to a Project, then, in addition
to its other remedies provided for herein, such payments shall be equitably
adjusted.

3.2 Minimum Project Funding

ELM and DNAP shall undertake Projects with payment schedules
that will generate payments to DNAP of at least $9,000,000 each three years, up
to a maximum of $30,000,000 during the ten-year period beginning on the
effective date hereof, with the understanding that if the minimum payments in
any year exceed the amounts payable for research services provided by DNAP
hereunder, then such excess shall be available as a credit towards future
services but shall not reduce ELM's obligation to continue minimum funding.
Unless otherwise agreed by the parties, minimum funding of $625,000 shall be
paid to DNAP at the beginning of each calendar quarter during the term of this
Agreement until the maximum of $30,000,000 has been reached.

The payment obligations of ELM shall be reduced by payments
by ELM to DNAP, if any, under other agreements (e.g., calling for joint
development of seed or crops) whereby DNAP provides research or development
services for ELM. Similarly, in such event, DNAP's corresponding duty to provide
services hereunder shall be reduced.

3.3 Payment Level

Unless otherwise agreed in the Project Plan, ELM shall pay
DNAP all of DNAP's direct costs (including direct R&D overhead) plus an industry
standard operating margin, but in no event more than 200% of DNAP's modified
direct costs, as customarily computed by DNAP to include only salaries,
benefits, supplies and travel with respect to Project personnel.

Article IV. Rights to Results of Research Program

4.1 Ownership Rights

Subject to paragraph 4.2, ELM will own the entire right,
title and interest in all Developed IP, as well as all other inventions,
discoveries, improvements or other technology, arising out of each Project and
the Research Program, whether or not patentable, together with all patent
applications or patents based thereon, regardless of whether the Developed IP
are made by employees of ELM or employees of DNAP. ELM

-5-
<PAGE>

will have the right to file, prosecute and maintain patent applications for all
Developed IP (at ELM's expense if outside a Project Plan). DNAP will promptly
disclose to ELM both the conception and the reduction to practice of Developed
IP. DNAP hereby represents and agrees that all employees and other persons
acting on its behalf in performing its obligations under this Agreement will be
obligated under a binding written agreement or applicable law to assign to DNAP
or ELM, as directed, all Developed IP made or developed by such employee or
other person. DNAP will make available to ELM or to ELM's authorized attorneys,
agents or representatives, (at ELM's expense if outside a Project Plan) DNAP
employees as necessary or appropriate to enable ELM to file, prosecute and
maintain patent applications and resulting patents with respect to all Developed
IP, for a period of time sufficient for ELM to obtain the assistance it needs
from such personnel. If DNAP requests that ELM take any action in a proceeding
incident to the Developed IP and ELM refuses or fails to take such action, DNAP
shall then have the right, but not the obligation, in the name of ELM, to
prosecute or defend any action or proceeding incident to the Developed IP. Any
such action shall be at the sole expense of DNAP. DNAP shall have no obligation
to undertake any such action, and if DNAP should do so, it shall have no
liability to ELM for the sufficiency or adequacy of any such actions taken by
DNAP.

4.2 License Rights to Developed IP

Unless otherwise agreed in a Project Plan, ELM hereby grants to
DNAP a perpetual, royalty-free (except as provided in Section 2.6 hereof) (a)
non-exclusive license, to use the Developed IP for research purposes only within
the Field, and (b) sole license to use the Developed IP outside the Field (which
sole license is subject to ELM's retained rights to use the Developed IP outside
the Field). Such retained rights to use the Developed IP outside the Field shall
include, but not be limited to, the right to make products and otherwise
commercialize the Developed IP. ELM will promptly, on request, execute any
further document or license with respect to DNAP's rights under this Section
4.2.

4.3 Notice of Patents Affecting Commercialization Rights

During the term of the Research Program, DNAP shall use all
reasonable efforts to inform ELM of:

(a) any patent owned by or patent application filed by a
third party of which DNAP is aware which claims a technology that DNAP is
considering for use in a Project, and that requires or may require one or both
of the parties to license rights thereunder in order to commercialize the
results of the Project; and

(b) any possible alternative to such a patented technology
of which DNAP is aware. In each such instance where DNAP is aware of an
alternative technology, the parties shall consider and discuss the feasibility
of using the alternative technology in place of the patented technology.

Article V. Confidentiality

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<PAGE>

5.1 Duties

Each party shall: (i) keep confidential and not disclose to any
third person or entity, (ii) restrict access to only those of its employees and
consultants who have reason to know for the purposes of this Agreement, and
(iii) use solely for purposes of this Agreement, any and all information and
biomaterials received from the other party under this Agreement, and all
Developed IP of which it obtains knowledge, except as provided in paragraph 5.2
below. Notwithstanding the foregoing each party shall be free to use such
information, biomaterials and Developed IP for purposes of exercising its rights
and fulfilling its duties under this Agreement.

5.2 Exceptions

The duties of confidentiality, access restrictions and non-use
provided by paragraph 5.1(a) above shall not apply to information received by
one party ("Receiving Party") from the other party ("Disclosing Party") if the
information:

(a) is public information at the time of disclosure by the
Disclosing Party to the Receiving Party;

(b) subsequently becomes public information other than by act or
omission of the Receiving Party;

(c) is already in the lawful possession of the Receiving Party,
as can reasonably be demonstrated by documentary evidence from the Receiving
Party, at the time of first disclosure by the Disclosing Party to the Receiving
Party; or

(d) is independently developed by employees of the Receiving Party
who did not have access to the information.

Article VI. Event of Default/Remedies/Other Termination Rights

6.1 Event of Default

It shall be an Event of Default hereunder if either party (i)
fails to pay any sums payable pursuant to this Agreement as and when they are
due; or (ii) materially breaches this Agreement.

6.2 Termination

The non-defaulting party shall have the right to terminate this
Agreement upon the occurrence of an Event of Default unless (i) the Event of
Default occurs under clause (i) of Section 6.1 and is cured within ten (10) days
after written notices thereof, or (ii) the Event of Default occurs under clause
(ii) of Section 6.1 and is cured within thirty (30) days after written notice
thereof, or (iii) the Event of Default occurs under clause (ii) of Section 6.1
and is remediable but is not reasonably susceptible to cure within such thirty
(30)

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<PAGE>

day period, then within such period of time as may be required to cure the same
if the defaulting party promptly commences to cure such Event of Default within
such thirty (30) day period and diligently prosecutes such cure to completion as
soon as is reasonably practicable; or (iv) if such Event of Default is not one
that can be remedied, the defaulting party shall have taken reasonable steps
within such thirty (30) day period to prevent a recurrence of such breach;
provided, however, that if such Event of Default that cannot be remedied recurs
- -------- -------
in the same calendar year, the nondefaulting party may, at its option, terminate
this Agreement immediately upon the recurrency by written notice to the other
party. ELM's rights to Developed IP and DNAP IP shall survive any termination
by ELM pursuant to this Agreement. DNAP's License rights to Developed IP shall
survive any termination by DNAP pursuant to this Agreement.

6.3 Other Remedies

In addition to all other remedies specified in Article 6, the non-
defaulting party shall have the right to pursue any and all available legal or
equitable remedies for the breach.

6.4 No Consequential Damages

In no event will either party be liable to the other or any third
party for any indirect, incidental or consequential damages with respect to the
performance or non-performance of this Agreement, whether arising out of breach
of warranty, breach of contract, tort (including negligence), strict products
liability or otherwise, even if advised of the possibility of such damage or if
such damage could have been reasonably foreseen, except only in case of personal
injury where applicable law requires such liability.

Article VII. Miscellaneous

7.1 Notices

All notices, demands, requests, and other communications required
or permitted hereunder shall be in writing and shall be deemed to have been
given when received by DNAP or ELM, as the case may be, at the following
addresses, or such other address as DNAP or ELM may from time to time designate
by written notice to the other as herein required:

EMPRESAS LA MODERNA, S.A. DE C.V.
Attn: Lic. Alejandro Sanchez-Mujica
Edificio Torrealta
Av. Roble 300 Mezzanine
66265 Garza Garcia, N.L.
Mexico

With a copy to: Thompson & Knight, P.C.
Attn: Joe A. Rudberg

-8-
<PAGE>

1700 Pacific Avenue, Suite 3300
Dallas, Texas 75201

DNA PLANT TECHNOLOGY CORPORATION
6701 San Pablo Avenue
Oakland, California 94608-1239
Attn: Vice President, Business Development with a copy to
DNAP Legal Department at same address

7.2 Choice of Law

This Agreement shall be governed by and construed in accordance
with the laws of the State of California, United States of America, without
giving effect to conflict of law principles.

7.3 Severability

In the event that any provision of this Agreement is held by a
court of competent jurisdiction to be unenforceable because it is invalid or in
conflict with any law of any relevant jurisdiction, the validity of the
remaining provisions shall not be affected, and the rights and obligations of
the parties shall be construed and enforced as if the Agreement did not contain
the particular provision held to be unenforceable, and any provision that is
held not to be enforceable in shall nevertheless be enforceable to the full
extent permitted by law.

7.4 Amendments

No amendment or modification of this Agreement shall be valid or
binding unless in writing signed by the parties.

7.5 Assignment

Neither party may assign this Agreement to any other party except to
an Affiliate or to an entity acquiring the party or a all of the party's
business in the subject area.

7.6 Arbitration

(a) The parties hereby undertake to use good faith efforts to
settle all disputes arising under this Agreement. Failing settlement, all
disputes, including without limitation, claims of breach of contract, fraud in
the inducement and negligence shall be referred to binding arbitration in
Dallas, Texas, if arbitration is initiated by DNAP, or in San Francisco,
California, if the arbitration is initiated by ELM, in accordance with the
Commercial Rules of Arbitration of the American Arbitration Association.

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<PAGE>

(b) If, within seven (7) days after receipt by one party of the
other party's notice of intention to arbitrate, the parties are unable to agree
on a single arbitrator, each party shall have seven (7) days to appoint its own
arbitrator from a list selected by the American Arbitration Association, and the
arbitrators thus chosen shall together, within seven (7) days of their
appointment, appoint a third arbitrator from the list selected by the American
Arbitration Association. If either party fails to appoint its own arbitrator
within the specified period, the arbitrator appointed by the other party shall
be the sole arbitrator. If both parties fail to appoint arbitrators within the
specified period, or if the arbitrators appointed by the parties fail to appoint
a third arbitrator within the specified period, the American Arbitration
Association shall make the appointment. The parties shall use their best efforts
to appoint arbitrators who are knowledgeable in the biotechnology industry. The
decision of the arbitrator(s) shall be final and may be enforced in any court of
competent jurisdiction. The prevailing party in any proceeding shall be
reimbursed by the other party for all expenses incurred in connection with
arbitration.

7.7 No Joint Venture

The parties shall perform their obligations under this Agreement
as independent contractors and each party shall be solely responsible for its
own financial obligations. Nothing contained in this Agreement shall be
construed to imply a joint venture or principal and agent relationship between
the parties and neither shall have the right to create any obligation, express
or implied, on behalf of the other.

7.8 Counterparts

This Agreement may be executed in one or more counterparts, each
of which will be deemed an original, but all of which will constitute one and
the same instrument.

IN WITNESS WHEREOF the parties have executed this Agreement in
duplicate originals as of the date first above written, as evidence by the
signature below of thee authorized representatives.

EMPRESAS LA MODERNA, S.A. de C.V.
DNA PLANT TECHNOLOGY
CORPORATION
By:
------------------------------
Name:
----------------------------
By: Title:
--------------------------- ---------------------------
Name:
-------------------------
Title: By:
------------------------ ------------------------------
Name:
----------------------------
Title:
---------------------------

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<PAGE>

EXHIBIT 10.7

PROMISSORY NOTE

$10,000,000.00 Dallas, Texas January 26, 1996

FOR VALUE RECEIVED, the undersigned, DNA PLANT TECHNOLOGY CORPORATION, a
Delaware corporation (herein called the "Borrower"), hereby promises to pay to
the order to BIONOVA U.S. INC., a Delaware corporation (herein called the
"Lender", which term shall also include any subsequent transferee of this Note),
the principal sum of Ten Million and No/100 Dollars U.S. ($10,000,000.00), with
interest on the unpaid balance thereof from the date of advancement thereof
pursuant to the Loan Agreement (as hereinafter defined) until maturity at the
rate or rates hereinafter provided, both principal and interest payable as
hereinafter provided funds in lawful money of the United States of America at
1700 Pacific Avenue, Suite 3300 (attention: JAR), Dallas, Texas 75201, or at
such other place as from time to time may be designated in writing by the holder
of this Note.

Borrower promises to pay interest on the principal amount hereof from time
to time outstanding, from January 29, 1996, at the rate of 10.25% per annum (the
"Loan Rate"), compounded annually. Interest shall accrue but not be payable
until the unpaid principal amount hereof or any portion hereof which is prepaid
is due and payable in full to Lender. Such interest shall be payable in like
coin or currency as the principal amount hereof. Anything to the contrary
notwithstanding, if at any time the Loan Rate exceeds the Maximum Rate (as
hereinafter defined), the Loan Rate shall be limited to the Maximum Rate, but
any subsequent reductions in the Loan Rate shall not reduce the rate of interest
which the unpaid principal balance of this Note bears below the Maximum Rate
until such time as the total amount of interest accrued on this Note equals the
amount of interest that would have accrued under this Note if the Loan Rate had
at all times been in effect. All past due principal and/or interest hereunder
shall bear interest from maturity at the Maximum Rate. All interest calculations
hereunder shall be made on the basis of a 365 day year and the actual number of
days elapsed. Any payment made by Borrower to Lender hereunder shall be credited
first to accrued and unpaid expenses hereunder or under the Loan Agreement, next
to accrued and unpaid interest hereunder, and last to unpaid principal
hereunder.

Unless sooner demanded by Lender as permitted under the Loan Agreement, the
entire unpaid principal amount hereof, together with interest accrued hereon,
shall, without notice, be due and payable in full to Lender in immediately
available funds on the earlier of (i) January 26, 1999, (ii) if either party has
elected to terminate that certain Merger Agreement of even date herewith among
Lender, Borrower and certain other parties noted therein (as such agreement may
be amended from time to time, the "Merger Agreement") pursuant to Section
11.1(j) thereof, then on the date on which any form of "Alternative Transaction"
(as that term is defined in the Merger Agreement) is actually consummated by
Borrower, and (iii) if the Merger Agreement terminates for any other reason,
then on the date on which an Alternative Transaction (involving more than 35%
of the voting power, directly or indirectly through options, warrants or
convertible securities, of Borrower or any party surviving such Alternative
Transaction or more than 35% of the fair market value of the assets of Borrower)
is actually consummated by

-1-

<PAGE>

Borrower. Upon the occurrence of an "Event of Default" under the Loan Agreement,
Lender may elect to declare and may at any time declare the entire unpaid
principal amount hereof, together with interest accrued hereon, to be
immediately due and payable.

As provided in the Loan Agreement, this Note is secured by an Assignment of
Patents of even date herewith evidencing a transfer of an interest in certain
patent rights by Borrower to Lender as described therein.

This Note may be prepaid in whole or in part at any time without bonus or
penalty, subject to the terms and conditions of the Loan Agreement.

This Note (a) is issued and delivered under that certain Loan Agreement of
even date herewith between Borrower and Lender (herein, as from time to time
supplemented, amended or restated, called the "Loan Agreement"), and is the Note
as defined therein, and (b) is subject to the terms and provisions of the Loan
Agreement, which contains provisions for payments and prepayments hereunder and
acceleration of the maturity hereof upon the happening of certain stated events.

It is the intent of Borrower and Lender in the execution of this Note and
all other instruments now or hereafter executed in connection with this Note to
contract in strict compliance with applicable usury law. In furtherance thereof,
Borrower and Lender stipulate and agree that none of the terms and provisions
contained in this Note, or in any other instrument executed in connection
herewith, shall ever be construed to create a contract to pay for the use,
forbearance or detention of money, interest at a rate in excess of the maximum
interest rate permitted to be charged by applicable law (the "Maximum Rate").
Neither the Borrower nor any guarantors, endorsers or other parties now or
hereafter becoming liable for payment of this Note shall ever be required to pay
interest on this Note at a rate in excess of the Maximum Rate and the provisions
of this paragraph shall control over all other provisions of this Note and any
other instruments now or hereafter executed in connection herewith which may be
in apparent conflict herewith. Lender expressly disavows any intention to charge
or collect excessive unearned interest or finance charges in the event the
maturity of this Note is accelerated. If the maturity of this Note shall be
accelerated for any reason or if the principal of this Note is paid prior to the
end of the term of this Note, and as a result thereof the interest received for
the actual period of existence of the loan evidenced by this Note exceeds the
Maximum Rate, Lender shall refund to Borrower the amount of such excess or shall
credit the amount of such excess against the principal balance of this Note then
outstanding. In the event that Lender shall collect monies which are deemed to
constitute interest which would increase the effective interest rate on this
Note to a rate in excess of the Maximum Rate, all such sums deemed to constitute
interest in excess of the Maximum Rate shall, upon such determination, at the
option of Lender, be either immediately returned to Borrower or credited against
the principal balance of this Note then outstanding, without further penalty to
Lender. By execution of this Note Borrower acknowledges that it believes the
loan evidenced by this Note to be non-usurious and agrees that if, at any time,
Borrower should have reason to believe that such loan is in fact usurious, it
will give Lender notice of such condition and Borrower agrees that Lender shall
have ninety (90) days in which to make appropriate refund or other adjustment in
order to correct such condition if in fact such exists. The term "applicable
law" as used in this

-2-
<PAGE>

Note shall mean the laws of the State of New York or the laws of the United
States, whichever laws allow the greater rate of interest, as such laws now
exist or may be changed or amended or come into effect in the future.

Should the indebtedness represented by this Note or any part thereof be
collected at law or in equity or through any bankruptcy, receivership, probate
or other court proceedings or if this Note is placed in the hands of attorneys
for collection after default, Borrower and all endorsers, guarantors and
sureties of this Note jointly and severally agree to pay in addition to the
principal and interest due and payable hereon reasonable attorneys' and
collection fees.

Borrower and all endorsers, guarantors and sureties of this Note and all
other persons liable or to become liable on this Note severally waive
presentment for payment, demand, notice of demand and of dishonor and nonpayment
of this Note, notice of intention to accelerate the maturity of this Note,
protest and notice of protest, diligence in collecting, and the bringing of suit
against any other part, and agree to all renewals, extensions, modifications,
partial payments, releases or substitutions of security, in whole or in part,
with or without notice, before or after maturity.

This Note and the rights and duties of the parties hereunder shall be
governed for all purposes by the law of the State of New York and the law of
the United States applicable to transactions within such state.

DNA PLANT TECHNOLOGY CORPORATION

By: /s/ ROBERT SERENBETZ
-----------------------------
Robert Serenbetz
Chief Executive Officer

-3-

<PAGE>

EXHIBIT 21.1

- - Bionova Acquisition, Inc., a Delaware corporation
- - International Produce Holding Company, a Delaware corporation
- Batiz & Sons, Inc., an Arizona corporation
- R.B. Packing, Inc., an Arizona corporation
- R.B. Packing of California, Inc., a California corporation
- Tanimura Distributing, Inc., a California corporation
- Premier Fruits & Vegetables BBL, Inc., a corporation organized under the
laws of Quebec, Canada
- R.B. Packing of Texas, Inc., a Texas corporation
- - Agricola Batiz, S.A. de C.V., a corporation organized under the laws of the
United Mexican States
- Commercializadora Premier, S.A. de C.V., a corporation organized under the
laws of the United Mexican States
- Interfruver de Mexico, S.A. de C.V., a corporation organized under the laws
of the United Mexican States
- Premier del Pacifico, S.A. de C.V., a corporation organized under the laws
of the United Mexican States
- Excelencia en Frutas y Verduras, S.A. de C.V., a corporation organized
under the laws of the United Mexican States
- Asesoria y Servicios del Noreste, S.A. de C.V., a corporation organized
under the laws of the United Mexican States

<PAGE>

EXHIBIT 23.1

The Board of Directors
DNA Plant Technology Corporation

We consent to the use of our report included in the accompanying Proxy
Statement/Prospectus and to the reference to our firm under the heading
"Experts" therein.

KPMG PEAT MARWICK LLP

August 9, 1996
San Francisco, California

<PAGE>

EXHIBIT 23.2

INDEPENDENT ACCOUNTANT'S CONSENT

We hereby consent to the use in the Proxy Statement/Prospectus constituting
part of this Registration Statement on Form S-4 of Bionova U.S. Inc. of our
report dated May 3, 1996, except as to Note 6, which is as of June 20, 1996,
relating to the combined financial statements of Agricola Batiz, S.A. de C.V.
and its subsidiaries and International Produce Holding Company and its
subsidiaries which appear in such Prospectus. We also consent to the reference
to us under the heading "Experts" in such Prospectus.

PRICE WATERHOUSE
Monterrey, N.L. Mexico
August 9, 1996

<PAGE>

EXHIBIT 23.4

CONSENT OF PIPER JAFFRAY INC.

We hereby consent to the use of our name in the Proxy Statement/Prospectus of
Bionova U.S. Inc. and DNA Plant Technology Corporation forming a part of this
Registration Statement on Form S-4 of Bionova U.S. Inc. and to the inclusion of
our opinion as Annex III to such Proxy Statement/Prospectus.

In giving the foregoing consent, we do not admit that we are within the category
of persons whose consent is required under Section 7 of the Securities Act of
1933, as amended, or the rules and regulations of the Securities and Exchange
Commission thereunder.

Piper Jaffray Inc.

August 8, 1996

<PAGE>

EXHIBIT 23.5

INDEPENDENT ACCOUNTANT'S CONSENT

We hereby consent to the use in the Proxy Statement/Prospectus constituting
part of this Registration Statement on Form S-4 of Bionova U.S. Inc. of our
report dated June 4, 1996 relating to the combined financial statements of R.B.
Packing, Inc., R.B. Packing of California, Inc. and Batiz & Sons, Inc. and our
report dated May 6, 1996 relating to the consolidated financial statements of
Bionova U.S. Inc. which appear in such Prospectus. We also consent to the
reference to us under the heading "Experts" in such Prospectus.

PRICE WATERHOUSE LLP
San Diego, California
August 9, 1996

<PAGE>

EXHIBIT 99.1

August 7, 1996

I, the undersigned, hereby consent to act as a director of Bionova U.S.
Inc., a Delaware corporation (the "Company"), if I am elected to serve in such
capacity and I hereby consent to the use of my name as a person who is about to
become a director of the Company in this Registration Statement on Form S-4
relating to the offer and sale to the public by the Company of the Company's
Common Stock, $.01 par value per share.

/s/ Robert Serenbetz
--------------------------------------------
Robert Serenbetz

<PAGE>

EXHIBIT 99.2

August 8, 1996

/s/ Nam-Hai Chua
--------------------------------------------
Dr. Nam-Hai Chua

<PAGE>

EXHIBIT 99.3

August 8, 1996

/s/ Gerald Laubach
--------------------------------------------
Dr. Gerald Laubach

<PAGE>

EXHIBIT 99.4

August 8, 1996

/s/ Evelyn Berezin
--------------------------------------------
Evelyn Berezin

<PAGE>

EXHIBIT 99.5

August 8, 1996

/s/ Douglas Luke, Jr.
--------------------------------------------
Douglas Luke, Jr.

<PAGE>

EXHIBIT 99.6

August 7, 1996

/s/ Bernardo Jimenez
--------------------------------------------
Bernardo Jimenez