<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
DNAP Holding Corporation
(Name of Issuer)
Common Stock, par value $.01 per share
(Title of Class of Securities)
23323K-10-7
(CUSIP Number)
Bernardo Jimenez
DNAP Holding Corporation
6701 San Pablo Avenue
Oakland, California 94608
(510) 547-2395
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 6, 1998
(Date of Event Which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box. [ ]
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7(d) for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
PAGE 1 OF 11
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CUSIP No. 23323K-10-7 13D/A Page 2 of 11 Pages
------------------
- -------------------------------------------------------------------------------
(1) Name of Reporting Persons/I.R.S. Identification Number
BIONOVA INTERNATIONAL, INC. 75-2671658
- -------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (a) / /
(See Instructions) (b) / /
- -------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------
(4) Source of Funds
(See Instructions) WC (See Item 3)
- -------------------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) / /
- -------------------------------------------------------------------------------
(6) Citizenship or Place of Organization BIONOVA INTERNATIONAL, INC. IS
A CORPORATION ORGANIZED UNDER THE
LAWS OF THE STATE OF DELAWARE.
- -------------------------------------------------------------------------------
Number of Shares (7) Sole Voting Power
Beneficially Owned 18,076,839
by Each Reporting --------------------------------------------------
Person With: (8) Shared Voting Power
0
--------------------------------------------------
(9) Sole Dispositive Power
18,076,839
--------------------------------------------------
(10) Shared Dispositive Power
0
- -------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
18,076,839
- -------------------------------------------------------------------------------
(12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) / /
- -------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
76.6%
- -------------------------------------------------------------------------------
(14) Type of Reporting Person* (See Instructions)
CO
- -------------------------------------------------------------------------------
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CUSIP No. 23323K-10-7 13D/A Page 3 OF 11 Pages
------------------
- -------------------------------------------------------------------------------
(1) Name of Reporting Persons
BIONOVA, S.A. DE C.V.
- -------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (a) / /
(See Instructions) (b) / /
- -------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------
(4) Source of Funds (See Instructions)
OO (See Item 3)
- -------------------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) / /
- -------------------------------------------------------------------------------
(6) Citizenship or Place of Organization BIONOVA, S.A. DE C.V. IS A
CORPORATION ORGANIZED UNDER THE
LAWS OF THE UNITED MEXICAN STATES.
- -------------------------------------------------------------------------------
Number of Shares (7) Sole Voting Power
Beneficially Owned 18,076,839*
by Each Reporting --------------------------------------------------
Person With: (8) Shared Voting Power
0
--------------------------------------------------
(9) Sole Dispositive Power
18,076,839*
--------------------------------------------------
(10) Shared Dispositive Power
0
- -------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
18,076,839*
- -------------------------------------------------------------------------------
(12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares*
(See Instructions) / /
- -------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
76.6%
- -------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions)
CO
- -------------------------------------------------------------------------------
* Includes 18,076,839 shares owned by Bionova International, Inc. Bionova,
S.A. de C.V. is the sole stockholder of Bionova International, Inc.
<PAGE>
CUSIP No. 23323K-10-7 13D/A Page 4 of 11 Pages
------------------
- -------------------------------------------------------------------------------
(1) Name of Reporting Persons
EMPRESAS LA MODERNA, S.A. DE C.V.
- -------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (a) / /
(See Instructions) (b) / /
- -------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------
(4) Source of Funds (See Instructions)
OO (See Item 3)
- -------------------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) / /
- -------------------------------------------------------------------------------
(6) Citizenship or Place of Organization EMPRESAS LA MODERNA, S.A. DE C.V.
IS A CORPORATION ORGANIZED UNDER
THE LAWS OF THE UNITED MEXICAN
STATES.
- -------------------------------------------------------------------------------
Number of Shares (7) Sole Voting Power
Beneficially Owned 18,076,839*
by Each Reporting --------------------------------------------------
Person With: (8) Shared Voting Power
0
--------------------------------------------------
(9) Sole Dispositive Power
18,076,839*
--------------------------------------------------
(10) Shared Dispositive Power
0
- -------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
18,076,839*
- -------------------------------------------------------------------------------
(12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) / /
- -------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
76.6%
- -------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions)
CO
- -------------------------------------------------------------------------------
* Includes 18,076,839 shares owned by Bionova International, Inc., a
wholly-owned subsidiary of Bionova, S.A. de C.V. Empresas La Moderna,
S.A. de C.V. is the holder of 99.99% of the shares of Bionova, S.A. de C.V.
<PAGE>
CUSIP No. 23323K-10-7 13D/A Page 5 OF 11 Pages
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- -------------------------------------------------------------------------------
(1) Name of Reporting Persons
MR. ALFONSO ROMO GARZA
- -------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (a) / /
(See Instructions) (b) / /
- -------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------
(4) Source of Funds (See Instructions)
OO (See Item 3)
- -------------------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) / /
- -------------------------------------------------------------------------------
(6) Citizenship or Place of Organization MR. ALFONSO ROMO GARZA IS A CITIZEN
OF THE UNITED MEXICAN STATES.
- -------------------------------------------------------------------------------
Number of Shares (7) Sole Voting Power
Beneficially Owned 18,076,839*
by Each Reporting --------------------------------------------------
Person With: (8) Shared Voting Power
0
--------------------------------------------------
(9) Sole Dispositive Power
18,076,839*
--------------------------------------------------
(10) Shared Dispositive Power
0
- -------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
18,076,839*
- -------------------------------------------------------------------------------
(12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) / /
- -------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
76.6%
- -------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions)
IN
- -------------------------------------------------------------------------------
* Includes 18,076,839 shares owned by Bionova International, Inc., a
wholly-owned subsidiary of Bionova, S.A. de C.V. Empresas La Moderna,
S.A. de C.V. is the holder of 99.99% of the shares of Bionova, S.A. de
C.V. Mr. Alfonso Romo Garza controls 50.9% of the shares of Empresas
La Moderna, S.A. de C.V.
<PAGE>
CUSIP No. 23323K-10-7 13D/A Page 6 of 11 Pages
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Statement on Schedule 13D
This Amendment No. 2 to the Statement on Schedule 13D ("Schedule 13D")
filed on October 7, 1996, as amended by Schedule 13D/A filed on July 22, 1998,
by Bionova International, Inc., a Delaware corporation ("Bionova
International"), Bionova, S.A. de C.V., a corporation organized under the laws
of the United Mexican States ("Bionova Mexico"), Empresas La Moderna, S.A. de
C.V., a corporation organized under the laws of the United Mexican States
("ELM") and Mr. Alfonso Romo Garza, with respect to the beneficial ownership by
such entities of shares of common stock, $.01 par value per share ("DHC Common
Stock"), of DNAP Holding Corporation, a Delaware corporation ("DHC" or the
"Issuer") is made to update Item 2 and amend Items 3-7 of the Schedule 13D.
ITEM 1. SECURITY AND ISSUER.
This Schedule 13D relates to shares of DHC Common Stock. The address of
the Issuer's principal executive offices is 6701 San Pablo Avenue, Oakland,
California 94608.
ITEM 2. IDENTITY AND BACKGROUND.
This item is amended to read as follows:
This Statement is a joint filing by Bionova International, Bionova Mexico,
ELM and Mr. Alfonso Romo Garza.
(1) BIONOVA INTERNATIONAL: Bionova International is a corporation
organized under the laws of the State of Delaware that is in the business
of acting as a holding company. Bionova International has its business
address and principal business office at 6701 San Pablo Avenue, Oakland,
California 94608.
BERNARDO JIMENEZ: Bernardo Jimenez is the Chief Executive Officer and
a Director of Bionova International. He is a citizen of the United
Mexican States, and his principal occupation is Chief Executive
Officer of the Issuer and Chief Operating Officer of the
agrobiotechnology division of ELM. His principal business address is
Bionova, S.A. de C.V., Plaza Comercial Las Villas, Rio Caura 358 Ote.
(Altos), Col. del Valle, 66220 Garza Garcia, N.L., Mexico.
ERIK C. JURGENSEN: Erik C. Jurgensen is the Treasurer and a Director
of Bionova International. He is a citizen of the United Mexican
States, and his principal occupation is Director of Planning and
Corporate Development at Pulsar Internacional, S.A. de C.V. and
President of the DUXX Graduate School of Business Leadership. His
principal business address is Pulsar Internacional, S.A. de C.V.,
Edificio Torrealta, Av. Roble 300 Mezzanine, Col. Valle del Campestre,
66265 Garza Garcia, N.L., Mexico.
JOE A. RUDBERG: Joe A. Rudberg is the Secretary of Bionova
International. He is a citizen of the United States, and his
principal occupation is attorney with Thompson & Knight, P.C. His
principal business address is Thompson & Knight, P.C., 1700 Pacific
Avenue, Suite 3300, Dallas, Texas 75201.
During the past five years, neither Bionova International nor any of its
executive officers or directors has (a) been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors), or (b) been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
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CUSIP No. 23323K-10-7 13D/A Page 7 of 11 Pages
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(2) BIONOVA MEXICO: Bionova Mexico is a corporation organized under the
laws of the United Mexican States that is in the business of acquiring and
holding interests in the agribusiness and biotechnology industries.
Bionova Mexico is the sole stockholder of Bionova International. Bionova
Mexico has its business address and principal business office at Plaza
Comercial Las Villas, Rio Caura 358 Ote. (Altos), Col. del Valle, 66220
Garza Garcia, N.L., Mexico.
(3) ELM: ELM is a corporation organized under the laws of the United
Mexican States and is in the business of holding interests in the
packaging, agribusiness and biotechnology industries. ELM is the holder of
99.99% of the shares of Bionova Mexico. ELM has its business address and
principal executive office at Batallon de San Patricio No. 111, 4th Floor,
Col. Valle Oriente, 66269 Garza Garcia, N.L., Mexico.
(4) MR. ALFONSO ROMO GARZA: Mr. Alfonso Romo Garza is a citizen of the
United Mexican States. His principal business office is at Pulsar
Internacional, S.A. de C.V., Edificio Torrealta, Av. Roble 300 Mezzanine,
Col. Valle del Campestre, 66265 Garza Garcia, N.L., Mexico and his
principal occupation is corporate executive.
During the past five years, none of the foregoing parties has (a) been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors), or (b) been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
This item is supplemented by the following information:
On October 6, 1998, Bionova International invested $30,000,000 in DHC in
exchange for 5,217,391 shares of DHC Common Stock at a purchase price of $5.75
per share. Bionova International used its own funds to finance the investment.
ITEM 4. PURPOSE OF TRANSACTION.
On July 16, 1998, Bionova International submitted a capitalization proposal
to DHC. The Board of Directors of DHC appointed a special committee to review
and evaluate the proposal and to negotiate the final terms of the transaction
with Bionova International. As a result of these negotiations, the special
committee and Bionova International agreed to the terms of a capitalization
transaction that was approved by DHC's Board of Directors on October 1, 1998 and
evidenced by a Stock Purchase Agreement dated October 1, 1998 (the "Stock
Purchase Agreement"). Pursuant to the Stock Purchase Agreement, on October 6,
1998, Bionova International invested $30,000,000 to purchase 5,217,391 shares of
DHC Common Stock at a price of $5.75 per share. The Stock Purchase Agreement is
described under Item 6 and is attached hereto as Exhibit C. As previously
agreed with Bionova International, DHC used a portion of the proceeds of the
stock purchase to repay $13,000,000 of its outstanding debt to Bionova
International and its affiliates.
Except as contemplated by the Stock Purchase Agreement, none of Bionova
International, Bionova Mexico, ELM or Mr. Alfonso Romo Garza has any present
plans or proposals that relate to or would result in or cause the events listed
below; however, from time to time in the ordinary course of business and
consistent with their fiduciary duties, such persons may consider such plans or
proposals in the future:
(a) the acquisition by any person of additional securities of the Issuer,
or the disposition of securities of the Issuer;
<PAGE>
CUSIP No. 23323K-10-7 13D/A Page 8 of 11 Pages
------------------
(b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its
subsidiaries;
(c) a sale or transfer of a material amount of assets of the Issuer or any
of its subsidiaries;
(d) any change in the present board of directors or management of the
Issuer, including any plans or proposals to change the number or term
of directors or to fill any existing vacancies on the board;
(e) any material change in the present capitalization or dividend policy
of the Issuer;
(f) any other material change in the Issuer's business or corporate
structure;
(g) changes in the Issuer's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control
of the Issuer by any person;
(h) a class of securities of the Issuer being de-listed from a national
securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities
association;
(i) a class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the
Securities Act of 1933; or
(j) any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
This item is amended to read as follows:
ITEM 5(a)
According to the Issuer, there are 23,588,031 shares of DHC Common Stock
outstanding as of October 6, 1998. Bionova International owns directly
18,076,839 shares of DHC Common Stock, which represents 76.6% of the outstanding
shares of DHC Common Stock.
Bionova Mexico does not directly own any DHC Common Stock. However,
because Bionova Mexico is the sole stockholder of Bionova International, Bionova
Mexico may be deemed to own beneficially the 18,076,839 shares of DHC Common
Stock held by Bionova International as described above.
ELM does not directly own any DHC Common Stock. However, because ELM owns
99.99% of the outstanding stock of Bionova Mexico, ELM may be deemed to own
beneficially the 18,076,839 shares of DHC Common Stock held by Bionova
International as described above.
Mr. Alfonso Romo Garza does not directly own any DHC Common Stock.
However, because he controls 50.9% of the outstanding stock of ELM, he may be
deemed to own beneficially the 18,076,839 shares of DHC Common Stock held by
Bionova International as described above.
ITEM 5(b)
Bionova International has sole voting and dispositive power with respect to
the shares of the Issuer's Common Stock held by it. As described above, Bionova
Mexico, ELM and Mr. Alfonso Romo Garza may also be deemed to have sole voting
and dispositive power with respect to such shares.
<PAGE>
CUSIP No. 23323K-10-7 13D/A Page 9 of 11 Pages
------------------
ITEM 5(c)
Except as set forth in this Statement, none of Bionova International,
Bionova Mexico, ELM or Mr. Alfonso Romo Garza has effected any transactions
involving DHC Common Stock during the 60 days prior to the date of this
Statement.
ITEM 5(d)
Except as set forth in this Statement, no other person is known to have the
right to receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, the securities of the Issuer that are owned
beneficially by the reporting persons.
ITEM 5(e)
Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SECURITIES OF THE ISSUER.
The second paragraph of this item is amended to read as follows:
Under Article I of the Governance Agreement, the Board of Directors of the
Issuer is to consist of nine (9) directors, with three (3) of such directors
being independent directors, which is defined as a person who (i) is not an
employee or an affiliate of any of the reporting persons or any affiliate
thereof and (ii) qualifies as an independent director for purposes of Rule 4460
of the Rules of the Nasdaq Stock Market. Of the three (3) independent
directors, two (2) are designated as DNAP independent directors. The remaining
independent director together with the remaining six (6) members of the Issuer's
Board of Directors, are designated by ELM.
This item is further supplemented by the following information:
On October 1, 1998, Bionova International and DHC entered into the Stock
Purchase Agreement. The following description of the Stock Purchase Agreement
is qualified in its entirety by reference to the Stock Purchase Agreement, which
is attached as Exhibit C hereto.
Pursuant to the terms of the Stock Purchase Agreement, Bionova
International invested $30,000,000 in DHC on October 6, 1998 in exchange for
5,217,391 shares of DHC Common Stock. Section 6.1 of the Stock Purchase
Agreement provides that at DHC's 1999 Annual Meeting of Stockholders, the
Stockholders will be asked to approve a proposal to amend DHC's Certificate of
Incorporation to increase the number of authorized shares of common stock to at
least 40 million and that Bionova International will vote its shares in favor of
this proposal.
Section 6.2 of the Stock Purchase Agreement provides that following the
annual meeting and subject to the approval of the proposal to amend the
Certificate of Incorporation, DHC will distribute to each record holder of DHC
Common Stock, as of a record date to be set by DHC, three rights (the "Rights")
for every four shares of DHC Common Stock held by such record holder. Each
Right will entitle the holder to purchase one share of DHC Common Stock at an
exercise price of $5.75 per share. Rights to purchase fractional shares will
not be issued; the number of Rights issued to each stockholder will be rounded
up to the next whole number. The Rights will expire on May 31, 2000. Upon
issuance of the Rights, Bionova International will surrender to DHC (at no cost
to DHC), a number of Rights that would entitle Bionova International to purchase
9,130,435 shares of Common Stock.
<PAGE>
CUSIP No. 23323K-10-7 13D/A Page 10 of 11 Pages
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Section 6.3 of the Stock Purchase Agreement provides that if Bionova
International or any of its affiliates loans money to DHC after the date of the
agreement and prior to the issuance of the Rights, then upon issuance of the
Rights Bionova International will immediately exercise a number of Rights (after
the surrender of Rights pursuant to Section 6.2) and thereby make a capital
contribution to DHC sufficient to allow DHC to repay such loan (and any accrued
interest and related withholding taxes) out of the proceeds of such exercise.
DHC shall then use the proceeds to make such repayment. During the period in
which the Rights are exercisable, Bionova International and its affiliates will
not make any loan or capital contribution to DHC (other than by exercising its
Rights) until all Rights held by Bionova International and its affiliates have
been exercised in full.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 99A - Governance Agreement dated as of September 26, 1996 by and
between ELM and the Issuer
Exhibit 99B - Joint Reporting Agreement dated as of October 7, 1996 by and
among Bionova International, Bionova Mexico, ELM and Mr.
Alfonso Romo Garza.
Exhibit 99C - Stock Purchase Agreement dated October 1, 1998 between
Bionova International and DHC.
<PAGE>
CUSIP No. 23323K-10-7 13D/A Page 11 of 11 Pages
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SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: October 16, 1998 BIONOVA INTERNATIONAL, INC.
By: /s/ Bernardo Jimenez
------------------------------------
Name: Bernardo Jimenez
Title: Chief Executive Officer
BIONOVA, S.A. DE C.V.
By: /s/ Bernardo Jimenez
------------------------------------
Name: Bernardo Jimenez
Title: Attorney-in-Fact
EMPRESAS LA MODERNA, S.A. DE C.V.
By: /s/ Bernardo Jimenez
------------------------------------
Name: Bernardo Jimenez
Title: Attorney-in-Fact
/s/ Alfonso Romo Garza
---------------------------------------
Alfonso Romo Garza
<PAGE>
INDEX TO EXHIBITS
Exhibit 99A - Governance Agreement dated as of September 26, 1996 by and
between ELM and the Issuer (incorporated by reference to
Schedule 13D filed by the Reporting Persons on October 7, 1996).
Exhibit 99B - Joint Reporting Agreement dated as of October 7, 1996 by and
among Bionova International, Bionova Mexico, ELM and Mr.
Alfonso Romo Garza (incorporated by reference to Schedule
13D filed by the Reporting Persons on October 7, 1996).
Exhibit 99C - Stock Purchase Agreement dated October 1, 1998 between
Bionova International and DHC.
<PAGE>
STOCK PURCHASE AGREEMENT
between
DNAP HOLDING CORPORATION
and
BIONOVA INTERNATIONAL, INC.
October 1, 1998
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C> <C>
1. Purchase and Sale of Stock. . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Agreement to Sell and Purchase Shares. . . . . . . . . . . . . . . . 1
1.2 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Representations and Warranties of the Company . . . . . . . . . . . . . . 1
2.1 Corporate Organization . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Qualification. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.3 Capitalization of the Company. . . . . . . . . . . . . . . . . . . . 1
2.4 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5 Noncontravention . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.6 Valid Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.7 SEC Filings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.8 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . 3
3. Representations and Warranties of the Investor. . . . . . . . . . . . . . 3
3.1 Corporate Organization . . . . . . . . . . . . . . . . . . . . . . . 3
3.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.3 Noncontravention . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.4 Purchase Entirely for Own Account. . . . . . . . . . . . . . . . . . 4
3.5 Disclosure of Information. . . . . . . . . . . . . . . . . . . . . . 4
3.6 Investment Experience. . . . . . . . . . . . . . . . . . . . . . . . 4
3.7 Restricted Securities. . . . . . . . . . . . . . . . . . . . . . . . 4
4. Conditions of the Investor's Obligations at Closing . . . . . . . . . . . 5
4.1 Reduction of Number of Shares of Common Stock Reserved for
Issuance under the 1998 Long Term Incentive Plan. . . . . . . . . . 5
4.2 Representations and Warranties . . . . . . . . . . . . . . . . . . . 5
4.3 Performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.4 Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . 5
4.5 Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.6 Proceedings and Documents. . . . . . . . . . . . . . . . . . . . . . 5
5. Conditions of the Company's Obligations at Closing. . . . . . . . . . . . 5
5.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . 5
5.2 Payment of Purchase Price. . . . . . . . . . . . . . . . . . . . . . 5
5.3 Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
6. Additional Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 6
6.1 Annual Meeting; Proxy Statement. . . . . . . . . . . . . . . . . . . 6
-i-
<PAGE>
6.2 Rights Offering; Registration Statement; Surrender of Rights by
the Investor. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6.3 Loans to the Company . . . . . . . . . . . . . . . . . . . . . . . . 7
6.4 Nasdaq Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.5 Fees and Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 8
7. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7.1 Indemnification by Company . . . . . . . . . . . . . . . . . . . . . 8
7.2 Indemnification by the Investor. . . . . . . . . . . . . . . . . . . 9
7.3 Conduct of Indemnification Proceedings . . . . . . . . . . . . . . . 9
8. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8.1 Survival of Warranties . . . . . . . . . . . . . . . . . . . . . . . 10
8.2 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . 10
8.3 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.4 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.5 Section Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.6 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.7 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.8 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . 11
8.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.10 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 11
9. Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made as of the 1st day of October, 1998,
by and among DNAP Holding Corporation, a Delaware corporation (the "Company"),
and Bionova International, Inc., a Delaware corporation (the "Investor").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. PURCHASE AND SALE OF STOCK.
1.1 AGREEMENT TO SELL AND PURCHASE SHARES. Subject to the terms
and conditions of this Agreement, the Investor agrees to purchase at the Closing
(as hereinafter defined), and the Company agrees to sell and issue to the
Investor at the Closing, 5,217,391 (collectively, the "Shares") shares of the
Company's common stock, par value $.01 per share ("Common Stock") for the
purchase price of $5.75 per share and for an aggregate purchase price of
$30,000,000.
1.2 CLOSING. The purchase and sale of the Shares shall take place
at the offices of Thompson & Knight, P.C., 1700 Pacific Avenue, Suite 3300,
Dallas, Texas 75201 at 9:00 A.M. on October 6, 1998, or at such other time and
place as the Company and the Investor mutually agree upon orally or in writing
(which time and place are designated as the "Closing").
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Investor that:
2.1 CORPORATE ORGANIZATION. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to carry on its
business as now conducted. No actions or proceedings to dissolve the Company
are pending or, to the best knowledge of the Company, threatened.
2.2 QUALIFICATION. Each of the Company and the Company's
subsidiaries is duly qualified or licensed to do business as a foreign
corporation and each of the Company and the Company's subsidiaries is in good
standing in each of the jurisdictions in which the failure to so qualify would
have a Material Adverse Effect.
2.3 CAPITALIZATION OF THE COMPANY. The authorized capital of the
Company consists of:
(i) COMMON STOCK. 25,000,000 shares of Common Stock, of
which 18,370,640 shares are issued and outstanding.
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(ii) PREFERRED STOCK. 5,000 shares of Preferred Stock, par
value $.01 per share (the "Preferred Stock"), no shares of which are issued and
outstanding.
2.4 AUTHORIZATION. The Company has full corporate power and
corporate authority to execute, deliver, and perform this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery, and
performance by the Company of this Agreement, and the consummation by it of the
transactions contemplated hereby, have been duly authorized by all necessary
corporate action of the Company (other than those transactions contemplated in
this Agreement which must be approved by the stockholders of the Company in
accordance with Applicable Law and the Company's Certificate of Incorporation).
This Agreement has been duly executed and delivered by the Company and
constitutes a valid and legally binding obligation of the Company, enforceable
against the Company 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 the
Company's 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.
2.5 NONCONTRAVENTION. The execution, delivery, and performance,
as the case may be, by the Company of this Agreement and the consummation by it
of the transactions contemplated hereby do not and will not (i) conflict with or
result in a violation of any provision of the Certificate of Incorporation or
Bylaws of the Company or (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 is a party or by which the Company
or any of its properties may be bound.
2.6 VALID ISSUANCE. The Shares, when issued, sold, and delivered
in accordance with the terms of this Agreement for the consideration expressed
herein, will be duly and validly issued, fully paid, and nonassessable.
2.7 SEC FILINGS. The Company has filed with the Securities and
Exchange Commission (the "SEC"), and has made available to the Investor a
complete and correct copy of, 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 since September 26, 1996
(the "SEC Filings"). The SEC Filings, at the time filed, complied as to form 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
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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 except as the same was corrected or superseded in a subsequent
document duly filed with the SEC. The audited consolidated financial statements
and unaudited consolidated interim financial statements of the Company included
in the SEC Filings present fairly in all material respects, in conformity with
generally accepted accounting principles applied on a consistent basis (except
as may be indicated in the notes thereto and, in the case of the unaudited
consolidated interim financial statements, except to the extent that preparation
of such financial statements in accordance with generally accepted accounting
principles is not required by applicable rules of the SEC), 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).
2.8 ABSENCE OF UNDISCLOSED LIABILITIES. Except to the extent
disclosed in the SEC Filings filed prior to the date hereof, (a) as of June 30,
1998, the Company had no material liabilities or obligations (whether accrued,
absolute, contingent, unliquidated, or otherwise) and (b) since June 30, 1998,
the Company has not 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. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. The Investor hereby
represents and warrants that:
3.1 CORPORATE ORGANIZATION. The Investor is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to carry on its
business as now conducted. No actions or proceedings to dissolve the Investor
are pending or, to the best knowledge of the Investor, threatened.
3.2 AUTHORIZATION. The Investor has full corporate power and
corporate authority to execute, deliver, and perform this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery, and
performance by the Investor of this Agreement, and the consummation by it of the
transactions contemplated hereby, have been duly authorized by all necessary
corporate action of the Investor. This Agreement has been duly executed and
delivered by the Investor and constitutes a valid and legally binding obligation
of the Investor, enforceable against the Investor 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.
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3.3 NONCONTRAVENTION. The execution, delivery, and performance,
as the case may be, by the Investor of this Agreement and the consummation by it
of the transactions contemplated hereby do not and will not (i) conflict with or
result in a violation of any provision of the Certificate of Incorporation or
Bylaws of the Investor or (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 Investor is a party or by which the
Investor or any of its properties may be bound or any material Permit held by
the Investor.
3.4 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made
with the Investor in reliance upon the Investor's representation to the Company,
which by the Investor's execution of this Agreement the Investor hereby
confirms, that the Shares will be acquired for investment for the Investor's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that the Investor has no present intention
of selling, granting any participation in, or otherwise distributing the same.
By executing this Agreement, the Investor further represents that the Investor
does not have any contract, undertaking, agreement, or arrangement with any
person to sell, transfer or grant participations to the person or to any third
person, with respect to any of the Shares.
3.5 DISCLOSURE OF INFORMATION. The Investor believes it has
received all the information it considers necessary or appropriate for deciding
whether to purchase the Shares. The Investor further represents that it has had
an opportunity to ask questions and receive answers from the Company regarding
the terms and conditions of the offering of the Shares and the business,
properties, prospects, and financial condition of the Company. The foregoing,
however, does not limit or modify the representations and warranties of the
Company in Section 2 of this Agreement or the right of the Investor to rely
thereon.
3.6 INVESTMENT EXPERIENCE. The Investor acknowledges that it is
able to fend for itself, can bear the economic risk of its investment, and has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Shares. The
Investor also represents it has not been organized for the purpose of acquiring
the Shares.
3.7 RESTRICTED SECURITIES. The Investor understands that the
Shares it is purchasing are characterized as "restricted securities" under the
federal securities laws inasmuch as they are being acquired from the Company in
a transaction not involving a public offering and that under such laws and
applicable regulations such securities may not be resold without registration
under the Act, except in certain limited circumstances.
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4. CONDITIONS OF THE INVESTOR'S OBLIGATIONS AT CLOSING. The obligations
of the Investor under Section 1.1 of this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions:
4.1 REDUCTION OF NUMBER OF SHARES OF COMMON STOCK RESERVED FOR
ISSUANCE UNDER THE 1998 LONG TERM INCENTIVE PLAN. The Board of Directors of the
Company shall have duly and validly approved a reduction of the number of shares
of Common Stock reserved for issuance under the Company's Long Term Incentive
Plan from 2,000,000 to 500,000.
4.2 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Section 2 shall be true on and as of the
date of the Closing with the same effect as though such representations and
warranties had been made on and as of the date of such Closing.
4.3 PERFORMANCE. The Company shall have performed and complied
with all agreements, obligations, and conditions contained in this Agreement
that are required to be performed or complied with by it on or before the
Closing.
4.4 COMPLIANCE CERTIFICATE. The President of the Company shall
deliver to the Investor at the Closing a certificate stating that the conditions
specified in Sections 4.2 and 4.3 have been fulfilled.
4.5 QUALIFICATIONS. All authorizations, approvals, or permits, if
any, of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale of
the Shares pursuant to this Agreement shall be duly obtained and effective as of
the Closing.
4.6 PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to the Investor's counsel, and it shall have received all such
counterpart original and certified or other copies of such documents as it may
reasonably request.
5. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations
of the Company to the Investor under this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions by the
Investor:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Investor contained in Section 3 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the Closing.
5.2 PAYMENT OF PURCHASE PRICE. The Investor shall have delivered
to the Company the full purchase price specified in Section 1.1.
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5.3 QUALIFICATIONS. All authorizations, approvals, or permits, if
any, of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale of
the Securities pursuant to this Agreement shall be duly obtained and effective
as of the Closing.
6. ADDITIONAL AGREEMENTS.
6.1 ANNUAL MEETING; PROXY STATEMENT.
(a) At the 1999 Annual Meeting of Stockholders of the
Company (the "1999 Annual Meeting"), the stockholders will be asked to approve a
proposal to amend the Company's Certificate of Incorporation to increase the
number of shares of Common Stock authorized thereunder from 25,000,000 to at
least 40,000,000 (the "Charter Amendment"). The Company shall propose to its
Board of Directors that they recommend to the stockholders of the Company that
they vote in favor of the adoption and approval of the Charter Amendment. The
Company will use its reasonable best efforts to solicit from the stockholders of
the Company proxies in favor of such adoption and approval and take all other
action reasonably necessary to secure a vote of the stockholders of the Company
in favor of such adoption and approval. In the event that the stockholders of
the Company approve the Charter Amendment, the Company shall take all actions
necessary to implement the Charter Amendment prior to the commencement of the
Rights Offering (as hereinafter defined).
(b) The Investor shall vote (including the taking of any
action by written consent, as necessary or appropriate) all shares of Common
Stock (including the Shares) which it is entitled to vote (or control the voting
of, directly or indirectly) at the 1999 Annual Meeting in favor of the Charter
Amendment.
(c) The Company shall prepare, shall file with the SEC
under the Exchange Act, and shall use its reasonable best efforts to have
cleared by the SEC, and promptly thereafter shall mail to its stockholders, a
proxy statement with respect to the 1999 Annual Meeting. The term "Proxy
Statement," as used herein, means such proxy statement and all related proxy
materials and all amendments and supplements thereto, if any. Except to the
extent otherwise determined in good faith by the Board of Directors of the
Company in the exercise of its fiduciary duties, taking into account the advice
of counsel, the Proxy Statement shall contain the recommendation of the Board
that the stockholders of the Company vote in favor of the adoption and approval
of all matters necessary to effectuate the Charter Amendment. The Company and
the Investor shall cooperate with each other in preparing the Proxy Statement,
and each of the Company and the Investor shall use its reasonable best efforts
to obtain and furnish the information required to be included in the Proxy
Statement. Each of the Company and the Investor each agrees promptly to correct
any information provided by it for use in the Proxy Statement if and to the
extent that such information shall have become false or misleading in any
material respect, and the Company further agrees to take all steps necessary to
cause the Proxy
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<PAGE>
Statement as so corrected to be filed with the SEC and to be disseminated
promptly to holders of shares of the Common Stock, in each case as and to the
extent required by Applicable Law.
6.2 RIGHTS OFFERING; REGISTRATION STATEMENT; SURRENDER OF RIGHTS
BY THE INVESTOR.
(a) Following the 1999 Annual Meeting and subject to the
approval by the stockholders of the Company of the Charter Amendment and the
effectiveness of the registration statement filed with the SEC in accordance
with Section 6.2(b) the Company will distribute to each record holder of
Common Stock, as of a record date to be set by the Company, three rights (the
"Rights") for every four shares of Common Stock held by such record holder.
Each Right will entitle the holder to purchase one share of Common Stock at
an exercise price of $5.75 per share. Rights to purchase fractional shares
will not be issued; the number of Rights issued to each stockholder will be
rounded up to the next whole number. The Rights will expire on May 31, 2000.
As used herein, the term "Rights Offering" means the transactions described
in this Section 6.2(a).
(b) The Company shall prepare and file a registration
statement on the appropriate form for the purpose of registering under the
Securities Act the offering, sale and delivery of the securities issuable in the
Rights Offering. The term "Registration Statement," as used herein, means such
registration statement and all amendments and supplements thereto, if any. The
Company shall use its reasonable best efforts to have the Registration Statement
declared effective under the Securities Act as promptly as practicable after the
1999 Annual Meeting. The Company, after consultation with the Investor, shall
use its reasonable best efforts to respond promptly to any comments made by the
SEC with respect to the Registration Statement. If and to the extent that the
information contained in the Registration Statement shall have become false or
misleading in any material respect, and the Company further agrees to take all
steps necessary to cause the Registration Statement (or the prospectus contained
therein) as so corrected to be filed with the SEC and to be disseminated to the
extent required by Applicable Law. The Company shall also take any action
(other than qualifying to do business in any jurisdiction in which it is not now
so qualified) reasonably required to be taken under any applicable state
securities laws in connection with the issuance of securities pursuant to the
Registration Statement.
(c) Upon issuance of the Rights, the Investor agrees to
immediately surrender to the Company at no cost to the Company, a number of
Rights that would entitle the Investor to purchase 9,130,435 shares of Common
Stock.
6.3 LOANS TO THE COMPANY. If the Investor or any of its
affiliates loans money to the Company after the date hereof and prior to the
issuance of the Rights, then upon issuance of the Rights the Investor will
immediately exercise a number of Rights (after the surrender of Rights pursuant
to Section 6.2(c)) sufficient to allow the Company to repay such loan (and any
accrued interest and related withholding taxes) out of the proceeds of such
exercise, and the
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Company shall use the proceeds to make such repayment. Neither the Investor
nor any of its affiliates shall make a capital contribution to the Company
after the date hereof and prior to the issuance of the Rights except in
accordance with the Governance Agreement dated September 26, 1996 between the
Company and Empresas La Moderna, S.A. de C.V. During the period in which the
Rights are exercisable, the Investor and its affiliates will not make any
loan or capital contribution to the Company until all Rights held by the
Investor and its affiliates have been exercised in full.
6.4 NASDAQ LISTING. The Company shall use its reasonable best
efforts to cause the shares of Common Stock issuable upon exercise of the Rights
to be approved for listing on the Nasdaq National Market (or such other stock
exchange on which the Common Stock is then listed), subject to official notice
of issuance prior to the consummation of the Rights Offering.
6.5 FEES AND EXPENSES. The Company shall be responsible for the
payment of all expenses incurred by the Company in connection with the purchase
of the Shares and the Rights Offering, including, without limitation, all fees
and expenses incurred in connection with the Registration Statement and the
Proxy Statement and the fees and expenses of the Company's legal counsel and all
other parties engaged by the Company to assist in these transactions.
7. INDEMNIFICATION.
7.1 INDEMNIFICATION BY COMPANY. The Company shall indemnify,
defend, and hold harmless the Investor and its Affiliates and each other person
who controls the Investor and its Affiliates within the meaning of Section 15 of
the Securities Act (collectively, the "Indemnified Parties") against all losses,
claims, damages, liabilities and expenses (including, without limitation,
reasonable fees of counsel and any amounts paid in settlement effected with the
Company's consent), to which any such Indemnified Party may become subject under
the Securities Act, the Exchange Act, at common law, or otherwise, insofar as
such losses, claims, damages, liabilities, or expenses (or action or
proceedings, whether commenced or threatened, in respect thereof) result from
(1) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Proxy Statement or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, (2) any
untrue statement or alleged untrue statement of a material fact contained in any
preliminary, final or summary prospectus, together with the documents
incorporated by reference therein (as amended or supplemented if the Company
shall have filed with the SEC any amendment thereof or supplement thereto), or
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, or (3) any
violation by the Company of any federal, state or common law rule or regulation
applicable to the Company and relating to action or inaction by the Company in
connection with the Registration Statement, the Proxy Statement or the Rights
Offering; and in each such case, the Company shall reimburse each Indemnified
Party for any reasonable legal or
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other expenses incurred by any of them in connection with investigating or
defending any such loss, claim, damage, liability, expense, action or
proceeding; provided, however, that the Company shall not be liable to any
Indemnified Party in any such case to the extent, but only to the extent,
that any such loss, claim, damage, liability or expense (or action or
proceeding, whether commenced or threatened, in respect thereof) arises out
of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement or in any
preliminary, final or summary prospectus, or the Proxy Statement in reliance
upon and in conformity with written information furnished to the Company by
or on behalf of any Indemnified Party for use in the preparation thereof.
Such indemnity and reimbursement of expenses and other obligations shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Parties and shall survive the transfer of such
securities by the Indemnified Parties.
7.2 INDEMNIFICATION BY THE INVESTOR. The Investor shall indemnify
and hold harmless, to the fullest extent permitted by law, the Company, its
directors, officers, employees and agents, and each other person who controls
the Company (within the meaning of Section 15 of the Securities Act)
(collectively, "Company Indemnified Parties") against all losses, claims,
damages, liabilities and expenses (including, without limitation, reasonable
fees of counsel and any amounts paid in settlement effected with the Investor's
consent) to which any Company Indemnified Party may become subject under the
Securities Act, the Exchange Act, at common law, or otherwise, insofar as such
losses, claims, damages, liabilities, or expenses (or actions or proceedings,
whether commenced or threatened, in respect thereof) are caused by (1) any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Proxy Statement or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (2) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary, final or summary prospectus, together with the documents
incorporated by reference therein (as amended or supplemented if the Company
shall have filed with the Commission any amendment thereof or supplement
thereto), or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading to the extent in the cases described in clauses (1) and (2), that
such untrue statement or omission was furnished in writing by such holder for
use in the preparation thereof, and (3) any violation by such holder of any
federal, state or common law rule or regulation applicable to such holder and
relating to action of or inaction by such holder in connection with the
Registration Statement, the Proxy Statement or the Rights Offering. Such
indemnity obligation shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company Indemnified Parties and shall
survive the transfer of such securities by such holder.
7.3 CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly after
receipt by an indemnified party under Section 7.1 or 7.2 of written notice of
the commencement of any action, suit, proceeding, investigation or threat
thereof made in writing with respect to which a claim for indemnification may be
made pursuant to this Section 7, such indemnified party shall, if a claim
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in respect thereof is to be made against an indemnifying party, give written
notice to the indemnifying party of the threat or commencement thereof;
provided, however, that the failure to so notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
except to the extent that the indemnifying party is actually prejudiced by
such failure to give notice. If any such claim or action referred to under
Section 7.1 or 7.2 is brought against any indemnified party and it then
notifies the indemnifying party of the threat or commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the
extent that it wishes, jointly with any other indemnifying party similarly
notified, to assume the defense thereof with counsel reasonably satisfactory
to such indemnified party. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense of any such claim
or action, the indemnifying party shall not be liable to such indemnified
party under this Section 7 for any legal expenses of counsel or any other
expenses subsequently incurred by such indemnified party in connection with
the defense thereof other than reasonable costs of investigation unless the
indemnifying party has failed to assume the defense of such claim or action
or to employ counsel reasonably satisfactory to such indemnified party.
Under no circumstances will the indemnifying party be obligated to pay the
fees and expenses of more than one law firm for all indemnified parties. The
indemnifying party shall not be required to indemnify the indemnified party
with respect to any amounts paid in settlement of any action, proceeding, or
investigation entered into without the written consent of the indemnifying
party. No indemnifying party shall consent to the entry of any judgment or
enter into any settlement without the consent of the indemnified party unless
(1) such judgment or settlement does not impose any obligation or liability
upon the indemnified party other than the execution, delivery or approval
thereof, and (2) such judgment or settlement includes as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified
party of a full release and discharge from all liability in respect of such
claim for all persons that may be entitled to or obligated to provide
indemnification under this Section 7.
8. MISCELLANEOUS.
8.1 SURVIVAL OF WARRANTIES. The warranties, representations, and
covenants of the Company and the Investor contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Closing, for a period of two years following the Closing, and shall in no way be
affected by any investigation of the subject matter thereof made by or on behalf
of the Investor or the Company.
8.2 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties. Nothing in
this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
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8.3 GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of Delaware without regard to the
principles of conflicts of laws thereof.
8.4 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.5 SECTION HEADINGS. The section headings used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
8.6 NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given (i) one business day after it has been sent by overnight
courier to the party to be notified, (ii) one business day after it has been
sent by facsimile to the party to be notified, provided receipt of such
facsimile has been confirmed by the recipient in writing, or (iii) three days
after it has been mailed to the party to be notified or upon deposit with the
United States Post Office, by registered or certified mail, postage prepaid; in
each case addressed or sent to the party to be notified at the address and/or
facsimile number indicated for such party on the signature page hereof, or at
such other address or facsimile number as such party may designate by 10 days'
advance written notice to the other parties.
8.7 EXPENSES. Irrespective of whether the Closing is effected,
each party shall pay all costs and expenses that it incurs with respect to the
negotiation, execution, delivery, and performance of this Agreement. If any
action at law or in equity is necessary to enforce or interpret the terms of
this Agreement, the prevailing party shall be entitled to reasonable attorney's
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.
8.8 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
only with the written consent of the Company and the Investor.
8.9 SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under Applicable Law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
8.10 ENTIRE AGREEMENT. This Agreement and the documents referred
to herein constitute the entire agreement between the parties hereto and no
party hereto shall be liable or bound to the other party in any manner by any
warranties, representations, or covenants except as specifically set forth
herein or therein.
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<PAGE>
9. CERTAIN DEFINED TERMS. As used in this Agreement, each of the
following terms has the meaning given it in this Article:
"Affiliate" has the meaning specified in Rule 12b-2 promulgated under
the Exchange Act.
"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.
"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 public, governmental, or regulatory body, agency,
department, commission, board, bureau, or other authority or instrumentality
(domestic or foreign).
"Material Adverse Effect" means any change, development, or effect
(individually or in the aggregate) which is, or is reasonably likely to be,
materially adverse (i) to the business, assets, results of operations, condition
(financial or otherwise), or prospects of the Company and its subsidiaries
considered as a whole, other than as a result of changes affecting companies
involved in the same business as the Company or affecting the economy in
general, or (ii) to the ability of the Company to perform on a timely basis any
material obligation of the Company under this Agreement.
"person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, enterprise, unincorporated
organization, or Governmental Entity.
"reasonable best efforts" means a party's 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.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
DNAP HOLDING CORPORATION
By: /s/ ARTHUR H. FINNEL
------------------------------------
Name: Arthur H. Finnel
Title: Executive Vice President
Address: 6701 San Pablo Avenue
Oakland, California 94608
Attn: Chief Executive Officer
Fax: (510) 450-9395
Phone: (510) 547-2395
BIONOVA INTERNATIONAL, INC.
By: /s/ BERNARDO JIMENEZ
------------------------------------
Name: Bernardo Jimenez
Title: President
Address: 6701 San Pablo Avenue
Oakland, California 94608
Attn: President
Fax: (510) 450-9395
Phone: (510) 547-2395
[SIGNATURE PAGE TO
STOCK PURCHASE AGREEMENT]
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