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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 21, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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DNAP HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
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<S> <C>
DELAWARE 75-2632242
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6701 SAN PABLO AVENUE ARTHUR H. FINNEL
OAKLAND, CALIFORNIA 94608 DNAP HOLDING CORPORATION
(510) 547-2395 6701 SAN PABLO AVENUE
(Address, including zip code, OAKLAND, CALIFORNIA 94608
and telephone number, including (510) 547-2395
area code, of Registrant's (Name, address, including zip code,
principal executive offices) and telephone number, including
area code, of agent for service)
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COPY TO:
MICHAEL C. TITENS
THOMPSON & KNIGHT, P.C.
1700 PACIFIC AVENUE
SUITE 3300
DALLAS, TEXAS 75201
(214) 969-1700
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after effectiveness of the Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED (1) UNIT(2) PRICE(2) REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, $.01 par value per share...... 8,572,589 $5.75 $49,292,386 $13,703.28
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(1) Maximum number of shares of DNAP Holding Corporation's common stock to be
sold to record holders of common stock in this rights offering. Includes
12,000 additional shares that may be issued as a result of rounding of the
number of rights to be distributed to holders of common stock as described
herein.
(2) Calculated in accordance with Rule 457(g) of the Securities Act.
------------------------
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 SECTION 8(a), MAY
DETERMINE.
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<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL, AND IT IS NOT SOLICITING AN OFFER TO BUY, THESE SECURITIES IN ANY STATE
WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED APRIL 21, 1999
PROSPECTUS
8,560,589 SHARES
[LOGO]
BIONOVA HOLDING CORPORATION
COMMON STOCK
$5.75 PER SHARE
We are distributing transferable rights to holders of our common stock. If
these holders exercise all of the rights issued to them in this rights offering,
except for rights to purchase 9,130,435 shares of common stock which Bionova
International, Inc. has agreed to surrender back to us at no cost, we will issue
up to 8,560,589 shares of common stock.
Our common stock is quoted on the Nasdaq National Market under the symbol
"BNVA."
SEE "RISK FACTORS" BEGINNING ON PAGE 7 TO READ ABOUT CERTAIN RISKS THAT YOU
SHOULD CONSIDER BEFORE EXERCISING THE RIGHTS ISSUED IN THIS RIGHTS OFFERING.
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<CAPTION>
PER SHARE TOTAL
<S> <C> <C>
Rights price.................................................. $5.75 $49,223,386
Proceeds, before expenses, to us.............................. $5.75 $49,223,386
</TABLE>
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS , 1999.
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TABLE OF CONTENTS
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PAGE
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Prospectus Summary......................................................................................... 1
Disclosure Regarding Forward-looking Statements............................................................ 7
Risk Factors............................................................................................... 7
The Rights Offering........................................................................................ 13
Use of Proceeds............................................................................................ 17
Plan of Distribution....................................................................................... 18
Federal Income Tax Considerations.......................................................................... 18
Taxation of U.S. Stockholders.............................................................................. 18
Taxation of Non-U.S. Stockholders.......................................................................... 20
Taxation of Bionova Holding Corporation.................................................................... 21
Price Range of Common Stock................................................................................ 22
Legal Matters.............................................................................................. 22
Experts.................................................................................................... 22
If You Would like Additional Information................................................................... 22
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PROSPECTUS SUMMARY
THIS SECTION ANSWERS IN SUMMARY FORM SOME QUESTIONS YOU MAY HAVE ABOUT
BIONOVA HOLDING CORPORATION AND THIS RIGHTS OFFERING. YOU SHOULD READ THE ENTIRE
PROSPECTUS CAREFULLY, INCLUDING THE RISKS DISCUSSED UNDER "RISK FACTORS," BEFORE
EXERCISING YOUR RIGHTS. IN THIS PROSPECTUS, WHEN WE USE THE TERMS "BIONOVA,"
"WE," "US," AND "OUR," THESE TERMS REFER TO BIONOVA HOLDING CORPORATION AND OUR
SUBSIDIARIES, UNLESS THE CONTEXT OTHERWISE REQUIRES. WHEN WE USE THE TERM
"BIONOVA INTERNATIONAL," WE ARE REFERRING TO BIONOVA INTERNATIONAL, INC., A
DELAWARE CORPORATION THAT OWNS APPROXIMATELY 76.6% OF OUR COMPANY.
QUESTIONS AND ANSWERS ABOUT BIONOVA HOLDING CORPORATION
WHAT IS BIONOVA HOLDING CORPORATION?
- - Bionova Holding Corporation is a holding company for:
- Agricola Batiz, S.A. de C.V., a Mexican corporation, of which Bionova owns
80%;
- International Produce Holding Company, a Delaware corporation, of which
Bionova owns 100%;
- DNA Plant Technology Corporation, a Delaware corporation, of which Bionova
owns 100%; and
- VPP Corporation, a Delaware corporation, of which Bionova owns 100%.
- - Please see page 3 for a chart illustrating our corporate structure.
WHAT DO WE DO?
- - Through our subsidiaries, we grow, market and distribute fresh fruits and
vegetables, and we develop and apply genetic engineering and transformation
technologies in plants.
- Agricola Batiz grows fresh fruits and vegetables, primarily tomatoes and
peppers, in Mexico and exports fresh produce to the United States.
Agricola Batiz owns 50.01% of Interfruver de Mexico, S.A. de C.V., a
Mexican corporation, which markets and distributes fresh produce in
Mexico, including fruits and vegetables supplied by Agricola Batiz.
Agricola Batiz also owns 98% of Siembra Cultivo y Cosecha del Noreste,
S.A. de C.V., a Mexican corporation, which provides labor and
administrative services to Agricola Batiz. Agricola Batiz is in the
process of changing its name to AgroBionova, S.A. de C.V.
- International Produce is a holding company whose subsidiaries market and
distribute fresh produce in the United States and Canada, including fruits
and vegetables supplied by Agricola Batiz.
- DNA Plant Technology develops and applies genetic engineering and
transformation technologies in plants, and develops and markets premium,
differentiated, fresh and processed, branded fruits and vegetables. DNA
Plant Technology also licenses its technology to other agricultural
companies and participates in joint ventures with other technology
companies.
- VPP develops and applies genetic engineering and transformation
technologies in vegetatively propagated plants (plants that are grown from
starter plants rather than from seeds).
WHAT IS OUR BUSINESS STRATEGY?
- vertical integration within the fresh produce industry, which means
involvement in all stages of the fresh produce industry from the growth
and development of plants to the marketing and distribution of fresh
produce;
- growth by acquisition of complementary businesses; and
- access to basic technology to distinguish ourselves from others in the
fresh produce business.
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- In the longer term, we expect to benefit from the combination of our
production, distribution and technology capabilities by focusing on the
development and commercialization of improved and/or proprietary products
that are developed with our technology.
WHAT IS OUR BACKGROUND AND OWNERSHIP STRUCTURE?
Savia, S.A. de C.V. owns a 76.6% interest in our company indirectly through
Bionova International. Savia was formerly known as Empresas La Moderna, S.A. de
C.V. Through its wholly-owned subsidiary Bionova, S.A. de C.V., Savia entered
the fresh produce industry in 1993 by agreeing to a series of business
relationships with Raul Batiz Echavarria and members of his family. In February
1993, Bionova S.A. de C.V. and the Batiz family formed Agricola Batiz, to which
the Batiz family transferred land and other assets used for growing and packing
fresh produce. Bionova, S.A. de C.V. and the Batiz family then negotiated the
structure of their joint ownership of the Batiz family's fresh produce
distribution business. In December 1994, Bionova, S.A. de C.V. and the Batiz
family formed International Produce to hold this business.
In January 1996, our company was formed as a wholly-owned subsidiary of
Bionova, S.A. de C.V. Later that year, Bionova, S.A. de C.V. transferred its
interests in Agricola Batiz and International Produce to us, and then
transferred its interest in our company to Bionova International. In September
1996, we formed a subsidiary that then merged into DNA Plant Technology. Through
this merger, DNA Plant Technology became our wholly-owned subsidiary, and we
issued 30% of our common stock to the former stockholders of DNA Plant
Technology. In 1997, we purchased all of the minority interests held by the
Batiz family in International Produce, and together with Bionova, S.A. de C.V.,
acquired the Batiz family interests in Agricola Batiz. In 1997, we formed VPP
Corporation to research and develop vegetatively propagated plants. In October
1998, Bionova International invested $30 million in our company and increased
its ownership percentage to 76.6%.
Savia owns 88% of Seminis, Inc., the leading vegetable seed company in the
world. Savia's subsidiary, Empaques Ponderosa, S.A. de C.V., is the leading
producer of folding box board and folding and flexible packaging in Mexico.
Savia recently acquired a majority interest in Seguros Comercial America, S.A.
de C.V., the largest insurance company in Mexico.
2
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WHAT IS OUR CORPORATE STRUCTURE?
[Corporate Organization Chart]
WHERE ARE WE LOCATED?
Our corporate headquarters are located at:
Bionova Holding Corporation
6701 San Pablo Avenue
Oakland, California 94608
(510) 547-2395
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QUESTIONS AND ANSWERS ABOUT THE RIGHTS OFFERING
WHAT IS A RIGHT?
We will distribute to you, at no charge, three rights for every four shares
of our common stock that you own on ,1999. We will not distribute
any fractional rights, but will round the number of rights you are entitled to
receive up to the nearest whole number. Each right entitles you to purchase one
share of common stock for $5.75. Each right will expire on May 31, 2000. When
you "exercise" a right, that means that you choose to purchase the common stock
that the right entitles you to purchase. You may exercise any number of your
rights, or you may choose not to exercise any rights.
WHAT IS A RIGHTS OFFERING?
A rights offering is an opportunity for you to purchase additional shares of
common stock at a fixed price and in an amount proportional to your existing
interest in our common stock. This enables you to maintain your current
percentage ownership in our common stock if all stockholders, including Bionova
International, exercise their rights acquired in this rights offering. If
relatively few stockholders exercise their rights, the rights offering gives you
an opportunity to increase your current percentage ownership in our common
stock.
WILL EVERY STOCKHOLDER RECEIVE RIGHTS IN PROPORTION TO THEIR CURRENT HOLDINGS?
Yes, except Bionova International will surrender back to us at no cost
9,130,435 rights (and will retain 4,427,195 rights) it acquires in the rights
offering. The reason Bionova International has agreed to surrender these rights
is because it purchased a total of 5,217,391 shares of our common stock for $30
million on October 1, 1998. Bionova International completed the purchase of
common stock before the rights offering to provide us with additional capital
more quickly than would have been possible through the rights offering. By
surrendering these rights, Bionova International is put back where it would be
if it invested its $30 million in this rights offering.
WHY ARE WE ENGAGING IN A RIGHTS OFFERING?
The rights offering is part of a recapitalization program adopted by our
Board of Directors in October 1998.
The recapitalization program has two parts:
- Investment by Bionova International--Last October, Bionova International
invested $30 million in our company to purchase 5,217,391 shares of our
common stock at $5.75 per share. We used a portion of the proceeds from
Bionova International's investment to repay approximately $13 million of
outstanding indebtedness to Bionova International and its affiliates.
- Rights offering--We are issuing all of our stockholders of record as of
, 1999, three transferable rights for every four shares of
common stock you own on that date. Our Board approved this rights offering
to give you the right to invest in our company on the same terms as
Bionova International and share in any benefits resulting from Bionova
International's $30 million investment, and to allow you to maintain or
increase your current equity interest in Bionova. The proceeds from the
rights offering, if any, will be used to repay our outstanding
indebtedness and to fund our working capital needs.
HOW DID WE ARRIVE AT THE $5.75 PER SHARE PRICE?
We arrived at the $5.75 per share price through negotiations with Bionova
International in connection with its purchase of 5,217,391 shares of our common
stock in October 1998. In order to ensure the fairness of the $5.75 per share
price to our stockholders other than Bionova International, a Special Committee
of
4
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our Board of Directors hired Piper Jaffray Inc., an independent investment
banking firm, to give its opinion as to the fairness, from a financial point of
view, of the $5.75 per share price. It was the opinion of Piper Jaffray Inc.
that the $5.75 per share price to be paid by Bionova International was fair to
our stockholders. The Special Committee recommended that we give all of our
stockholders the same opportunity to purchase shares of our common stock as was
afforded Bionova International. Through this rights offering, we are offering
you the opportunity to purchase additional shares in an amount proportional to
your existing interest in our common stock at the same price per share as was
paid by Bionova International in October 1998.
HOW DO I EXERCISE MY RIGHTS?
If you are the registered holder of shares of common stock on
, 1999, you must properly complete the attached rights certificate
and forward it to The Bank of New York Company, Inc. on or before May 31, 2000.
The address for The Bank of New York Company, Inc. is on page 16. Your rights
certificate must be accompanied by proper payment for each share that you wish
to purchase. If you are a beneficial owner of shares of common stock on
, 1999 and such shares are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee, you will need to
contact such nominee to exercise your rights. See "The Rights Offering--Exercise
of Rights" and "Method of Payment" for more information on how to exercise your
rights.
AFTER I EXERCISE MY RIGHTS, CAN I CHANGE MY MIND?
No. Once you send in your rights certificate and payment, you cannot revoke
the exercise of your rights.
IS EXERCISING MY RIGHTS RISKY?
The exercise of your rights involves a degree of risk. You should carefully
consider the "Risk Factors" described in this prospectus, beginning on page 7.
WHAT HAPPENS IF I CHOOSE NOT TO EXERCISE MY RIGHTS?
You will retain your current number of shares of common stock even if you do
not exercise your rights. If you do not exercise your rights, your current
percentage ownership in Bionova, and your voting rights could be diluted if
other stockholders, including Bionova International, decide to exercise their
rights. See "Risk Factors--Dilution" for more information regarding the dilution
of your interest if you do not exercise your rights.
CAN I SELL MY RIGHTS?
Yes, the rights are transferable, but there is currently no active trading
market for the rights. We do not intend to apply for a listing or quotation for
the rights on any stock exchange or stock market. Therefore, we cannot assure
you that you will be able to sell your rights at all or at a price that is
satisfactory to you. See "Risk Factors--Because no prior market for the rights
exists, you may be unable to sell or transfer the rights" for more information
on your ability to transfer the rights without exercising them for common stock.
WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF EXERCISING MY RIGHTS?
The receipt and exercise of your rights are intended to be nontaxable.
Stockholders who sell their rights may be taxed on all or a portion of the
proceeds from that sale. You should seek specific tax advice from your personal
tax advisor. See "Federal Income Tax Considerations" for more information
regarding the taxation of your exercise of the rights.
5
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WHEN WILL I RECEIVE MY NEW SHARES?
If you purchase shares of common stock through the rights offering, we will
send you certificates representing those shares as soon as practicable after you
exercise your rights.
HOW MUCH MONEY WILL BIONOVA RECEIVE FROM THE RIGHTS OFFERING?
Our gross proceeds from the rights offering depend on the number of shares
that are purchased upon exercise of rights. If our stockholders, including
Bionova International, exercise all the rights other than the 9,130,435 rights
Bionova International will surrender to us at no cost, we will receive proceeds
of approximately $49.2 million.
HOW WILL WE USE THE PROCEEDS FROM THE RIGHTS OFFERING?
We intend to use the proceeds from the rights offering to repay certain of
our outstanding debt and for additional working capital. See "Use of Proceeds"
for additional information on our use of the proceeds from this offering.
HOW MANY SHARES WILL BE OUTSTANDING AFTER THE RIGHTS OFFERING?
The number of shares of common stock outstanding after the rights offering
depends on the number of shares that are purchased before the rights offering
ends. If our stockholders, including Bionova International, exercise all of
their rights (other than the rights Bionova International will surrender to us)
then we will issue a total of 8,560,589 new shares of common stock. We will then
have approximately 32,148,620 shares of common stock issued and outstanding
after the rights offering.
ARE THERE DIFFERENCES BETWEEN EXERCISING THE RIGHTS IN THIS RIGHTS OFFERING AND
BUYING SHARES OF BIONOVA'S COMMON STOCK IN THE OPEN MARKET?
Yes. Some of the differences are:
- Price--It will cost you $5.75 per share of common stock purchased in the
rights offering. The price per share of common stock purchased on the open
market may be higher or lower than the $5.75 per share price. On April 16,
1999, the last reported sales price of the common stock on the Nasdaq
National Market was $3.50 per share. See "Price Range of Common Stock" for
more information on historical prices of our common stock.
- Limit on number of shares--You are only entitled to purchase an additional
three shares for every four shares you owned on , 1999. If
you want to significantly increase your ownership interest in Bionova, you
may be able to acquire more shares of common stock at a lower price on the
open market.
- Dilutive effect--A purchase on the open market will increase your
ownership interest in Bionova slightly more than exercising the same
number of rights because of the dilution that results from issuances of
additional shares by Bionova.
WHO CAN I TALK TO IF I HAVE MORE QUESTIONS?
If you have more questions about the rights offering, please contact:
Corporate Investor Communications, Inc.
111 Commerce Road
Carlstadt, New Jersey 07072
(877) 460-2558
6
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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus includes "forward-looking" statements within the meaning of
Section 27A of the Securities Act of 1933, and Section 21E of the Securities
Exchange Act of 1934. All statements other than statements of historical facts
included in this prospectus, including statements regarding our financial
position, business strategy, prospects, plans and objectives of our management
for future operations, and industry conditions, are forward-looking statements.
Although we believe that the expectations reflected in these forward-looking
statements are reasonable, we can give you no assurance that these expectations
will prove to be correct. In addition to important factors described elsewhere
in this prospectus, the following "Risk Factors," sometimes have affected, and
in the future could affect, our actual results and could cause these results
during 1999, and beyond, to differ materially from those expressed in any
forward-looking statements made by us or on our behalf.
RISK FACTORS
In deciding whether to exercise your rights, and when you evaluate our
performance and the forward-looking statements in this prospectus, you should
carefully consider the following risk factors, as well as the other information
contained in this prospectus.
RISKS RELATING TO OUR FARMING AND DISTRIBUTION BUSINESS
FLUCTUATIONS IN SUPPLY AND DEMAND MAY CAUSE PRICE FLUCTUATIONS RESULTING IN OUR
INABILITY TO COVER OUR COSTS
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 these 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 for us to harvest a crop, resulting in a
total loss of the costs incurred in growing the crop. Even when market prices
are sufficient to allow us to recover our direct harvesting and packing costs,
prices may not be high enough to allow us to recover our costs associated with
growing our products and/or overhead and other indirect costs. In addition,
oversupply can affect the prices we obtain for our 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 our
competitors' home countries).
LIMITED BARRIERS OF ENTRY INTO THE FARMING AND PRODUCE DISTRIBUTION INDUSTRY CAN
RESULT IN OVERSUPPLY OF OUR PRODUCTS WHICH DECREASES OUR PROFITABILITY
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.
BAD WEATHER CAN AFFECT THE AMOUNT OF PRODUCE WE CAN SELL, WHICH CAN DECREASE OUR
REVENUES AND PROFITABILITY
Weather conditions greatly affect the amount of fresh produce we bring to
market, and, accordingly, the prices we receive for our 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. Conversely, unusually favorable weather
conditions can result in oversupply that drives down the prices realized by
producers, including Agricola Batiz.
7
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CROP DISEASE CAN AFFECT THE AMOUNT OF PRODUCE WE CAN SELL WHICH CAN DECREASE OUR
REVENUES AND PROFITABILITY
Crop disease and pestilence can be unpredictable and can have a devastating
effect on our 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
our crops are damaged, the profits we 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 we may experience low yields or may only be able to
sell a portion of our crop.
LABOR SHORTAGES AND UNION ACTIVITY CAN AFFECT OUR ABILITY TO HIRE WORKERS TO
HARVEST OUR CROPS WHICH CAN HURT OUR FINANCIAL CONDITION
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, our labor costs can be expected to increase.
The Mexican farm work force retained by Agricola Batiz is unionized. If the
union attempts to disrupt production and is successful on a large scale, labor
costs will likely increase and work stoppages may be encountered, which would be
particularly damaging in our 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 the United States and in Mexico, the trucking
industry is largely unionized and therefore susceptible to labor disturbances.
As a result, delivery delays caused by labor disturbances in the trucking
industry or any other reason could limit our ability to get fresh produce to
market before it spoils.
AGRICOLA BATIZ'S RELIANCE ON LEASES AND PRODUCTION ASSOCIATIONS COULD RESULT IN
INCREASED COSTS WHICH COULD ADVERSELY AFFECT OUR FINANCIAL RESULTS
Agricola Batiz relies on agricultural land leased from others and production
associations with other growers for a large part of its supply. If the other
parties to these leases and other arrangements were to choose not to renew their
agreements with Agricola Batiz, Agricola Batiz 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.
OUR DEPENDENCE ON ONE SUPPLIER EXPOSES US TO RISKS IF OUR RELATIONSHIP WITH THAT
SUPPLIER IS NOT MAINTAINED
One grower in Baja California, Santa Cruz Empacadora, S. de R.L. de C.V.,
accounted in 1998 for approximately 12% of our consolidated sales. Agricola
Batiz has recently entered into a five-year production association agreement
with this grower that extends through 2003.
OUR PARTICIPATION IN AN INDUSTRY WITH NUMEROUS COMPETITORS CAN DECREASE OUR
SALES AND THEREFORE OUR PROFITABILITY
The fresh produce industry in general, and the tomato industry in
particular, is characterized by a large number of competitors at both the
production and distribution levels. We are one of many companies engaged in
research and product development activities based on agricultural biotechnology.
Our competitors include specialized biotechnology firms, as well as major
pharmaceutical, food and chemical companies, many of which have substantial
financial, technical and marketing resources.
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RISKS RELATING TO OUR SCIENTIFIC RESEARCH AND DEVELOPMENT BUSINESS
GOVERNMENT REGULATION CAN CAUSE DELAYS AND INCREASED COSTS WHICH DECREASE OUR
REVENUES AND PROFITABILITY
Our subsidiaries' activities in the United States are extensively regulated
by the Food and Drug Administration, the United States Department of
Agriculture, the Environmental Protection Agency, and other federal and state
regulatory agencies in the United States. Similarly, our subsidiaries'
activities in Mexico are extensively regulated by the Secretaria de Agricultura,
Ganaderia y Desarrollo Rural, the Secretaria de Salud, and other federal and
state regulatory agencies in Mexico. Also, certain of our 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 our current or future
genetically engineered products will be granted on a timely basis.
IF THE PRODUCTS WE DEVELOP AND MARKET ARE NOT COMMERCIAL SUCCESSES, WE WILL NOT
RECOUP OUR DEVELOPMENT AND PRODUCTION COSTS WHICH WILL HURT OUR FINANCIAL
CONDITION
We are currently in the early stages of marketing several of our new
products, 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 our product development projects are in the early stages, and these
projects may not be successful. 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.
IF THE PUBLIC IS UNWILLING TO ACCEPT GENETICALLY ENGINEERED PRODUCTS WE WILL NOT
RECOUP OUR DEVELOPMENT AND PRODUCTION COSTS WHICH WILL HURT OUR FINANCIAL
CONDITION
Our 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. We cannot assure you that these products will gain
sufficient public acceptance to be profitable, even if these products obtain the
required regulatory approvals.
WE MAY NOT BE SUCCESSFUL IN OBTAINING PATENTS, PROTECTING OUR TRADE SECRETS AND
CONDUCTING OUR BUSINESS WITHOUT INFRINGING ON THE RIGHTS OF OTHERS, WHICH
COULD ADVERSELY AFFECT OUR BUSINESS
Our success depends, in part, on our ability to obtain and enforce patents,
maintain trade secret protection, and conduct our business without infringing
the proprietary rights of others. If others develop competing technologies and
market competing products, our sales could be adversely affected. If we are not
able to maintain our trade secrets or to enforce our patents, our competitive
position could be adversely affected. If others obtain patents covering part of
our technology, our research efforts could be adversely affected. In addition,
we license technology from third parties. If we cannot maintain these licenses,
or if we cannot obtain licenses to other useful technology on commercially
reasonable terms, our research efforts could be adversely affected.
RISKS RELATING TO OUR FINANCIAL CONDITION
WE MAY CONTINUE TO SUSTAIN LOSSES AND ACCUMULATE DEFICITS IN THE FUTURE
We have sustained losses in 1996, 1997 and 1998. The factors that caused
these losses, including factors described in this section, may continue to limit
our ability to make a profit in the future.
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<PAGE>
EVEN AFTER THE RIGHTS OFFERING, WE MAY NEED ADDITIONAL FINANCING TO EXECUTE OUR
ACQUISITION STRATEGY, WHICH COULD HURT OUR GROWTH AND FINANCIAL CONDITION
The recapitalization program is intended to allow us to repay certain of our
outstanding debt and raise additional working capital. Even after the completion
of the recapitalization program we may need additional capital to meet our
working capital requirements. Our projected cash flows from operations and
existing capital resources, including our existing credit lines, may not be
sufficient to allow us to pursue proposed business strategies to acquire
additional producers, distributors, marketers and additional rights to
technologies. Therefore, our ability to pursue these acquisitions may depend on
our ability to obtain additional capital, which could cause us to incur
additional debt or issue additional equity securities. We cannot assure you that
additional capital will be available on satisfactory terms, if at all, and, as a
result, we may be restricted in our pursuit of future growth and acquisition
strategies.
WE MAY NOT BE ABLE TO ADAPT OUR MANAGEMENT INFORMATION SYSTEMS AND CONTROLS TO
KEEP PACE WITH OUR RAPID GROWTH, WHICH COULD HURT OUR FINANCIAL CONDITION
Our business has undergone rapid growth through acquisition of complementary
businesses. As a result of this rapid growth, significant strains have been
placed on the management, operations and financial resources of our
subsidiaries. The realization of our business strategy depends on, among other
things, our ability to adapt management information systems and controls and to
hire, train and retain qualified employees to allow these operations to be
effectively managed. The geographic separation of our subsidiaries' operations
exacerbates these issues.
RISKS RELATING TO OUR INTERNATIONAL OPERATIONS
LEGAL LIMITATIONS COULD AFFECT OUR OWNERSHIP OF RURAL LAND IN MEXICO, WHICH
COULD DECREASE OUR SUPPLY OF PRODUCE CAUSING A DECREASE IN OUR REVENUES AND
PROFITABILITY
Agricola Batiz owns a substantial amount of rural land in Mexico which it
uses to grow fresh fruits and vegetables. Historically, the ownership of rural
land in Mexico has been subject to legal limitations and claims by residents of
rural communities, which in some cases could lead to the owner being forced to
surrender its land. Though Agricola Batiz is in compliance with all applicable
legal limitations, Agricola Batiz has been, and continues to be, involved in
land dispute proceedings as part of its ordinary course of business. Agricola
Batiz has not lost any land as a result of these proceedings. If Agricola Batiz
is required to surrender any of its land, the volume of fresh fruits and
vegetables it produces would decline and adversely affect our profitability.
CURRENCY FLUCTUATIONS AND INFLATION CAN INCREASE THE COST OF OUR PRODUCTS IN THE
UNITED STATES AND ABROAD WHICH DECREASES OUR REVENUES AND PROFITABILITY
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. These exchange
rate fluctuations impact our subsidiaries' business. If the value of the peso
decreases relative to the value of the dollar, then (a) imports of produce into
Mexico for distribution by our subsidiaries become more expensive in peso terms
and therefore more difficult to sell in the Mexican market and (b) 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.
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VOLATILE INTEREST RATES IN MEXICO CAN INCREASE OUR CAPITAL COSTS
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 our Mexican subsidiaries and for
growers and other Mexican parties with whom we do business, both for borrowings
denominated in pesos and for borrowings denominated in dollars. Costs of
operations for our Mexican subsidiaries are higher as a result.
TRADE DISPUTES BETWEEN THE UNITED STATES AND MEXICO CAN RESULT IN TARIFFS,
QUOTAS AND BANS ON IMPORTS, INCLUDING OUR PRODUCTS, WHICH CAN HURT OUR
FINANCIAL CONDITION
Notwithstanding the enactment of the North American Free Trade Agreement,
Mexico and the United States from time to time are involved in trade disputes.
The United States has, on occasion, imposed tariffs, quotas, and importation
bans on products produced in Mexico. Because some of our subsidiaries produce
products in Mexico which we sell in the United States, such actions, if taken,
could adversely affect our business.
GENERAL BUSINESS RISKS
OUR OPERATIONS MAY BE SIGNIFICANTLY AFFECTED BY THE YEAR 2000 PROBLEM
The Year 2000 problem refers to errors that may occur as a result of
computers using two digits rather than four digits to define the applicable
year. Software and hardware may recognize a date using "00" as the year 1900,
rather than the year 2000. The failure to identify and/or properly correct a
Year 2000 problem could result in an interruption in, or a failure of certain
normal business activities or operations. Such failures could materially and
adversely affect our ability to process transactions, send invoices, or engage
in other normal business activities. However, our Year 2000 project is expected
to be completed by July 31, 1999. With the completion of this project as
scheduled, we believe that the possibility of significant interruptions of
normal business activities and operations will be reduced.
BIONOVA INTERNATIONAL HAS SUBSTANTIAL CONTROL OVER OUR COMPANY AND CAN AFFECT
VIRTUALLY ALL DECISIONS MADE BY OUR STOCKHOLDERS
Bionova International beneficially owns 18,076,839 shares of our common
stock accounting for 76.6% of all issued and outstanding shares. As a result,
Bionova International has the requisite voting power to significantly affect
virtually all decisions made by Bionova and our stockholders, including the
power to elect all of our directors and to block corporate actions such as an
amendment to most provisions of our certificate of incorporation.
RISKS RELATING TO THE RIGHTS OFFERING
IF YOU DO NOT EXERCISE YOUR RIGHTS, YOUR OWNERSHIP INTEREST MAY BE DILUTED
If you do not exercise all of your rights, you may experience dilution of
your percentage ownership in our common stock relative to stockholders who
exercise their rights. For example, if Bionova International exercises the
4,427,195 rights it will retain and no other stockholder exercises any rights,
then Bionova International's percentage ownership will increase to 80.3% and the
other stockholders' proportionate interest in Bionova will decrease by
approximately 3.7 percentage points. The chart below illustrates the
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potential dilution that could result if a stockholder who owns 100,000 shares of
common stock fails to exercise its rights, and other stockholders (including
Bionova International) exercise all their rights.
<TABLE>
<CAPTION>
AFTER THE RIGHTS OFFERING
AFTER THE RIGHTS ASSUMING ALL STOCKHOLDERS
OFFERING ASSUMING ALL OTHER THAN THIS
BEFORE THE STOCKHOLDERS EXERCISE STOCKHOLDER EXERCISES
RIGHTS OFFERING ALL RIGHTS THEIR RIGHTS
---------------- ------------------------ -------------------------
<S> <C> <C> <C>
Shares owned by stockholder............... 100,000 175,000 100,000
Total number of common shares
outstanding............................. 23,588,031 32,148,620 32,073,620
Stockholder's percentage ownership........ 0.42% 0.54% 0.31%
Book Value per Share (as of December 31,
1998)................................... $ 1.79 $ 2.84 $ 2.83
</TABLE>
BECAUSE NO PRIOR MARKET FOR THE RIGHTS EXISTS, YOU MAY BE UNABLE TO SELL OR
TRANSFER THE RIGHTS
You are permitted to sell or transfer your rights, but we cannot assure you
that such a sale will be practicable or profitable. There is currently no active
trading market for the rights and we do not intend to apply for a listing or
quotation for the rights on any stock exchange or stock market. We, therefore,
cannot assure you that you will be able to sell your rights at all or at a
satisfactory price.
THE SALE OF A SUBSTANTIAL AMOUNT OF COMMON STOCK MAY AFFECT THE MARKET PRICE
If substantial amounts of common stock are sold in the public market
following the rights offering, the market price of the common stock could be
adversely affected. If the rights offering is fully subscribed, we will have
approximately 32,148,620 shares of common stock outstanding. Of those shares,
approximately 22,504,034 shares (70% percent) will be held by Bionova
International. Bionova International is an "affiliate" of Bionova under Rule 144
of the Securities Act of 1933 and therefore the shares of common stock owned by
Bionova International will be subject to the volume limitations of Rule 144 and
other resale restrictions. The sale of a substantial number of these shares at
any time or over time could adversely affect the market price of our common
stock. We cannot predict the effect that the availability and future sales of
common stock could have on the market price.
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THE RIGHTS OFFERING
THE RIGHTS
We are distributing transferable rights to holders of our common stock on
, 1999, at no cost to the stockholders. We will give you three
rights for every four shares of common stock that you owned on ,
1999. You will not receive fractional rights during the rights offering, but
instead we will round your number of rights up to the nearest whole number. Each
right will entitle you to purchase one share of common stock for $5.75.
SUBSCRIPTION RIGHT
Each right will entitle you to receive, upon payment of $5.75 to us, one
share of common stock. We will send you certificates representing the shares
that you purchase pursuant to your rights as soon as practicable after you
exercise your rights.
EXPIRATION DATE
The rights will expire at 5:00 p.m., New York City Time, on May 31, 2000,
unless we decide to extend the rights offering. We currently do not intend to
extend the rights offering. If you do not exercise your rights prior to May 31,
2000, your rights will be null and void. We will not be required to issue shares
of common stock to you if our rights agent receives your rights certificate or
your payment after that date, regardless of when you sent the rights certificate
and payment, unless you send the documents in compliance with the Guaranteed
Delivery Procedures described below.
DETERMINATION OF SHARE PRICE
Our Board of Directors decided to set an exercise price of $5.75 per share
as a result of arms-length negotiation with Bionova International. The $5.75 per
share price should not be considered an indication of the actual value of our
company or our common stock. The market price of our common stock may increase
or decrease during the rights offering. You may not be able to sell shares of
common stock purchased during the rights offering at a price equal to or greater
than $5.75 per share.
The exercise price for the rights and the number of shares of common stock
issuable on exercise of the rights are subject to adjustment in certain
circumstances. These circumstances include the occurrence of a stock dividend,
recapitalization, reorganization, or a merger or consolidation.
TRANSFERABILITY OF RIGHTS
You may transfer the rights evidenced by a single rights certificate in
whole by endorsing the rights certificate for transfer in accordance with the
accompanying instructions. You may transfer a portion of the rights evidenced by
a single rights certificate (but not fractional rights) by delivering to the
rights agent a rights certificate properly endorsed for transfer, with
instructions to register a portion of the rights evidenced by the rights
certificate in the name of the transferee and to issue a new rights certificate
to the transferee evidencing the transferred rights. In such event, a new rights
certificate evidencing the balance of the rights will be issued to you, or, if
you so instruct, to an additional transferee.
We cannot assure you that selling your rights will be practicable or
profitable. There is currently no active trading market for the rights. We do
not intend to apply for a listing or quotation for the rights on any stock
exchange or stock market. We cannot assure you that you will be able to sell
your rights at all or at a satisfactory price.
If you wish to transfer all or a portion of your rights (but not fractional
rights), you should allow a sufficient amount of time prior to May 31, 2000, for
- the transfer instructions to be received and processed by the rights
agent;
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<PAGE>
- a new rights certificate to be issued and transmitted to the transferee or
transferees with respect to the transferred rights, and to you with
respect to retained rights; and
- the rights evidenced by the new rights certificates to be exercised by the
recipients.
Neither we nor the rights agent will be liable to a transferee or transferor
of rights if rights certificates are not received in time for exercise prior to
May 31, 2000.
Except for the fees charged by the rights agent (which we will pay, as
described below), you will be responsible for paying any commissions, fees and
other expenses (including brokerage commissions and transfer taxes) incurred in
connection with the purchase, exercise or transfer of the rights. Neither we nor
the rights agent will pay any such commissions, fees or expenses.
EXERCISE OF RIGHTS
You may exercise your rights by delivering to the rights agent on or prior
to May 31, 2000:
- A properly completed and duly executed rights certificate;
- Any required signature guarantees; and
- Payment in full of $5.75 per share of common stock to be purchased through
the exercise of rights.
You should deliver your rights certificate and payment to the address set
forth below under "--Rights Agent."
METHOD OF PAYMENT
Payment for the shares must be made by:
- cashier's check or bank draft drawn upon a United States bank or a postal,
telegraphic or express money order payable to "The Bank of New York
Company, Inc., as Rights Agent"; or
- wire transfer of funds to the account maintained by the rights agent for
such purpose at:
The Bank of New York
ABA Number: 021000018
A/C Number: 8900060603
Reference: Bionova Holding Corporation & Stephen M. Gilbert
If you are purchasing an aggregate number of shares of common stock totaling
$500,000 or more, we may agree to an alternative payment method. If you use an
alternative payment method, the rights agent must receive the full amount of
your payment in currently available funds within one Nasdaq National Market
trading day prior to May 31, 2000.
Payment will be deemed to have been received by the rights agent only upon:
- clearance of any uncertified check;
- receipt by the rights agent of any certified check or bank draft drawn
upon a U.S. bank or of any postal, telegraphic or express money order; or
- receipt of funds by the rights agent through an alternative payment
method.
PLEASE NOTE THAT FUNDS PAID BY UNCERTIFIED PERSONAL CHECK MAY TAKE AT LEAST
FIVE BUSINESS DAYS TO CLEAR. ACCORDINGLY, IF YOU WISH TO PAY BY MEANS OF AN
UNCERTIFIED PERSONAL CHECK, WE URGE YOU TO MAKE PAYMENT SUFFICIENTLY IN ADVANCE
OF MAY 31, 2000, TO ENSURE THAT THE PAYMENT IS RECEIVED AND CLEARS BEFORE THAT
DATE. WE ALSO URGE YOU TO CONSIDER PAYMENT BY MEANS OF CERTIFIED OR CASHIER'S
CHECK, MONEY ORDER OR WIRE TRANSFER OF FUNDS.
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<PAGE>
GUARANTEED DELIVERY PROCEDURES
If you want to exercise your rights, but time will not permit your rights
certificate to reach the rights agent on or prior to May 31, 2000, you may
exercise your rights if you satisfy the following guaranteed delivery
procedures:
- You send, and the rights agent receives, payment in full for each share of
common stock being purchased through the rights on or prior to May 31,
2000;
- You send, and the rights agent receives, on or prior to May 31, 2000, a
notice of guaranteed delivery, substantially in the form provided with the
attached instructions, from a member firm of a registered national
securities exchange or a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States. The notice of guaranteed delivery must
state your name, the number of rights that you hold, the number of shares
of common stock that you wish to purchase pursuant to the rights. The
notice of guaranteed delivery must guarantee the delivery of your rights
certificate to the rights agent within three Nasdaq National Market
trading days following the date of the notice of guaranteed delivery; and
- You send, and the rights agent receives, your properly completed and duly
executed rights certificate, including any required signature guarantees,
within three Nasdaq National Market trading days following the date of
your notice of guaranteed delivery. The notice of guaranteed delivery may
be delivered to the rights agent in the same manner as your rights
certificate at the addresses set forth below, or may be transmitted to the
rights agent by facsimile transmission, to facsimile number (212)
815-6213. You can obtain additional copies of the form of notice of
guaranteed delivery by requesting it from the rights agent at the address
set forth below under
"--Rights Agent."
SIGNATURE GUARANTEES
Signatures on the rights certificate must be guaranteed by an eligible
guarantor institution, as defined in Rule 17Ad-15 of the Exchange Act, subject
to the standards and procedures adopted by the rights agent. Eligible guarantor
institutions include banks, brokers, dealers, credit unions, national securities
exchanges and savings associations.
Signatures on the rights certificate do not need to be guaranteed if:
- the rights certificate provides that the shares of common stock to be
purchased are to be delivered directly to you, the record owner of such
rights; or
- the rights certificate is submitted for the account of a member firm of a
registered national securities exchange or a member of the National
Association of Securities Dealers, Inc., or a commercial bank or trust
company having an office or correspondent in the United States.
SHARES HELD FOR OTHERS
If you hold shares of common stock for the account of others, such as a
broker, a trustee or a depository for securities, you should notify the
respective beneficial owners of such shares as soon as possible to obtain
instructions with respect to the rights beneficially owned by them.
If you are a beneficial owner of common stock held by a holder of record,
such as a broker, trustee or a depository for securities, you should contact the
holder and ask him to effect transactions in accordance with your instructions.
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<PAGE>
FOREIGN STOCKHOLDERS
If your address is outside of the United States or is an APO or FPO address,
we will not mail your rights to you, but the rights agent will hold the rights
for your account. To exercise your rights you must notify the rights agent by
completing an international rights form, which will be mailed to you instead of
a rights certificate. You should mail or telecopy the international rights form
to the rights agent's address and telecopy number, set forth on page 16.
AMBIGUITIES IN EXERCISE OF THE RIGHTS
If you do not specify the number of rights being exercised on your rights
certificate, or if your payment is not sufficient to pay the total purchase
price for all of the shares that you indicated you wished to purchase, you will
be deemed to have exercised the maximum number of rights that could be exercised
for the amount of the payment that the rights agent receives from you.
If your payment exceeds the total purchase price for all of the rights shown
on your rights certificate, your payment will be applied, until depleted, to
subscribe for shares of common stock in the following order:
(1) to subscribe for the number of shares, if any, that you indicated on the
rights certificate(s) that you wished to purchase through your rights;
(2) to subscribe for shares of common stock until your rights have been fully
exercised.
Any excess payment remaining after the foregoing allocation will be returned
to you as soon as practicable by mail, without interest or deduction.
PLEASE CAREFULLY READ THE INSTRUCTIONS ACCOMPANYING THE RIGHTS CERTIFICATE
AND FOLLOW THOSE INSTRUCTIONS IN DETAIL.
DO NOT SEND RIGHTS CERTIFICATES TO US.
YOU ARE RESPONSIBLE FOR CHOOSING THE PAYMENT AND DELIVERY METHOD FOR YOUR
RIGHTS CERTIFICATES, AND YOU BEAR THE RISKS ASSOCIATED WITH SUCH DELIVERY. IF
YOU CHOOSE TO DELIVER YOUR RIGHTS CERTIFICATE AND PAYMENT BY MAIL, WE RECOMMEND
THAT YOU USE REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED.
WE ALSO RECOMMEND THAT YOU ALLOW A SUFFICIENT NUMBER OF DAYS TO ENSURE DELIVERY
TO THE RIGHTS AGENT AND CLEARANCE OF PAYMENT PRIOR TO MAY 31, 2000. BECAUSE
UNCERTIFIED PERSONAL CHECKS MAY TAKE AT LEAST FIVE BUSINESS DAYS TO CLEAR, WE
STRONGLY URGE YOU TO PAY, OR ARRANGE FOR PAYMENT, BY MEANS OF CERTIFIED OR
CASHIER'S CHECK, MONEY ORDER OR WIRE TRANSFER OF FUNDS.
OUR DECISION BINDING
All questions concerning the timeliness, validity, form and eligibility of
any exercise of rights will be determined by us and our determinations will be
final and binding. We may waive any defect or irregularity, or permit a defect
or irregularity to be corrected within an amount of time as we may determine, or
reject the purported exercise of any right by reason of any defect or
irregularity in the exercise. Subscriptions will not be deemed to have been
received or accepted until all irregularities have been waived or cured within
such time as we determine in our sole discretion. Neither we nor the rights
agent will be under any duty to give notification of any defect or irregularity
in connection with the submission of rights certificates or incur any liability
for failure to give such notification.
NO REVOCATION
AFTER YOU HAVE EXERCISED YOUR RIGHTS, YOU MAY NOT REVOKE THAT EXERCISE.
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FEES AND EXPENSES
We will pay all fees charged by the rights agent. You are responsible for
paying any other commissions, fees, taxes or other expenses incurred in
connection with the exercise or transfer of the rights. Neither we nor the
rights agent will pay such expenses.
RIGHTS AGENT
We have appointed The Bank of New York Company, Inc. as rights agent for the
rights offering. The rights agent's address for packages sent my mail is:
The Bank of New York
Tender & Exchange Department
P.O. Box 11248
Church Street Station
New York, New York 10286-1248
or if sent by courier or overnight delivery:
The Bank of New York
Tender & Exchange Department
101 Barclay Street
Receive and Deliver Window
New York, New York 10286
The rights agent's telephone number is (800) 507-9357.
You should deliver your rights certificate, payment of the exercise price
and notice of guaranteed delivery (if any) to the rights agent. Eligible
institutions may deliver the notice of guaranteed delivery by facsimile at (212)
815-6213.
We will pay the fees and expenses of the rights agent, which we estimate
will total $8,000. We have also agreed to indemnify the rights agent from any
liability which it may incur in connection with the rights offering.
IF YOU HAVE QUESTIONS
If you have questions or need assistance concerning the procedure for
exercising rights, or if you would like additional copies of this prospectus,
the instructions, or the notice of guaranteed delivery, you should contact the
information agent:
Corporate Investor Communications, Inc.
111 Commerce Road
Carlstadt, New Jersey 07072
(877) 460-2558
USE OF PROCEEDS
We will apply the net proceeds from the rights offering first to repay
certain of our outstanding debt and for additional working capital.
The rights offering is part of a recapitalization program, adopted by our
Board of Directors in October 1998. The first phase of the program commenced on
October 1, 1998 when Bionova International, our majority stockholder, purchased
a total of 5,217,391 shares of our common stock at $5.75 per share for an
aggregate purchase price of approximately $30 million. We used a portion of the
proceeds from Bionova International's investment to repay approximately $13
million of outstanding indebtedness to Bionova International and its affiliates.
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The second phase of the recapitalization program is this rights offering.
Our Board of Directors approved the rights offering to allow our stockholders,
other than Bionova International, the right to invest in our common stock on the
same terms as Bionova International and share in any benefits resulting from
Bionova International's $30 million investment, and to allow you to purchase
additional shares of common stock proportional to your existing interest in our
common stock.
If all of our stockholders, including Bionova International, exercise all of
the rights other than the 9,130,435 rights Bionova International will surrender
to us at no cost, our net proceeds as a result of the exercise will be
approximately $49.2 million. However, we cannot assure you that any of our
stockholders will exercise their rights or that there will be any proceeds at
all.
PLAN OF DISTRIBUTION
Promptly following the effective date of the registration statement that
contains this prospectus, we will distribute the rights and copies of this
prospectus to individuals who own shares of common stock on , 1999.
If you wish to exercise your rights and purchase shares of common stock, you
should complete the rights certificate and return it, with payment for the
shares, to the rights agent, The Bank of New York Company, Inc., at the address
on page 16. See "The Rights Offering--Exercise of Rights" for more information
concerning the exercise of your rights.
If you have any questions, you should contact our information agent,
Corporate Investor Communications, Inc. at the telephone number and address on
page 16. At the conclusion of the rights offering, we will pay the information
agent a fee which we estimate will total $8,000 for its services as information
agent.
FEDERAL INCOME TAX CONSIDERATIONS
The following summarizes the material federal income tax considerations of
the rights offering to you and Bionova. This summary is based on current law,
which is subject to change at any time, possibly with retroactive effect. This
summary is not a complete discussion of all federal income tax consequences of
the rights offering, and, in particular, may not address federal income tax
consequences applicable to our stockholders subject to special treatment under
federal income tax law. In addition, this summary does not address the tax
consequences of the rights offering under applicable state, local or foreign tax
laws. This discussion assumes that your shares of common stock and the rights
and shares issued to you during the rights offering constitute capital assets.
Receipt and exercise of the rights distributed pursuant to the rights
offering is intended to be nontaxable to our stockholders, and the following
summary assumes they will qualify for such nontaxable treatment. If, however,
the rights offering does not qualify as a nontaxable distribution, you would be
treated as receiving a dividend (to the extent of our current and accumulated
earnings and profits) equal to the fair market value of the rights on their
distribution date and expiration of the rights would result in a capital loss.
THIS DISCUSSION IS INCLUDED FOR YOUR GENERAL INFORMATION ONLY. YOU SHOULD
CONSULT YOUR TAX ADVISOR TO DETERMINE THE TAX CONSEQUENCES TO YOU OF THE RIGHTS
OFFERING IN LIGHT OF YOUR PARTICULAR CIRCUMSTANCES, INCLUDING ANY STATE, LOCAL
AND FOREIGN TAX CONSEQUENCES.
TAXATION OF U.S. STOCKHOLDERS
The following summary is a general discussion of certain United States
federal income tax consequences applicable under current law to the rights
offering to U.S. stockholders. For purposes of this offering, the term "U.S.
stockholder" means a stockholder who is for United States federal income tax
purposes is:
(a) a citizen or resident of the United States;
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(b) a corporation or other entity created or organized under the laws of the
United States or of any political subdivision thereof;
(c) an estate, the income of which is subject to United States federal income
taxation regardless of its source;
(d) a trust whose administration is subject to the primary supervision of a
United States court and that has one or more United States persons who have
the authority to control all substantial decisions of the trust; or
(e) a person whose worldwide income or gain is otherwise subject to United
States federal income tax regardless of source or that is otherwise subject
to United States federal income taxation on a net income basis.
RECEIPT OF A RIGHT
You will not recognize any gain or other income upon receipt of a right.
TAX BASIS AND HOLDING PERIOD OF RIGHTS
Your tax basis in each right will depend on whether you exercise the right,
transfer the right, or allow the right to expire. If you exercise or transfer a
right, your tax basis in the right generally will be determined by allocating
the tax basis of your common stock on which the right is distributed between the
common stock and the right, in proportion to their relative fair market values
on the date of distribution of the right. However, if the fair market value of
your rights is less than 15 percent of the fair market value of your existing
shares of common stock, then the tax basis of each right will be deemed to be
zero, unless you elect to allocate tax basis to your rights by attaching an
election statement to your federal income tax return for 1999.
If you allow a right to expire, it will be treated as having no tax basis.
Your holding period for a right will include your holding period for the
share of common stock upon which the right is issued.
EXPIRATION OF RIGHTS
You will not recognize any gain or loss upon the expiration of a right.
TRANSFER OF RIGHTS
If you sell any of your rights, you will recognize a gain or loss equal to
the difference between the sale proceeds and your basis (if any) in the rights
sold. If your holding period for the rights (determined as described above) is
more than one year, such gain or loss generally will be long-term capital gain
or loss.
EXERCISE OF RIGHTS
You generally will not recognize a gain or loss on the exercise of a right.
The tax basis of any share of common stock that you purchase through the rights
offering will be equal to the sum of your tax basis (if any) in the right
exercised and the price paid for the share. The holding period of the shares of
common stock purchased through the rights offering will begin on the date that
you exercise your rights.
INFORMATION REPORTING AND BACKUP WITHHOLDING
In general, information reporting requirements may apply to dividend
payments on common stock received when you exercise your rights and to payments
on the proceeds of a sale of the rights or common stock. A 31% backup
withholding tax may apply to these payments unless you (i) are a corporation or
19
<PAGE>
come within certain other exempt categories and, when required, demonstrate your
exemption, or (ii) provide a correct taxpayer identification number, certify as
to no loss of exemption from backup withholding and otherwise comply with the
requirements of the backup withholding rules.
In addition, if shares of the common stock you acquire when you exercise
your rights are sold to, or through, a "broker," the broker may be required to
withhold 31% of the entire sales price, unless either (i) the broker determines
that you are a corporation or other exempt recipient or (ii) you provide, in the
required manner, certain identifying information. This type of sale must also be
reported by the broker to the IRS, unless the broker determines that you are an
exempt recipient. The term "broker" as defined in Treasury regulations includes
all persons who, in the ordinary course of their business, stand ready to effect
sales made by others.
Any amounts withheld under the backup withholding rules from a payment to
you will be allowed as a credit against your United States federal income tax,
provided that the required information is furnished to the IRS.
TAXATION OF NON-U.S. STOCKHOLDERS
The following discussion is limited to the United States federal income tax
consequences relevant to a stockholder who is not a U.S. stockholder.
TRANSFER OF RIGHTS OR COMMON STOCK
You generally will not be subject to United States federal income tax or
withholding tax on gain realized on the sale or exchange of the rights or the
shares of common stock unless:
(a) the gain is effectively connected with the conduct of your U.S. trade or
business;
(b) if you are an individual, you are present in the United States for a period
or periods aggregating 183 days or more during the taxable year of the
transfer and certain other circumstances are present;
(c) you are subject to tax pursuant to the provisions of the Internal Revenue
Code applicable to certain U.S. expatriates; or
(d) the gain is subject to tax under Section 897 of the Internal Revenue Code
regarding "United States real property interests."
We believe the rights and the shares of common stock that you receive when
you exercise your rights should not be "United States real property interests"
within the meaning of Section 897(c) of the Internal Revenue Code. Consequently,
you should not be subject to United States federal income tax or withholding tax
under Section 897 of the Internal Revenue Code on the amount of gain you realize
on the sale or exchange of the rights or the common stock. If you are subject to
United States federal income tax or withholding tax under another exception, you
will be subject to the rules discussed in the section above entitled "Taxation
of U.S. Stockholders," except for certain rules related to dividends and branch
profits tax discussed below.
DIVIDENDS ON COMMON STOCK
Generally, dividends received by you with respect to the common stock you
receive when you exercise your rights will be subject to United States
withholding tax at a rate of 30% of the gross amount of the dividend. This rate
may be reduced by an applicable income tax treaty and compliance with certain
requirements that you document your entitlement to the benefits of the treaty.
If the dividends are effectively connected with the conduct of a U.S. trade or
business by you, the dividends will be taxed at the graduated rates applicable
to U.S. citizens, resident aliens, and domestic corporations and would not be
subject to United States withholding tax if you give an appropriate statement to
the withholding agent prior to payment of the dividend. Treasury regulations
that will be effective January 1, 2000, provide
20
<PAGE>
alternative methods for establishing exemptions from or reductions of
withholding on payments to foreign persons, including exemptions for payments
through certain qualified intermediaries.
BRANCH PROFITS TAX
If you are a foreign corporation, you may be subject to an additional branch
profits tax at a rate of 30% or lower treaty rate on dividends or capital gains
that are effectively connected to the conduct of a U.S. trade or business. You
should consult applicable income tax treaties, which may include different
rules, subject to compliance with certain requirements that you document your
entitlement to treaty benefits.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Backup withholding, which generally is a withholding tax imposed at the rate
of 31% on payments to persons that fail to furnish certain required information,
and information reporting will not apply to payments of dividends or payments
made of the proceeds from the disposition of rights or common stock to or
through the U.S. office of any broker if you certify to your non-U.S. status
under penalties of perjury or otherwise establish an exemption. This of course
assumes that the payor does not have actual knowledge that you are a U.S. person
or that the conditions of any other exemption are not, in fact, satisfied.
We must report annually to the IRS and to each of you any dividends that are
subject to withholding or that are exempt from U.S. withholding tax. Copies of
these information returns may also be made available, under the provisions of a
specific treaty or agreement, to the tax authorities of the country in which you
reside.
Any amounts withheld under the backup withholding rules from a payment to
you generally should be allowed as a refund or a credit against your United
States federal income tax liability, provided that the requisite procedures are
followed.
TAXATION OF BIONOVA HOLDING CORPORATION
We will not recognize any gain, other income or loss upon the issuance of
the rights, the lapse of the rights, or the receipt of payment for shares of
common stock upon exercise of the rights.
21
<PAGE>
PRICE RANGE OF COMMON STOCK
Our common stock is quoted on the Nasdaq National Market. From September 27,
1996 to April 28, 1999, our common stock traded under the symbol "DNAP." Since
April 29, 1999, our common stock has traded under the symbol "BNVA." The
following table shows the quarterly high and low closing sales price per share
for our common stock as reported on the Nasdaq National Market for the periods
indicated.
<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
1999
First Quarter.......................................................................... 4 3
Second Quarter (through April 16, 1999)................................................ 3 5/8 3 1/8
1998
First Quarter.......................................................................... 4 1/2 3 7/8
Second Quarter......................................................................... 4 5/8 3 3/4
Third Quarter.......................................................................... 4 3/8 3 1/8
Fourth Quarter......................................................................... 3 7/8 3 1/8
1997
First Quarter.......................................................................... 6 3 5/8
Second Quarter......................................................................... 4 3/4 3 1/2
Third Quarter.......................................................................... 5 3/8 3 5/8
Fourth Quarter......................................................................... 5 4
</TABLE>
On April 20, 1999 the last reported sale price of the common stock on the
Nasdaq National Market was $3 1/8 per share. As of April 14, 1999 there were
1,546 record holders of the common stock.
We have never paid cash dividends. Our management intends to retain any
future earnings for payment of our outstanding indebtedness and for the
operation and expansion of our business and does not anticipate paying any cash
dividends in the foreseeable future.
LEGAL MATTERS
The validity of the issuance of the shares of common stock offered hereby
will be passed upon for us by Thompson & Knight, P.C., Dallas, Texas. Our
corporate secretary, Joe A. Rudberg, is a shareholder in the firm of Thompson &
Knight, P.C.
EXPERTS
The financial statements incorporated in this Prospectus by reference to the
Annual Report on Form 10-K for the year ended December 31, 1998, have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
IF YOU WOULD LIKE ADDITIONAL INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the U.S. Securities and Exchange Commission. You may read and
copy this information at the SEC's public reference rooms, which are located at:
<TABLE>
<S> <C>
7 World Trade Center, Suite
450 Fifth Street, NW 1300
Washington, DC 20549 New York, NY 10048
500 West Madison Street, Suite 1400
Chicago, IL 60661-2511
</TABLE>
22
<PAGE>
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. This information is also available on-line through the SEC's
Electronic Data Gathering, Analysis, and Retrieval System (EDGAR), located on
the SEC's web site (http://www.sec.gov.).
Also, we will provide you (free of charge) with any of our documents filed
with the SEC. To get your free copies, please call or write:
Julie Huang
Investor Relations
Bionova Holding Corporation
c/o Edelman Financial Worldwide
1500 Broadway
New York, New York 10036-4015
(212) 768-0550
We have filed a registration statement with the SEC on Form S-3 with respect
to the rights offering. This prospectus is a part of the registration statement,
but the prospectus does not repeat important information that you can find in
the registration statement, reports and other documents that we have filed with
the SEC. The SEC allows us to "incorporate by reference" other documents filed
with the SEC, which means that we can disclose important information to you by
referring you to other documents. The documents that are incorporated by
reference are legally considered to be a part of this prospectus. The documents
incorporated by reference are:
(1) Annual Report on Form 10-K for the year ended December 31, 1998;
(2) Definitive Proxy Statement relating to our 1999 annual meeting of
stockholders;
(3) Any filings with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act of 1934 between the date of this prospectus and the
expiration of the rights offering.
As you read the above documents, you may find some inconsistencies in
information from one document to another. If you find inconsistencies between
the documents, or between a document and this prospectus, you should rely on the
statements made in the most recent document.
You should rely only on the information in this prospectus or incorporated
by reference. We have not authorized anyone to provide you with any different
information.
Prospective investors may rely on the information contained in this
prospectus. We have not authorized anyone to provide prospective investors with
information different from that contained in this prospectus. This prospectus is
not an offer to sell nor is it seeking an offer to buy these securities in any
state where the offer or sale is not permitted. This prospectus is not an offer
to sell nor is it seeking an offer to buy securities other than the shares of
common stock to be issued pursuant to the rights offering. The information
contained in this prospectus is correct only as of the date of this prospectus,
regardless of the time of the delivery of this prospectus or any sale of these
securities.
No action is being taken in any jurisdiction outside the United States to
permit a public offering of the common stock or possession or distribution of
this prospectus in any such jurisdiction. Persons who come into possession of
this prospectus in jurisdictions outside the United States are required to
inform themselves about and to observe any restrictions as to this offering and
the distribution of this prospectus applicable in the jurisdiction.
23
<PAGE>
[LOGO]
<TABLE>
<S> <C>
RIGHTS AGENT: INFORMATION AGENT:
Corporate Investor Communications,
The Bank of New York Inc.
101 Barclay Street 111 Commerce Road
New York, New York 10286 Carlstadt, New Jersey 07072
(800) 507-9357 (877) 460-2558
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses in connection with this
Registration Statement. We will pay all expenses of the rights offering. All
such expenses are estimates, other than the filing fees payable to the
Securities and Exchange Commission and the Nasdaq National Market.
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee.................. $13,703.28
Nasdaq listing fee............................................. $17,500.00
Printing fees and expenses..................................... 25,000.00
Legal fees and expenses........................................ 22,000.00
Information agent fee.......................................... 8,000.00
Blue sky fees and expenses..................................... 5,000.00
Rights agent fee............................................... 8,000.00
Miscellaneous.................................................. 10,000.00
Total........................................................ $109,203.28
----------
----------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Subsection (a) of Section 145 of the General Corporation Law of Delaware
(the "DGCL") empowers a corporation to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or complete
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 he is or was a director, 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 him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he 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 cause to believe his conduct was unlawful. Subsection (b)
of Section 145 of the DGCL empowers a corporation to 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 acted in any of the
capacities set forth above, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification may be made in respect to 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 or the court in which such action or suit was brought shall determine
that despite the adjudication of liability such person is fairly and reasonably
entitled to indemnity for such expenses which the court shall deem proper.
Section 145 of the DGCL further provides that to the extent a director,
officer, employee or agent of a corporation has been successful in the defense
of any action, suit or proceeding referred to in subsections (a) and (b) or in
the defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith; that indemnification or advancement of expenses
provided for by Section 145 shall not be deemed exclusive of any other rights to
which the indemnified party may be entitled; and empowers the corporation to
purchase and maintain insurance on behalf of a director, officer, employee or
agent of the corporation against any liability asserted against him or incurred
by him in any such capacity or arising out of his status as such whether or not
the corporation would have the power to indemnify him against such liabilities
under Section 145.
Article Five of our Certificate of Incorporation and Article VI of our
By-laws provide in effect for our indemnification of each of our directors and
officers to the fullest extent permitted by applicable law.
II-1
<PAGE>
ITEM 16. EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ------------- -----------------------------------------------------------------------------------------------------
<C> <S>
4.1 Form of Rights Agreement by and between DNAP Holding Corporation and The Bank of New York Company,
Inc. as rights agent (including form of right certificate)
4.2 Form of Letter to Stockholders
4.3 Form of Rights Certificate
4.4 Form of Instructions for Rights Certificate
4.5 Form of Letter to Brokers
4.6 Form of Letter to Clients
4.7 Form of Notice of Guaranteed Delivery
4.8 Form of Letter to Foreign Stockholders
4.9 Form of Guidelines to Form W-9
5 Opinion of Thompson & Knight, P.C.
23.1 Consent of Thompson & Knight, P.C. (included in Exhibit 5)
23.2 Consent of independent accountants
24 Power of Attorney (included on signature page)
</TABLE>
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement 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.
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 Item 15, 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 Act 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 by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance on Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it is declared effective.
(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus 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 the initial
bona fide offering thereof.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and 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 April
21, 1999.
<TABLE>
<CAPTION>
DNAP HOLDING CORPORATION
<S> <C> <C>
By: /s/ BERNARDO JIMENEZ
------------------------------------------
Bernardo Jimenez
Chief Executive Officer
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on April 21, 1999. Each of the undersigned officers and
directors of the registrant hereby constitutes Bernardo Jimenez and Arthur H.
Finnel and each of them, his true and lawful attorneys-in-fact with full power
to sign for him and in his name in the capacities indicated below and to file
any and all amendments to the registration statement filed herewith (including
post-effective amendments), making such changes in the registration statement as
the registrant deems appropriate, and to sign and file any other registration
statement for the same offering that is to be effective upon filing pursuant to
Rule 462(b) under the Securities Act of 1933, and generally to do all such
things in his name and behalf in his capacity as an officer and director to
enable the registrant to comply with the provisions of the Securities Act of
1933 and all requirements of the Securities and Exchange Commission.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- ----------------
<C> <S> <C>
Chief Executive Officer
/s/ BERNARDO JIMENEZ and Chairman of the
- ------------------------------ Board (Principal April 21, 1999
Bernardo Jimenez Executive Officer)
/s/ ARTHUR H. FINNEL Chief Financial Officer
- ------------------------------ (Principal Financial and April 21, 1999
Arthur H. Finnel Accounting Officer)
/s/ EVELYN BEREZIN
- ------------------------------ Director April 20, 1999
Evelyn Berezin
/s/ PETER DAVIS
- ------------------------------ Director April 19, 1999
Peter Davis
/s/ CARLOS HERRERA
- ------------------------------ Director April 21, 1999
Carlos Herrera
- ------------------------------ Director April , 1999
Erik C. Jurgensen
- ------------------------------ Director April , 1999
Eugenio Najera
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- ----------------
<C> <S> <C>
/s/ GERALD LAUBACH
- ------------------------------ Director April 19, 1999
Gerald Laubach
/s/ ALEJANDRO PEREZ
- ------------------------------ Director April 21, 1999
Alejandro Perez
/s/ CHRISTOPHER SOMERVILLE
- ------------------------------ Director April 19, 1999
Christopher Somerville
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
4.1 Form of Rights Agreement by and between DNAP Holding Corporation
and The Bank of New York Company, Inc. as rights agent (including
form of right certificate)
4.2 Form of Letter to Stockholders
4.3 Form of Rights Certificate
4.4 Form of Instructions for Rights Certificate
4.5 Form of Letter to Brokers
4.6 Form of Letter to Clients
4.7 Form of Notice of Guaranteed Delivery
4.8 Form of Letter to Foreign Stockholders
4.9 Form of Guidelines to Form W-9
5 Opinion of Thompson & Knight, P.C.
23.1 Consent of Thompson & Knight, P.C. (included in Exhibit 5)
23.2 Consent of independent accountants
24 Power of Attorney (included on signature page)
</TABLE>
<PAGE>
EXHIBIT 4.1
FORM OF RIGHTS AGREEMENT
This RIGHTS AGREEMENT (the "Agreement") is dated as of _____________
,1999, between DNAP Holding Corporation, a Delaware corporation (the "Company"),
and The Bank of New York Company, Inc., a ___________ corporation, as Rights
Agent (the "Rights Agent").
RECITALS
WHEREAS, the Company proposes to issue Rights (the "Rights") entitling
the holders thereof to purchase an aggregate of up to 17,691,023 shares of the
Company's Common Stock, $.01 par value (the "Common Stock"), plus 12,000
additional shares that may be issued as a result of rounding the number of
Rights; and
WHEREAS, Bionova International, Inc., a Delaware corporation and the
Company's largest stockholder ("Bionova International"), has agreed to surrender
to the Company (at no cost to the Company) Rights to purchase 9,130,435 shares
of Common Stock; and
WHEREAS, the Rights Agent, at the request of the Company, has agreed to
act as the agent of the Company in connection with the issuance, registration,
transfer, exchange and exercise of the Rights;
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein set forth, the parties hereto agree as follows:
AGREEMENT
1. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the instructions
hereinafter set forth; and the Rights Agent hereby accepts such appointment,
upon the terms and conditions hereinafter set forth.
2. AMOUNT ISSUED. Subject to the provisions of this Agreement, the
Company shall issue transferable Rights to purchase 17,691,023 shares of Common
Stock plus 12,000 additional shares that may be issued as a result of rounding
the number of Rights distributed to Record Holders (as defined below) (9,130,435
of which will be immediately surrendered by Bionova International to the
Company). The Company shall distribute to holders of Common Stock (the "Record
Holders") as of __________ (the "Record Date") three (3) Rights for every four
(4) shares of Common Stock held of record on the Record Date. No fractional
rights or cash in lieu thereof will be issued or paid. The number of Rights
distributed to each Record Holder will be rounded up to the nearest whole
number. Each Right shall entitle the holder thereof to purchase one share of
Common Stock at a price of $5.75 per share upon exercise of the Right as herein
provided.
<PAGE>
3. FORM OF RIGHTS CERTIFICATES.
(a) The Rights shall be evidenced by certificates (the "Rights
Certificates") to be delivered pursuant to this Agreement in registered
form only. The Rights Certificates and the forms of election to purchase
shares of Common Stock and of assignment to be printed on the reverse
thereof shall be in substantially the form set forth in EXHIBIT A hereto
together with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Agreement, and may
have such letters, numbers or other marks of identification and such
legends or endorsements placed thereon as may be required to comply with
any law or with any rules made pursuant thereto or with any rules of any
securities exchange, any agreement between the Company and any holder of
a Right (a "Rightholder"), or as may, consistently herewith, be
determined by the officers executing such Rights Certificates, as
evidenced by their execution of such Rights Certificates.
(b) No Rights Certificate may be divided in such a way as to
permit the holder to receive a greater number of Rights than the number
to which such Rights Certificate entitles its holder, except that a
depositary, bank, trust company, and securities broker or dealer holding
shares of Common Stock on the Record Date for more than one beneficial
owner may by delivering a written request by 5:00 p.m., New York City
time, on a date which is fifteen (15) business days from the effective
date of the Registration Statement, as hereinafter defined, and, upon
proper showing to the Rights Agent, exchange its Rights Certificate to
obtain a Rights Certificate for the number of Rights to which all such
beneficial owners in the aggregate would have been entitled had each been
a Record Holder. The Company reserves the right to refuse to issue any
such Rights Certificate if such issuance would be inconsistent with the
principle that each beneficial owner's holdings will be rounded up to the
nearest whole Right.
4. EXECUTION OF RIGHTS CERTIFICATES. Rights Certificates shall be
signed on behalf of the Company by its Chief Executive Officer, an Executive
Vice President or its Treasurer and attested by its Secretary or Assistant
Secretary. Each such signature upon the Rights Certificates may be in the form
of a facsimile signature of the current or any future Chief Executive Officer,
Executive Vice President, Treasurer, Secretary or Assistant Secretary and may be
imprinted or otherwise reproduced on the Rights Certificates and for that
purpose the Company may adopt and use the facsimile signature of any person who
shall have been Chief Executive Officer, Executive Vice President, Treasurer,
Secretary or Assistant Secretary, notwithstanding the fact that at the time the
Rights Certificates shall be delivered or disposed of, such person shall have
ceased to hold such office.
If any officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer before the Rights Certificates so
signed shall have been delivered by the Rights Agent or disposed of by the
Company, such Rights Certificates nevertheless may be delivered or disposed of
as though such person had not ceased to be such officer of the Company; and any
Rights Certificate may be signed on behalf of the Company by any person who, at
the actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights
2
<PAGE>
Certificate, although at the date of the execution of this Agreement any such
person was not such officer.
5. REGISTRATION. The Rights Certificates shall be numbered and shall
be registered in a register (the "Rights Register") to be maintained by the
Rights Agent. The Company and the Rights Agent may deem and treat the
registered holder of a Rights Certificate as the absolute owner thereof
(notwithstanding any notation of ownership or other writing thereon made by
anyone), for the purpose of any exercise thereof or any distribution to the
holder thereof and for all other purposes, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary.
6. CERTAIN RIGHTS ISSUED TO BIONOVA INTERNATIONAL NOT EXERCISABLE OR
TRANSFERABLE. Pursuant to a Stock Purchase Agreement dated as of October 1,
1998, among the Company and Bionova International, Bionova International has
agreed that it will immediately surrender to the Company at no cost to the
Company 9,130,435 of the 13,557,630 Rights it will receive pursuant to Section 2
of this Agreement. The Rights Agent hereby agrees that it will not accept for
exercise, exchange or transfer any Rights Certificate issued in the name of, or
to be issued in the name of Bionova International, if such Rights Certificate
pertains to any of the 9,130,435 Rights surrendered to the Company by Bionova
International, and that it will notify the Company immediately upon receipt of
any such Rights Certificate.
7. REGISTRATION OF TRANSFERS AND EXCHANGES. Subject to Section 6
hereof, until the Close of Business on the Expiration Date (as hereinafter
defined), the Rights Agent shall from time to time register the transfer of any
outstanding Rights Certificates in the Rights Register, upon surrender of such
Rights Certificates, duly endorsed, and, if not surrendered by or on behalf of
an original holder of Rights Certificates or a transferee thereof, accompanied
by a written instrument or instruments of transfer in form satisfactory to the
Rights Agent, duly signed by the registered holder or holders thereof or by the
duly appointed legal representative thereof or by a duly authorized attorney,
such signature to be guaranteed by (a) a bank or trust company, (b) a broker or
dealer that is a member of the National Association of Securities Dealers, Inc.
(the "NASD"), (c) a member of a national securities exchange or (d) by an
"eligible guarantor institution" as defined under Rule 17Ad-15 promulgated under
the Securities Exchange Act of 1934, as amended. Upon any such registration of
transfer, a new Rights Certificate shall be issued to the transferee.
Rights Certificates may be exchanged at the option of the holder or
holders thereof, when surrendered to the Rights Agent at its offices or agency
maintained in New York, New York (or at such other offices or agencies as may be
designated by the Agent) for the purpose of exchanging, transferring and
exercising the Rights (a "Rights Agent Office,") or at the offices of any
successor Rights Agent as provided in Section 18 hereof, for another Rights
Certificate or other Rights Certificates of like tenor and representing in the
aggregate a like number of Rights.
3
<PAGE>
8. DURATION AND EXERCISE OF RIGHTS; SUBSCRIPTION PRICE.
(a) The Rights shall expire at (i) 5:00 p.m. New York City Time
(the "Close of Business") on May 31, 2000, subject to extension by up to
10 days, in the sole discretion of the Company in a written statement to
the Rights Agent and with notice to registered Rightholders in the manner
provided for in Section 15 (such date of expiration being hereinafter
referred to as the "Expiration Date"). At such time as the Rights become
exercisable, and thereafter until the Close of Business on the Expiration
Date, the Rights may be exercised on any business day. After the Close of
Business on the Expiration Date, the Rights will become void and of no
value.
(b) Subject to the provisions of this Agreement, each Right
shall entitle the holder thereof to purchase from the Company (and the
Company shall issue and sell to such holder of a Right) one fully paid
and nonassessable share of Common Stock at the price of $5.75 (U.S.) per
share (the "Subscription Price") (the "Subscription Right").
(c) A Rightholder shall exercise such Holder's right to
purchase shares of Common Stock by depositing with the Rights Agent at a
Rights Agent Office, the Rights Certificate evidencing such Right with
the form of election to purchase on the reverse thereof duly completed
and signed by the registered holder or holders thereof or by the duly
appointed legal representative thereof or by a duly authorized attorney,
such signature (if not signed by or on behalf of an original holder of
Rights) to be guaranteed in the manner described in Section 6 hereof, and
paying to the Rights Agent in lawful money of the United States of
America by check or bank draft drawn upon a United States bank or a
postal, telegraphic or express money order of an amount equal to the
Subscription Price multiplied by the number of shares of Common Stock in
respect of which the Rights are being exercised. Once a Rightholder
exercises a Right, that exercise may not be revoked.
(d) If a Rightholder wishes to exercise its Rights, but time
will not permit such holder to cause the Rights Certificate or Rights
Certificates evidencing such Rights to reach the Rights Agent on or prior
to the Expiration Date, such Rights may nevertheless be exercised if all
of the following conditions (the "Guaranteed Delivery Procedures") are
met:
(i) such holder has caused payment in full of the
Subscription Price for each share of Common Stock being subscribed
to be received (in the manner set forth in subsection (c) above)
by the Rights Agent on or prior to the Expiration Date;
(ii) the Rights Agent receives, on or prior to the
Expiration Date, a guarantee notice (a "Notice of Guaranteed
Delivery"), substantially in the form provided with the
Instruction for Use of the Bionova Holding Corporation Rights
Certificates (the "Instructions") distributed with the Rights
Certificates, from a member firm of a registered national
securities exchange or a member of the National Association of
Securities Dealers, Inc. (the "NASD"), or from a commercial bank
or
4
<PAGE>
trust company having an office or correspondent in the United
States (each, an "Eligible Institution"), stating the name of the
exercising Rightholder, the number of Rights represented by the
Rights Certificate or Rights Certificates held by such exercising
Rightholder, the number of shares of Common Stock being subscribed
for pursuant to the Subscription Right, and guaranteeing the
delivery to the Rights Agent of any Rights Certificate evidencing
such Rights within three (3) Nasdaq trading days following the
date of the Notice of Guaranteed Delivery; and
(iii) the properly completed Rights Certificate or Rights
Certificates evidencing the Rights being exercised, with any
required signatures guaranteed, is received by the Rights Agent
within three (3) Nasdaq trading days following the date of the
Notice of Guaranteed Delivery relating thereto. The Notice of
Guaranteed Delivery may be delivered to the Rights Agent in the
manner set forth in Section 21 hereof.
Unless a Rights Certificate (i) provides that the shares of Common Stock
to be issued pursuant to the exercise of Rights represented thereby are to be
delivered directly to the holder of such Rights or (ii) is submitted for the
account of an Eligible Institution, signatures on such Rights Certificate must
be guaranteed by an Eligible Institution.
(e) Subject to Sections 6 and 9, upon such surrender of a
Rights Certificate and payment of the Subscription Price, and as soon as
practicable after the Expiration Date the Rights Agent, in its capacity
as the Company's transfer agent (the "Transfer Agent"), shall requisition
for issuance and delivery to or upon the written order of the registered
holder of such Rights Certificate and in such name or names as such
registered holder may designate, a certificate or certificates for the
share or shares of Common Stock issuable upon the exercise of the
Subscription Right evidenced by such Rights Certificate. Such certificate
or certificates shall be deemed to have been issued and any person so
designated to be named therein shall be deemed to have become the holder
of record of such share or shares of Common Stock as of the Expiration
Date.
The Subscription Price will be deemed to have been received by the Rights
Agent only upon (i) clearance of any uncertified check, or (ii) receipt by the
Rights Agent of any certified check or bank draft drawn upon a U.S. bank or any
postal, telegraphic or express money order.
(f) The Rights evidenced by a Rights Certificate shall be
exercisable, at the election of the registered holder thereof, either as
an entirety or from time to time for a portion of the number of Rights
specified in the Rights Certificate. If less than all of the Rights
evidenced by a Rights Certificate surrendered upon the exercise of Rights
are exercised at any time prior to the Expiration Date, a new Rights
Certificate or Certificates shall be issued for the number of Rights
evidenced by the Rights Certificate so surrendered that have not been
exercised.
5
<PAGE>
(g) The Rights Agent shall account promptly to the Company with
respect to Rights exercised and concurrently pay or deliver to the
Company all moneys and other consideration received by it upon the
purchase of shares of Common Stock through the exercise of the
Subscription Rights.
(h) If either the number of Rights being exercised is not
specified on a Rights Certificate, or the payment delivered is not
sufficient to pay the full aggregate Subscription Price for all shares of
Common Stock stated to be subscribed for, the Rightholder will be deemed
to have exercised the maximum number of Rights that could be exercised
for the amount of the payment delivered by such Rightholder. If the
payment delivered by the Rightholder exceeds the aggregate Subscription
Price for the number of Rights evidenced by the Rights Certificate(s)
delivered by such Rightholder, the payment will be applied, until the
Right is depleted, to subscribe for shares of Common Stock. Any excess
payment remaining after the foregoing allocation will be returned to such
Rightholder.
9. CANCELLATION OF RIGHTS. If the Company shall purchase or
otherwise acquire Rights, the Rights Certificates representing such Rights shall
thereupon be delivered to the Rights Agent and be canceled by it and retired.
The Rights Agent shall cancel all Rights Certificates surrendered for exchange,
substitution, transfer or exercise in whole or in part.
10. PAYMENT OF TAXES. The Company will pay all documentary stamp
taxes attributable to the initial issuance of Rights and of shares of Common
Stock upon the exercise of Rights; provided, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any transfer
involved in the issue of any Rights Certificates or any certificates for shares
of Common Stock in a name other than the registered holder of a Rights
Certificate surrendered upon the exercise of a Right, and the Company shall not
be required to issue or deliver such certificates unless or until the person or
persons requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid or adequate provision has been made for the payment
thereof.
11. MUTILATED OR MISSING RIGHTS CERTIFICATES. If any of the Rights
Certificates shall be mutilated, lost, stolen or destroyed, the Company may in
its discretion issue, and the Rights Agent shall deliver, in exchange and
substitution for and upon cancellation of the mutilated Rights Certificate, or
in lieu of and substitution for the Rights Certificate lost, stolen or
destroyed, a new Rights Certificate of like tenor and representing an equivalent
number of Rights, but only upon receipt of evidence satisfactory to the Company
and the Rights Agent of such loss, theft or destruction of such Rights
Certificate and indemnity or bond, if requested, also satisfactory to them.
Applicants for such substitute Rights Certificates shall also comply with such
other reasonable regulations and pay such other reasonable charges as the
Company or the Rights Agent may prescribe.
12. RESERVATION OF SHARES OF COMMON STOCK. For the purpose of
enabling it to satisfy any obligation to issue shares of Common Stock upon
exercise of Rights, the Company will at all
6
<PAGE>
times through the Close of Business on the Expiration Date, reserve and keep
available, free from preemptive rights and out of its aggregate authorized but
unissued shares of Common Stock, the number of shares of Common Stock
deliverable upon the exercise of all outstanding Rights (except for the
9,130,435 Rights under which Bionova International will surrender to the
Company) and the Transfer Agent is hereby irrevocably authorized and directed at
all times to reserve such number of authorized and unissued shares of Common
Stock as shall be required for such purpose. The Rights Agent, in its capacity
as Transfer Agent, is hereby irrevocably authorized to requisition from time to
time stock certificates issuable upon exercise of outstanding Rights.
Before taking any action that would cause an adjustment pursuant to
Section 14(b) reducing the Subscription Price below the then par value (if any)
of the shares of Common Stock issuable upon exercise of the Rights, the Company
will take any corporate action that may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock at the Subscription Price as so adjusted.
The Company covenants that all shares of Common Stock issued upon
exercise of the Rights will, upon issuance in accordance with the terms of this
Agreement, be fully paid and nonassessable and free from all liens, charges and
security interests created by or imposed upon the Company with respect to the
issuance thereof.
13. REGISTRATION OF RIGHTS AND SHARES OF COMMON STOCK. The Company
has filed with the SEC a registration statement, on Form S-3 (the "Registration
Statement") which has been or will be declared effective. The Company will use
its best efforts to keep the Registration Statement continuously effective from
the date hereof through the Close of Business ten (10) business days following
the Expiration Date. So long as any unexpired Rights remain outstanding, the
Company will take all necessary action to obtain and keep effective any and all
permits, consents and approvals of government agencies and authorities and to
make filings under federal and state securities acts and laws, which may be or
become necessary in connection with the issuance, sale, transfer and delivery of
the Rights Certificates, the exercise of the Rights and the issuance, sale,
transfer and delivery of the shares of Common Stock issued upon exercise of
Rights.
14. ADJUSTMENT OF SUBSCRIPTION PRICE AND NUMBER OF SHARES OF COMMON STOCK
PURCHASABLE OR NUMBER OF RIGHTS.
(a) Except as provided in subsection (b) below, the
Subscription Price and the number of shares of Common Stock purchasable
upon the exercise of each Right shall not be adjusted during the term of
the Rights Offering or upon exercise of any Right or Rights.
(b) If the Company shall (i) pay a dividend on its shares of
Common Stock in shares of Common Stock, (ii) subdivide its outstanding
shares of Common Stock, (iii) combine its outstanding shares of Common
Stock into a smaller number of shares of Common Stock or (iv) reclassify
the Common Stock (including any such reclassification in connection with
a consolidation or merger in which the Company is the continuing
7
<PAGE>
corporation), the number of shares of Common Stock purchasable upon
exercise of each Right immediately prior thereto shall be adjusted so
that the holder of each Right shall be entitled upon exercise to receive
the kind and number of shares of Common Stock or other securities of the
Company which such holder would have owned or have been entitled to
receive after the happening of any of the events described above, had
such Right been exercised immediately prior to the happening of such
event or any record date with respect thereto. An adjustment made
pursuant to this subparagraph (b) shall become effective immediately
after the effective date of such event retroactive to the record date, if
any, for such event. In addition, in the event of any reclassification of
the Common Stock, references in this Agreement to Common Stock shall
thereafter be deemed to refer to the securities into which the Common
Stock shall have been reclassified.
(c) In case of any consolidation of the Company with or merger
of the Company into another corporation or in case of any sale or
conveyance to another corporation of the property of the Company as an
entirety or substantially as an entirety or the Company is a party to a
merger or binding share exchange which reclassifies or changes its
outstanding shares of Common Stock, the Company or such successor or
purchasing corporation, as the case may be, shall execute with the Rights
Agent an agreement, in form and substance substantially equivalent to
this Agreement, that each holder of a Rights Certificate shall have the
right thereafter, subject to terms and conditions substantially
equivalent to those contained in this Agreement, upon payment of the
Subscription Price in effect immediately prior to such action to purchase
upon exercise of each Right the kind and amount of shares and other
securities and property which such holder would have owned or have been
entitled to receive after the happening of such consolidation, merger,
sale or conveyance had such Right been exercised immediately prior to
such action. The Company shall mail by first-class mail, postage
prepaid, to each registered holder of a Right, notice of the execution of
any such agreement. Such agreement shall provide for adjustments, which
shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Section 14. The provisions of this subparagraph (c)
shall similarly apply to successive consolidations, mergers, sales or
conveyances. The Rights Agent shall be under no duty or responsibility to
determine the correctness of any provisions contained in any such
agreement relating either to the kind or amount of shares of stock or
other securities or property receivable upon exercise of Rights or with
respect to the method employed and provided therein for any adjustments
and shall be entitled to rely upon the provisions contained in any such
agreement.
15. NOTICES TO RIGHTHOLDERS.
If:
(a) the Company shall declare any dividend payable in any
securities upon its shares of Common Stock or make any distribution
(other than a cash dividend declared in the ordinary course) to the
holders of its shares of Common Stock, or
8
<PAGE>
(b) the Company shall offer to the holders of its shares of
Common Stock any additional shares of Common Stock or securities
convertible or exchangeable into shares of Common Stock or any right to
subscribe for or purchase Common Stock, or
(c) there shall be a dissolution, liquidation or winding up of
the Company (other than in connection with a consolidation, merger or
sale of all or substantially all of its property, assets and business as
an entirety),
(d) then the Company shall (i) cause written notice of such
event to be filed with the Rights Agent and shall cause written notice of
such event to be given to each of the registered holders of the Rights
Certificates at such holder's address appearing on the Rights Register,
by first-class mail, postage prepaid, and (ii) make a public announcement
in a daily morning English language newspaper of general circulation in
New York City, New York, of such event, such giving of notice and
publication to be completed at least ten (10) calendar days (or twenty
(20) calendar days in any case specified in clause (c) above) prior to
the date fixed as a record date or the date of closing the transfer books
for the determination of the stockholders entitled to such dividend,
distribution or subscription rights, or for the determination of
stockholders entitled to vote on such proposed dissolution, liquidation
or winding up. Such notice shall specify such record date or the date of
closing the transfer books, as the case may be. The failure to give the
notice required by this Section 15 or any defect therein shall not affect
the legality or validity of any dividend, distribution, right, option,
warrant, dissolution, liquidation or winding up or the vote upon or any
other action taken in connection therewith.
16. MERGER, CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT. Any
corporation into which the Rights Agent may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Rights Agent shall be a party, or any corporation
succeeding to the shareholder services business of the Rights Agent, shall be
the successor to the Rights Agent hereunder without the execution or filing of
any paper or any further act on the part of any of the parties hereto, provided
that such corporation would be eligible for appointment as a successor Rights
Agent under the provisions of Section 18.
17. RIGHTS AGENT. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent shall not be responsible for any failure
of the Company to comply with any of the covenants contained in this
Agreement or in the Rights Certificates to be complied with by the
Company nor shall it at any time be under any duty or responsibility to
any holder of a Right to make or cause to be made any adjustment in the
Subscription Price or in the number of shares of Common Stock issuable
upon exercise of any Rights (except as instructed by the Company);
9
<PAGE>
(b) The Company agrees to indemnify the Rights Agent and save
it harmless against any and all losses, liabilities and expenses,
including judgments, costs and reasonable counsel fees and expenses, for
anything done or omitted by the Rights Agent arising out of or in
connection with this Agreement except as a result of its gross negligence
or bad faith;
(c) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged
and delivered all such further and other acts, instruments and assurances
as may reasonably be required by the Rights Agent for the carrying out or
performing the provisions of this Agreement; and
(d) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chief Executive Officer, Executive Vice President, the
Treasurer or an Assistant Treasurer, the Secretary or an Assistant
Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and shall not be liable for
any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer or in good faith
reliance upon any statement signed by any one of such officers of the
Company with respect to any fact or matter (unless other evidence in
respect thereof is herein specifically prescribed) which may be deemed to
be conclusively proved and established by such signed statement.
18. CHANGE OF RIGHTS AGENT. If the Rights Agent shall resign (such
resignation to become effective not earlier than sixty (60) days after the
giving of written notice thereof to the Company and the registered holders of
Rights Certificates) or shall become incapable of acting as Rights Agent or if
the Board of Directors of the Company shall by resolution remove the Rights
Agent (such removal to become effective not earlier than thirty (30) days after
the filing of a certified copy of such resolution with the Rights Agent and the
giving of written notice of such removal to the registered holders of Rights
Certificates), the Company shall appoint a successor to the Rights Agent. If
the Company shall fail to make such appointment within a period of thirty (30)
days after such removal or after it has been so notified in writing of such
resignation or incapacity by the Rights Agent or by the registered holder of a
Rights Certificate (in the case of incapacity), then the registered holder of
any Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a successor to the Rights Agent. Pending appointment of a
successor to the Rights Agent, either by the Company or by such a court, the
duties of the Rights Agent shall be carried out by the Company. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be a
bank or trust company, in good standing, incorporated under the laws of any
state or of the United States of America. As soon as practicable after
appointment of the successor Rights Agent, the Company shall cause written
notice of the change in the Rights Agent to be given to each of the registered
holders of the Rights Certificates at such holder's address appearing on the
Rights Register. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed. The former Rights
Agent shall deliver and transfer to the successor Rights Agent, the Rights
Register and any other property at the time held by it hereunder and execute and
deliver, at
10
<PAGE>
the expense of the Company, any further assurance, conveyance, act or deed
necessary for the purpose. Failure to give any notice provided for in this
Section 18 or any defect therein, shall not affect the legality or validity of
the removal of the Rights Agent or the appointment of a successor Rights Agent,
as the case may be.
19. RIGHTHOLDER NOT DEEMED A STOCKHOLDER. Nothing contained in this
Agreement or in any of the Rights Certificates shall be construed as conferring
upon the holders thereof the right to vote or to receive dividends or to consent
or to receive notice as stockholders in respect of the meetings of stockholders
or for the election of directors of the Company or any other matter, or any
rights whatsoever as stockholders of the Company.
20. DELIVERY OF PROSPECTUS. If the Company is required under
applicable federal or state securities laws to deliver a prospectus upon
exercise of Rights, the Company will furnish to the Rights Agent sufficient
copies of a prospectus, and the Rights Agent agrees that upon the exercise of
any Rights Certificate by the holder thereof, the Rights Agent will deliver to
such holder, prior to or concurrently with the delivery of the certificate or
certificates for the shares of Common Stock issued upon such exercise, a copy of
the prospectus.
21. NOTICES TO COMPANY AND RIGHTS AGENT. Any notice or demand
authorized by this Agreement to be given or made by the Rights Agent or by any
registered holder of any Rights Certificate to or on the Company shall be
sufficiently given or made if sent by mail, first-class or registered, postage
prepaid, addressed (until another address is filed in writing by the Company
with the Rights Agent), as follows:
Bionova Holding Corporation
6701 San Pablo Avenue
Oakland, California 94608
Attention: Chief Executive Officer
If the Company shall fail to maintain such office or agency or shall fail
to give such notice of any change in the location thereof, presentation may be
made and notices and demands may be served at the principal office of the Rights
Agent.
Any notice pursuant to this Agreement to be given by the Company or by
any registered holder of any Rights Certificate to the Rights Agent shall be
sufficiently given if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing by the Rights Agent with the
Company), as follows:
The Bank of New York Company, Inc.
101 Barclay Street
New York, New York 10126
Attention: Mr. Steve Gilbert
11
<PAGE>
22. SUPPLEMENTS AND AMENDMENTS. The Company and the Rights Agent may
from time to time supplement or amend this Agreement without the approval of any
holders of Rights Certificates in order to cure any ambiguity, manifest error or
other mistake in this Agreement, or to correct or supplement any provision
contained herein that may be defective or inconsistent with any other provision
herein, or to make any other provisions in regard to matters or questions
arising hereunder that the Company and the Rights Agent may deem necessary or
desirable and that shall not adversely affect, alter or change the interests of
the holders of the Rights in any material respect.
Any supplement or amendment of this Agreement which may not be made by
the Company and the Rights Agent without the approval of holders of Rights
Certificates pursuant to the preceding paragraph shall require the approval of
the holders of Rights Certificates entitled to purchase upon exercise thereof a
majority of the shares of Common Stock which may be purchased upon the exercise
of all outstanding Rights Certificates at the time that such amendment or
supplement is to be made. Notwithstanding the foregoing, any amendment or
supplement to this Agreement which would provide for an adjustment to either (i)
the number of shares of Common Stock purchasable upon exercise of a Right or
(ii) the exercise price for which shares of Common Stock are purchasable upon
exercise of a Right, in either case, in a manner not provided for in this
Agreement and in a manner that would have a substantial negative impact on the
holders of Rights Certificates, then such amendment or supplement shall require
the consent of the holders of seventy five percent (75%) of the Rights
Certificates.
23. SUCCESSORS. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
24. TERMINATION. This Agreement shall terminate the Close of
Business on the date which is fifteen (15) Nasdaq trading days after the
Expiration Date. Upon termination of the Agreement, the Rights Agent shall
retain all canceled Rights Certificates and related documentation as required
by applicable law.
25. GOVERNING LAW. This Agreement and each Rights Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Delaware and for all purposes shall be construed in accordance with the internal
laws of the State of Delaware without regard to principles of conflict of law or
choice of laws of the State of Delaware or any other jurisdiction which would
cause the application of any laws other than of the State of Delaware.
26. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Rights Certificates any legal or
equitable right, remedy or claim under this Agreement, and this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates.
27. COUNTERPARTS. This Agreement may be executed in a number of
counterparts and each
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<PAGE>
of such counterparts shall all for purposes be deemed to be an original, and
such counterparts shall together constitute but one and the same instrument.
28. HEADINGS. The headings of sections of this Agreement have been
inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions
hereof.
13
<PAGE>
IN WITNESS WHEREOF the parties hereto have caused this Rights Agreement
to be executed and delivered as of the day and year first above written.
BIONOVA HOLDING CORPORATION
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
Attest:
By:
----------------------------
Name:
-----------------------
Title:
----------------------
THE BANK OF NEW YORK COMPANY, INC.
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
Attest:
By:
----------------------------
Name:
-----------------------
Title:
----------------------
14
<PAGE>
EXHIBIT A
FORM OF RIGHTS CERTIFICATE
CONTROL No. _________ Number of Rights ___________
VOID IF NOT RECEIVED BY THE RIGHTS AGENT
BEFORE 5:00 P.M. NEW YORK CITY TIME
ON MAY 31, 2000
BIONOVA HOLDING CORPORATION
SUBSCRIPTION RIGHTS FOR COMMON STOCK
Dear Stockholder:
As the registered owner of this Rights Certificate, you are the owner
of the number of Rights shown above. Each Right entitles you to subscribe
for one share of common stock, par value $.01 per share, of Bionova Holding
Corporation. You may subscribe for such shares at the subscription price of
$5.75 per share. The other terms and conditions of these Rights are set forth
in the enclosed Prospectus.
You have been issued three (3) Rights every four (4) shares of common
stock that you held on __________, 1999. You have not been issued fractional
Rights, but instead your number of Rights was rounded up to the nearest whole
Right.
- -------------------------------------------------------------------------------
SAMPLE CALCULATION OF SUBSCRIPTION RIGHT
Shares of Common Stock owned on ____________, 1999: ___ x .75 = _____ shares you
are entitled to purchase (round up fractions of shares)
- -------------------------------------------------------------------------------
THIS SUBSCRIPTION RIGHT IS TRANSFERABLE
The Rights are transferable but there is currently no active trading
market for the Rights. The Company does not intend to apply for a listing or
quotation of the Rights on any stock exchange or stock market.
You have three choices:
1. You can subscribe for all of the new shares listed in the box
above.
2. You can subscribe for less than the number of new shares listed in
the box above and transfer the rest of your Rights or allow them
to expire; or
3. If you do not want to purchase any additional shares, you can
transfer all of your Rights or disregard this material.
TO SUBSCRIBE, FULL PAYMENT OF THE SUBSCRIPTION PRICE IS REQUIRED FOR EACH
SHARE OF COMMON STOCK. YOU MUST COMPLETE THE REVERSE SIDE OF THIS FORM TO
SUBSCRIBE FOR NEW SHARES OR TRANSFER YOUR RIGHTS.
Attest: BIONOVA HOLDING CORPORATION
By: By:
--------------------------- -------------------------------------
Name: Name:
---------------------- -------------------------------
Title: Title:
--------------------- ------------------------------
Control No.
---------------
Account No.
---------------
No. of Rights:
------------
<PAGE>
[REVERSE SIDE OF RIGHTS CERTIFICATE]
DELIVERY OPTIONS FOR RIGHTS CERTIFICATE
BY FIRST CLASS MAIL: BY HAND OR OVERNIGHT COURIER:
The Bank of New York Company, Inc. The Bank of New York Company, Inc.
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
Delivery to an address other than one of the addresses listed above will
not constitute valid delivery.
Delivery by facsimile will not constitute valid delivery.
PLEASE PRINT ALL INFORMATION CLEARLY AND LEGIBLY
IF YOU WISH TO SUBSCRIBE FOR YOUR FULL SUBSCRIPTION RIGHT OR A PORTION THEREOF:
I apply for shares X $5.75 = $
------------- -----------------
(No. of new shares) (Amount Enclosed)
TO SUBSCRIBE: I acknowledge that I have received the Prospectus for this offer
and I hereby irrevocably subscribe for the number of shares indicated above on
the terms and conditions specified in the Prospectus. I hereby agree that if I
fail to pay for the shares of common stock for which I have subscribed, the
Company may exercise its legal remedies against me.
TO TRANSFER RIGHTS: For value received, ____ of the Rights represented by this
Subscription Certificate are assigned to:
------------------------------------
(Print Full Name of Assignee)
- ----------------------------------- ------------------------------------
(Print Full Address)
- -----------------------------------
Signature(s) of Subscriber(s) ------------------------------------
Signature(s) of Assignor(s)
Please give your telephone number: IMPORTANT: The Signature(s) must
( ) correspond in every particular, without
---------------------- alteration, with the name(s) as printed
on the reverse of this Rights
Certificate.
- -----------------------------------
Your Signature must be guaranteed by:
- ----------------------------------- (a) a commercial bank or trust
company, (b) a member firm of a
- ----------------------------------- domestic stock exchange, or (c) a
Address for delivery of shares if credit union.
other than shown on front.
Signature Guaranteed:
----------------------
(Name of Bank or Firm)
By:
---------------------------------
(Signature of Officer)
YOU MUST HAVE YOUR SIGNATURE
GUARANTEED IF YOU WISH TO HAVE YOUR
SHARES DELIVERED TO AN ADDRESS
OTHER THAN THAT SHOWN ON THE FRONT
OF THIS CERTIFICATE.
<PAGE>
If permanent change of address,
check here [_]
FULL PAYMENT FOR THE SHARES MUST ACCOMPANY THIS FORM AND MUST BE MADE PAYABLE IN
UNITED STATES DOLLARS IN A CHECK OR BANK DRAFT DRAWN UPON A U.S. BANK OR POSTAL,
TELEGRAPHIC OR EXPRESS MONEY ORDER AND PAYABLE TO THE BANK OF NEW YORK COMPANY,
INC., AS RIGHTS AGENT.
STOCK CERTIFICATES FOR THE SHARES SUBSCRIBED TO PURSUANT TO THE RIGHTS OFFERING
WILL BE DELIVERED AS SOON AS PRACTICABLE AFTER THE DATE UPON WHICH YOU EXERCISE
YOUR RIGHTS.
ANY REFUND IN CONNECTION WITH YOUR SUBSCRIPTION WILL BE DELIVERED AS SOON AS
PRACTICABLE THEREAFTER.
<PAGE>
EXHIBIT 4.2
[BIONOVA'S LOGO APPEARS HERE]
6701 San Pablo Avenue
Oakland, California 94608
May __, 1999
Dear Stockholder:
Enclosed are the Prospectus and other materials relating to the rights
offering by Bionova Holding Corporation ("Bionova").
Please carefully review the Prospectus, which describes how you can
participate in the rights offering. You will find answers to some frequently
asked questions about the rights offering beginning on page 4 of the
Prospectus. You should also refer to the detailed Instructions for Use of
Rights Certificates, included with this letter.
SUMMARY OF TERMS OF THE OFFERING
- You will receive three transferable rights for every four shares of
Bionova common stock you owned on ________, 1999. For example, if you
own 100 shares of common stock, you will receive 75 rights.
- You may purchase one share of common stock for each right you receive
at the subscription price of $5.75 per share.
- The rights offering expires at 5:00 p.m., New York City Time, on May
31, 2000. If you do not exercise or transfer your rights before that
date, they will expire and will have no monetary value.
If your shares are held in your name, a Rights Certificate is enclosed. If
your shares are held in the name of your bank or broker, you must contact your
bank or broker if you wish to participate in this offering.
There is currently no active trading market for the rights. Bionova does
not intend to apply for a listing or quotation of the rights on any stock
exchange or stock market. Therefore, we cannot assure you that you will be able
to sell your rights at all or at a price that is satisfactory to you.
If you do not exercise your rights, your ownership in Bionova may be
diluted. Please see page 7 of the Prospectus for a discussion of dilution and
other risk factors.
Bernardo Jimenez
[SIGNATURE APPEARS HERE]
Chairman and CEO
If you have any questions concerning the rights offering, please feel free
to contact the Bionova's information agent, Corporate Investor Communications,
Inc. at (877) 460-2558.
<PAGE>
EXHIBIT 4.3
FORM OF RIGHTS CERTIFICATE
CONTROL No. _________ Number of Rights ___________
VOID IF NOT RECEIVED BY THE RIGHTS AGENT
BEFORE 5:00 P.M. NEW YORK CITY TIME
ON MAY 31, 2000
BIONOVA HOLDING CORPORATION
SUBSCRIPTION RIGHTS FOR COMMON STOCK
Dear Stockholder:
As the registered owner of this Rights Certificate, you are the owner of
the number of Rights shown above. Each Right entitles you to subscribe for
one share of common stock, par value $.01 per share, of Bionova Holding
Corporation. You may subscribe for such shares at the subscription price of
$5.75 per share. The other terms and conditions of these Rights are set forth
in the enclosed Prospectus.
You have been issued three (3) Rights every four (4) shares of common stock
that you held on __________, 1999. You have not been issued fractional Rights,
but instead your number of Rights was rounded up to the nearest whole Right.
- --------------------------------------------------------------------------------
SAMPLE CALCULATION OF SUBSCRIPTION RIGHT
Shares of Common Stock owned on ____________, 1999: ___ x .75 = _____ shares you
are entitled to purchase (round up fractions of shares)
- --------------------------------------------------------------------------------
THIS SUBSCRIPTION RIGHT IS TRANSFERABLE
The Rights are transferable but there is currently no active trading market
for the Rights. The Company does not intend to apply for a listing or quotation
of the Rights on any stock exchange or stock market.
You have three choices:
1. You can subscribe for all of the new shares listed in the box above.
2. You can subscribe for less than the number of new shares listed in the
box above and transfer the rest of your Rights or allow them to
expire; or
3. If you do not want to purchase any additional shares, you can transfer
all of your Rights or disregard this material.
TO SUBSCRIBE, FULL PAYMENT OF THE SUBSCRIPTION PRICE IS REQUIRED FOR EACH
SHARE OF COMMON STOCK. YOU MUST COMPLETE THE REVERSE SIDE OF THIS FORM TO
SUBSCRIBE FOR NEW SHARES OR TRANSFER YOUR RIGHTS.
Attest: BIONOVA HOLDING CORPORATION
By: By:
---------------------------- ---------------------------------
Name: Name:
----------------------- ----------------------------
Title: Title:
---------------------- ---------------------------
Control No.
--------------
Account No.
--------------
No. of Rights:
-----------
<PAGE>
[REVERSE SIDE OF RIGHTS CERTIFICATE]
DELIVERY OPTIONS FOR RIGHTS CERTIFICATE
BY FIRST CLASS MAIL: BY HAND OR OVERNIGHT COURIER:
The Bank of New York Company, Inc. The Bank of New York Company, Inc.
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
Delivery to an address other than one of the addresses listed above will
not constitute valid delivery.
Delivery by facsimile will not constitute valid delivery.
PLEASE PRINT ALL INFORMATION CLEARLY AND LEGIBLY
IF YOU WISH TO SUBSCRIBE FOR YOUR FULL SUBSCRIPTION RIGHT OR A PORTION THEREOF:
I apply for shares X $5.75 = $
------------------ ----------------
(No. of new shares) (Amount Enclosed)
TO SUBSCRIBE: I acknowledge that I TO TRANSFER RIGHTS: For value
have received the Prospectus for received, ____ of the Rights represented
this offer and I hereby irrevocably by this Subscription Certificate are
subscribe for the number of shares assigned to:
indicated above on the terms and
conditions specified in the
Prospectus. I hereby agree that if
I fail to pay for the shares of
common stock for which I have
subscribed, the Company may
exercise its legal remedies
against me.
--------------------------------------
(Print Full Name of Assignee)
- ----------------------------------- --------------------------------------
(Print Full Address)
- ----------------------------------- --------------------------------------
Signature(s) of Subscriber(s) Signature(s) of Assignor(s)
Please give your telephone number: IMPORTANT: The Signature(s) must
( ) correspond in every particular, without
------------------- alteration, with the name(s) as printed on
the reverse of this Rights Certificate.
- -----------------------------------
Your Signature must be guaranteed by: (a) a
- ----------------------------------- commercial bank or trust company, (b) a
member firm of a domestic stock exchange,
- ----------------------------------- or (c) a credit union.
Address for delivery of shares if
other than shown on front.
Signature Guaranteed:
----------------------
(Name of Bank or Firm)
By:
----------------------------------------
(Signature of Officer)
YOU MUST HAVE YOUR SIGNATURE
GUARANTEED IF YOU WISH TO HAVE YOUR
SHARES DELIVERED TO AN ADDRESS
OTHER THAN THAT SHOWN ON THE FRONT
OF THIS CERTIFICATE.
<PAGE>
If permanent change of address,
check here [_]
FULL PAYMENT FOR THE SHARES MUST ACCOMPANY THIS FORM AND MUST BE MADE PAYABLE IN
UNITED STATES DOLLARS IN A CHECK OR BANK DRAFT DRAWN UPON A U.S. BANK OR POSTAL,
TELEGRAPHIC OR EXPRESS MONEY ORDER AND PAYABLE TO THE BANK OF NEW YORK COMPANY,
INC., AS RIGHTS AGENT.
STOCK CERTIFICATES FOR THE SHARES SUBSCRIBED TO PURSUANT TO THE RIGHTS OFFERING
WILL BE DELIVERED AS SOON AS PRACTICABLE AFTER THE DATE UPON WHICH YOU EXERCISE
YOUR RIGHTS.
ANY REFUND IN CONNECTION WITH YOUR SUBSCRIPTION WILL BE DELIVERED AS SOON AS
PRACTICABLE THEREAFTER.
<PAGE>
EXHIBIT 4.4
INSTRUCTIONS FOR USE OF BIONOVA HOLDING CORPORATION
RIGHTS CERTIFICATES
CONSULT CORPORATE INVESTOR COMMUNICATIONS, INC. (INFORMATION AGENT), OR
YOUR BANK OR BROKER WITH QUESTIONS
The following instructions relate to a rights offering (the "Rights
Offering") by Bionova Holding Corporation, a Delaware corporation ("Bionova"),
to the holders of its Common Stock, par value $.01 per share ("Common Stock"),
as described in Bionova's Prospectus dated May ___, 1999 (the "Prospectus").
Holders of record of Common Stock at the close of business on __________,
1999 (the "Record Date") are receiving three transferable subscription rights
(the "Rights") for every four shares of Common Stock held by them as of the
close of business on the Record Date. An aggregate of 17,691,023 Rights are
being distributed in connection with the Rights Offering. Each Right is
exercisable, upon payment of $5.75 in cash ("the Subscription Price"), to
purchase one share of Common Stock of Bionova (the "Subscription Privilege").
See "The Rights Offering" in the Prospectus.
No fractional Rights or cash in lieu thereof will be issued or paid. The
number of Rights issued to each record holder will be rounded up to the nearest
full Right.
The Rights will expire at 5:00 p.m., New York City Time, on May 31, 2000,
unless extended by Bionova (as it may be extended, the "Expiration Date").
The Rights are transferable, but there is currently no market for the
Rights. Bionova does not intend to apply for a listing or quotation for the
Rights on any stock exchange or stock market.
The number of Rights to which you are entitled is printed on the face of
your Rights Certificate. You should indicate your wishes with regard to the
exercise or transfer of your Rights by completing the appropriate section on the
back of your Rights Certificate and returning the Rights Certificate to the
Rights Agent in the envelope provided.
YOUR RIGHTS CERTIFICATES MUST BE RECEIVED BY THE RIGHTS AGENT, OR
GUARANTEED DELIVERY REQUIREMENTS WITH RESPECT TO YOUR RIGHTS CERTIFICATE MUST BE
COMPLIED WITH, ON OR BEFORE THE EXPIRATION DATE. PAYMENT OF THE SUBSCRIPTION
PRICE OF ALL RIGHTS EXERCISED, INCLUDING FINAL CLEARANCE OF ANY CHECKS, MUST BE
RECEIVED BY THE RIGHTS AGENT ON OR BEFORE THE EXPIRATION DATE. ONCE A HOLDER OF
RIGHTS HAS EXERCISED THE SUBSCRIPTION PRIVILEGE, SUCH EXERCISE MAY NOT BE
REVOKED.
1. SUBSCRIPTION PRIVILEGES.
To exercise Rights, complete the back of the Rights Certificate and send
your properly completed and executed Rights Certificate, together with payment
in full of the Subscription Price for each share of Common Stock subscribed for
pursuant to the Subscription Privilege, to the Rights Agent. Delivery of the
Rights Certificate must be made by mail or by overnight delivery. FACSIMILE
DELIVERY OF THE RIGHTS CERTIFICATE WILL NOT CONSTITUTE VALID DELIVERY. All
payments must be made in United States dollars by (i) check or bank draft drawn
upon United States bank or postal, telegraphic or express money order payable to
The Bank of New York Company, Inc., as Rights Agent; or (ii) in the case of
persons acquiring shares at an aggregate Subscription Price of $500,000 or more,
an alternative payment method arranged with the Rights Agent.
ACCEPTANCE OF PAYMENTS.
Payments will be deemed to have been received by the Rights Agent only upon
the (a) clearance of any uncertified check, (b) receipt by the Rights Agent of
any certified check or bank draft drawn upon a United States bank or postal,
telegraphic or express money order or (c) receipt of funds by the Rights Agent
through an agreed upon alternative payment method. IF PAYING BY UNCERTIFIED
PERSONAL CHECK, PLEASE NOTE THAT THE FUNDS PAID THEREBY MAY TAKE AT LEAST FIVE
BUSINESS DAYS TO CLEAR. ACCORDINGLY, HOLDERS OF RIGHTS WHO WISH TO PAY THE
SUBSCRIPTION PRICE BY MEANS OF UNCERTIFIED PERSONAL CHECK ARE URGED TO MAKE
PAYMENT SUFFICIENTLY IN ADVANCE OF THE EXPIRATION
<PAGE>
DATE TO ENSURE THAT SUCH PAYMENT IS RECEIVED AND CLEARS BY SUCH DATE. YOU ARE
URGED TO CONSIDER PAYMENT BY MEANS OF CERTIFIED OR CASHIER'S CHECK OR MONEY
ORDER.
EXERCISE THROUGH BANK OR BROKER; PROCEDURES FOR GUARANTEED DELIVERY.
You may also transfer your Rights Certificate to your bank or broker in
accordance with the procedures specified in Instruction 3(a) below, make
arrangements for the delivery of funds on your behalf and request such bank or
broker to exercise the Rights represented by such Rights Certificate on your
behalf. Alternatively, you may cause a written guarantee substantially in the
form available from the Rights Agent (the "Notice of Guaranteed Delivery") from
a member firm of a registered national securities exchange or a member of the
National Association of Securities Dealers, Inc. or a commercial bank or trust
company having an office or correspondent in the United States, to be received
by the Rights Agent on or prior to the Expiration Date guaranteeing delivery of
your properly completed and executed Subscription Certificate within three
Nasdaq National Market trading days following the date of the Notice of
Guaranteed Delivery. If this procedure is followed, your Rights Certificates
must be received by the Rights Agent within three Nasdaq National Market trading
days of the Notice of Guaranteed Delivery. Additional copies of the Notice of
Guaranteed Delivery may be obtained upon request from the Rights Agent at the
address, or by calling the telephone number, indicated below.
Banks, brokers and other nominee holders of Rights who exercise the
Subscription Privilege on behalf of beneficial owners of Rights will be required
to certify to the Rights Agent and Bionova as to the aggregate number of Rights
that have been exercised by each beneficial owner of Rights (including such
nominee itself) on whose behalf such nominee holder is acting. In the event such
certification is not delivered in respect of a Rights Certificate, the Rights
Agent shall for all purposes be entitled to assume that such certificate is
exercised on behalf of a single beneficial owner.
CONTACTING THE RIGHTS AGENT.
The address of the Rights Agent are as follows:
If by First Class Mail: Hand or Overnight Courier:
The Bank of New York Company, Inc. The Bank of New York Company, Inc.
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Delivery Window
New York, New York 10286-1248 New York, New York 10286
FACSIMILE TRANSMISSION: (212) 815-6213
(FOR ELIGIBLE INSTITUTIONS ONLY)
FOR CONFIRMATION BY TELEPHONE: (800) 507-9357
PARTIAL EXERCISES; EFFECT OF OVER- AND UNDERPAYMENTS.
If you exercise less than all of the Rights evidenced by your Rights
Certificate, the Rights Agent either (i) will issue to you a new Rights
Certificate evidencing the unexercised Rights or (ii) if you so indicate on your
Rights Certificate, will transfer the unexercised Rights in accordance with your
instructions. However, if you choose to have a new Rights Certificate sent to
you or to a transferee, you or such transferee may not receive any such new
Rights Certificate in sufficient time to permit sale or exercise of the Rights
evidenced thereby. If you have not indicated the number of Rights being
exercised, or if the dollar amount you have forwarded is not sufficient to
purchase (or exceeds the amount necessary to purchase) the number of shares
subscribed for, you will be deemed to have exercised the Subscription Privilege
with respect to the maximum number of whole Rights which may be exercised for
the Subscription Price payment delivered by you. To the extent that the
Subscription Price payment delivered by you exceeds the product of the
Subscription Price multiplied by the number of Rights evidenced by the Rights
Certificates delivered by you, the Rights Agent will mail to you such excess
funds (without interest or deduction).
2
<PAGE>
2. DELIVERY OF STOCK CERTIFICATES.
As soon as practicable after the valid exercise of Rights, the Rights Agent
will mail to each exercising Rights holder certificates representing shares of
Common Stock purchased pursuant to the Subscription Privilege at the address
shown on the face of your Rights Certificate unless you provide instructions to
the contrary on the back of your Rights Certificate.
3. TRANSFER RIGHTS.
To transfer all of your Rights to a transferee other than a bank or broker,
you must complete your Rights Certificate in its entirety, execute the Rights
Certificate and have your signature guaranteed by an Eligible Guarantor
Institution (as defined in Rule 17Ad-15 of the Securities Exchange Act of 1934),
subject to the standards and procedures adopted by the Rights Agent. A Rights
Certificate that has been properly transferred in its entirety may be exercised
by a new holder without having a new Rights Certificate issued. In order to
exercise, or otherwise take action with respect to, such a transferred Rights
Certificate, the new holder should deliver the Rights Certificate, together with
payment of the applicable Subscription Price and complete separate instructions
signed by the new holder, to the Rights Agent in ample time to permit the Rights
Agent to take the desired action. Because only the Rights Agent can issue Rights
Certificates, if you wish to transfer less than all of the Rights evidenced by
your Rights Certificate to a designated transferee, you must instruct the Rights
Agent as to the action to be taken with respect to the Rights not sold or
transferred, or you must divide your Rights Certificate into Rights Certificates
of appropriate smaller denominations by following the procedures set forth in
Instruction 4 below. The Rights Certificate evidencing the number of Rights you
intend to transfer can then be transferred by following the procedures set forth
in this Instruction 3(b).
NOTE: YOUR ABILITY TO TRANSFER YOUR RIGHTS WITHOUT EXERCISING THEM FOR COMMON
STOCK IS SUBJECT TO THE EXISTENCE OF AN ACTIVE TRADING MARKET FOR THE RIGHTS.
BIONOVA DOES NOT INTEND TO APPLY FOR A LISTING OR QUOTATION OF THE RIGHTS ON ANY
STOCK EXCHANGE OR STOCK MARKET. THEREFORE, YOU, YOUR BROKER OR YOUR BANK MAY BE
UNABLE TO TRANSFER THE RIGHTS.
4. TO HAVE A RIGHTS CERTIFICATE DIVIDED INTO SMALLER DENOMINATIONS.
To have a Rights Certificate divided into smaller denominations, send your
Rights Certificate, together with complete separate instructions (including
specification of the denominations into which you wish your Rights to be
divided) signed by you, to the Rights Agent, allowing a sufficient amount of
time for the Rights Certificates to be issued and returned so that they can be
used prior to the Expiration Date. Alternatively, you may ask a bank or broker
to effect such actions on your behalf. Your signature must be guaranteed by an
Eligible Guarantor Institution if any of the new Rights Certificates are to be
issued in a name other than that in which the old Rights Certificate was issued.
Rights Certificates may not be divided into fractional Rights, and any
instruction to do so will be rejected. As a result of delays in the mail, the
time of the transmittal, the necessary processing time and other factors, you or
your transferee may not receive such new Rights Certificates in time to enable
the Rights holder to complete a sale or exercise by the Expiration Date. Neither
Bionova nor the Rights Agent will be liable to either a transferor or transferee
for any such delays.
5. EXECUTION.
(a) EXECUTION BY REGISTERED HOLDER. The signature on the Rights
Certificate must correspond with the name of the registered holder exactly
as it appears on the face of the Rights Certificate without any alteration
or change whatsoever. Persons who sign the Rights Certificate in a
representative or other fiduciary capacity must indicate their capacity
when signing and, unless waived by the Rights Agent in its sole and
absolute discretion, must present to the Rights Agent satisfactory evidence
of their authority so to act.
(b) EXECUTION BY PERSON OTHER THAN REGISTERED HOLDER. If the Rights
Certificate is executed by a person other than the holder named on the face
of the Rights Certificate, proper evidence of authority of the person
executing the Rights Certificate must accompany the same unless the Rights
Agent, in its discretion, dispenses with proof of authority.
3
<PAGE>
(c) SIGNATURE GUARANTEES. Your signature must be guaranteed by an
Eligible Guarantor Institution (A) if you wish to transfer your Rights, as
specified in Instruction 3(b) above, to a transferee other than a bank or
broker, (B) if you wish a new Rights Certificate or Certificates to be
issued in a name other than that in which the old Rights Certificate was
issued, as specified in Instruction 4 above, or (C) if you specify special
payment or delivery instructions.
6. METHOD OF DELIVERY.
The method of delivery of Rights Certificates and payment of the
Subscription Price to the Rights Agent will be at the election and risk of the
Rights holder. If sent by mail, it is recommended that they be sent by
registered mail, properly insured, with return receipt requested, and that a
sufficient number of days be allowed to ensure delivery to the Rights Agent
prior to the Expiration Date.
7. SPECIAL PROVISIONS RELATING TO THE DELIVERY OF RIGHTS THROUGH DEPOSITORY
FACILITY PARTICIPANTS.
In the case of holders of Rights that are held of record through The
Depository Trust Company ("DTC"), exercises of the Subscription Privilege may be
effected by instructing DTC to transfer Rights (such Rights, "Depository
Rights") from the DTC account of such holder to the DTC account of the Rights
Agent, together with payment of the Subscription Price for each share of Common
Stock subscribed for pursuant to the Subscription Privilege.
8. SUBSTITUTE FORM W-9.
Each Rights holder who elects to exercise Rights must provide the Rights
Agent with a correct Taxpayer Identification Number ("TIN") on Substitute Form
W-9, substantially in the form provided with these instructions. A copy of
Substitute Form W-9 may be obtained upon request from the Rights Agent at the
address indicated above. Failure to provide information on the form may subject
such holder to a $50.00 penalty and to 31% back-up federal income tax
withholding with respect to dividends that may be paid by Bionova on shares of
Common Stock purchased upon the exercise of Rights and payments that may be
remitted to Rights holders by the Rights Agent in respect of Rights sold on such
holder's behalf by the Rights Agent.
4
<PAGE>
EXHIBIT 4.5
[BIONOVA LOGO APPEARS HERE]
6701 San Pablo Avenue
Oakland, California 94608
May __, 1999
To: Securities Dealers, Commercial Banks, Trust Companies, and Other Nominees
This letter is being distributed to securities dealers, commercial banks,
trust companies and other nominees in connection with the offering by Bionova
Holding Corporation ("Bionova" or "the Company") of an aggregate of 17,691,023
shares of Common Stock, par value $.01 per share ("Common Stock") of Bionova, at
a subscription price of $5.75 per share of Common Stock ("Subscription Price").
The rights are initially distributed to all holders of record of shares of
Bionova's Common Stock as of the close of business on ____________, 1999 (the
"Record Date"). The rights are described in the enclosed Prospectus and
evidenced by a Rights Certificate registered in your name or in the name of your
nominee.
Each beneficial owner of shares of Common Stock registered in your name or
the name of your nominee is entitled to three rights for every four shares of
Common Stock owned by such beneficial owner. Holders of record will not receive
fractional rights, but instead rights will be rounded up to the nearest full
right.
We are asking you to contact your clients for whom you hold shares of
Common Stock registered in your or in the name of your nominee to obtain
instructions with respect to the rights.
Enclosed are copies of the following documents:
1. Prospectus;
2. An instruction booklet regarding the exercise or transfer of Rights
including a form of Notice of Guaranteed Delivery and Substitute Form
W-9;
3. A form of letter from brokers to clients; and
4. A return envelope addressed to The Bank of New York Company, Inc., as
Rights Agent.
Your prompt action is requested. The rights will expire at 5:00 P.M., New
York City Time, on May 31, 2000, unless extended by Bionova (as it may be
extended, the "Expiration Date").
To exercise rights, properly completed and executed Rights Certificates and
payment in full for all rights exercised must be delivered to the Rights Agent
as indicated in the Prospectus prior to the Expiration Date, unless the
guaranteed delivery procedures described in the Prospectus are followed.
Additional copies of the enclosed materials may be obtained by contacting
the Company's Information Agent, Corporate Investor Communications, Inc. at
(877)460-2558.
Sincerely,
BIONOVA HOLDING CORPORATION
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON
AS AN AGENT OF BIONOVA HOLDING CORPORATION, THE RIGHTS AGENT OR ANY OTHER PERSON
MAKING OR DEEMED TO BE MAKING OFFERS OF THE COMMON STOCK ISSUABLE UPON VALID
EXERCISE OF THE RIGHTS, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY
STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFERING EXCEPT FOR
STATEMENTS MADE IN THE PROSPECTUS.
<PAGE>
EXHIBIT 4.6
RIGHTS OFFERING
for Shares of Common Stock
Bionova Holding Corporation
May ___, 1999
To Our Clients:
We are enclosing for your consideration a Prospectus dated May ___, 1999
describing the issuance to stockholders of record as of the close of business on
__________, 1999 (the "Record Date") of transferable rights ("Rights") to
purchase shares of Common Stock of Bionova Holding Corporation ("Bionova") at
the subscription price of $5.75 per share.
Your attention is directed to the following:
- Shareholders will receive three (3) transferable Rights for every four
(4) shares of Common Stock of Bionova held as of the close of business
on the Record Date. No fractional rights or cash in lieu thereof will
be paid, and the number of Rights distributed to each holder of record
of Common Stock will be rounded up to the nearest whole number of
Rights.
- One Right will entitle the holder to purchase one share of Common
Stock of Bionova at the subscription price of $5.75 per share.
- Although the Rights are transferable, there is currently no active
trading market for the rights. Bionova does not intend to apply for a
listing or quotation for the rights on any stock exchange or stock
market.
- The expiration date of the rights offering is 5:00 p.m. New York City
time, on May 31, 2000 unless extended by Bionova.
Since we are the holder of record of the shares of Common Stock of Bionova
held in your Account, we have received your transferable Rights. We will
exercise or sell your Rights only in accordance with your instructions. If you
do not give us your instructions, your Rights will become valueless after the
Expiration Date.
Please forward your instructions to us by completing the form on the
reverse side. Your Rights will expire at 5:00 p.m. New York City time, May 31,
2000, unless the rights offering is extended by Bionova.
<PAGE>
LETTER OF INSTRUCTIONS
To My Bank or Broker:
The undersigned acknowledges receipt of the Prospectus relating to the
rights offering by Bionova Holding Corporation ("Bionova"). This letter
instructs you to exercise the Rights, as indicated below, which you hold for the
account of the undersigned upon the terms and conditions set forth in the
Prospectus.
- EXERCISE _____________ Rights to purchase shares of Common Stock of
Bionova at the subscription price. (One Right is required for the
purchase of each share of Common Stock)
I am enclosing a check for $_______ (equal to the number of
shares to be purchased times the subscription price).
DATED:
---------------------- --------------------------------------
--------------------------------------
Signature(s)
--------------------------------------
Account Number
--------------------------------------
Please type or print name
<PAGE>
EXHIBIT 4.7
NOTICE OF GUARANTEED DELIVERY FOR SHARES OF
COMMON STOCK OF BIONOVA HOLDING CORPORATION
SUBSCRIBED FOR IN THE RIGHTS OFFERING
As set forth in the Prospectus dated May ___, 1999, under "The Rights
Offering -- Exercise of Rights," this form or one substantially equivalent
hereto may be used as a means of effecting subscription for shares of Common
Stock of Bionova Holding Corporation. Such form may be delivered by hand or
sent by telex, facsimile transmission, overnight courier or mail to the Rights
Agent.
THE RIGHTS AGENT IS
THE BANK OF NEW YORK COMPANY, INC.
BY MAIL: BY HAND OR OVERNIGHT COURIER:
Tender and Exchange Department Tender and Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
FACSIMILE TRANSMISSION
(FOR ELIGIBLE INSTITUTIONS ONLY):
(212) 815-6213
CONFIRMATION BY TELEPHONE:
(800) 507-9357
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS
VIA A TELECOPY FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE, DOES NOT
CONSTITUTE A VALID DELIVERY.
Prior to 5:00 p.m., New York City time, on the Expiration Date, the member
firm of a registered national securities exchange or member of the National
Association of Securities Dealers, Inc., or commercial bank or trust company
which completes this form must communicate the guarantee, the name of the
exercising Rights holder, the number of Rights represented by the Rights
Certificate(s) held by such exercising holder and the number of shares
subscribed for in this Rights Offering to the Rights Agent and must deliver this
Notice of Guaranteed Delivery, fully completed and duly executed on the reverse
hereof, together with payment in full for all subscribed shares, guaranteeing
delivery of a properly completed and signed copy of the Rights Certificate to
the Rights Agent. Failure to do so will result in a forfeiture of the Rights.
<PAGE>
GUARANTEE
The undersigned, a member of the firm of a registered national securities
exchange or member of the National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or correspondent in the United
States, guarantees delivery to the Rights Agent by the close of business on the
third Nasdaq National Market trading day following the date hereof, of a
properly completed and duly executed Rights Certificate evidencing the Rights
being exercised as indicated herein.
Number of Rights to be delivered ________________
Method of delivery (circle one) A. Through DTC*
B. Direct to Rights Agent
- ----------------------------------------
Number of Shares Subscribed for
pursuant to Rights Offering
- ---------------------------------------- ----------------------------------
Name of Firm Authorized Signature
- ---------------------------------------- ----------------------------------
Address Title
Name
- ---------------------------------------- ------------------------------
Zip Code (Please Type or Print)
- ---------------------------------------- ----------------------------------
Contact Name Phone Number
Dated_________________, 1999
*IF THE RIGHTS ARE DELIVERED THROUGH DTC, A REPRESENTATIVE OF THE BANK OF NEW
YORK COMPANY, INC. WILL PHONE YOU WITH A PROTECT IDENTIFICATION NUMBER, WHICH
NEEDS TO BE RELATED BY YOU TO DTC.
<PAGE>
EXHIBIT 4.8
SPECIAL NOTICE TO HOLDERS OF
BIONOVA HOLDING CORPORATION
COMMON STOCK
WHOSE ADDRESSES ARE OUTSIDE
THE UNITED STATES
Dear Stockholder:
Enclosed you will find materials relating to the distribution (the "Rights
Offering") by Bionova Holding Corporation (the "Bionova") to holders of the
Bionova's Common Stock, par value $.01 per share (the "Common Stock"), of record
as of the close of business on __________, 1999, (the "Record Date") of
transferable rights ("Rights") to subscribe for and purchase shares of the
Bionova's Common Stock on the basis of three (3) Rights for every four (4)
shares of Common Stock held as of record on the Record Date. A Rights
Certificate representing Rights to subscribe for shares of the Bionova's Common
Stock at $5.75 per share is not included in this mailing, but instead in being
held on your behalf by the Rights Agent, The Bank of New York Company, Inc. If
you wish to exercise any or all of these Rights, you must so instruct the Rights
Agent in the manner described in the accompanying Prospectus and Instructions as
to Use of Bionova Holding Corporation Rights Certificates by 5:00 p.m., New York
City time, on May 31, 2000, unless the Rights Offering is extended by the
Company (as it may be extended, the "Expiration Date"). Rights not exercised by
such time will expire and become worthless.
ANY QUESTIONS OR REQUESTS FOR ASSISTANCE CONCERNING THE RIGHTS OFFERING
SHOULD BE DIRECTED TO CORPORATE INVESTOR COMMUNICATIONS, INC., THE INFORMATION
AGENT AT (877) 460-2558.
<PAGE>
EXHIBIT 4.9
IMPORTANT TAX INFORMATION
Under federal income tax law, dividend payments that may be made by DNAP
Holding Company ("DNAP") on shares of common stock issued pursuant to the
exercise of rights may be subject to backup withholding. In order to avoid
backup withholding, you must provide us with your current TIN on Substitute Form
W-9 below. If you are an individual, the TIN is your Social Security number.
If we are not provided with the correct TIN, you may be subject to a $50 penalty
imposed by the Internal Revenue Service. In addition, any exercise of rights by
you may be subject to 31% backup withholding tax.
You may not be subject to these backup withholding and reporting
requirements (for example, corporations, in most cases, and certain foreign
individuals are not subject to backup withholding). If you are a foreign
individual wishing to qualify as an exempt recipient, you must submit to us a
properly completed Form W-8, signed under penalties of perjury, attesting to
your exempt status. A Form W-8 can be obtained from DNAP. See the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9" for additional instructions.
If backup withholding applies, we are required to withhold 31% of any
payment paid to you. Backup withholding is not an additional tax. Rather, the
federal income tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service provided
the required information is furnished.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on any payment made to you with respect to
the exercise of the rights, you are required to notify us of your current TIN
(or the TIN of any other payee) by completing the form below, certifying that
the TIN provided on Substitute Form W-9 is correct (or that you are awaiting a
TIN), and that (i) you are exempt from backup withholding, (ii) you have not
been notified by the Internal Revenue Service that you are subject to backup
withholding as a result of failure to report all interest or dividends or (iii)
the Internal Revenue Service has notified you that you are no longer subject to
backup withholding. The box in Part 3 of the Substitute Form W-9 may be checked
if you (or other payee) have not been issued a TIN and have applied for a TIN or
intend to apply for a TIN in the near future. If the box in Part 3 is checked
and we are not provided with a TIN within 60 days, we will withhold 31% on all
payments, if any, until a TIN is provided to us.
WHAT NUMBER TO GIVE BIONOVA
You are required to give us the TIN (e.g., Social Security number or
Employer Identification Number) of the record owner of the rights. If the
rights are registered in more than one name or are not registered in the name of
the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9," for additional guidance on which
number to report.
<PAGE>
<TABLE>
<CAPTION>
<S><C>
- ----------------------------------------------------------------------------------------------------------
PAYER'S NAME: Bionova Holding Corporation
- ----------------------------------------------------------------------------------------------------------
PAYEE'S NAME:
- ----------------------------------------------------------------------------------------------------------
BUSINESS NAME (IF DIFFERENT):
- ----------------------------------------------------------------------------------------------------------
ADDRESS:
- ----------------------------------------------------------------------------------------------------------
MARK APPROPRIATE BOX: INDIVIDUAL/SOLE PROPRIETOR CORPORATION PARTNERSHIP OTHER
- ----------------------------------------------------------------------------------------------------------
SUBSTITUTE Part 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT --------------------------------
RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. Social Security Number(s)
FORM W-9
OR
------------------------------
Employer Identification
Number(s)
---------------------------------------------------------------------------------
DEPARTMENT OF THE PART 2-- PART 3--
TREASURY CERTIFICATION - Under Penalties of Perjury, I Awaiting TIN / /
INTERNAL REVENUE certify that:
SERVICE
(1) The number shown on this form is my
correct taxpayer identification number (or
I am waiting for a number to be issued for
me), and
(2) I am not subject to backup withholding
because: (a) I am exempt from backup
withholding, or (b) I have not been
notified by the Internal Revenue Service
(IRS) that I am subject to backup
withholding as a result of a failure to
report all interest or dividends, or (c)
the IRS has notified me that I am no
longer subject to backup withholding.
---------------------------------------------------------------------------------
PAYER'S REQUEST FOR CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been
TAXPAYER IDENTIFICATION notified by the IRS that you are currently subject to backup withholding because
NUMBER ("TIN") you have failed to report all interest or dividends on your tax return. THE
INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS
DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.
SIGNATURE DATE
---------------------------------------- ----------------------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A $50 PENALTY
IMPOSED BY THE INTERNAL REVENUE SERVICE AND BACKUP WITHHOLDING OF 31%
OF THE DISTRIBUTION MADE TO YOU. PLEASE REVIEW THE ENCLOSED
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
NOTE: YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 3 OF THE SUBSTITUTE FORM W-9.
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration office or (2)
I intend to mail or deliver an application in the near future. I understand
that if I do not provide a taxpayer identification number within 60 days, 31% of
all reportable payments made to me thereafter may be withheld until I provide a
taxpayer identification number.
SIGNATURE DATE
------------------------------------------- -----------------------
- --------------------------------------------------------------------------------
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the Payer -
Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the name and
number to give the payer.
<TABLE>
- ----------------------------------- --------------------------------
<CAPTION>
For this type of account: Give the name and
SOCIAL SECURITY number of --
- ----------------------------------- --------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of the account
account) or, if combined funds, the first
individual on the account (1)
3. Custodian account of a minor The minor (2)
(Uniform Gift to Minors Act)
4. a. The usual revocable The grantor-trustee (1)
savings trust account
(grantor is also trustee)
b. So-called trust account The actual owner (1)
that is not a legal or
valid trust under State
law
5. Sole proprietorship account The owner (3)
- ----------------------------------- --------------------------------
<CAPTION>
For this type of account: Give the name and EMPLOYER
IDENTIFICATION number of--
- ----------------------------------- --------------------------------
<S> <C>
6. A valid trust, estate, or Legal entity (Do not furnish the
pension trust identifying number of the
personal representative or
trustee unless the legal entity
itself is not designated in the
account title.) (4)
7. Corporate account The corporation
8. Association, club, religious, The organization
charitable, educational, or
other tax-exempt organization
account
9. Partnership The partnership
10. A broker or registered nominee The broker or nominee
11. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State
or local government, school
district or prison) that
receives agricultural program
payments.
</TABLE>
- ----------------------------------- --------------------------------
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a social security number that
person's number must be furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name. You may also enter your business or
"doing business as" name. You may use either your social security number
or, if you have one, your employer identification number.
(4) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name listed, the
number will be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at a local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number. You may also obtain Form SS-4 by calling the IRS at 1-800-TAX-FORM.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- - An organization exempt from tax under section 501(a), or an individual
retirement account.
- - The United States or any wholly-owned agency or instrumentality thereof.
- - A state, the District of Columbia, a possession of the United States, or
any political subdivision or wholly-owned agency or instrumentality
thereof.
- - A foreign government, a political subdivision of a foreign government, or
any wholly-owned agency or instrumentality thereof.
- - An international organization or any wholly-owned agency or instrumentality
thereof.
Payees specifically exempted from backup withholding on interest and dividend
payments include the following:
- - A corporation.
- - A financial institution.
- - A registered dealer in securities or commodities registered in the U.S.,
the District of Columbia, or a possession of the U.S.
- - A real estate investment trust.
- - A common trust fund operated by a bank under section 584(a).
- - An exempt charitable remainder trust, or a non-exempt trust described in
section 4947.
- - An entity registered at all times during the tax year under the Investment
Company Act of 1940.
- - A foreign central bank of issue.
- - A middleman known in the investment community as a nominee or who is listed
in the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List.
PAYMENTS EXEMPT FROM BACKUP WITHHOLDING
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- - Payments to nonresident aliens subject to withholding under section 1441.
- - Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
- - Payments of patronage dividends not paid in money.
- - Payments made by certain foreign organizations.
- - Section 404(k) payments made by an ESOP.
Payments of interest not generally subject to backup withholding include the
following:
- - Payments of interest on obligations issued by individuals. Note: You may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
- - Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- - Payments described in section 6049(b)(5) to non-resident aliens.
- - Payments on tax-free covenant bonds under section 1451.
- - Payments made by certain foreign organizations.
Exempt payees described above may file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND DATE THE
FORM, AND RETURN IT TO THE PAYER.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see sections 6041, 6041A, 6042, 6044, 6045, 6049,
6050A, 6050N, and their regulations.
Privacy Act Notice. Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes and to help verify the accuracy of tax returns. The IRS also may
provide this information to the Department of Justice for civil and criminal
litigation and to cities, states, and the District of Columbia to carry out
their tax laws. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish a
taxpayer identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) Penalty for Failure to Furnish Taxpayer identification Number.-If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) Civil Penalty for False information With Respect to Withholding.-If you make
a false statement with no reasonable basis that results in no backup
withholding, you are subject to a penalty of $500.
(3) Criminal Penalty for Falsifying Information.-Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
EXHIBIT 5
[Thompson & Knight, P.C. Letterhead]
(214) 969-1437
April 21, 1999
DNAP Holding Corporation
6701 San Pablo Avenue
Oakland, California 94608
Re: Registration Statement on Form S-3
Gentlemen:
We have acted as counsel for DNAP Holding Corporation (the "Company") in
connection with the registration under the Securities Act of 1933 (the
"Securities Act") of 8,572,589 shares (the "Shares") of its common stock, par
value $0.01 per share, issuable upon exercise of the rights (the "Rights") that
are described in the Company's Registration Statement on Form S-3 (the
"Registration Statement"), filed with the Securities and Exchange Commission
(the "Commission") under the Securities Act, as such Registration Statement may
be amended from time to time. In connection with the filing of the Registration
Statement, you have requested our opinion concerning certain corporate matters.
In connection with rendering the opinion expressed below, we have examined
the originals or copies, certified or otherwise authenticated to our
satisfaction, of such corporate records of the Company, certificates of public
officials and other instruments and documents as we have deemed necessary to
require as a basis for the opinions hereafter expressed. As to questions of
fact material to such opinions, we have, where relevant facts were not
independently established, relied upon statements of officers of the Company.
Based upon the foregoing and the further qualifications stated below, we
are of the opinion that:
Upon (a) the effectiveness of the Registration Statement, (b) the
distribution of the Rights as set forth therein, and (c) the exercise of
the Rights and the issuance and sale of the Shares upon the exercise of
Rights in accordance with the terms and conditions set forth in the
Registration Statement, including the payment in full of the subscription
price therefor, the Shares will be legally issued, fully paid and
non-assessable.
We hereby consent to the filing of this opinion with the Commission as
Exhibit 5 to the Registration Statement and to the reference to us in the
Prospectus under the caption "Legal
<PAGE>
April 21, 1999
Page 2
Matters." 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 within the rules or regulations of the Commission thereunder.
Very truly yours,
THOMPSON & KNIGHT,
A Professional Corporation
By: /s/ Michael C. Titens
---------------------------------
Michael C. Titens,
Attorney
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
DNAP Holding Corporation
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated March 23, 1999 appearing on page 29 of DNAP Holding Corporation's
Annual Report on Form 10-K for the year ended December 31, 1998. We also
consent to the reference to us under the heading "Experts" in such Prospectus.
PRICEWATERHOUSECOOPERS LLP
San Diego, California
April 15, 1999
