Manufacturing And Shared Service Agreement

EXHIBIT 10.12

MANUFACTURING AND SHARED SERVICE AGREEMENT

THIS AGREEMENT is made as of December 31, 2007 (" Effective Date" ) (this " Agreement" ) by and between BASF Corporation, a Delaware corporation (" BASF" ), with offices at 100 Campus Drive, Florham Park, New Jersey 07932, and AMVAC Chemical Corporation, a California corporation, with offices at 4695 MacArthur Court, Suite 1250, Newport Beach, CA 92660 (" AMVAC" ). All capitalized terms herein, not otherwise defined, shall have the same meaning given to them in that certain Sale and Purchase Agreement by and between AMVAC and BASF, dated November 27, 2006 (the " SPA" ).

WHEREAS, AMVAC and BASF' s parent company BASF Aktiengesellschaft entered into a Sale and Purchase Agreement dated November 17, 2006 (" SPA" ), and pursuant to Article 3 of the terms of that SPA, AMVAC exercised its option to purchase those certain assets defined and set forth in the SPA as the Optioned Assets, and have purchased such Optioned Assets as of the Option Closing Date; and

WHEREAS, in connection with such purchase BASF and AMVAC have entered into a lease of that certain parcel of land described in a Ground Lease as of the Option Closing Date; and

WHEREAS, AMVAC desires to obtain from BASF and BASF desires to provide certain manufacturing services and the sharing of support services as more fully set forth herein. NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein, the parties agree as follows: WITNESSETH:

1. Definitions. (a) All capitalized terms not defined herein shall have the definition set forth in the SPA. (b) " Hannibal Site" shall mean BASF's production site located in Hannibal, Missouri, U.S.A. (c) Reserved.

(d) " Product(s)" shall mean those products listed on Exhibit B of the SPA. New products may be added to the definition of Products upon the written agreement of both Parties, which agreement shall not be unreasonably withheld or delayed, provided however, that BASF may take into account, without limitation, the following factors in considering the appropriateness of new products proposed by AMVAC: (i) the compatibility of the proposed new product and its associated equipment, raw materials, intermediates, and waste streams, with those already existing at, and planned for, the Hannibal Site, and (ii) the ability of BASF to stay within all regulatory permit conditions. As part of the new product discussions between the parties as contemplated by this section, AMVAC shall provide adequate information and training to BASF concerning any agreed new product, including without limitation the information set forth on Exhibit B-1. Once new products are accepted, all terms related to Products, including without limitation the Management Fee set forth in Exhibit I, shall apply to such new products.


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(e) " Services" shall mean those activities and services described in this Agreement and all other services, sites, equipment, material and activities, including labor and performance, necessary, incidental or appropriate to provide the services called for in this Agreement, in a safe, clean, prompt and efficient manner. (f) " T/C Unit" shall mean the T/C Site as defined in the SPA located on the property as defined in the Ground Lease. 2. Services.

(a) During the Term, and in consideration of the fee set forth in Section 4, BASF shall: (i) purchase and pay for, receive, and store (subject to the storage limitations set forth in Exhibit M) quantities of raw materials (mutually agreed upon as set forth more fully in Exhibit E) and packaging materials, and (ii) manufacture, load, ship and deliver, such quantities of Product, both as shall from time to time be specified by AMVAC. Manufacturing of the Product shall take place only at the T/C Unit using the Manufacturing Equipment, and warehousing and other non-manufacturing facilities. However, the parties acknowledge that the Services shall further include all necessary services and infrastructure provided at the Hannibal Site necessary for BASF to meet its obligations under this Agreement in a timely manner. The Services may only be conducted at facilities that operate in compliance with all Federal, State and local laws and in conformance with good practices. The Services shall also include quality assurance and quality control (QA/QC) services for AMVAC. BASF will not change any process qualified for use in the production of Products without the prior written consent of AMVAC, except that BASF may change such processes within the current ranges of accepted and existing process controls. BASF also agrees to test and approve production lots according to an agreed upon sample and control plan.

(b) So long as AMVAC performs its obligations under Section 8, BASF shall maintain the Manufacturing Equipment and other Hannibal Site resources, including employees, necessary to provide the Services to AMVAC pursuant to this Agreement.

(c) BASF shall operate the T/C Unit in compliance with BASF's then applicable Hannibal Site policies relating to health and safety, and applicable permit and other legal requirements and restrictions.

(d) The Parties acknowledge that a crew of operational, supervisory and clerical personnel, as set forth at Exhibit K (" Direct Charged Personnel" ), shall be charged directly to the T/C Unit. In the event the T/C Unit does not need the services of one or more of the Direct Charged Personnel, and BASF is able to employ such personnel, then AMVAC will be credited for all hours they are employed outside the T/C Unit, at the rate BASF then is able to obtain for temporary workers for such work. BASF shall have no obligation to employ such personnel outside the T/C Unit. BASF shall take direction from AMVAC concerning the employment at the T/C Unit of any unused Direct Charged Personnel.

(e) AMVAC grants to BASF and its Affiliates a revocable, paid up, royalty free, T/C Unit based license to use the Divested Transferred Rights to the extent necessary to perform BASF' s obligations under this Agreement. BASF shall have the right to sublicense such rights to their permitted assigns, coextensive with BASF rights to assign this Agreement to a third party under Section 23 herein.

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(f) BASF reserves the right, upon reasonable notice to AMVAC, to decline to operate the Manufacturing Equipment at the T/C Unit if BASF deems it unsafe to do so.

3. Volume Forecasts. (a) Forecast : Each month AMVAC will for planning purposes provide to BASF a non-binding rolling written forecast of its estimated monthly requirements for Products for the ensuing eighteen (18) month period.

(b) Binding Forecast : At least six (6) months prior to the date of delivery, AMVAC shall submit a binding order for Product. AMVAC is responsible for variable costs to the extent reasonably incurred in reliance on such forecast, changes that are made thereto, and other direction given to BASF from time to time. BASF agrees that to the extent reasonably practicable, it will provide AMVAC with a best estimate of forecast changes and the potential impact on scheduled production as a result of other directions made by AMVAC .

(c) Deliveries : BASF shall make commercially reasonable efforts to meet delivery schedule specified by AMVAC, but BASF shall have no liability to AMVAC if, despite BASF' s efforts, a particular delivery is not made on schedule.

4. Payment for Services. (a) In consideration of the Services rendered pursuant to this Agreement, AMVAC shall pay monthly BASF a fee equal to: ***.

(b) BASF shall accept, in connection with the Services called for hereby, exclusive liability for the payment of any wages, salaries or other remuneration paid to any and all persons employed by BASF in connection with the performance of the Services and other direct costs associated with the Services. BASF shall also accept exclusive liability for the payment and reporting of any taxes or contributions for Social Security, unemployment insurance, old age payments, annuities or retirement benefits which are measured by such wages, salaries or other remuneration paid by it in connection with the performance of the Services and comply with all applicable rules and regulations respecting the assumption of liability for any of the aforesaid taxes or contributions.

(c) BASF shall invoice AMVAC at the end of each calendar month for the fees for that month set forth in Section 4(a). 5. Payment Terms.

AMVAC shall pay the invoices referenced in Section 4(c) above within forty-five (45) days from invoice date. Any invoiced amount not paid by the forty-sixth (46 th ) day following the invoice date (the " Forty-Sixth Day" ) will accrue interest at the default interest rate set forth in Section 17.4 of the SPA from the Forty-Sixth Day to the date of payment.


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6. Term.

(a) This Agreement shall commence on the Effective Date and shall continue in effect twenty (20) years, and shall renew for additional one (1) year terms thereafter, unless terminated by either party at the end of the initial, or any subsequent term by written notice given six (6) months in advance of the end of such term (the " Term" ).

(b) AMVAC shall have an immediate right to terminate this Agreement and the Ground Lease by providing written notice to BASF in the event that (A) BASF is in material breach of any of the provisions of this Agreement and does not (i) either cure such breach within thirty (30) days after the date of such notice or, (ii) if cure can not be accomplished within thirty (30) days, begin such cure within such thirty (30) days and proceed diligently to effect such cure thereafter, or (B) BASF (i) ceases to function as a going concern, (ii) makes an assignment for the benefit of its creditors, (iii) becomes the subject of any proceeding under applicable bankruptcy, receivership, insolvency or similar laws instituted by or against AMVAC, which proceeding is not dismissed as to AMVAC within forty-five (45) days after it has been instituted, or (iv) liquidates or dissolves. BASF shall have an immediate right to terminate this Agreement and the Ground Lease by providing written notice to AMVAC in the event that (A) AMVAC is in breach of any of the provisions of this Agreement and does not cure such breach within thirty (30) days after the date of such notice, or (B) AMVAC (i) ceases to function as a going concern, (ii) makes an assignment for the benefit of its creditors, (iii) becomes the subject of any proceeding under applicable bankruptcy, receivership, insolvency or similar laws instituted by or against BASF, which proceeding is not dismissed as to BASF within forty-five (45) days after it has been instituted, or (iv) liquidates or dissolves.

(c) AMVAC shall have the right to assume the operations of the T/C Unit, upon one hundred eighty (180) days written notice to BASF. In that event: (i) AMVAC shall pay to BASF all the training costs associated with retraining of each of the BASF operating personnel covered by a collective bargaining agreement as such personnel are reassigned (through any " bid and bump" procedure then in effect with any collective bargaining agreement) into BASF jobs outside the T/C Unit, and (ii) the fee payable to BASF shall be reduced as set forth on Exhibit J. AMVAC shall thereafter be responsible for all operation of the T/C Unit, and BASF shall be responsible only for the providing of the Services as set forth on Exhibit H and those Services set forth on Exhibit F.

(d) AMVAC shall have the right to cease operations at the Hannibal facility, upon one hundred eighty (180) days prior written notice, to terminate this Agreement and the Ground Lease without cause, provided that AMVAC shall be responsible for the Shutdown Costs (defined in Section 7).

(e) The Parties intend that all obligations of this Agreement shall be performed, and accordingly, any provisions and obligations of this Agreement that must survive termination or expiration of this Agreement for their fulfillment shall so survive.

7. Termination and Obligation to Remove Manufacturing Equipment.

Upon termination of the Agreement, AMVAC will remove at its sole cost and expense and will assume sole responsibility and liability for the dismantling, cleaning and removal of the Manufacturing Equipment and Improvements as defined in the Ground Lease from the T/C Unit as set forth more fully in the Ground Lease (" Shutdown Costs" ). In the event BASF assigns this Agreement, by operation of law or otherwise to a non-Affiliate, and AMVAC within two (2) years of such assignment elects, pursuant to Section 6(d) to terminate this Agreement and the Ground Lease, then notwithstanding the provisions set forth above, AMVAC shall be relieved of the obligation to pay Shutdown Costs, but will make to BASF' s Assignee a one time payment of *** on the last day of this Agreement.


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8. Maintenance Capital and Identified Capital Expenditures. (a) As described in Section 4(v) hereof, AMVAC shall pay to BASF the costs of maintenance capital items above five thousand US Dollars ($5,000.00) expended at the T/C Unit which (i) appreciably extend the life of the Manufacturing Equipment or (ii) are necessary for the mechanical reliability of the Manufacturing Equipment to produce Products or (iii) for the protection of health, safety and the environment. An item shall only be defined as maintenance capital if doing so would be consistent with past practices at the Hannibal Site. BASF agrees to provide AMVAC with a maintenance capital appropriation request prior to incurring any such cost, to which AMVAC may consent or not in its reasonable discretion.

AMVAC has in Section 8.4 of the SPA committed to reimburse BASF the costs of the Maintenance Capital items set forth in Exhibit C, and in reliance upon such commitment, BASF has previously undertaken such Maintenance Capital efforts. AMVAC shall have the right to retain a third party to perform maintenance capital items provided that (a) AMVAC shall pay such third party directly for such work and such work shall be removed from AMVAC' s payment responsibilities in the maintenance capital budget, (b) the third party must perform the work to reasonable standards required by BASF, (c) such third party shall agree to abide by BASF' s contractor Hannibal Site rules and policies in effect at such time, and (d) the retention of such third party complies with the Hannibal Site collective bargaining agreement(s) in place at such time.

(b) AMVAC agrees that it shall, at its sole cost and expense, perform, or arrange with third parties to perform, all engineering services associated with identified capital improvements set forth on Exhibit C which remain unimplemented as of the Effective Date of this Agreement. (c) AMVAC acknowledges that under no circumstances is BASF required to perform or provide to AMVAC engineering services, but further acknowledges that, in order to safe ...