LICENSE AND SUPPLY AGREEMENT

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT. PORTIONS FOR WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED BY “[*]”. CONFIDENTIAL INFORMATION OMITTED HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

EXHIBIT 10.1

 

LICENSE AND SUPPLY AGREEMENT

 

THIS LICENSE AND SUPPLY AGREEMENT is entered into as of the Effective Date (as that term is defined in Section 1.23) by and between BASF Aktiengesellschaft, a corporation organized under the laws of Germany and having its principal offices at 67056 Ludwigshafen, Germany (“ BASF ”) and AMVAC Chemical Corporation, a corporation organized under the laws of California, United States of America and having its principal offices at 4695 MacArthur Court, Suite 1250, Newport Beach, CA 92660 United States of America (“ AMVAC ”). Each of BASF and AMVAC shall be referred to individually as a “ Party ” and collectively as the “ Parties .”

 

W I T N E S S E T H

 

WHEREAS , BASF discovered the Compound (as that term is defined in Section 1.16) as well as certain proprietary and confidential know-how relating thereto, and is in the late stages of developing the Compound as a post-emergent grass and broadleaf herbicide;

 

WHEREAS , during [*], BASF permitted AMVAC and others to evaluate potential commercialization opportunities with respect to use of the Compound in corn in the United States of America, its territories and possessions (the “ US ”) and Canada;

 

WHEREAS , AMVAC desires to expand its corn herbicide portfolio and to develop further and obtain registrations for the Compound for use in corn in the US and Canada (together with the US, the “ Territory ”) in return for certain exclusive and nonexclusive commercialization rights and BASF is willing to grant AMVAC such rights;

 

WHEREAS , the Parties entered into a Letter of Intent dated [*], as amended (the “ LOI ”), pursuant to which BASF granted AMVAC a [*] patent and know-how license in order to enable AMVAC to undertake development activities with respect to the Compound in the Territory and, subject to certain provisos, AMVAC agreed to pay the so-called “fee for service” fees to the US’s Environmental Protection Agency (the “ EPA ”) in order to avoid potentially adverse developments in the registration process for the Compound in the US;

 

WHEREAS , the Parties agreed in Section 1 of the LOI to negotiate exclusively with one another in good faith during the Interim Term (as that term is defined in the LOI) with respect to the terms and conditions of a license and supply agreement under which BASF would, among other things, grant to AMVAC certain rights in the Territory with respect to the [*] Patent (as that term is defined in Section 1.22) and BASF proprietary intellectual property related to the Compound and AMVAC would, among other things, obtain registrations in the Territory for the Compound TGAI (as that term is defined in Section 1.18) and end-use products containing such Compound TGAI as an herbicidal active ingredient for use in corn in the Territory; and

 

WHEREAS , the Parties desire to set forth in this instrument the terms and conditions of said license and supply agreement.

 

NOW , THEREFORE , in consideration of the premises as well as the representations, warranties, covenants and agreements hereinafter set forth and intending to be legally bound, the Parties agree as follows:

 

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ARTICLE I

DEFINITIONS

 

Unless the context otherwise requires, the capitalized terms defined below shall have the meanings specified and any term referred to in the singular shall be deemed to include the plural and vice versa as the context requires:

 

1.1 “ Access Fee ” refers to those fees calculated in accordance with (i) the Additional Data, Additional Initial Registration Work Data, and New Study Data compensation formula set forth in Schedule 1.1 (the “ Data Depreciation Formula ”) and (ii) the New Study Data compensation formula set forth in Schedule 1.1 (the “ Data Compensation Formula ”).

 

1.2 “ Additional Development Work ” means (i) any Interim Term Development Work (as that term is defined in the LOI) completed prior to the Effective Date and (ii) any study or other development work (a) conducted by or on behalf of AMVAC with respect to the Compound TGAI or the Solo Product on or after the Effective Date including, without limitation, Interim Term Development Work which continues during the Term, (b) required by the EPA or PMRA in order to file for and obtain the Initial Registrations including, without limitation, those biology studies, accumulation studies, and Product formulation development work to which Schedule 1.2 refers, and (c) the aggregate costs for which do not exceed [*].

 

1.3 “ Additional Data ” means any data resulting from Additional Development Work. For the avoidance of doubt, Interim Term Data (as that term is defined in the LOI) existing as of the Effective Date shall be deemed Additional Data for purposes of this Agreement.

 

1.4 “ Affiliate ” means any Person which controls (as hereinafter defined), is controlled by or is under common control with a Party, by way of direct or indirect ownership of more than fifty percent (>50%) of the voting stock or the equity thereof, as the case may be. For purposes of this Section 1.4, “controlling,” “controlled” and “control” mean the power to direct or influence the management and policies of the Party in question, whether through the ownership of voting securities, by contract or otherwise.

 

1.5 “ Agreement ” means this instrument.

 

1.6 “ AMVAC Confidential Information ” means (i) AMVAC Development Work (as that term is defined in Section 2.1(A)) and (ii) AMVAC Data (as that term is defined in Section 2.4(A)(iii)(c)).

 

1.7 “ Applicable Law ” means any law, statute, regulation and ordinance of any Governmental Authority having jurisdiction over or related to any Registration, the Compound TGAI, any Product, or BASF Know-How, Information and Data in the Territory.

 

1.8 “ Applicable Permit ” means any waiver, exemption, variance, permit, authorization, license or similar approval required to be obtained or maintained under any Applicable Law.

 

1.9 “ BASF Confidential Information ” means (i) BASF Know, How, Information and Data, (ii) Joint Additional Initial Registration Work and Joint Additional Initial Registration Work Data (as those terms are defined in Section 2.4(A)(i)), and (iii) Joint New Studies, Joint New Study Data, BASF New Studies, and BASF New Study Data (as those terms are defined in Section 2.4(A)(ii)).

 

1.10 “ BASF Know-How, Information and Data ” means that certain BASF formulation know-how and information with respect to each of the Compound TGAI, BASF Products, and the Solo Product to which Schedule 1.10 refers, as well as the BASF Study Data, in existence as of the Effective Date, the

 

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1.11 “ BASF Patents ” means those BASF patents and patent applications listed in Schedule 1.11 and all divisionals, reissues, reexaminations, term extensions, continuations and continuations-in-part thereof.

 

1.12 “ BASF Products ” means each [*] (i) which contains as its only active ingredients Compound TGAI and that compound commonly referred to as [*] and (a) for the US, has [*] use rate or such lower use rate to which BASF consents in writing or (b) for Canada, has [*] or such lower use rate to which BASF consents in writing or (ii) which contains as its active ingredients Compound TGAI and [*], at least one of which is proprietary to BASF and (y) for the US, has [*] or such lower use rate to which BASF consents in writing or (z) for Canada, has [*] or such lower use rate to which BASF consents in writing.

 

1.13 “ BASF Study Data ” means only those data which results from studies that (i) were initiated by or on behalf of BASF with respect to the Compound TGAI and/or any Product prior to commencement of the Interim Term and (ii) are required by the EPA or PMRA in order to file for and obtain a Registration(s) for the Compound TGAI. For the avoidance of doubt, all BASF Study Data is identified in Schedule 1.13 .

 

1.14 “ Cite ” means (i) with respect to AMVAC, it shall be granted a letter of access, letter of authorization or other similar right in order to enable it to reference or cite to the BASF Information, Know-How and Data or, if directly referencing or citing to the BASF Know-How, Information and Data is not possible for either regulatory or legal reasons, BASF shall enter into any and all documents necessary to put AMVAC in the position as if such direct referencing or citation were possible and (ii) with respect to BASF, it shall be granted a letter of access, letter of authorization or other similar right in order to enable it to reference or cite to the Additional Data, Additional Initial Registration Work Data (as that term is defined in Section 2.4(A)(i)), and New Study Data (as that term is defined in Section 2.4(A)(ii)) or, if directly referencing or citing to the Additional Data, Additional Initial Registration Work Data, and/or New Study Data is not possible for either regulatory or legal reasons, AMVAC shall enter into any and all documents necessary to put BASF in the position as if such direct referencing or citation were possible.

 

1.15 “ Commercialization ” means the date on which AMVAC, either directly or through any third party, commences its first sales of any Product in the Territory pursuant to a Registration or [*], whichever occurs first.

 

1.16 “ Compound ” means BASF’s proprietary 670H compound (including any optical isomer thereof) which exhibits [*] activity, the chemical name and structural formula for which are set forth in Schedule 1.16 .

 

1.17 “ Compound Price ” means those prices for Compound TGAI to which Section 5.5 refers.

 

1.18 “ Compound TGAI ” means that form of Compound technical grade of active ingredient which meets the Specifications.

 

1.19 “ Confidentiality Agreement ” means that confidentiality agreement, effective January 7, 2004, by and between the Parties.

 

1.20 “ Contract Year ” means, for the first contract year, the period commencing on the Effective Date and expiring [*] and, for the second and subsequent contract years during the Term, the twelve (12) month period commencing on [*] and each anniversary thereof, respectively.

 

1.21 “ Covered Products ” means the Solo Product and BASF Products.

 

1.22 [*].

 

1.23 “ Effective Date ” means the date on which AMVAC receives written notice from BASF that there is Resolution.

 

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1.24 “ Exclusive ” means that, for the duration of the Initial Term and, if applicable, the Extended Term, the Party granting the right or license in question would neither retain for itself the rights granted to the other Party nor grant such rights to any Person.

 

1.25 “ Extended Term ” shall have the meaning ascribed to it in Section 10.1.

 

1.26 “ Field ” means use as a [*] only.

 

1.27 “ Governmental Authority ” means any governmental department, commission, board, bureau, agency, court or other instrumentality of any supranational organization of sovereign states, country, state, province, territory, commonwealth, municipality or other political subdivision thereof.

 

1.28 “ Initial Registrations ” means (i) the initial Registration in the US for the Compound TGAI or the Solo Product, whichever occurs first and (ii) the initial Registration in Canada for the Compound TGAI or the Solo Product, whichever occurs first.

 

1.29 “ Initial Term ” shall have the meaning ascribed to it in Section 10.1.

 

1.30 “ Invention ” means any and all developments, modifications, discoveries, and inventions, whether patentable or not, made by or on behalf of AMVAC with respect to, related to, derived from, based on, or comprising in any way, whether directly or indirectly and whether in whole or in part, the [*] Patent or any BASF Patent, BASF Know-How, Information and Data, Additional Data, Additional Initial Registration Work Data, Joint Additional Initial Registration Work Data, New Study Data, or Joint New Study Data.

 

1.31 “[*]” means [*], a company organized under the laws of [*].

 

1.32 “ Non-Exclusive ” means that, for the duration of the Initial Term and, if applicable, the Extended Term, the Party granting the right or license in question retains for itself the rights granted to the other Party as well as the right to grant such rights to any Person.

 

1.33 “ Other Product ” means any [*] coformulation, other than a BASF Product, which contains the Compound TGAI and [*], none of which are proprietary to BASF and (i) for the US, has [*] use rate or such lower use rate to which BASF consents in writing or (ii) for Canada, has [*] use rate or such lower use rate to which BASF consents in writing.

 

1.34 “[*] Products Royalty ” shall have the meaning ascribed to it in Section 5.6(B).

 

1.35 “ Person ” means, other than a Party, any individual, corporation, partnership, association, trust or other entity or organization including, without limitation, any Governmental Authority.

 

1.36 “ PMRA ” means Canada’s Pest Management Regulatory Agency.

 

1.37 “ Products ” means BASF Products, the Solo Product, and Other Products.

 

1.38 “ Register ” or “ Registration ” means the Initial Registrations and any registration, registration change, or re-registration as well as the maintenance or renewal of any such registration or re-registration which is required by EPA or PMRA in order to offer for sale, sell, promote, and/or distribute in the US or Canada, respectively, the Compound TGAI or any Product for use in the Field only.

 

1.39 “ Registration Fees ” means the so-called “fee for service” fees that the EPA and/or PMRA charges to either Party in connection with any Registration of the Compound TGAI and/or any Product plus interest, if any.

 

1.40 “ Resolution ” means [*].

 

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1.41 [*].

 

1.42 “ Shared Gross Profit for [*] Products ” shall have the meaning ascribed to in Section 5.6(A).

 

1.43 “ Solo Product ” means that post-emergent corn herbicide formulation which contains the Compound TGAI as the sole herbicidal active ingredient, meets the Specifications, and (i) for the US, has [*] use rate or such lower use rate to which BASF consents in writing or (ii) for Canada, has [*] use rate or such lower use rate to which BASF consents in writing.

 

1.44 “ Specifications ” means (i) the specifications for Compound TGAI and (ii) the specifications for the Solo Product, as the context dictates, which are set forth in Schedule 1.44 .

 

1.45 “ Term ” shall have the meaning ascribed to it in Section 10.1.

 

Unless otherwise indicated to the contrary in this Agreement by the context or use thereof: (i) words importing the masculine gender shall also include the feminine and neutral genders, and vice versa; and (ii) words importing the singular shall also include the plural, and vice versa.

 

ARTICLE II

LICENSES

 

2.1 Grants .

 

A. AMVAC Development Work, Registrations and Formulations . For the duration of the [*] and subject to the terms and conditions of this Agreement, BASF grants to AMVAC a (i) [*] sublicense, without the right to grant a sublicense to any Person, under the [*] Patent and (ii) [*] license, without the right to grant a sublicense to any Person, to use and Cite to the BASF Know-How, Information and Data, and under the BASF Patents for the exclusive purposes of AMVAC:

 

(a) undertaking Additional Development Work, Additional Initial Registration Work (as that term is defined in Section 2.4(A)(i)), Joint Additional Initial Registration Work, New Studies (as that term is defined in Section 2.4(A)(ii)), and Joint New Studies (collectively, “ AMVAC Development Work ”) in the Field in the Territory;

 

(b) obtaining in AMVAC’s name Registrations ;and

 

(c) formulating or having formulated, in the Territory only, Products.

 

B. Commercialization . For the duration of the [*] and subject to the terms and conditions of this Agreement, BASF grants to AMVAC a (i) [*] sublicense, without the right to grant a sublicense to any Person, under the [*] Patent and (ii) [*] license, without the right to grant a sublicense to any Person, to use and Cite to the BASF Know-How, Information and Data and under the BASF Patents for the exclusive purpose of AMVAC offering for sale, selling, promoting, and distributing Products in the Field in the Territory only. In consideration of the Exclusive nature of the license granted to AMVAC in this Section 2.1(B) (but subject to the provisions of Schedule 10.1 ) and the obligations assumed by AMVAC under the LOI and pursuant to Section 2.4(A)(i), (a) BASF agrees that it shall not offer for sale, sell, promote, or distribute in the Territory prior to [*] any product containing any [*] active ingredient which is proprietary to BASF and, as of the Effective Date, not registered by BASF for use in the Field, provided that the foregoing obligation shall not apply to any Acquired Product (as hereinafter defined) and (b) AMVAC agrees that it shall not offer for sale, sell, promote, or distribute in the Territory during the [*] any product including, without limitation, any Acquired Product, but excluding Products, containing any [*] active ingredient which product is, as of the Effective Date, neither registered nor promoted, distributed, or marketed by AMVAC for use in the Field; provided , however , that if an Acquired Product becomes part of the AMVAC product portfolio during the Term, AMVAC shall have the right, but not the obligation, to dispose of such Acquired Product to a non-

 

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Affiliate Person within six (6) months of AMVAC’s acquisition of the Acquired Product in question. For purposes of this Section 2.1(B), “ Acquired Product ” means any product acquired by BASF or AMVAC, as the case may be, and/or any Affiliate thereof after the Effective Date, whether acquired as a result of a merger, reorganization, purchase of stock or assets, or by virtue of a licensing or other similar transaction, in each case with a bona fide , non-Affiliate Person.

 

2.2 [Intentionally Omitted].

 

2.3 No Additional License . For the avoidance of doubt, AMVAC acknowledges and agrees that all rights in and to the BASF Study Data is or shall vest exclusively in BASF or its designee(s) and that except for the licenses granted to AMVAC under Section 2.1, no right or license, either express or implied, under the BASF Study Data or any patent, copyright, trade secret, know-how or other intellectual property right of BASF or any Affiliate thereof is granted to AMVAC under this Agreement or otherwise.

 

2.4 Responsibility, Cost and Ownership.

 

A. Development Work and Registrations .

 

(i) Additional Development Work, Additional Initial Registration Work, Joint Additional Initial Registration Work, and Registrations . During the Term, AMVAC shall undertake diligently and shall have exclusive responsibility for (i) obtaining and maintaining all Registrations within the Territory at its sole cost and expense, subject to the remaining provisions of this Section 2.4(A), and (ii) performing all Additional Development Work at its sole cost and expense. Notwithstanding the foregoing, if the cost to obtain the Initial Registrations in both countries of the Territory exceeds, in the aggregate, [*] (such actual, out-of-pocket, costs for the Initial Registrations exceeding [*] referred to herein as the “ Additional Initial Registration Costs ”), such Additional Development Work necessary to obtain the Initial Registrations shall be deemed “ Additional Initial Registration Work ” or “ AIRW ”. AMVAC shall promptly notify BASF of all Additional Initial Registration Work and if the Parties decide to jointly conduct such AIRW (“ Joint Additional Initial Registration Work ” or “ JAIRW ”), the Parties will (x) cooperate in conducting the JAIRW, (y) share equally the Additional Initial Registration Costs for such JAIRW, (z) jointly own the results of such JAIRW (the “ Joint Additional Initial Registration Work Data ” or “ JAIRW Data ”) but, for the duration of the Term, use such JAIRW Data subject to the terms and conditions of this Agreement; provided , however , that payment by BASF of its [*] of the aggregated Additional Initial Registration Costs for such JAIRW shall be made via deduction, of an amount equal to [*] of such aggregated Additional Initial Registration Costs, from the Shared Gross Profit for [*] Products and [*] Products Royalty for [*] during which a Shared Gross Profit for [*] Products and/or [*] Products Royalty occurs (the “ Additional Initial Registration Costs Deduction ” or “ AIRCD ”); and provided , further , that in the event that the aggregate amount of the Shared Gross Profit for [*] Products and [*] Products Royalty for [*] is insufficient to cover the AIRCD in question, the Parties agree that the remaining amount of such AIRCD shall be made via deduction of an amount equal to [*] thereof from the Shared Gross Profit for [*] Products and [*] Products Royalty for each of the immediately [*] during which a Shared Gross Profit for [*] Products and/or [*] Products Royalty occurs; and provided , finally , that if after such [*] period BASF still owes any portion of the AIRCD in question it shall make a lump sum payment to AMVAC equal to [*]. If BASF decides not to participate in the cost and/ or performance of any given AIRW, AMVAC agrees to use commercially reasonable efforts to conduct such AIRW (and to promptly advise BASF if AMVAC intends to not conduct the AIRW in question) and AMVAC shall have the right, subject to the terms and conditions of this Agreement including, without limitation, the provisions of this Section 2.4(A) and Section 10.2(A), to conduct such AIRW at its sole cost and expense and, subject to the provisions of this Section 2.4(A), the applicable provisions of Section 10.3, BASF’s proprietary rights in and to the BASF Patents, BASF Know-How, Information and Data, and any other intellectual property of BASF or any of its Affiliates, all rights in and to the results of such AIRW (the “ Additional Initial Registration Work Data ” or “ AIRW Data ”) shall vest exclusively in AMVAC or its designee(s). AMVAC shall have the right, subject to the terms and conditions of this Agreement including, without limitation, the provisions

 

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of this Section 2.4(A), to use such AIRW Data in the Field in the Territory. Notwithstanding the licenses granted to BASF with respect to AIRW Data pursuant to Section 2.4(C), if subsequent to BASF’s decision to not fund any given Additional Initial Registration Work BASF desires to become a joint owner of any AIRW Data, it shall reimburse AMVAC in accordance with the provisions of the Data Depreciation Formula and, upon making the payment calculated according to such Data Depreciation Formula, (i) the AIRW Data in question shall be deemed JAIRW Data, (ii) the Additional Initial Registration Work from which the JAIRW Data in question resulted shall be deemed JAIRW, and (iii) AMVAC shall execute such documents as are reasonably required under Applicable Law to vest in BASF its ownership interest, rights, and title in and to the JAIRW Data in question. For the avoidance of doubt, the Parties agree that the Registration Fees shall not count toward the Additional Initial Registration Costs. Subject to the provisions of this Section 2.4(A), the applicable provisions of Sections 10.1 and 10.3, BASF’s proprietary rights in and to the BASF Patents, BASF Know-How, Information and Data, and any other intellectual property of BASF or any of its Affiliates, all rights in and to Additional Data and Registrations shall vest exclusively in AMVAC or its designee(s).

 

(ii) New Studies and [*] New Studies . If any Governmental Authority in the Territory requests that AMVAC, or if AMVAC is required by any Governmental Authority in the Territory to, conduct any new or additional studies to permit Registration (other than the Initial Registrations) or maintain any Registration (including the Initial Registrations) of Compound TGAI or any Products (each such new or additional study, a “ New Study ”), AMVAC shall promptly provide notice thereof to BASF. If any Governmental Authority requests that BASF, or if BASF is required by any Governmental Authority to, conduct any study related to the Compound BASF may, but is not obligated to, notify AMVAC of the same and offer it an opportunity to participate in the cost and/or performance thereof as hereinafter provided (each such study, a “ BASF New Study ”). If the Parties decide to [*] conduct any New Study or BASF New Study (each, a “[*] New Study ”), the Parties will (i) cooperate in conducting the [*] New Study, (ii) share [*] the total actual out-of-pocket costs therefor, (iii) [*] own the results of such [*] New Study (the “[*] New Study Data ”) but, for the duration of the Term, use such [*] Study Data subject to the terms and conditions of this Agreement. If BASF decides not to participate in the cost and/or performance of any given New Study, AMVAC agrees to use commercially reasonable efforts to conduct such New Study (and to promptly advise BASF if AMVAC intends to not conduct the New Study in question) and AMVAC shall have the right, subject to the terms and conditions of this Agreement including, without limitation, the provisions of this Section 2.4(A) and Section 10.2(A), to conduct such New Study [*] and, subject to the provisions of this Section 2.4(A), the applicable provisions of Section 10.3, BASF’s proprietary rights in and to the BASF Patents, BASF Know-How, Information and Data, and any other intellectual property of BASF or any of its Affiliates, all rights in and to the results of such New Study (the “ New Study Data ”) shall vest [*] in AMVAC or its designee(s). AMVAC shall have the right, subject to the terms and conditions of this Agreement including, without limitation, the provisions of this Section 2.4(A), to use such New Study Data in the Field in the Territory. Notwithstanding the licenses granted to BASF with respect to New Study Data pursuant to Section 2.4(C), if subsequent to BASF’s decision to not fund any given New Study BASF desires to become a [*] of any New Study Data, it shall reimburse AMVAC in accordance with the provisions of the Data Depreciation Formula and, upon making the payment calculated according to such Data Depreciation Formula, (i) the New Study Data in question shall be deemed [*] New Study Data, (ii) the New Study from which the New Study Data in question resulted shall be deemed a [*] New Study, and (iii) AMVAC shall execute such documents as are reasonably required under Applicable Law to vest in BASF its ownership interest, rights, and title in and to the [*] New Study Data. For the avoidance of doubt, if AMVAC decides not to participate in the performance of any given BASF New Study, BASF shall have the right to conduct such BASF New Study [*] and all rights in and to the results of such BASF New Study (the “ BASF New Study Data ”) shall vest [*] in BASF or its designee(s). Subsequent to AMVAC’s decision to not fund any given BASF New Study, AMVAC may become a [*] of any BASF New Study Data upon AMVAC reimbursing BASF in an amount to be mutually agreed for such BASF New Study, provided that such amount shall in no event exceed [*] of BASF’s actual out-of-pocket costs to conduct such BASF New Study. Upon AMVAC’s payment of such mutually agreed

 

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amount, (i) the BASF New Study Data in question shall be deemed [*] New Study Data, (ii) the BASF New Study from which the BASF New Study Data in question resulted shall be deemed a [*] New Study, and (iii) BASF shall execute such documents as are reasonably required under Applicable Law to vest in AMVAC its ownership interest, rights, and title in and to the [*] New Study Data.

 

(iii) AMVAC Data Obligations . The Parties acknowledge and agree that:

 

(a) notwithstanding the provisions of Section 2.4(A)(i) and (ii), AMVAC shall not have the right to undertake any development work with respect to the Compound TGAI or any Product including, without limitation, AMVAC Development Work unless (1) Registration of the Compound TGAI or such Product will not be granted or continued by EPA or PMRA if the AMVAC Development Work in question is not performed or (2) AMVAC obtains the prior written consent of BASF, not to be unreasonably withheld or delayed, if such AMVAC Development Work would not meet the criteria set forth in the preceding clause (1);

 

(b) notwithstanding the provisions of Section 2.4(A)(i) and (ii), AMVAC shall obtain BASF’s prior written approval, not to be unreasonably withheld or delayed, of each protocol for AMVAC Development Work prior to commencement thereof;

 

(c) AMVAC shall not withdraw any Additional Data, Additional Initial Registration Work Data, Joint Additional Initial Registration Work Data, Joint New Study Data, or New Study Data (collectively, the “ AMVAC Data ”) once the same is submitted to EPA and/or PMRA without the prior written consent of BASF;

 

(d) BASF shall have the right to review any and all AMVAC Data prior to AMVAC’s submission thereof to EPA, PMRA, or any other Governmental Authority in or outside the Territory upon request to AMVAC, and

 

(e) BASF shall have the right to review any and all correspondence by or on behalf of AMVAC with, and responses by or on behalf of AMVAC to any inquiry of, EPA, PMRA and any other Governmental Authority in or outside the Territory with respect to the Compound TGAI or any Product prior to AMVAC’s submission of such correspondence or response thereto.

 

B. Initial Registrations . AMVAC agrees to use all commercially reasonable efforts to obtain the Initial Registrations by [*].

 

C. BASF’s Access to Additional Data, Additional Initial Registration Work Data, and New Study Data .

 

(i) Outside the Territory . AMVAC hereby grants to BASF a [*] (subject to the provisions of this Agreement), [*] license, without the right to grant any sublicense other than as expressly set forth in clause (iii) below, in and outside the Field, outside the Territory, to use and Cite to the Additional Data, Additional Initial Registration Work Data, and New Study Data for the [*] purposes of: (a) undertaking development work with respect to the Compound, technical grade(s) of active ingredient of the Compound, and products containing any such technical grade(s) of active ingredient of the Compound as an active ingredient; (b) obtaining registrations for the aforesaid technical grade(s) of active ingredient and/or aforesaid products; (c) formulating or having formulated the aforesaid products; and (d) offering for sale, selling, promoting, and distributing, directly or indirectly, such products.

 

(ii) In the Territory . AMVAC hereby grants to BASF a [*] (subject to the provisions of this Agreement), [*] license, without the right to grant any sublicense other than as expressly set forth in clause (iii) below, in the Territory, to use and Cite to the Additional Data, Additional Initial Registration Work Data, and New Study Data for the exclusive purposes of: (a) undertaking

 

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development work with respect to the Compound, technical grade(s) of active ingredient of the Compound, and products containing any such technical grade(s) of active ingredient of the Compound as an active ingredient; (b) obtaining registrations for the aforesaid technical grade(s) of active ingredient and/or aforesaid products; (c) formulating or having formulated the aforesaid products; and (d) offering for sale, selling, promoting, and distributing, directly or indirectly, such products outside the Field.

 

(iii) Sublicenses . Under the license granted to it in Section 2.4(C)(i), BASF shall have the right to grant a sublicense, but without the right to further license or sublicense, (a) to any of its Affiliates conducting business in a country in which BASF desires to exercise any of the rights granted to it under the license in question, provided that BASF’s right to grant any such sublicense shall be limited to one Affiliate per country and (b) in [*] only, to [*]. Under the license granted to it in Section 2.4(C)(ii), BASF shall have the right to grant a sublicense, but without the right to further license or sublicense, to any [*] for purposes of such [*] exercising in the [*], respectively, any of the rights granted to BASF under the license in question.

 

(iv) Access Fee . In consideration of the licenses granted to BASF pursuant to Sections 2.4(C)(i) and (ii), BASF agrees to pay to AMVAC, during the Term, subject to the applicable provisions of Article X and Schedule 10.1, but in no event after expiration of the Term, certain Access Fees. For the avoidance of doubt, the licenses granted under Sections 2.4(C)(i) and (ii) shall survive expiration and termination, other than termination by AMVAC pursuant to Section 10.2(A) for breach by BASF, of this Agreement except that such licenses shall be [*] at such time; provided , however , that in the case of termination of this Agreement by AMVAC pursuant to Section 10.2(A) for breach by BASF, BASF shall have the option, but not the obligation, to become a [*] of any or all Additional Data, Additional Initial Registration Work Data, and New Study Data by compensating AMVAC in accordance with the provisions of the Data Compensation Formula, at which time the applicable provisions of Section 2.4 shall apply with respect to such joint ownership.

 

2.5 [*] Effects . If during or after the Term a Party observes or is advised by any Person of any actual or potential [*] effect of the Compound TGAI or any Product including, without limitation, any [*] (for purposes of this Section 2.5, an “ Observing Party ”), such Observing Party shall notify the other Party in accordance with the provisions of Section 13.3 no later than [*] following the Observing Party’s receipt of such information; provided , however , that [*], notification by the Observing Party to the other Party shall be immediate. All notices required hereunder shall include a detailed description of the [*] effects observed including, without limitation, the nature of the study or incident and the time and place of the occurrence. The provisions of this Section 2.5 will survive the termination or expiration of this Agreement for a period of [*].

 

2.6 Reporting . No later than each January 1 and June 1 during the Term, AMVAC shall submit to BASF a written status report detailing the progress of and schedule for the Additional Development Work and the timetable for Registrations in the Territory.

 

2.7 BASF Employee Assistance . [*], the BASF employees identified in Schedule 2.7 shall be reasonably available to answer technical and biological questions AMVAC may have with respect to the Compound; provided , however , that such availability is at BASF’s sole and complete discretion, not to be unreasonably withheld or delayed, and at times and dates convenient to the business of BASF.

 

ARTICLE III

REGISTRATION FEES

 

To avoid adverse developments in the Registration process(es) for the Compound TGAI or any Product in the Territory, AMVAC hereby agrees that if the due date for any Registration Fee(s) occurs after the Effective Date, AMVAC shall pay any and all such Registration Fees that BASF is required by the EPA and/or PMRA to remit with respect to such Registration process(es). Upon the Effective Date, BASF shall execute such documents as are reasonably required under Applicable Law to transfer the applications for Registrations to AMVAC.

 

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ARTICLE IV

COMMERCIALIZATION OF THE COMPOUND TGAI AND PRODUCTS

 

4.1 Commercialization Rights . Pursuant to Section 2.1(B) and subject to the terms and conditions of this Agreement, AMVAC shall have an [*] right to offer for sale, sell, promote, and distribute the Compound TGAI and Products in the Field in the Territory for the duration of the [*].

 

4.2 Compensation . In consideration for the rights and licenses granted to AMVAC under this Agreement, AMVAC agrees to make the payments described in Section 4.3 in the installments described in, and subject to the terms and conditions of, such Section 4.3.

 

4.3 License Payments . AMVAC agrees to compensate BASF as follows:

 

A. Lump Sum Payment . AMVAC shall make a one-time, lump sum payment of [*] to BASF [*] within [*]. Such [*] payment shall be made in [*] via wire transfer to an account specified by BASF. Upon receipt of the [*] payment, BASF shall provide a complete copy of the BASF Know-How, Information and Data to AMVAC.

 

B. Fees . The Parties agree that the fee for the rights and licenses granted to AMVAC under this Agreement shall be included in the Compound Prices specified in Section 5.5.

 

C. Profit Sharing and Royalties . BASF shall share in AMVAC’s profits on, and be entitled to receive royalties from, AMVAC’s sales of Products in accordance with the provisions of Section 5.6.

 

4.4 Marketing .

 

A. Commercial Launch . AMVAC agrees to use all commercially reasonable efforts to commence commercial launch of the Products in the Territory by [*].

 

B. Trademarks . Subject to the provisions of this Section 4.4(B), AMVAC may advertise, promote, market, sell and distribute Products under any trademark, trade name and trade dress of its own choosing (collectively, the “AMVAC Trademarks”); provided, however, that AMVAC shall not associate any AMVAC Trademark with any trademark used by or registered to BASF or any Affiliate thereof (each, a “BASF Trademark”). AMVAC agrees not to claim or to assert any right of ownership in or to any BASF Trademark or the goodwill associated therewith. AMVAC further agrees not to take any action which may destroy, damage or impair in any way the ownership or rights of BASF or any Affiliate thereof in or to any BASF Trademark. AMVAC shall not register, either directly or indirectly, in its own name or on behalf of any other Person, any trademark identical, or confusingly similar, to any BASF Trademark. AMVAC shall not adopt, use, own, or acquire any BASF Trademark, or any mark, name or trade dress confusingly similar thereto. BASF agrees not to claim or to assert any right of ownership in or to any AMVAC Trademark or the goodwill associated therewith. BASF further agrees not to take any action which may destroy, damage or impair in any way the ownership or rights of AMVAC or any Affiliate thereof in or to any AMVAC Trademark. BASF shall not register, either directly or indirectly, in its own name or on behalf of any other Person, any trademark identical, or confusingly similar, to any AMVAC Trademark. BASF shall not adopt, use, own, or acquire any AMVAC Trademark, or any mark, name or trade dress confusingly similar thereto. Nothing in this Section 4.4(B) is intended to limit either Party’s rights under applicable trademark law.

 

4.5 [*]. [*], BASF agrees to [*] with AMVAC concerning [*] BASF granting AMVAC the right(s) and/or license(s) necessary for AMVAC to register and offer for sale, sell, promote, and distribute the Compound TGAI and Products in the Field in [*].

 

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ARTICLE V

MANUFACTURE, SUPPLY AND PURCHASE OF THE COMPOUND TGAI

 

5.1 Manufacture of the Compound TGAI . During the Term, BASF retains the exclusive rights to manufacture and/or have manufactured the Compound TGAI for sale to AMVAC.

 

5.2 Exclusive Source . During the Term, AMVAC shall purchase one hundred percent (100%) of its requirements for the Compound TGAI from BASF or an Affiliate thereof exclusively pursuant to the terms and conditions of this Agreement.

 

5.3 Minimum Purchase Requirement . If, during the period commencing with the Contract Year during which Commercialization occurs and ending with the expiration of the [*] Contract Year thereto, AMVAC does not purchase the Cumulative Minimum Volume (as that term is hereinafter defined), then BASF shall have the right, and without the need for any further action, to convert the license granted to AMVAC under Section 2.1(B) from Exclusive to Non-Exclusive and AMVAC shall do all commercially reasonable things necessary to enable BASF to use and Cite, [*] to AMVAC’s Registrations and any and all AMVAC Data in support thereof. For purposes of this Agreement, “ Cumulative Minimum Volume ” means [*] of one hundred percent (100%) Compound TGAI. Starting with the [*] Contract Year [*] to the Contract Year during which Commercialization occurs, BASF shall have the right to terminate this Agreement upon [*] prior written notice and the provisions of Section 10.3(B) shall apply if AMVAC does not purchase an aggregate of [*] of one hundred percent (100%) Compound TGAI in any [*] Contract Years.

 

5.4 Forecasts and Ordering.

 

A. If Registration/Commercialization is Expected by [*] .

 

(i) [*] Contract Year During Which Commercialization is Expected to Occur . If AMVAC expects to obtain an Initial Registration and to commence Commercialization by [*], then for the [*] Contract Year during which Commercialization is expected to occur AMVAC shall:

 

(a) submit its [*] forecast for Products to BASF no later than [*];

 

(b) place its [*] order for Compound TGAI and/or Products no later than [*], which [*] order shall be within [*] of the aforesaid [*] forecast; and

 

(c) take delivery, in accordance with the provisions of Section 5.10, of Compound TGAI and/or Products during [*], or such other mutually agreed date.

 

(ii) [*] Contract Year Following Commercialization . If AMVAC expects to obtain an Initial Registration and to commence Commercialization by [*], then for the [*] Contract Year following the Contract Year during which Commercialization occurs AMVAC shall:

 

(a) submit its [*] forecast for Products to BASF no later than [*]; and

 

(b) place its [*] order for Compound TGAI and/or Products no later than [*], which [*] order shall be within [*] of the aforesaid [*] forecast and shall specify the desired delivery date and US port of entry.

 

(iii) [*] Contract Years Following Commercialization . If AMVAC expects to obtain an Initial Registration and to commence Commercialization by [*], then for the [*] Contract Years following the Contract Year during which Commercialization occurs AMVAC shall:

 

(a) submit its [*] forecast for Products to BASF no later than [*] of each such prior Contract Year (e.g., the first such forecast would be due [*] for the [*] season); and

 

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(b) place its [*] order for Compound TGAI and/or Products no later than [*] of each such prior Contract Year, which [*] order shall be within [*] of the aforesaid [*] forecast and shall specify the desired delivery date and US port of entry (e.g., the first such forecast would be due [*] for the [*] season).

 

B. If Registration/Commercialization is Expected Later Than [*] .

 

(i) [*] Contract Year During Which Commercialization is Expected to Occur . If AMVAC expects to obtain an Initial Registration and to commence Commercialization after [*], then for the [*] Contract Year during which Commercialization is expected to occur AMVAC shall:

 

(a) submit its [*] forecast for Products to BASF no later than [*];

 

(b) place its [*] order for Compound TGAI and/or Products no later than [*], which [*] order shall be within [*] of the aforesaid [*] forecast;

 

(c) take delivery, in accordance with the provisions of Section 5.10, of Compound TGAI and/or Products during [*] or such other mutually agreed date; and

 

(d) if necessary, submit a [*] order for additional Compound TGAI and/or Products no later than [*] and specify in such order the desired delivery date and US port of entry.

 

(ii) [*] Contract Year Following Commercialization . If AMVAC expects to obtain an Initial Registration and to commence Commercialization after [*], then for the [*] Contract Year following the Contract Year during which Commercialization occurs AMVAC shall:

 

(a) submit its [*] forecast for Products to BASF no later than [*]; and

 

(b) place its [*] order for Compound TGAI and/or Products no later than [*], which [*] order shall be within [*] of the aforesaid [*] forecast and shall specify the desired delivery date and US port of entry.

 

(iii) [*] Contract Years Following Commercialization . If AMVAC expects to obtain an Initial Registration and to commence Commercialization after [*], then for the [*] Contract Years following the Contract Year during which Commercialization occurs AMVAC shall:

 

(a) submit its [*] forecast for Products to BASF no later than [*] of each such Contract Year; and

 

(b) place its [*] order for Compound TGAI and/or Products no later than [*] of each such Contract Year, which [*] order shall be within [*] of the aforesaid [*] forecast and shall specify the desired delivery date and US port of entry.

 

C. Rolling Forecasts . Commencing no later than [*] of the Contract Year during which Commercialization occurs and beginning with each calendar quarter thereafter during the Term, AMVAC shall submit a written, [*] rolling forecast of its requirements for the Compound TGAI (i) on a [*] basis for the [*] Contract Years following the Contract Year in which Commercialization occurs and (ii) on a [*] basis for the [*] Contract Years following the Contract Year in which Commercialization occurs.

 

5.5 Price .

 

A. [*] Contract Year During Which Commercialization Occurs and the [*] Contract Years . For the [*] Contract Year during which Commercialization occurs and for the [*] Contract Years, the Compound Price shall be:

 

(i) For the [*] during which Commercialization occurs, [*] of one hundred percent (100%) Compound TGAI [*];

 

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(ii) For the [*] following the Contract Year during which Commercialization occurs, [*] of one hundred percent (100%) Compound TGAI [*]; and

 

(iii) For the [*] following the Contract Year during which Commercialization occurs, [*] of one hundred percent (100%) Compound TGAI [*].

 

B. [*] Contract Years Following the Contract Year During Which Commercialization Occurs When AMVAC’s Orders Equal or Exceed the Minimum Volume . For purposes of this Section 5.5(B) and Section 5.5(C), “ Minimum Volume ” means [*] of one hundred percent (100%) Compound TGAI. Provided that in the [*] Contract Year following the Contract Year during which Commercialization occurs AMVAC orders an amount of Compound TGAI which is equal to or exceeds the Minimum Volume, the Compound Price shall be equal to [*].

 

C. [*] Contract Years Following the Contract Year During Which Commercialization Occurs When AMVAC Orders Less than the Minimum Volume . If in the [*] Contract Year following the Contract Year during which Commercialization occurs AMVAC orders an amount of Compound TGAI which is less than the Minimum Volume, the Compound Price for such year shall be equal to [*].

 

5.6 Profit Sharing and Royalties .

 

A. [*] Products . In consideration for the licenses granted in Section 2.1 to AMVAC with respect to [*] Products, for the Contract Year during which Commercialization occurs and each [*] Contract Year during which any [*] Product is sold by AMVAC, BASF and AMVAC shall share [*] the Shared Gross Profit for [*] Products, subject to the provisions of Section 8.3. No later than each [*] of the Contract Year during which Commercialization occurs and each [*] Contract Year, AMVAC shall prepare and provide to BASF an interim report which reasonably estimates the expected Shared Gross Profit for [*] Products for the then-current Contract Year. AMVAC shall reconcile the Shared Gross Profit for [*] Products for the Contract Year in question and remit to BASF its [*] share thereof in [*] via wire transfer to an account specified by BASF no later than [*] of the Contract Year during which the sales of the [*] Products leading to the Shared Gross Profit for [*] Products in question were made, such earnings to be determined by AMVAC in accordance with generally accepted accounting principles for the US. For purposes of this Agreement, “ Shared Gross Profit for [*] Products ” for any given Contract Year means [*].

 

B. [*] Products . In consideration for the licenses granted in Section 2.1 to AMVAC with respect to [*] Products, for the Contract Year during which Commercialization occurs and each [*] Contract Year during which any [*] Product is sold by AMVAC, it shall pay to BASF (i) a royalty in an amount equal to [*] contained, in the aggregate, in the [*] Products sold by AMVAC in the US during the Contract Year in question (the “ US Royalty ”) and (ii) a royal