AMERICAN VANGUARD CORP (Form: 10-K, Received: 03/16/2005 15:46:01)

AMERICAN VANGUARD CORPORATION, a Delaware corporation:

ERIC G. WINTEMUTE:

/ S / C ARL S ODERLIND

/ S / E RIC G. W INTEMUTE

Carl Soderlind for

the Compensation Committee

Eric G. Wintemute

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For The Year Ended December 31, 2004

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For The Transition Period From To

Commission file number 001-13795

AMERICAN VANGUARD CORPORATION


Delaware		95-2588080
(State or other jurisdiction of Incorporation or organization)		(I.R.S. Employer Identification Number)

4695 MacArthur Court, Newport Beach, California		92660
(Address of principal executive offices)		(Zip Code)

(949) 260-1200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class:		Name of each exchange on which registered:
Common Stock, $.10 par value		American Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant is an accelerated filer as defined in Rule 12b-2 of the Securities and Exchange Act of 1934. Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

The aggregate market value of the voting stock of the registrant held by non-affiliates is $114.9 million. This figure is estimated as of June 30, 2004, at which date the closing price of the registrant’s Common Stock on the American Stock Exchange was $33.68 per share. For purposes of this calculation, shares owned by executive officers, directors, and 5% stockholders known to the registrant have been deemed to be owned by affiliates. The number of shares of $.10 par value Common Stock outstanding as of June 30, 2004, was 8,971,697. The number of shares of $.10 par value Common Stock outstanding as of March 11, 2005, was 9,096,095.

AMERICAN VANGUARD CORPORATION

ANNUAL REPORT ON FORM 10-K

December 31, 2004


		Page No.
	PART I

Item 1.	Business	1

Item 2.	Properties	7

Item 3.	Legal Proceedings	8

Item 4.	Submission of Matters to a Vote of Security Holders	13

	PART II

Item 5.	Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities	14

Item 6.	Selected Financial Data	15

Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	16

Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	28

Item 8.	Financial Statements and Supplementary Data	28

Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	28

Item 9A.	Controls and Procedures	28

Item 9B.	Other Information	31

	PART III

Item 10.	Directors and Executive Officers of the Registrant	32

Item 11.	Executive Compensation	34

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	36

Item 13.	Certain Relationships and Related Transactions	38

Item 14.	Principal Accounting Fees and Services	38

	PART IV

Item 15.	Exhibits, Financial Statement Schedules, and Reports on Form 8-K	39

SIGNATURES AND CERTIFICATIONS		40

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

PART I

Unless otherwise indicated or in the context otherwise requires, the terms “Company,” “we,” “us,” and “our” refer to American Vanguard Corporation and its consolidated subsidiaries.

Forward-looking statements in this report, including without limitation, statements relating to the Company’s plans, strategies, objectives, expectations, intentions, and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties. (Refer to PART II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operation, Risk Factors, of this Annual Report.)

ITEM 1

BUSINESS

American Vanguard Corporation was incorporated under the laws of the State of Delaware in January 1969 and operates as a holding company. Unless the context otherwise requires, references to the “Company”, or the “Registrant” in this Annual Report refer to American Vanguard Corporation and its consolidated subsidiaries. The Company conducts its business through its subsidiaries, AMVAC Chemical Corporation (“AMVAC”), GemChem, Inc. (“GemChem”), 2110 Davie Corporation (“DAVIE”), AMVAC Chemical UK Ltd. (“Chemical UK”), Quimica Amvac de Mexico S.A. de C.V. (“Quimica Amvac”) (Refer to Export Operations), and Environmental Mediation, Inc.

Based on similar economic and operational characteristics, the Company’s business is aggregated into one reportable segment. Refer to Part I, Item 7 for selective enterprise information.

AMVAC

AMVAC is a California corporation that traces its history from 1945. AMVAC is a specialty chemical manufacturer that develops and markets products for agricultural and commercial uses. It manufactures and formulates chemicals for crops, human and animal health protection. These chemicals which include insecticides, fungicides, molluscicides, growth regulators, and soil fumigants, are marketed in liquid, powder, and granular forms. AMVAC’s business is continually undergoing an evolutionary change. Years ago AMVAC considered itself a distributor-formulator, but now AMVAC primarily manufactures, distributes, and formulates its own proprietary products or custom manufactures or formulates for others.

In December 2004, AMVAC entered into an agreement with Bayer CropScience LP, an affiliate of Bayer AG, to market, sell and distribute Bolster 15G, a soybean pesticide used to control nematodes, through AMVAC’s SmartBox system in key Midwest soybean growing states beginning in the 2005 season. Additionally, in December 2004, AMVAC licensed the trade name Nuvan ^® to Syngenta India Limited, a business unit of Syngenta Crop Protection AG. The agreement provides a two-year license to Syngenta India to sell products under the Nuvan name in the animal and public health market, as well as the crop protection market in India. AMVAC will continue to sell products under the Nuvan name in the animal and public health market in over thirty other countries.

In January 2004, AMVAC entered into an agreement with Syngenta Crop Protection (“Syngenta”) to supply Force 3G for use through AMVAC’s SmartBox system beginning in the 2004 season. Force 3G is a corn soil insecticide manufactured and marketed by Syngenta for the control of corn rootworm, wireworm, cutworm and white grub in cotton.

In December 2003, AMVAC acquired certain assets related to the active ingredient dichlorvos (“DDVP”) used in the animal health business and marketed primarily under the trade name Nuvan ^® from Novartis Animal Health, Inc. a business unit of Novartis AG. Since 1975, AMVAC has manufactured a technical form of DDVP, used primarily in specialty markets as a broad-spectrum household and specialty insecticide. Nuvan, which is used primarily for animal health to control flies and ecto-parasites, will expand the AMVAC’s animal health

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business as well as its international sales of DDVP. DDVP products are highly effective in controlling in enclosed spaces, a wide variety of pests including mosquitoes, flies, and cockroaches. AMVAC has been the primary generator of data to support the registration of DDVP products worldwide.

In February 2003, AMVAC acquired certain assets associated with the global Pre-Harvest Protection business from Pace International, L.L.C. (“Pace”). Pace’s global Pre-Harvest Protection business encompassed five product lines:

•

Deadline ^® —a line of snail and slug control products used in agriculture and by commercial landscapers;

•

Hivol ^® 44—a plant growth regulator used primarily in citrus;

•

Hinder ^™ —a deer and rabbit repellant;

•

Bac-Master ^™ —streptomycin antibiotic used primarily to control Fire Blight (a bacterial disease of apples and peers that kills blossoms, shoots, limbs, and sometimes, entire trees; and

•

Leffingwell ^® Supreme 415 Oil ^™ —a horticultural oil insecticide for aphids, mites and scale.

Pace will continue to manufacture Deadline and Hinder under a multi-year supply agreement with AMVAC. Additionally, AMVAC has an option to acquire Pace’s Deadline manufacturing facility in Yakima County, Washington.

In January 2003, AMVAC acquired certain assets associated with the Evital 5G cranberry herbicide business conducted in the United States from Syngenta.

In July 2002, AMVAC acquired from Flowserve U.S. Inc. (“Flowserve”), all or substantially all of its assets associated with the SmartBox closed delivery system. The SmartBox system electronically dispenses granular crop protection products, replacing older technology that utilizes mechanically driven sprockets and chains. The state-of-the-art SmartBox technology allows farmers to apply crop protection products accurately and efficiently while avoiding contact with the product. The computer controller enables farmers to monitor and change application rates while planting and provides the farmers with a permanent record of application. Initially the SmartBox system was developed by Flowserve in partnership with E.I. DuPont de Nemours and Company (“DuPont”) and Zeneca, Inc. which partnership commenced in 1995. At the same time it acquired certain assets associated with the Fortress ^® corn soil insecticide business from DuPont in 2000, AMVAC assumed DuPont’s SmartBox partnership interest. Thereafter, Zeneca, Inc. abandoned its SmartBox partnership interest. In 2000, AMVAC sold its Fortress 5G (5% active ingredient—chlorethoxyfoxs) corn soil insecticide to the American farmer in the SmartBox system. Later that year, AMVAC secured exclusive marketing rights in the U.S. Bayer CropScience’s Aztec ^® 4.67G corn soil insecticide which also can be applied through the SmartBox system. By offering both products, AMVAC provides farmers a choice of two different chemistries to apply through the SmartBox system. This allows farmers to rotate products from year to year, thereby preventing insects from building resistance to any one specific product. AMVAC is currently looking at utilizing this system for other crops where the safety features of the system would provide an important benefit.

In July 2002, AMVAC acquired from Syngenta all U.S. Environmental Protection Agency (“EPA”) end-use product registrations and data support as well as a license to the Ambush 25WP trademark (wettable powder formulation) in the United States. Syngenta will continue to own the rights and assets of the liquid formulation (Ambush 2EC) in the United States.

In June 2002, AMVAC acquired certain assets associated with the Folex cotton defoliant business conducted in the United States by Aventis CropScience USA prior to Bayer AG’s acquisition of Aventis CropScience S.A. The purchase included the EPA end-use product registration for Folex as well as the Folex

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trademark and product inventories. In addition, an existing supply agreement with Bayer Corporation providing for the supply of active ingredient and access to data in support of the end-use product registration has been assigned to AMVAC, allowing AMVAC to purchase the active ingredient in Folex from Bayer. Bayer markets a product under its trademark Def ^® which is similar to Folex, and continues to sell Def following its acquisition of Aventis.

In addition to the product line acquisitions disclosed above, in August 2001, AMVAC acquired certain assets associated with the Phosdrin ^® international insecticide business from BASF Agro B.V. The purchase included all active registrations, access to the underlying data for the registrations and trademarks in 55 countries. AMVAC has manufactured and formulated Phosdrin ^® for the international market at its Los Angeles facility since 1985. Additionally, AMVAC has been the primary data generator and data holder for the product since 1989. In May 2000, AMVAC acquired certain assets associated with the worldwide Dacthal ^® (“DCPA”) herbicide business from GB Biosciences Corporation. The purchase included the worldwide rights, including U.S. EPA registration rights and similar regulatory entities in other countries, manufacturing and process technology, trademarks and all product related intellectual property. Dacthal has been sold for weed control in crops such as onions, garlic, cauliflower, cotton and strawberries for approximately thirty years. In February 2000, AMVAC acquired certain assets associated with the Fortress ^® soil insecticide business from DuPont. AMVAC acquired all U.S. EPA and state registrations, manufacturing and process technology, trademarks and all product related intellectual property. The acquisition included certain rights and obligations to the SmartBox delivery system as well as DuPont’s existing finished and semi-finished inventory including the closed delivery system containers. Fortress insecticide provides control of the corn rootworm, a devastating pest in corn. In 1998, AMVAC acquired certain assets associated with the U.S. Dibrom ^® insecticide business from Valent USA Corporation (“Valent”), a wholly-owned subsidiary of Sumitomo Chemical Company, Limited. The purchase included all EPA registration rights and state registrations of the product line, an extensive data package, inventory, trademarks and all product related intellectual property. AMVAC had manufactured and formulated Dibrom ^® prior to its acquisition, dating back to 1981, for Valent and formerly for Chevron, which had held the U.S. rights to Dibrom ^® prior to Valent. AMVAC has owned certain international rights to the Dibrom ^® product line since 1991. In 1997 AMVAC purchased the rights, title and interest to Vapam ^® (Metam Sodium), a soil fumigant, from Zeneca, Inc. The purchase included inventories of Vapam ^® , EPA registration rights issued under Federal Insecticide, Fungicide and Rodenticide Act (“FIFRA”) and certain other assets. AMVAC has manufactured Metam Sodium at its Los Angeles facility since 1988. In 1993 AMVAC purchased from Du Pont the rights, title and interest (including Du Pont’s EPA registration rights) in Bidrin ^® , an insecticide for cotton crops, and in 1991 AMVAC purchased from Rhone-Poulenc AG Company its Napthalene Acetic Acid (“NAA”) plant growth regulator product line including Rhone-Poulenc’s EPA registration rights.

Seasonality

The agricultural chemical industry in general is cyclical in nature. The demand for AMVAC’s products tends to be slightly seasonal. Seasonal usage, however, does not necessarily follow calendar dates, but more closely follows varying growing seasonal patterns, weather conditions and weather related pressure from pests, and customer marketing programs and requirements.

Backlog

AMVAC does not believe that backlog is a significant factor in its business. AMVAC primarily sells its products on the basis of purchase orders, although it has entered into requirements contracts with certain customers.

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Customers

United Agri Products, Helena Chemical Company and Agriliance accounted for 18%, 12% and 11%, respectively of the Company’s sales in 2004. Helena Chemical Company and United Agri Products accounted for 11% each of the Company’s sales in 2003. United Agri Products, Agriliance and Helena Chemical Company accounted for 22%, 12% and 10%, respectively of the Company’s sales in 2002. United Agri Products, Helena and Agriliance are distributors of the Company’s products.

Competition

AMVAC faces competition from many domestic and foreign manufacturers in its marketplaces. Competition in AMVAC’s marketplace is based primarily on efficacy, price, safety and ease of application. Many of such competitors are larger and have substantially greater financial and technical resources than AMVAC. AMVAC’s ability to compete depends on its ability to develop additional applications for its current products and expand its product lines and customer base. AMVAC competes principally on the basis of the quality of its products price and the technical service and support given to its customers. The inability of AMVAC to effectively compete in several of AMVAC’s principal products would have a material adverse effect on AMVAC’s results of operations.

Generally, the treatment against pests of any kind is broad in scope, there being more than one way or one product for treatment, eradication, or suppression. AMVAC has attempted to position itself in smaller niche markets which are no longer of strong focus to larger companies. These markets are small by nature, require significant and intensive management input, ongoing product research, and are near product maturity. These types of markets tend not to attract larger chemical companies due to the smaller volume demand, and larger chemical companies have been divesting themselves of products that fall into such niches as is evidenced by AMVAC’s successful acquisitions of certain product lines.

Intellectual Property

AMVAC’s proprietary product formulations are protected, to the extent possible, as trade secrets and, to a lesser extent, by patents and trademarks. Although AMVAC considers that, in the aggregate, its trademarks, licenses, and patents constitute a valuable asset, it does not regard its business as being materially dependent upon any single or several trademarks, licenses, or patents.

EPA Registrations

AMVAC’s products also receive protection afforded by the effect of the FIFRA legislation that makes it unlawful to sell any pesticide in the United States unless such pesticide has first been registered by the EPA as well as under similar state laws. Substantially all of AMVAC’s products are subject to EPA registration and re-registration requirements and are conditionally registered in accordance with FIFRA. This licensing by EPA is based, among other things, on data demonstrating that the product will not cause unreasonable adverse effects on human health or the environment when it is used according to approved label directions. All states where any of AMVAC’s products are used require a registration by that specific state before it can be marketed or used in that state. State registrations are renewed annually, as appropriate. The EPA and state agencies have required, and may require in the future, that certain scientific data requirements be performed on registered products sold by AMVAC. AMVAC, on its own behalf and in joint efforts with other registrants, has furnished, and is currently furnishing, certain required data relative to specific products.

Under FIFRA, the federal government requires registrants to submit a wide range of scientific data to support U.S. registrations. This requirement results in operating expenses in such areas as testing and the

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production of new products. AMVAC expensed $3,081,000, $4,669,000 and $2,940,000 during 2004, 2003 and 2002 respectively, related to gathering this information. Based on facts known today, AMVAC estimates it will spend approximately $3,000,000 in 2005. Because scientific analyses are constantly improving, it cannot be determined with certainty whether or not new or additional tests may be required by the regulatory authorities. Additionally, while FIFRA Good Laboratory Practice standards specify the minimum practices and procedures which must be followed in order to ensure the quality and integrity of data related to these tests submitted to the EPA, there can be no assurance the EPA will not request certain tests/studies be repeated. AMVAC expenses these costs on an as incurred basis. See also PART II, Item 7 of this Annual Report for discussions pertaining to research and development expenses.

Raw Materials

AMVAC utilizes numerous firms as well as internal sources to supply the various raw materials and components used by AMVAC in manufacturing its products. Many of these materials are readily available from domestic sources. In those instances where there is a single source of supply or where the source is not domestic, AMVAC seeks to secure its supply by either long-term arrangements or advance purchases from its suppliers. AMVAC believes that it is considered to be a valued customer to such sole-source suppliers. Recent increases in energy costs are expected to have an adverse impact on the Company, although the ultimate impact cannot be measured at this time.

Environmental

During 2004, AMVAC continued activities to address environmental issues associated with its facility (the “Facility”) in Commerce, California.

In March 1997, the California Environmental Protection Agency Department of Toxic Substances Control (“DTSC”) accepted the Facility into its Expedited Remedial Action Program (“ERAP”). Under this program, the Facility must prepare and implement an environmental investigation plan. Depending on the findings of the investigation, the Facility may also be required to develop and implement remedial measures to address any historical environmental impairment. The environmental investigation and any remediation activities related to ten underground storage tanks at the Facility, which had been closed in 1995, will also be addressed by AMVAC under ERAP.

Soil and groundwater characterization activities began in December 2002 in accordance with the Site Investigation Plan that was approved by the DTSC. Additional activities were conducted in 2003 and 2004 with oversight provided by the DTSC. Additional investigation is planned over the next year under the oversight of the DTSC. Potential remediation activities may be initiated in late 2005. These investigation and potential remediation activities are required at all facilities that currently have, or in the past had, hazardous waste storage permits. Because AMVAC previously held a hazardous waste management permit, AMVAC is subject to these requirements. The cost associated with the potential remediation activities is not expected to have a material impact on the Company’s financial statements.

AMVAC is subject to numerous federal and state laws and governmental regulations concerning environmental matters and employee health and safety at the Commerce, California and Axis, Alabama facilities. AMVAC continually adapts its manufacturing process to the environmental control standards of the various regulatory agencies. The U.S. EPA and other federal and state agencies have the authority to promulgate regulations that could have an impact on AMVAC’s operations.

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AMVAC expends substantial funds to minimize the discharge of materials in the environment and to comply with the governmental regulations relating to protection of the environment. Wherever feasible, AMVAC recovers raw materials and increases product yield in order to partially offset increasing pollution abatement costs.

The Company is committed to a long-term environmental protection program that reduces emissions of hazardous materials into the environment, as well as to the remediation of identified existing environmental concerns. Federal and state authorities may seek fines and penalties for violation of the various laws and governmental regulations. As part of its continuing environmental program, except as disclosed in PART I, Item 3, Legal Proceedings, of this Annual Report, the Company has been able to comply with such proceedings and orders without any materially adverse effect on its business.

Employees

As of March 11, 2005 , the Company employed approximately 229 persons . AMVAC, on an ongoing basis, due to the seasonality of its business, uses temporary contract personnel to perform certain duties primarily related to packaging of its products. The Company believes it is cost beneficial to employ temporary contract personnel. None of the Company’s employees are subject to a collective bargaining agreement.

The Company believes it maintains positive relations with its employees.

Export Operations

The Company opened an office in 1998 in Mexico to conduct business in Mexico and related areas. The office operates under the name Quimica AMVAC De Mexico S.A. de C.V. and markets chemical products for agricultural and commercial uses.

The Company opened an office in August 1994, in the United Kingdom to conduct business in the European chemical market. The office, operating under the name AMVAC Chemical UK Ltd., focuses on developing product registration and distributor networks for AMVAC’s product lines throughout Europe. The office is located in Surrey, England, a city southwest of London. The operating results of this operation were not material to the Company’s total operating results for the years ended December 31, 2004, 2003 and 2002.

The Company classifies as export sales all products bearing foreign labeling shipped to a foreign destination.


	2004			2003			2002
Export Sales	$	10,265,000		$	8,943,000		$	7,470,000
Percentage of Net Sales		6.8	%		7.2	%		7.4	%

Risk Management

The Company continually evaluates insurance levels for product liability, property damage and other potential areas of risk. Management believes its facilities and equipment are adequately insured against loss from usual business risks. The Company has purchased claims made products liability insurance. There can be no assurance, however, that such products liability coverage insurance will continue to be available to the Company, or if available, that it will be provided at an economical cost to the Company.

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GEMCHEM, INC.

GemChem is a California corporation incorporated in 1991 and purchased by the Company in 1994. GemChem is a national chemical distributor. GemChem, in addition to purchasing key raw materials for the Company, also sells into the pharmaceutical, cosmetic and nutritional markets. Prior to the acquisition, GemChem acted in the capacity as the domestic sales force for the Company (from September 1991).

2110 DAVIE CORPORATION

DAVIE currently owns real estate for corporate use only. See also PART I, Item 2 of this Annual Report.

ENVIRONMENTAL MEDIATION, INC.

EMI is an environmental consulting firm.

* * *

Available Information

The Company makes available free of charge (through its website, www.american-vanguard.com ), its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with the Securities and Exchange Commission (“SEC”). Such reports are also available free of charge on the SEC’s website, www.sec.gov . Also available free of charge on the Company’s website are our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee Charters, our Code of Conduct and Ethics, our Employee Complaint Procedures for Accounting and Auditing Matters and our policy on Stockholder Nomination and Communication. The Company’s Internet website and the information contained therein or incorporated therein are not intended to be incorporated into this Annual Report on Form 10-K.

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ITEM 2

PROPERTIES

The Company’s corporate headquarters are located in Newport Beach, California. This facility is leased. See PART IV, Item 15 of this report for further information.

AMVAC owns in fee the Facility constituting approximately 152,000 square feet of improved land in Commerce, California (“Commerce”) on which its West-Coast manufacturing and some of its warehouse facilities and offices are located.

DAVIE owns in fee approximately 72,000 square feet of warehouse, office and laboratory space on approximately 118,000 square feet of land in Commerce, California, which is leased to AMVAC.

In 2001, AMVAC completed the acquisition of a manufacturing facility from DuPont. The facility is one of three such units located on DuPont’s 510 acre complex in Axis, Alabama. The acquisition consisted of a long-term ground lease of 25 acres and the purchase of all improvements thereon. The facility is a multi-purpose plant designed primarily to manufacture pyrethroids and organophosphates. The acquisition increased AMVAC’s capacity while also providing flexibility and geographic diversity. (Refer to PART II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operation of this Annual Report.)

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The Facility’s production areas are designed to run on a continuous twenty-four hour per day basis. AMVAC regularly adds chemical processing equipment to enhance its production capabilities. AMVAC believes its facilities are in good operating condition and are suitable and adequate for AMVAC’s foreseeable needs, have flexibility to change products, and can produce at greater rates as required. Facilities and equipment are insured against losses from fire as well as other usual business risks. The Company knows of no material defects in title to, or encumbrances on, any of its properties except that substantially all of the Company’s assets are pledged as collateral under the Company’s loan agreements with its primary lender. For further information, refer to note 3 of the Notes to the Consolidated Financial Statements in PART IV, Item 15 of this Annual Report.

AMVAC owns approximately 42 acres of unimproved land in Texas for possible future expansion.

GemChem’s, Chemical UK’s and Quimica AMVAC’s facilities consist of administration and sales offices which are leased.

The Company believes its properties to be suitable and adequate for its current purposes. The Company knows of no material defects in title to, or encumbrances on, any of its properties except that substantially all of the Company’s assets are pledged as collateral under the Company’s loan agreements with its primary lender. For further information, refer to note 2 of the Notes to the Consolidated Financial Statements in Part IV, Item 15 of this Annual Report.

ITEM 3

LEGAL PROCEEDINGS

DBCP LAWSUITS

Hawaii Matters

AMVAC and the Company were served with complaints in February 1997. The actions were filed in the Circuit Court of the Second Circuit, State of Hawaii entitled Board of Water Supply of the County of Maui v. Shell Oil Co., et. al. The suit named as defendants the Company, AMVAC, Shell Oil Company, The Dow Chemical Company, Occidental Chemical Company, Occidental Petroleum Corporation, Occidental Chemical Corporation, and Brewer Environmental Industry, Inc. Maui Pineapple Company was joined as a cross-defendant. The Complaint alleged that between two and four of the Board’s wells had been contaminated with 1,2-dibromo-3-chloropropane (“DBCP”) in excess of the maximum contaminant level (“MCL”). In addition, the Board of Water Supply contended that future wells may exceed the MCL level and would need remediation. While the suit could only include damages that had incurred by the time of the scheduled trial date of October 18, 1999, future suits could be filed as a well became contaminated. On August 2, 1999, a global settlement was reached, which included the remediation of the existing contaminated wells in addition to the installation of filtration devices on other wells for the next forty years on the island of Maui. The cash settlement was three million dollars ($3,000,000) of which AMVAC’s (and the Company’s) portion was five hundred thousand dollars ($500,000). [As to matters independent of indemnity issues, the Company recovered four hundred thousand dollars ($400,000) from one of its insurers.] The settlement agreement obligates the defendants to pay for the ongoing operation and maintenance of the filtration devices for up to forty years. The annual costs of operation and maintenance per well is estimated to be approximately sixty-nine thousand dollars ($69,000), to be adjusted annually by the consumer price index. The defendants are also obligated to pay between ninety and one-hundred percent for the cost of the installation of filtration devices on other wells that may exceed the defined maximum contaminant level in the next forty years. The number of future wells needing remediation could be less than six or more than that amount, however, the maximum number of wells subject to remediation under the agreement is fifty. AMVAC’s share of the ongoing operation and maintenance charges and installation of additional devices on other wells is seventeen and one-half percent. The obligations of the defendants under this agreement are secured by a twenty million-dollar letter of credit obtained by Dow Chemical. AMVAC will pay seventeen and one-half percent of the annual cost of the letter

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of credit (which does not have a material impact on the Company’s financial statements) directly to Dow Chemical. On June 10, 2004, AMVAC was notified that the plaintiff had completed conversion of the H’Poko wells from a temporary to a permanent filtration facility. After credits of approximately eight hundred thousand dollars ($800,000) from the settlement were deducted from the one million eight hundred thousand dollars ($1,800,000) cost of a two-vessel system, the claim to the defendants was one million dollars ($1,000,000). The cost of the temporary facility was included in the original settlement. On January 21, 2005, defendants were notified that the claim by the plaintiff would be submitted in approximately sixty days. AMVAC’s share of the permanent filtration system will be one hundred and seventy-five thousand dollars ($175,000) which has been accrued for/reserved by the Company. Thus far, no additional wells have been remediated nor have there been ongoing operation and maintenance charges.

In October 1997, AMVAC was served with a Complaint(s) in which it was named as a defendant, filed in the Circuit Court, First Circuit, State of Hawaii and in the Circuit Court of the Second Circuit, State of Hawaii (two identical suits) entitled Patrickson, et. al. v. Dole Food Co., et. al (“Patrickson Case”) alleging damages sustained from injuries caused by plaintiffs’ exposure to DBCP while applying the product in their native countries. Other named defendants are: Dole Food Co., Dole Fresh Fruit, Dole Fresh Fruit International, Pineapple Growers Association of Hawaii, Shell Oil Company, Dow Chemical Company, Occidental Chemical Corporation, Standard Fruit Company, Standard Fruit & Steamship, Standard Fruit Company De Costa Rica, Standard Fruit Company De Honduras, Chiquita Brands, Chiquita Brands International, Martrop Trading Corporation, and Del Monte Fresh Produce. (American Vanguard Corporation has not been sued in these actions.) The ten named plaintiffs are citizens of four countries—Guatemala, Costa Rica, Panama, and Ecuador. Punitive damages are sought against each defendant. The plaintiffs were banana workers and allege that they were exposed to DBCP in applying the product in their native countries. The case was also filed as a class action on behalf of other workers so exposed in these four countries. The plaintiffs” allege sterility and other injuries. (The plaintiffs’ attorneys (from South Carolina) have also represented foreign banana workers in the Texas and Mississippi matters discussed below.) For the last seven years, the focus of the case has been on procedural issues. The defendants moved to dismiss under the doctrine of forum non conveniens . Under this doctrine, the foreign plaintiffs would have to sue in their own countries rather than using the United States courts. The plaintiffs wish to keep the cases in the United States and have them remanded to state court. The plaintiffs also contend that the federal court does not have jurisdiction. In September 1998, the court granted defendants’ motion to dismiss based on the grounds of forum non conveniens . A number of conditions were imposed including consent to jurisdiction in the four foreign countries for the ten named plaintiffs, use of discovery taken in the United States, the requirement that the plaintiffs file suits in their home countries by December 9, 1998, and the agreement by defendants to pay any judgment, if any, that might be entered in the foreign countries. The court order also provided that the plaintiffs could return to the United States if the foreign countries refused to accept jurisdiction. The court then dismissed the case on March 8, 1999. The plaintiffs subsequently appealed to the Ninth Circuit Court of Appeal. The Ninth Circuit issued its decision on May 30, 2001, holding that the federal court did not have jurisdiction. A petition for writ of certiorari (a writ of a superior court to call up the records of an inferior court or quasi-judicial body) was filed in United States Supreme Court on October 5, 2001 and the United States Supreme Court subsequently granted a hearing. Oral argument was held on January 22, 2003. On April 22, 2003, the United States Supreme Court issued its decision in favor of the plaintiffs, holding there was no jurisdiction in federal court. This vacates the order dismissing the case under the forum non conveniens doctrine. One September 5, 2003, the U.S. District Court in Honolulu issued an order that the case will be remanded to state court unless there is an objection filed by September 18, 2003. As the U.S. Supreme Court has issued its final decision on the lack of federal court jurisdiction, the case will be remanded to state. Once the case reaches state court, the defendants will have to decide whether they will file a motion to dismiss under forum non conveniens pursuant to state court procedures. No activity took place on this case throughout 2004 or to date as apparently, the suit has not been officially received in the state court upon remand. The plaintiffs’ attorneys reported that the ten plaintiffs filed suit in their home countries by December 9, 1998,

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alleging in excess of two million United States dollars ($2,000,000) per plaintiff. The suit in Guatemala was served on AMVAC in March 2001, but no defendant has been required to answer. Suits in the other countries have not been served. AMVAC has engaged local attorneys in the countries to defend these foreign suits. No discovery has taken place on the individual claims of the plaintiffs. It is too early to provide any evaluation of the likelihood of an unfavorable outcome at this time. Without such discovery, it is unknown whether any of the plaintiffs was exposed to AMVAC brand DBCP or what statute of limitation defenses may apply. AMVAC intends to contest the cases vigorously.

On or about October 1, 2003, the Company was indirectly advised of a possible claim for ground water contamination on the Island of Maui. (This is separate and distinct from Item 1 (A) above.) The Company was provided with communications between Maui Land & Pineapple Company, Inc. (“Maui Pine”) and Hawaii Water Service Company (“HWSC”). HWSC is a non-municipally owned public water utility owning three water wells allegedly contaminated with DBCP and 1,2,3-tri-chloropropane (“TCP”). HWSC further alleges that the wells were contaminated by the above mentioned chemicals manufactured, marketed, distributed and/or sold by Maui Pine, Maui Pineapple Company (collectively, “Maui Pine”), The Dow Chemical Company, Dow AgroSciences, LLC (collectively, “Dow”), Occidental Petroleum Corporation, Occidental Chemical Corporation (collectively, “Occidental”), Shell Oil Company, Shell Chemical Company (collectively, “Shell”), American Vanguard Corporation, AMVAC Chemical Company (collectively, “AMVAC”), BEI Hawaii and Brewer Environmental Industries Holdings, Inc. (collectively “Brewer”). On or about October 17, 2003, all parties agreed to a tolling of the applicable statute of limitations in order to enter into mediation proceedings. The Company has been advised that the total claim could approximate four million dollars ($4,000,000), inclusive of future expenses for operations and maintenance of filtration devices on the wells. The parties met with an independent mediator on January 14 and 15, 2004 to discuss this claim. On January 15, 2004, the Company reached a settlement with HWSC for fifty-five thousand dollars ($55,000.00), contingent upon obtaining a court order approving the settlement as one made in good faith. The settlement includes future expenses for operations and maintenance. As not all parties settled at the mediation, HWSC filed suit in the Circuit Court of the Second Circuit, State of Hawaii on February 1, 2004. The non-settling parties subsequently removed the case to federal court, which has delayed the filing of motions in state court to approve the settlement as one made in good faith. The case was remanded to state court on January 7, 2005. With the case back in state court, a motion for approval of the good faith settlement will be made. Once the court approves the settlement, the fifty-five thousand dollars ($55,000) will be paid to HWSC to conclude AMVAC’s involvement.

Mississippi Matters

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have not been served. On January 19, 2001, the court issued an unpublished decision, finding that there was jurisdiction in federal court, but remanded just one case (Espinola) back to the trial court to determine if a stipulation which limited the plaintiff’s recovery to fifty thousand dollars ($50,000) was binding. If the stipulation is binding, that case will be remanded to state court. If the stipulation is not binding, that case will be dismissed along with the others, requiring the plaintiffs to litigate in their native countries. A deposition of the plaintiff Espinola was scheduled but was never taken. The federal court then ordered remand to state court. The attorneys for Dow Chemical Co. filed a motion for reconsideration, explaining that the plaintiffs attorneys did not produce their client for deposition. This motion is still pending. No activity took place on this matter throughout 2004 or to date. No discovery has taken place on the individual claims of these plaintiffs. If the Espinola case is tried in Mississippi state court, the maximum recovery is fifty thousand dollars ($50,000). Without discovery, it is unknown whether any of the plaintiffs were exposed to the Company’s product or what statute of limitation defense may apply. AMVAC intends to contest the cases vigorously. It is too early to provide an evaluation of the likelihood of an unfavorable outcome at this time.

Louisiana Matters

In November 1999, AMVAC was served with three complaints filed in the 29 ^th Judicial District Court for the Parish of St. Charles, State of Louisiana entitled Pedro Rodrigues et. al v. Amvac Chemical Corporation et. al, Andres Puerto, et. al v. Amvac Chemical Corporation, et. al and Eduardo Soriano, et al v. Amvac Chemical Corporation et. al. Other named defendants are: Dow Chemical Company, Occidental Chemical Corporation, Shell Oil Company, Standard Fruit, Dole Food, Chiquita Brands, Tela Railroad Company, Compania Palma Tica, and Del Monte Fresh Produce. American Vanguard Corporation is not named as a defendant. These suits were filed in 1996, they were not served until November 1999. (These complaints were filed in association with the same attorneys who have handled the Delgado and Carcamo matters listed below.) The complaints allege personal injuries from alleged exposure to DBCP (punitive damages are also sought). The plaintiffs (approximately three thousand nine hundred) are primarily from the countries of the Philippines, Costa Rica, Ecuador and Guatemala. In November 1999, the cases were removed to the United States District Court for the Eastern District of Louisiana. The plaintiffs filed a motion to remand the cases back to the state court in December 1999. In February 2000, the plaintiffs’ attorneys withdrew their motion to remand the cases to state court without prejudice, stating that they would wait for an appellate court determination on similar issues in the Mississippi and Texas cases. Dow Chemical Company, Shell Oil Company and Occidental Chemical Corporation contend that the vast majority of these plaintiffs were included in the settlement of some fifteen thousand plaintiffs mentioned in the Delgado and Carcamo matters discussed below. In September 2002, the plaintiffs’ attorneys finally evaluated their list of plaintiffs who had settled previously. They agreed that the plaintiffs who settled with Dow Chemical Company, Shell Oil Company, and Occidental Chemical Corporation were now only proceeding against the grower defendants. The plaintiffs who had not settled previously would continue with the suit against all defendants, including AMVAC. Thus, out of the approximately three thousand nine-hundred plaintiffs, about three hundred and fourteen are left (one hundred and sixty-seven are from Ecuador, one hundred and two are from Costa Rica and forty-five are from Guatemala). The plaintiffs filed a consolidated third amended complaint in October 2002 with Soriano as the lead case. Each plaintiff seeks in excess of the minimum jurisdiction of federal court for diversity of citizenship cases, seventy-five thousand dollars ($75,000). AMVAC has answered the third amended complaint. With the United States Supreme Court holding there was no federal court jurisdiction in the Patrickson case, the federal court judge issued an order to the parties in April 2003 as to why the cases should not be remanded to state court. The defendants argued that there was still federal court jurisdiction because of diversity of citizenship, but this diversity did not exist at the time the suites were originally filed in 1996 and accordingly, the court remanded the cases to state court in June 2003. In state court, the three cases were assigned to two different judges. The defendants considered filing another motion to dismiss based on forum non conveniens . In Louisiana, all defendants must join in making such a motion. By this time, unfavorable anti- forum non conveniens laws had passed or were pending in several of the

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countries where the plaintiffs resided. Several of the defendants were against consenting to jurisdiction in those countries, which is a condition required by an order of dismissal under forum non conveniens . As a result, these cases will now be litigated in state court in Louisiana. The state court has not yet scheduled any case management or status conferences. It is likely that the three cases will be reconsolidated in state court. No activity took place on this matter throughout 2004 or to date. As in the other banana worker’s cases, no discovery has taken place on the individual claims of the plaintiffs. Thus, it is unknown as to how many of the plaintiffs claim exposure to AMVAC’s product and whether their claims are barred by applicable statutes of limitation. AMVAC intends to vigorously contest these cases. It is too early to provide any evaluation of the likelihood of an unfavorable outcome at this time.

Texas Matters

These matters involve an earlier round of litigation by foreign banana workers. The complaints filed in the United States Court of Appeals, Fifth Circuit entitled Franklin Rodriquez Delgado, et al., Jorge Colindres Carcamo, individually and on behalf of all other similarly situated, et al., Juan Ramon Valdez, et al., and Isae Carcamo v. Shell Oil Company, et al. The complaints are for personal injuries from alleged exposure to DBCP. AMVAC was not sued by the plaintiffs but was sued on a third party complaint by Dow Chemical Company. These cases were originally filed in various state courts in Texas and removed by the defendants to federal court. By order dated July 11, 1995, the United States District Court granted defendants’ motion to dismiss pursuant to the doctrine of forum non conveniens , requiring the plaintiffs to sue in their native countries. The court required the defendants to consent to jurisdiction in the foreign countries along with other conditions. As AMVAC had not been sued by the plaintiffs directly, it refused to consent to jurisdiction in the foreign countries for these plaintiffs. In 1995, Dow Chemical Company dismissed its third party complaint against AMVAC without prejudice. Subsequently, Dow Chemical Company and Shell Oil Company settled with these plaintiffs as well as with about fifteen thousand other banana workers represented by the plaintiffs’ law firm (not the firm representing the Patrickson and Mississippi plaintiffs). Dow Chemical Company was then dismissed by the plaintiffs with prejudice in September 1997. Two intervenors (who are represented by the same attorneys as the plaintiffs in the Patrickson and Mississippi cases) have filed a motion in opposition to this dismissal. The plaintiffs appealed to the Fifth Circuit on the order of dismissal under forum non conveniens . In October 2000, the Fifth Circuit found federal court jurisdiction and affirmed the dismissals based on forum non conveniens . The United States Supreme Court refused to accept a hearing at that time. While AMVAC is not presently a party in this lawsuit having been dismissed without prejudice, the case is still pending, with the focus now shifted to the grower defendants. These remaining claims are apparently now being remanded to state courts in Texas.

Nicaragua Matters

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management order that would permit obtaining plaintiffs’ medical records in Nicaragua and starting depositions of eighteen of the plaintiffs in Los Angeles and independent medical examination scheduled to take place in May 2005. At a status conference on February 9, 2005, a trial date for July 17, 2006 was scheduled. No discovery has yet taken place on the individual claims of the plaintiffs. Thus, it is unknown as to how many of the thirty-six plaintiffs, if any, actually claim exposure to AMVAC’s product, the nature and extent of their injuries, and whether their claims are barred by applicable statutes of limitation. AMVAC intends to vigorously contest this case. It is too early to provide any evaluation of the likelihood of an unfavorable outcome at this time.

In January 2003, three new cases were filed in Nicaragua. This time defendants besides Dow Chemical Company, Shell Oil Company and Dole Food were sued, including AMVAC, Occidental Chemical Corporation, Del Monte Fresh Produce, Chiquita Brands, Ameribrom and three Chevron entities. It is reported that these plaintiffs claim damages for sterility and that there are approximately three hundred and fifty plaintiffs named in these three cases. It has also been reported that a suit seeking damages for personal injuries based on alleged exposure to DBCP in groundwater has been filed in Nicaragua. AMVAC has not been served to date and has not seen the complaints. AMVAC disputes that the Nicaraguan courts have jurisdiction over it. AMVAC intends to vigorously contest these cases. It is too early to provide any evaluation of the likelihood of an unfavorable outcome at this time.

OTHER MATTERS

The Company may be, from time to time, involved in other legal proceedings arising in the ordinary course of its business. The results of litigation cannot be predicted with certainty. The Company has and will continue to expend resources and incur expenses in connection with these proceedings. There can be no assurance that the Company will be successful in these proceedings. While the Company continually evaluates insurance levels for product liability, property damage and other potential areas of risk, an adverse determination in one or more of these proceedings could subject the Company to significant liabilities, which could have a material adverse effect on its financial condition and operating results.

ITEM 4

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted during the fourth quarter of 2004 to a vote of security holders, through the solicitation of proxies or otherwise.

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PART II

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

ITEM 5

MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The Company’s $0.10 par value common stock (“Common Stock”) is listed on the American Stock Exchange under the ticker symbol AVD (since January 1998). The Company’s Common Stock traded on The NASDAQ Stock Market under the symbol AMGD from March 1987 through January 1998.

The following table sets forth the range of high, low and closing sales prices as reported for the Company’s Common Stock for the calendar quarters indicated (as adjusted for stock splits and stock dividends).


	High		Low		Close
Calendar 2004
First Quarter	$	32.13	$	22.33	$	31.33
Second Quarter		41.50		27.90		33.68
Third Quarter		36.00		27.25		35.74
Fourth Quarter		40.95		31.30		36.78
Calendar 2003
First Quarter	$	11.11	$	8.91	$	11.09
Second Quarter		13.60		11.10		12.24
Third Quarter		19.03		12.20		16.63
Fourth Quarter		26.00		16.57		24.97

As of March 11, 2005, the number of stockholders of the Company’s Common Stock was approximately 1,900, which includes beneficial owners with shares held in brokerage accounts under street name and nominees.

On September 14, 2004, the Company announced that the Board of Directors declared a cash dividend of $.05 per share which was distributed on October 15, 2004 to stockholders of record as of October 1, 2004.

On March 16, 2004, the Company announced that the Board of Directors declared a 3 for 2 stock split and a cash dividend of $.12 per share ($.08 as adjusted for 3 for 2 stock split). Both dividends were distributed on April 16, 2004 to stockholders of record at the close of business on March 26, 2004. The cash dividend was paid on the number of shares outstanding prior to the 3 for 2 stock split. Stockholders entitled to fractional shares resulting from the stock split received cash in lieu of such fractional share based on the closing price of the Company’s common stock on March 26, 2004. Accordingly, all weighted average share and per share amounts have been restated to reflect the stock split.

On September 12, 2003, the Company announced that the Board of Directors declared a cash dividend of $.05 per share ($.033 as adjusted for 3 for 2 stock split announced on March 16, 2004) which was distributed on October 17, 2003 to stockholders of record as of October 3, 2003.

On March 19, 2003, the Company announced that the Board of Directors declared a 3 for 2 stock split and a cash dividend of $.13 per share ($.058 as adjusted for stock splits). Both dividends were distributed on April 11, 2003 to stockholders of record at the close of business on March 28, 2003.

The Company has issued a cash dividend in each of the last nine years dating back to 1996.

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EQUITY COMPENSATION PLAN INFORMATION (1)


Plan category	(a)	(b)		(c)
Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders	1,611,000	$	11.63	317,401
Equity compensation plans not approved by security holders	—			—

Total	1,611,000			317,401

(1)

Does not include the American Vanguard Corporation Employee Stock Purchase Plan (approved by security holders in June 2001). Under this plan an aggregate of 600,000 shares of Common Stock may be sold to eligible employees pursuant to the plan. The purchase price shall be equal to 85% of the fair market value of the Company’s Common Stock on the first day of the enrollment period or on the last day of the enrollment period, whichever is lower.

ITEM 6

SELECTED FINANCIAL DATA (in thousands, except for weighted average number of shares and per share data)


	2004		2003		2002		2001		2000
Operating revenues	$	150,855	$	124,863	$	100,671	$	83,127	$	74,517

Operating income	$	24,958	$	16,542	$	11,879	$	10,367	$	8,828

Income before income tax expense	$	23,733	$	16,182	$	11,278	$	9,023	$	7,185

Net income	$	14,477	$	10,263	$	7,049	$	5,639	$	4,311

Earnings per common share(1)	$	1.61	$	1.16	$	.81	$	.66	$	.49

Earnings per common share—assuming dilution(1)	$	1.51	$	1.10	$	.78	$	.64	$	.48

Total assets	$	122,346	$	106,734	$	75,448	$	68,565	$	66,091

Long-term debt and capital lease obligations, less current portion	$	19,474	$	22,142	$	17,765	$	14,164	$	18,647

Stockholders’ equity	$	63,972	$	50,334	$	40,243	$	33,958	$	29,288

Weighted average shares outstanding(1)		8,981,698		8,811,303		8,670,301		8,605,314		8,877,096

Weighted average shares outstanding—assuming dilution(1)		9,583,725		9,314,253		9,091,785		8,870,850		9,024,309

Dividends per share of common stock(1)	$	.130	$	.091	$	.069	$	.053	$	.051

The selected consolidated financial data set forth above with respect to each of the calendar years in the five-year period ended December 31, 2004 have been derived from the Company’s consolidated financial statements and are qualified in their entirety by reference to the more detailed consolidated financial statements

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and the independent registered public accounting firm’s reports thereon which are included elsewhere in this Report on Form 10-K for the three years ended December 31, 2004. See ITEM 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

(1)	The basic and diluted weighted average number of shares outstanding, net income per share and dividend information for all periods presented have been restated to reflect the effects of stock splits and dividends.

ITEM 7

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Results of Operations

2004 Compared with 2003:


	2004		2003		Change
Net sales:
Crop	$	122,498,000	$	104,895,000	$	17,603,000
Non-crop		28,357,000		19,968,000		8,389,000

	$	150,855,000	$	124,863,000	$	25,992,000

Gross profit:
Crop	$	58,465,000	$	47,932,000	$	10,534,000
Non-crop		13,793,000		10,942,000		2,851,000

	$	72,258,000	$	58,874,000	$	13,385,000

The Company reported net income of $14,477,000 or $1.51 per diluted share in 2004 as compared to net income of $10,263,000 or $1.10 per diluted share in 2003. (Net income per share data has been restated to reflect the effect of a 3 for 2 stock split that was distributed on April 16, 2004.)

Net sales in 2004 increased by 21% to $150,855,000 from $124,863,000 in 2003. The record sales levels were as a result of increased sales (primarily attributable to higher sales volume) of the Company’s product lines used for crop protection (primarily on cotton) as well as sales of Bifenthrin, the generic pyrethroid product the Company launched during the first quarter of 2004. Also contributing to the increased sales were sales increases of the Company’s mosquito adulticide which was heavily used as a result of the hurricanes in 2004. There were no unusual or infrequent events or transactions outside of the ordinary course of business, which materially impacted net sales.

Gross profits increased $13,384,000 to $72,258,000 in 2004 from $58,874,000 in 2003. Gross profit margins increased to 48% in 2004 from 47% in 2003. The improvement in gross profit margins was due to the changes in the sales mix of the Company’s products.

Gross profit margins may not be comparable to those of other companies, since some companies include their distribution network in cost of goods sold and the Company, as well as others, include distribution costs in operating expenses (or other line items other than cost of goods sold).

Operating expenses, which are net of other income and expenses, increased by $4,968,000 to $47,300,000 in 2004 from $42,332,000 in 2003. Operating expenses as a percentage of sales were 31% in 2004 as compared to 34% in 2003. The differences in operating expenses by specific departmental costs are as follows:

•

Selling expenses increased by $1,662,000 to $17,940,000 in 2004 from $16,278,000 in 2003. The increase was due primarily to increased variable selling expenses that relate to both increased sales levels and the product mix of sales.

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•

General and administrative expenses increased by $3,301,000 to $12,728,000 in 2004 as compared to $9,427,000 in 2003. The increase was due to increases in outside professional expenses, payroll and payroll related costs, and costs related to the amortization of intangible assets in connection with new asset acquisitions. The increase in outside professional expenses include compliance costs of approximately $575,000 in 2004, related to Section 404 of the Sarbanes-Oxley Act.

•

Research and product development costs and regulatory registration expenses declined by $769,000 to $6,956,000 in 2004 from $7,725,000 in 2003. The decline was a result of lower costs incurred to generate scientific data related to the registration.

•

Freight, delivery and warehousing costs increased $774,000 to $9,676,000 in 2004 as compared to $8,902,000 in 2003 due to the increased sales levels.

Interest costs before capitalized interest and interest income were $1,310,000 in 2004 as compared to $986,000 in 2003. The Company’s average overall debt in 2004 was $37,822,000 as compared to $24,526,000 in 2003. The higher overall debt levels accounted for the higher gross interest costs. The Company recorded $303,000 in interest income in 2003, which primarily relates to income taxes receivable from the state of California as a result of filing amended tax returns for the years ended December 31, 1995 through 1998. (The overall after tax effect of recording the tax benefit due from California (franchise tax) generated $.03 per diluted share in 2003. The refund was received in July 2003.) The Company capitalized $72,000 of interest costs related to construction in progress during 2004 as compared to $323,000 in 2003.

Income tax expense increased by $3,337,000 to $9,256,000 in 2004 as compared to $5,919,000 in 2003. The Company’s effective tax rate was 39.0% in 2004 as compared to 36.5% in 2003. (See note 4 to the Consolidated Financial Statements for additional analysis of the changes in income tax expense.)

Weather patterns can have an impact on the Company’s operations. Weather conditions influence pest population by impacting gestation cycles for particular pests and the effectiveness of some of the Company’s products, among other factors. The end user of some of the Company’s products may, because of weather patterns, delay or intermittently disrupt field work during the planting season which may result in a reduction of the use of some of the Company’s products. During 2004, weather patterns did not have a material adverse effect on the Company’s results of operations.

Because of elements inherent to the Company’s business, such as differing and unpredictable weather patterns, crop growing cycles, changes in product mix of sales, ordering patterns that may vary in timing, and promotional programs, measuring the Company’s performance on a quarterly basis, (gross profit margins on a quarterly basis may vary significantly) even when such comparisons are favorable, is not as meaningful an indicator as full-year comparisons. The primary reason is that the use cycles do not necessarily coincide with financial reporting cycles. Because of the Company’s cost structure, the combination of variable revenue streams, and the changing product mixes, results in varying quarterly levels of profitability.

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Results of Operations

2003 Compared with 2002:


	2003		2002		Change
Net sales:
Crop	$	104,895,000	$	79,271,000	$	25,624,000
Non-crop		19,968,000		21,400,000		(1,432,000	)

	$	124,863,000	$	100,671,000	$	24,192,000

Gross profit:
Crop	$	47,932,000	$	32,834,000	$	15,098,000
Non-crop		10,942,000		11,041,000		(99,000	)

	$	58,874,000	$	43,875,000	$	14,999,000

The Company reported net income of $10,263,000 or $1.10 per diluted share in 2003 as compared to net income of $7,049,000 or $.78 per diluted share in 2002. (Net income per share data have been restated to reflect the effect of a 3 for 2 stock split that was distributed on April 16, 2004.)

Net sales in 2003 increased by 24% to $124,863,000 from $100,671,000 in 2002. The record sales levels were as a result of increased sales (primarily attributable to higher sales volume) of the Company’s product lines used for crop protection. Specifically, increased sales of the Company’s insecticides, soil fumigants, molluscicides, and plant growth regulators product lines more than offset a decline in sales of the Company’s defoliant and fungicide product lines, resulting in the overall increase in net sales. There were no unusual or infrequent events or transactions outside of the ordinary course of business, which materially impacted net sales.

Gross profits increased $14,999,000 to $58,874,000 in 2003 from $43,875,000 in 2002. Gross profit margins increased to 47% in 2003 from 44% in 2002. The improvement in gross profit margins was due to the changes in the sales mix of the Company’s products.

Operating expenses, which are net of other income and expenses, increased by $10,336,000 to $42,332,000 in 2003 from $31,996,000 in 2002. Operating expenses as a percentage of sales were 34% in 2003 as compared to 32% in 2002. The differences in operating expenses by specific departmental costs are as follows:

•

Selling expenses increased by $5,602,000 to $16,278,000 in 2003 from $10,676,000 in 2002. The increase was due primarily to increased variable selling expenses that relate to both increased sales levels and the product mix of sales.

•

General and administrative expenses increased by $1,000,000 to $9,427,000 in 2003 as compared to $8,427,000 in 2002. The increase was due to increases in expenses related to the amortization of intangible assets in connection with new asset acquisitions in 2003 and increased payroll and payroll related costs.

•

Research and product development costs and regulatory registration expenses increased by $2,008,000 to $7,725,000 in 2003 from $5,717,000 in 2002. The increase was a result of increases in costs incurred to generate scientific data related to the registration and possible new uses of the Company’s products (which accounted for approximately 85% of the increase) and increased payroll and payroll related costs.

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•

Freight, delivery and warehousing costs increased $1,726,000 to $8,902,000 in 2003 as compared to $7,176,000 in 2002 due to the increased sales levels.

Interest costs before capitalized interest and interest income remained virtually unchanged at $986,000 in 2003 as compared to $973,000 in 2002. The Company recorded $303,000 in interest income in 2003, which primarily relates to income taxes receivable from the state of California as a result of filing amended tax returns for the years ended December 31, 1995 through 1998. (The overall after tax effect of recording the tax benefit due from California (franchise tax) generated $.033 per diluted share in 2003. The refund was received in July 2003.) The Company capitalized $323,000 of interest costs related to construction in progress during 2003 as compared to $347,000 in 2002.

Income tax expense increased by $1,690,000 to $5,919,000 in 2003 as compared to $4,229,000 in 2002. The Company’s effective tax rate was 36.6% in 2003 as compared to 37.5% in 2002. (See note 4 to the Consolidated Financial Statements for additional analysis of the changes in income tax expense.)

Liquidity and Capital Resources

Operating activities provided $15,410,000 of cash during the year ended December 31, 2004. Net income of $14,477,000, non-cash depreciation and amortization of $5,800,000 and an increase in accrued expenses and other payables of $7,008,000, provided $27,285,000 of cash for operations. Increases in inventories, prepaid expenses and receivables of $10,246,000, $422,000 and $108,000 along with a decline in deferred taxes and accounts payable of $1,053,000 and $46,000, respectively, used $11,875,000 in cash for operating activities.

The Company used $11,066,000 in investing activities in 2004. It invested $8,483,000 in capital expenditures, $2,612,000 in intangible assets while other non-current assets declined by $29,000.

The Company used $4,774,000 in financing activities during 2004. The Company received proceeds from new long-term debt of $21,288,000. Net borrowings under the Company’s fully-secured revolving line of credit declined by $12,200,000. The Company made payments on its debt of $13,023,000, received $637,000 from the issuance of common stock, paid cash dividends of $1,175,000 and purchased treasury stock for $301,000.

On October 7, 2004, the Company executed an Amended and Restated Credit Agreement, with a syndicate of commercial lenders led by the Company’s primary bank as the administrative agent and a lender, two other banks as lenders and a fourth as a participant, for an $80,000,000 fully-secured credit facility. This credit facility replaced the Company’s previous credit facility with its primary bank and one other bank entered into in May 2002 and amended in March 2004. The new credit facility consists of a $45,000,000 revolving line of credit and a $35,000,000 term loan. These loans bear interest at the prime rate (“Referenced Loans”), or at the Company’s options, a fixed rate of interest offered by the Bank (such as an adjusted LIBOR rate plus certain margins, in each case dependent on certain debt ratios (“Fixed Loans”)). The principal payments of the term loan are payable in equal quarterly installments on or before the last business day of each February, May, August and November, commencing November 30, 2004 and in one final installment in the amount necessary to repay the remaining outstanding principal balance of the term loan in full on the maturity date. Interest accruing on the Referenced Loans are payable quarterly, in arrears, on the last day of each March, June, September and December, and on the maturity date of such loan in the amount of interest then accrued but unpaid. Interest accruing on the Fixed Loans are payable on the last day of the interest period, provided that, with an interest period longer than three months, interest is payable on the last day of each three-month period after the commencement of such interest period. The senior secured revolving line of credit and term loan matures on October 7, 2009 (five years from the closing date) and contain certain covenants as defined in the agreement. The Company had $43,000,000 of availability under its revolving line of credit as of December 31, 2004.

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Management continues to believe, that to continue to improve its working capital position and maintain flexibility in financing interim needs, it is prudent to explore all available sources of financing. Accordingly, the Company filed a universal shelf registration statement on Form S-3 with the SEC on February 25, 2005 pursuant to which the Company may issue common and preferred stock, warrants and debt securities from time to time, up to an aggregate offering price of $50,000,000. The terms of any future offering would be established at the time of the offering.

Contractual Obligations and Off-Balance Sheet Arrangements

The following summarizes our contractual obligations at December 31, 2004 and the effects such obligations are expected to have on liquidity and cash flow in future periods:


	Payments Due by Period
	Total		Less than 1 Year		1–3 Years		4–5 Years		After 5 Years
Long-term debt	$	1,000	$	1,000	$	—	$	—	$	—
Note payable to bank		21,580		4,107		8,213		7,213		2,048
Accrued royalty obligations		1,837		1,837		—		—		—
Employment agreement(s)		1,597		683		914		—		—
Operating leases		1,398		278		534		466		120

	$	27,412	$	7,905	$	9,661	$	7,679	$	2,168

Recently Issued Accounting Guidance

In November 2002, the FASB issued FASB Interpretation No. 45 (“FIN 45”) Guarantor’s Accounting and Disclosure Requirement for Guarantees, Including Indirect Guarantees of Indebtedness of Others . This Interpretation elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and initial measurement provisions of this Interpretation are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The following is a summary of the Company’s agreements that the Company has determined is within the scope of FIN 45.

Under its bylaws and written indemnification agreements, the Company has agreed to indemnify its officers and directors for certain events or occurrences arising as a result of the officer or director’s serving in such capacity. The term of the indemnification period is for the officer’s or director’s lifetime. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. However, the Company has a directors’ and officers’ liability insurance policy that reduces its exposure and enables it to recover a portion of any future amounts paid. As a result of its insurance policy coverage, the Company believes the estimated fair value of these indemnification agreements is minimal and has no liability recorded for these agreements as of December 31, 2004.

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during short-term disability. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions may be unlimited. The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the Company believes the estimated fair value of these provisions is minimal. Accordingly, the Company has no liabilities recorded for these agreements as of December 31, 2004.

On October 22, 2004, the American Jobs Creation Act of 2004 (the “Act”) was signed into law. The Act provides for a special one-time tax deduction of 85% of certain foreign earnings that are repatriated (as defined in the Act) in either an enterprise’s last tax year that began before the enactment date, or the first tax year that begins during the one-year period beginning on the date of enactment. The Act also includes a tax deduction of up to 9% (when fully phased-in) of the lesser of (a) “qualified production activities income”, as defined in the Act or (b) taxable income (after the deduction for the utilization of any net operating loss carryforwards). As a result of the Act, the FASB issued FASB Staff Positions (“FSP”) 109-1, “Application of FASB Statement No. 109, Accounting for Income Taxes, to the Tax Deduction on Qualified Production Activities Provided by the American Jobs Creation Act of 2004”, and 109-2, “Accounting and Disclosure Guidance for the Foreign Repatriation Provision within the American Jobs Creation Act of 2004”. These FSPs were issued effective as of December 21, 2004. The Company is still assessing the financial statement impact of the Act and these FSPs.

In November 2004, the FASB issued SFAS No. 151, “Inventory Costs.” This statement amends Accounting Research Bulletin (“ARB”) No. 43, Chapter 4 and clarifies that abnormal amounts of idle facility expense, freight, handling costs and wasted materials should be recognized as period charges and requires that fixed production overhead be allocated to inventory based on the normal capacity of the production facility. SFAS No. 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The adoption of this statement is not expected to have a material impact on the Company’s financial statements.

In December 2004, the FASB issued SFAS No. 123 (revised 2004), “Share-Based Payment”. This statement replaced SFAS No. 123, “Accounting For Stock-Based Compensation” and superseded APB Opinion No. 25, “Accounting for Stock Issued to Employees”. This statement requires that the cost resulting from all share-based payment transactions be recognized through the financial statements at an amount based on the fair value of an award at the date of its grant. The statement is effective for all periods beginning after June 15, 2005. The Company will adopt the statement as of July 1, 2005 and therefore, will incur compensation expenses in the third and fourth quarters of 2005 for any non-vested options granted prior to 2005. The Company is still assessing the financial statement impact of adoption.

Foreign Exchange

Management does not believe that the fluctuation in the value of the dollar in relation to the currencies of its customers in the last three fiscal years has adversely affected the Company’s ability to sell products at agreed upon prices denominated in U.S. dollars. No assurance can be given, however, that adverse currency exchange rate fluctuations will not occur in the future. Should adverse currency exchange rate fluctuations occur in geographies where the Company sells/exports its products, management is not certain such fluctuations will materially impact the Company’s operating results.

Inflation

Management believes inflation has not had a significant impact on the Company’s operations during the past three years.

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CRITICAL ACCOUNTING POLICIES

Certain of the Company’s policies require the application of judgment by management in selecting the appropriate assumptions for calculating financial estimates. These judgments are based on historical experience, terms of existing contracts, commonly accepted industry practices and other assumptions that the Company believes are reasonable under the circumstances. These estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary. Actual results may differ from these estimates under different assumptions or conditions. The Company’s critical accounting polices and estimates include:

Revenue Recognition

Revenue from sales is recognized at the time title and the risks of ownership passes. This is when the customer has made the fixed commitment to purchase the goods, the products are shipped per the customers’ instructions, the sales price is determinable, and collection is reasonably assured.

Long-lived Assets

The carrying value of long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Measurement of the impairment loss is based on the fair value of the asset. Generally, fair value will be determined using valuation techniques such as the present value of expected future cash flows.

Property, Plant and Equipment and Depreciation

Property, plant and equipment includes the cost of land, buildings, machinery and equipment, office furniture and fixtures, automobiles, and construction projects and significant improvements to existing plant and equipment. Interest costs related to significant construction projects may be capitalized at the Company’s weighted average cost of capital. Expenditures for maintenance and minor repairs are expensed as incurred. When property or equipment is sold or otherwise disposed of, the related cost and accumulated depreciation is removed from the respective accounts and the gain or loss realized on disposition is reflected in earnings. All plant and equipment is depreciated using the straight-line method, utilizing estimated useful property lives. Building lives range from 10 to 30 years; machinery and equipment lives range from 3 to 15 years; office furniture and fixture lives range from 3 to 10 years, automobile lives range from 3 to 6 years; construction projects and significant improvements to existing plant and equipment lives range from 3 to 15 years when placed in service.

Foreign Currency Translation

Assets and liabilities of foreign subsidiaries, where the local currency is the functional currency, have been translated at year end exchange rates and profit and loss accounts have been translated using weighted average yearly exchange rates. Adjustments resulting from translation have been recorded in the equity section of the balance sheet as cumulative translation adjustments in other comprehensive income.

The effect of foreign currency exchange gains and losses on transactions that are denominated in currencies other than the entity’s functional currency are remeasured into the functional currency using the end of the period exchange rates. The effects of remeasurement related to foreign currency transactions are included in current profit and loss accounts.

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Goodwill and Other Intangible Assets

The primary identifiable intangible assets of the Company relate to product rights associated with its product acquisitions. The Company adopted the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets. Under the provisions of SFAS No. 142, identifiable intangibles with finite lives are amortized and those with indefinite lives are not amortized. The estimated useful life of an identifiable intangible asset to the Company is based upon a number of factors including the effects of demand, competition, and expected changes in the marketability of the Company’s products. The Company tests identifiable intangible assets for impairment at least annually, relying on a number of factors including operating results, business plans and future cash flows. Identifiable intangible assets that are subject to amortization are evaluated for impairment using a process similar to that used to evaluate elements of property. The impairment test for identifiable intangible assets not subject to amortization consists of a comparison of the fair value of the intangible asset with its carrying amount. An impairment loss, if any, is recognized for the amount by which the carrying value exceeds the fair value of the asset. Fair value is typically estimated using a discounted cash flow analysis, which requires the Company to estimate the future cash flows anticipated to be generated by the particular asset(s) being tested for impairment as well as select a discount rate to measure the present value of the anticipated cash flows. When determining future cash flow estimates, the Company considers historical results adjusted to reflect current and anticipated operating conditions. Estimating future cash flows requires significant judgment by the Company in such areas as future economic conditions, industry-specific conditions, product pricing and necessary capital expenditures. The use of different assumptions or estimates for future cash flows could produce different impairment amounts (or none at all) for long-lived assets, goodwill and identifiable intangible assets. As of January 1, 2002, the Company had an immaterial amount of goodwill and amortization related to the goodwill. As such, the adoption of SFAS 142, did not have a material impact on the Company’s financial statements.

Risk Factors

The Company’s business may be adversely affected by cyclical and seasonal effects.

The chemical industry in general is cyclical and demands for its products tend to be slightly seasonal. Seasonal usage follows varying agricultural seasonal patterns, weather conditions and weather related pressure from pests, and customer marketing programs and requirements. Weather patterns can have an impact on the Company’s operations. The end user of some of its products may, because of weather patterns, delay or intermittently disrupt field work during the planting season which may result in a reduction of the use of some products and therefore may reduce our revenues and profitability. There can be no assurance that the Company will adequately address any adverse seasonal effects.

The industry in which the Company does business is extremely competitive and its business may suffer if the Company is unable to compete effectively.

Generally, the treatment against pests of any kind is broad in scope, there being more than one way or one product for treatment, eradication, or suppression. The Company faces competition from many domestic and foreign manufacturers, marketers and distributors participating in its marketplace. Competition in the marketplace is based primarily on efficacy, price, safety and ease of application. Many of the Company’s competitors are larger and have substantially greater financial and technical resources. The Company’s ability to compete depends on its ability to develop additional applications for its current products, and to expand its product lines and customer base. The Company competes principally on the basis of the quality of its products, and the technical service and support given to its customers. There can be no assurance that the Company will compete successfully with existing competitors or with any new competitors.

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If the Company is unable to successfully position itself in smaller niche markets, its business may be materially adversely affected.

The Company has attempted to position itself in smaller niche markets that have been or are being abandoned by larger chemical companies. These types of markets tend not to attract larger chemical companies due to the smaller volume demand. As a result, larger chemical companies have been divesting themselves of products that fall into such smaller niche markets. These smaller niche markets require significant and intensive management input and ongoing product research and are near product maturity. There can be no assurance that the Company will be successful in these smaller niche markets or, if it is successful in one or more niche markets, that it will continue to be successful in such niche markets.

The manufacturing of the Company’s products is subject to governmental regulations.

The Company operates two manufacturing facilities—one in Los Angeles, California and the other in Axis, Alabama (the “Facilities”). The Facilities operate under the terms and conditions imposed by required licenses and permits by state and local authorities. The manufacturing of key ingredients for the Company’s products occurs at the Facilities. An inability to renew or maintain a license or permit or if the fees for such licenses or permits were increased significantly, wither would impede the Company’s access to key ingredients and the cost of production would increase, either of which would materially and adversely affect the Company’s ability to provide its products in a timely and affordable manner.

The distribution and sale of the Company’s products are subject to prior governmental approvals and thereafter ongoing governmental regulation.

The Company’s products are subject to laws administered by federal, state and foreign governments, including regulations requiring registration, approval and labeling of its products. The labeling requirements restrict the use of and type of application for our products. More stringent restrictions could make our products less desirable which would adversely affect our revenues and profitability. Substantially all of the Company’s products are subject to the EPA registration and re-registration requirements, and are conditionally registered in accordance with the FIFRA. Such registration requirements are based, among other things, on data demonstrating that the product will not cause unreasonable adverse effects on human health or the environment when used according to approved label directions. All states where any of the Company’s products are used also require registration before they can be marketed or used in that state. Governmental regulatory authorities have required, and may require in the future, that certain scientific data requirements be performed on the Company’s products. The Company, on its behalf and in joint efforts with other registrants, have and are currently furnishing certain required data relative to its products. Under FIFRA, the federal government requires registrants to submit a wide range of scientific data to support U.S. registrations. This requirement has significantly increased the Company’s operating expenses in such areas as testing and the production of new products. The Company expects such increases to continue in the future. Because scientific analyses are constantly improving, it cannot be determined with certainty whether or not new or additional tests may be required by regulatory authorities. Responding to such requirements may cause delays in the sales of our products which delays would adversely affect our profitability. While FIFRA Good Laboratory Practice standards specify the minimum practices and procedures which must be followed in order to ensure the quality and integrity of data related to these tests submitted to the U.S. EPA, there can be no assurance the EPA will not request certain tests or studies be repeated. In addition, more stringent legislation or requirements may be imposed in the future. The Company can provide no assurance that any testing approvals or registrations will be granted on a timely basis, if at all, or that its resources will be adequate to meet the costs of regulatory compliance.

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The Company may be subject to environmental liabilities.

The Company, its facilities and its products are subject to numerous federal and state laws and governmental regulations concerning environmental matters and employee health and safety. The Company continually adapts its manufacturing process to the environmental control standards of the various regulatory agencies. The U.S. EPA and other federal and state agencies have the authority to promulgate regulations that could have a significant impact on the Company’s operations. The Company expends substantial funds to minimize the discharge of materials in the environment and to comply with governmental regulations relating to protection of the environment. Federal and state authorities may seek fines and penalties for violation of the various laws and governmental regulations, and could, among other things, impose liability on the Company for cleaning up the damage resulting from release of pesticides and other agents into the environment.

The Company’s use of hazardous materials exposes it to potential liabilities.

The Company’s development and manufacturing of chemical products involve the controlled use of hazardous materials. While the Company continually adapts its manufacturing process to the environmental control standards of regulatory authorities, it cannot completely eliminate the risk of accidental contamination or injury from hazardous or regulated materials. In the event of such contamination or injury, the Company may be held liable for significant damages or fines. In the event that such damages or fines are assessed, it could have a material adverse effect on the Company’s financial and operating results.

The Company’s business may give rise to product liability claims not covered by insurance or indemnity agreements.

The manufacturing, marketing, distribution and use of chemical products involve substantial risk of product liability claims. A successful product liability claim which is not insured may require the Company to pay substantial amounts of damages. In the event that such damages are paid, it could have a material adverse effect on the Company’s financial and operating results.

Adverse results in pending legal and regulatory proceedings could have adverse effects on the Company’s business.

The Company is currently, and may from time to time be, involved in legal and regulatory proceedings. The results of litigation and such proceedings cannot be predicted with certainty. The Company has and will continue to expend resources and incur expenses in connection with these proceedings. There can be no assurance that the Company will be successful in these proceedings. While the Company continually evaluates insurance levels for product liability, property damage and other potential areas of risk, an adverse determination in one or more of these proceedings could subject the Company to significant liabilities, which could have a material adverse effect on its financial condition and operating results.

The Company’s future success will depend on its ability to develop additional applications for its products, and to expand its product lines and customer base.

The Company has grown primarily by a strategy of acquiring mature product lines from larger competitors and expanding sales of these products based on new applications and new users. The Company’s success will depend, in part, on its ability to develop additional applications for its products, and to expand its product lines and customer base in a highly competitive market. There can be no assurance that the Company will be successful in adequately addressing these development needs on a timely basis or that, if these developments are addressed, the Company will be successful in the marketplace. In addition, there can be no assurance that products or technologies (e.g., genetic engineering) developed by others will not render the Company’s products

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noncompetitive or obsolete which would have a material adverse effect on its financial and operating results. Many of the mature product lines the Company has acquired from larger competitors were divested as a result of a mergers involving such large competitors.

The Company faces risks related to acquisitions of product lines.

The Company has expanded and intends to continue to expand its operations through the acquisition of additional product lines from these larger competitors. There can be no assurance that the Company will be able to identify, acquire or profitably manage additional product lines, or successfully integrate any acquired product lines without substantial expenses, delays or other operational or financial problems. There is an increasing trend in selling mature product lines through a competitive bid process. As a result, we may not be the successful bidder for a desirable product, or, if successful, we may pay a higher price for such product than if there was no competitive bid process. Further, acquisitions may involve a number of special risks or effects, including diversion of management’s attention, failure to retain key acquired personnel, unanticipated events or circumstances, minimum purchase quantities, legal liabilities and amortization of acquired intangible assets and other one-time or ongoing acquisition related expenses. Some or all of these special risks or effects could have a material adverse effect on the Company’s financial and operating results. Client satisfaction or performance problems associated with a business or product line could have a material adverse impact on the Company’s reputation. In addition, there can be no assurance that acquired product lines, if any, will achieve anticipated revenues and earnings.

The Company relies on intellectual property which it may be unable to protect, or may be found to infringe the rights of others.

The Company’s proprietary product formulations are protected, to the extent possible, as trade secrets and, to a lesser extent, by patents and trademarks. Most of the mature products that the Company has acquired which were patented are currently “off patent” because the patent has expired. The Company can provide no assurance that the way it protects its proprietary rights will be adequate or that its competitors will not independently develop similar or competing products.

Further, the Company can provide no assurance that its is not infringing other parties’ rights. Any claims could require the Company to spend significant sums in litigation, pay damages, develop non-infringing intellectual property, or acquire licenses to the intellectual property which is the subject of asserted infringement.

The Company relies on key executives in large part for its success.

The Company’s success is highly dependent upon the efforts and abilities of its executive officers, particularly Eric G. Wintemute, its President and Chief Executive Officer. Although Mr. Wintemute has entered into an employment agreement with the Company, this does not guarantee that he will continue his employment. The loss of the services of Mr. Wintemute or other executive officers could have a material adverse effect upon its financial and operating results.

Concentration of ownership among the Company’s Co-Chairmen of the Board of Directors may prevent new investors from influencing significant corporate decisions.

As of March 11, 2005, Herbert A. Kraft and Glenn A. Wintemute, the Company’s Co-Chairmen of the Board of Directors, beneficially owned approximately 16% and 12%, respectively, of the Company’s common stock. These stockholders as a group will be able to influence substantially the Company’s Board of Directors and thus its management and affairs. If acting together, they would be able to influence most matters requiring the approval by the Company’s stockholders, including the election of directors, any merger, consolidation or

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sale of all or substantially all of the Company’s assets and any other significant corporate transaction. The concentration of ownership may also delay or prevent a change in control if opposed by these stockholders irrespective of whether the proposed transaction is at a premium price or otherwise beneficial to the Company’s stockholders as a whole.

The Company’s stock price may be volatile and an investment in the Company’s stock could decline in value.

The market prices for securities of companies in the Company’s industry have been highly volatile and may continue to be highly volatile in the future. Often this volatility is unrelated to operating performance of a company.

The Company’s business may be adversely affected by terrorist activities.

The Company’s business depends on the free flow of products and services through the channels of commerce. Recently, in response to terrorists’ activities and threats aimed at the United States, transportation, mail, financial and other services have been slowed or stopped altogether. Further delays or stoppages in transportation, mail, financial or other services could have a material adverse effect on the business, results of operations and financial condition. Furthermore, the Company may experience an increase in operating costs, such as costs for transportation, insurance and security as a result of the activities and potential activities. The Company may also experience delays in receiving payments from payers that have been affected by the terrorist activities and potential activities. The U.S. economy in general is being adversely affected by the terrorist activities and potential activities and any economic downturn could adversely impact results of operations, impair the ability to raise capital or otherwise adversely affect the ability to grow the business.

Compliance with changing regulation of corporate governance and public disclosure may result in additional expenses.

Complying with changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, new SEC regulations and changes to the American Stock Exchange rules, will require the Company to expend significant resources. The Company is committed to maintaining the highest standards of corporate governance and public disclosure. As a result, the Company will continue to invest necessary resources to comply with evolving laws, regulations and standards, and this investment may result in increased expenses and a diversion of management time and attention from revenue-generating activities.

The impact of FAS 123(R) may require recognition of significant financial expense for stock options.

FAS 123(R), as published by the Financial Accounting Standards Board, will require the Company, as a public company, to recognize in its financial statements an expense for stock options that are granted and become exercisable after June 15, 2005. The Company is in the process of determining the level and impact of such recognition. If the level is high, it could have a significant adverse effect on the Company’s financial results as reported in its financial statements.

Note On Forward-Looking Statements

This report contains forward-looking statements. Forward-looking statements relate to future periods and include descriptions of our plans, objectives, and underlying assumptions for future operations, our market opportunities, our acquisition opportunities, and our ability to compete. Generally, “may,” “could,” “will,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “intend,” “continue” and similar words identify forward-

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looking statements. Forward-looking statements are based on our current expectations and are subject to risks and uncertainties that can cause actual results to differ materially. For information on these risks and uncertainties, see the “Risk Factors” in this report. We urge you to consider these factors carefully in evaluating the forward-looking statements contained in this report. Forward-looking statements are made only as of the date of this report.

ITEM 7A

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risk related to changes in interest rates, primarily from its borrowing activities. The Company’s indebtedness to its primary lender is evidenced by a line of credit with a variable rate of interest, which fluctuates with changes in the lender’s reference rate. At December 31, 2004, the Company’s outstanding indebtedness on the line of credit was $2,000,000. A 1% change in the reference rate during 2004 would have increased or decreased the Company’s interest expense, based on the weighted outstanding balance, by approximately $194,000. The Company does not use derivative financial instruments for speculative or trading purposes.

The Company conducts business in various foreign currencies, primarily in Europe and Mexico. Therefore changes in the value of the currencies of such countries or regions affect the Company’s financial position and cash flows when translated into U.S. Dollars. As of December 31, 2004 the Company had not established a formal foreign currency hedging program. The Company has mitigated and will continue to mitigate a portion of its currency exchange exposure through operation of decentralized foreign operating companies in which the majority of all costs are local-currency based. A 10% change in the value of all foreign currencies would have an immaterial effect on the Company’s financial position and cash flows.

ITEM 8

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Financial Statements and Supplementary Data are listed at PART IV, Item 15, Exhibits, Financial Statement Schedules.

ITEM 9

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of December 31, 2004, management, under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based upon this evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that these disclosure controls and procedures are effective, in all material respects, in ensuring that the information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported on a timely basis.

There have been no significant changes in the Company’s internal controls or in other factors subsequent to the date of the evaluation that could significantly affect these controls.

Management’s Report on Internal Control over Financial Reporting

Management of the Company is responsible for the establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) of the Securities Exchange Act of 1934. The Company’s

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internal control over financial reporting is designed to provide reasonable assurance to management and the Board of Directors as to the fair, reliable and timely preparation and presentation of consolidated financial statements filed with the SEC.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even processes determined to be effective can provide only reasonable assurance with respect to the financial statement preparation and presentation.

Management conducted an evaluation of the Company’s internal controls over financial reporting based on a framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework . This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the effectiveness of controls and a conclusion on the evaluation. Based on this evaluation, management believes that as of December 31, 2004, the Company’s internal control over financial reporting is effective.

The Company’s independent registered public accounting firm, BDO Seidman LLP, has issued an attestation report on management’s assessment of internal control over financial reporting as of December 31, 2004 and that report is included herein.

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Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting

To the Board of Directors and Stockholders of American Vanguard Corporation

Newport Beach, California

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control Over Financial Reporting, that American Vanguard Corporation (AMVAC) maintained effective internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). AMVAC’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of AMVAC’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that AMVAC maintained effective internal control over financial reporting as of December 31, 2004, is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, AMVAC maintained, in all material respects, effective internal control over financial reporting as of December 31, 2004, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of American Vanguard Corporation, as of December 31, 2004 and 2003 and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2004 of AMVAC and our report dated March 3, 2005 expressed an unqualified opinion thereon.

/s/ BDO SEIDMAN LLP

Los Angeles, California

March 3, 2005

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

ITEM 9B

OTHER INFORMATION

None.

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

PART III

ITEM 10

DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following persons are the current Directors and Executive Officers of Registrant:


Name of Director/Officer	Age	Capacity
Herbert A. Kraft	81	Co-Chairman
Glenn A. Wintemute	80	Co-Chairman
Eric G. Wintemute	49	Director, President and Chief Executive Officer
Jay R. Harris (1)(2)	70	Director
John B. Miles (2)(3)	61	Director
Carl R. Soderlind (1)(2)(3)	71	Director
Irving J. Thau (1)(3)	65	Director

(1)	Member of the Audit Committee.

(2)	Member of the Compensation Committee.

(3)	Member of the Nominating and Corporate Governance Committee.

Herbert A. Kraft has served as Co-Chairman of the Board since July 1994. Mr. Kraft served as Chairman of the Board and Chief Executive Officer from 1969 to July 1994.

Glenn A. Wintemute has served as Co-Chairman of the Board since July 1994. Mr. Wintemute served as President of the Company and all operating subsidiaries since 1984 and was elected a director in 1971. He served as President of AMVAC from 1963 to July 1994.

Eric G. Wintemute has served as a director since June 1994. Mr. Wintemute has also served as President and Chief Executive Officer since July 1994. He was appointed Executive Vice President and Chief Operating Officer of the Company in January 1994. He is the son of the Company’s Co-Chairman, Glenn A. Wintemute.

Jay R. Harris has served as director since March 2000. Mr. Harris is President and Founder of Goldsmith & Harris, a broker dealer providing investment research to institutional and professional investors. He has held this position since 1982, the year Goldsmith & Harris (or its predecessors) was founded.

John B. Miles has served as a director since March 1999. Mr. Miles is a Partner with the law firm McDermott Will & Emery and has held the position of Partner since 1987. Prior to 1987, Mr. Miles was a partner with Kadison Pfaelzer Woodward Quinn & Rossi. Mr. Miles has previously served on boards of directors for public and private corporations.

Carl R. Soderlind has served as a director since June 2000. Mr. Soderlind served as Chairman and Chief Executive Officer of Golden Bear Oil Specialties, a producer of niche specialty oil and chemical products used in a variety of industrial applications from 1997 to 2001. From 1961 to 1996 he served in various capacities of Witco Corporation, with his most recent position being Senior Executive Vice President and member of the Management Committee.

Irving J. Thau has served as a director since September 2003. From 1962 to 1995, he held various positions with Ernst & Young LLP, where his primary responsibilities were directing and providing accounting, auditing, and business advisory services to publicly held and privately owned organizations. He was admitted to partnership in 1974, and most recently served as Ernst & Young’s West Region Director of Financial Advisory Services. In 1995, Mr. Thau founded Thau and Associates, Inc., a financial consulting company of which he

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

currently serves as President. Mr. Thau is also a director and Chairman of the Audit Committee of American Home Mortgage Investment Corp. The Company’s Board of Directors has determined that Mr. Thau is independent under applicable rules and regulations currently prescribed by the SEC and applicable rules and listing standards of the American Stock Exchange. The Company’s Board of Directors has also determined the Mr. Thau is the Audit Committee financial expert within the meaning of applicable SEC rules and regulations.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s executive officers, directors, and persons who own more than ten percent of a registered class of the Company’s equity securities to file reports of ownership and changes in ownership with the Securities and Exchange Commission.

Based solely on the Company’s review of the copies of such forms received by the Company, or representations obtained from certain reporting persons, the Company believes that during the year ended December 31, 2004 all filing requirements applicable to its officers, directors, and greater than ten percent beneficial stockholders were complied with.

Code of Ethics

The Company has adopted a code of ethics, the American Vanguard Corporation Code of Conduct and Ethics (the “Code of Ethics”), that applies to all employees, including the Company’s principal executive officer, principal financial officer and principal accounting officer. The Code of Ethics is posted on the Company’s Internet website, www.american-vanguard.com . Any amendment to, or waiver from, the Code of Ethics will be posted on the Company’s website within five business days following the date of the amendment or waiver.

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

ITEM 11

EXECUTIVE COMPENSATION

The following table sets forth the aggregate cash and other compensation for services rendered for the years ended December 31, 2004, 2003 and 2002 paid or awarded by the Company and its subsidiaries to the its Chief Executive Officer and certain highly compensated executive officers of the Corporation, whose aggregate remuneration exceeded $100,000 (the “named executive officers”).

Summary Compensation Table


					Long-Term Compensation
		Annual Compensation(1)			Awards			Payouts
(a)	(b)	(c)	(d)	(e)	(f)	(g)	(h)	(i)
Name and Principal Position	Year	Salary ($)	Bonus ($)(3)	Other Annual Compensation ($)	Restricted Stock Award(s) ($)	Securities Underlying Options/SARs (#)	LTIP Payouts ($)	All Other Compensation ($)
Eric G. Wintemute President and Chief Executive Officer	2004 2003 2002	652,649 620,293 532,518	— — —	— — —	— — —	— — —	— — —	6,880 6,140 5,380	(2) (2) (2)

James A. Barry Sr. V.P., CFO & Secretary/Treasurer	2004 2003 2002	255,159 226,242 210,542	— — —	— — —	— — —	— — —	— — —	6,880 5,563 5,380	(2) (2) (2)

Mark H. Blincoe V.P., CAO (4)	2004 2003 2002	102,338 — —	— — —	— — —	— — —	— — —	— — —	1,777 — —	(2)

Glen D. Johnson Sr. Vice President of AMVAC	2004 2003 2002	319,109 285,966 246,356	— — —	— — —	— — —	— — —	— — —	4,013 2,515 260	(2) (2) (2)

Christopher K. Hildreth (5) Sr. Vice President of AMVAC	2004 2003 2002	289,150 199,778 —	— — —	— — —	— — —	— — —	— — —	6,348 3,434 —	(2) (2) (2)

Robert F. Gilbane President of GemChem	2004 2003 2002	255,242 237,242 226,143	— — —	— — —	— — —	— — —	— — —	8,167 6,140 5,380	(2) (2) (2)

(1)	No executive officer enjoys perquisites that exceed the lesser of $50,000, or 10% of such officer’s salary.

(2)	These amounts represent the Company’s contribution to the Company’s Retirement Savings Plan, a qualified plan under Internal Revenue Code Section 401(k).

(3)	Included in salary column.

(4)	Mr. Blincoe joined the Company as Vice President and Chief Administrative Officer in June 2004.

(5)	Mr. Hildreth joined AMVAC Chemical Corporation as Senior Vice President in February, 2003.

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE

The following table shows, with respect to the named executive officers, the number of shares covered by both exercisable and non-exercisable stock options as of December 31, 2004, with respect to options to purchase Common Stock of American Vanguard Corporation. Also reported are the values for “in-the-money” options which represent the positive spread between the exercise price of any such existing stock options and the year-end closing price of the Common Stock. The closing price of the Common Stock on December 31, 2004, the last trading day of American Vanguard’s fiscal year, was $36.78 per share.

AGGREGATED OPTION/SAR EXERCISES IN 2004

AND FY-END OPTION/SAR VALUES


(a)	(b)	(c)	(d)	(e)
	Shares Acquired on Exercise (#)	Value Realized ($)	Number of Securities Underlying Unexercised Options/SARs at Fy-End (#) Exercisable/ Unexercisable	Value of Unexercised In-the-Money Options/SARs at Fy-End ($) Exercisable/ Unexercisable
Eric G. Wintemute	—	—	67,500/101,250	1,821,825/2,732,738
James A. Barry	—	—	34,500/37,500	977,625/ 921,765
Mark H. Blincoe	—	—	2,500/10,000	5,700/22,800
Glen D. Johnson	91,452	3,160,581	4,500/18,000	68,310/273,240
Christopher K. Hildreth	—	—	45,000/22,500	1,228,950/614,475
Robert F. Gilbane	—	—	21,000/24,000	622,980/567,120

Compensation Committee Interlocks and Insider Participation

The Compensation Committee of the Board for the year ended December 31 , 2004 , consisted of Messrs. Carl R. Soderlind, Jay R. Harris and John B. Miles. The executive compensation philosophy of the Company is aimed at (i) attracting and retaining qualified executives; (ii) motivating performance to achieve specific strategic objectives of the Company; and (iii) aligning the interest of senior management with the long-term interest of the Company’s shareholders.

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

ITEM 12

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

To the knowledge of the Company, the ownership of the Company’s outstanding Common Stock as of March 11, 2005, by persons who are directors, beneficial owners of 5% or more of the outstanding Common Stock and by all directors and officers as a group is set forth below. Unless otherwise indicated the Registrant believes that each of the persons set forth below has the sole power to vote and to dispose of the shares listed opposite his name.


Office (if any)	Name and Address Beneficial Owner	Amount and Nature of Beneficial Ownership	Percent of Class
Co-Chairman	Herbert A. Kraft 4695 MacArthur Court Newport Beach, CA 92660	1,416,148(1)	15.5%

Co-Chairman	Glenn A. Wintemute 4695 MacArthur Court Newport Beach, CA 92660	1,092,608(2)	12.0%

	St. Denis J. Villere & Company 210 Baronne Street New Orleans, LA 70112	815,628	9.0%

	T. Rowe Price Associates, Inc. 100 E. Pratt Street Baltimore, MD 21202	792,125	9.1%

Director, President & CEO	Eric G. Wintemute 4695 MacArthur Court Newport Beach, CA 92660	505,330(3)	5.5%

Director	Jay R. Harris 4695 MacArthur Court Newport Beach, CA 92660	442,767(4)	4.9%

	Goldsmith & Harris et. al. 80 Pine Street New York, NY 10005	338,682(5)	3.7%

President (GEMCHEM)	Bob Gilbane 4695 MacArthur Court Newport Beach, CA 92660	193,929(6)	2.1%

Senior Vice President (AMVAC)	Glen D. Johnson 4695 MacArthur Court Newport Beach, CA 92660	54,352(7)	—(1	4)

Senior Vice President (AMVAC)	Christopher K. Hildreth 4695 MacArthur Court Newport Beach, CA 92660	45,642(8)	—(1	4)

Sr. V.P., CFO & Secretary/Treasurer	James A. Barry 4695 MacArthur Court Newport Beach, CA 92660	36,566(9)	—(1	4)

Director	Carl R. Soderlind 4695 MacArthur Court Newport Beach, CA 92660	34,724(10)	—(1	4)

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES


Office (if any)	Name and Address Beneficial Owner	Amount and Nature of Beneficial Ownership	Percent of Class

Director	John B. Miles 4695 MacArthur Court Newport Beach, CA 92660	28,933(11)	—(14)

Director	Irving J. Thau 4695 MacArthur Court Newport Beach, CA 92660	12,705(12)	—(14)

V.P. & CAO	Mark H. Blincoe 4695 MacArthur Court Newport Beach, CA 92660	2,500(13)	—(14)

Directors and Officers as a group (15)		3,938,272	41.8%

(1)

Mr. Kraft owns all of his shares with his spouse in a family trust, except as to 5,188 shares held in an Individual Retirement Account. This figure includes 10,890 shares of Common Stock Mr. Kraft is entitled to acquire pursuant to stock options exercisable within sixty days of the filing of this Annual Report.

(2)	This figure includes 10,890 shares of Common Stock Mr. Glenn Wintemute is entitled to acquire pursuant to stock options exercisable within sixty days of the filing of this Annual Report.

(3)

This figure includes 101,250 shares of Common Stock Mr. Eric Wintemute is entitled to acquire pursuant to stock options exercisable within sixty days of the filing of this report as well as 52,260 shares of Common Stock owned by Mr. Wintemute’s minor children for which Mr. Wintemute is a trustee and disclaims beneficial ownership.

(4)	This figure includes 7,260 shares of Common Stock Mr. Harris is entitled to acquire pursuant to stock options exercisable within sixty days of the filing of this Annual Report.

(5)	This figure does not include shares beneficially owned by Jay Harris. Mr. Harris shares with Goldsmith & Harris et. al. the power to direct the disposition of 442,767 shares of the security.

(6)	This figure includes 21,000 shares of Common Stock Mr. Gilbane is entitled to acquire pursuant to stock options exercisable within sixty days of the filing of this Annual Report.

(7)	This figure represents 4,500 shares of Common Stock Mr. Johnson is entitled to acquire pursuant to stock options exercisable within sixty days of the filing of this Annual Report.

(8)	This figure represents 45,000 shares of Common Stock Mr. Hildreth is entitled to acquire pursuant to stock options exercisable within sixty days of the filing of this Annual Report.

(9)	This figure includes 34,500 shares of Common Stock Mr. Barry is entitled to acquire pursuant to stock options exercisable within sixty days of the filing of this Annual Report.

(10)	This figure represents 3,630 shares of Common Stock Mr. Soderlind is entitled to acquire pursuant to stock options exercisable within sixty days of the filing of this Annual Report.

(11)	This figure represents 18,150 shares of Common Stock Mr. Miles is entitled to acquire pursuant to stock options exercisable within sixty days of the filing of this Annual Report.

(12)	This figure represents 12,705 shares of Common Stock Mr. Thau is entitled to acquire pursuant to stock options exercisable within sixty days of the filing of this Annual Report.

(13)	This figure represents 2,500 shares of Common Stock Mr. Blincoe is entitled to acquire pursuant to stock options exercisable within sixty days of the filing of this Annual Report.

(14)	Under 1% of class.

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

ITEM 13

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

John B. Miles, a Director of the Company, is also a partner in the law firm of McDermott, Will & Emery which provides legal services to the Company.

ITEM 14

PRINCIPAL ACCOUNTING FEES AND SERVICES

The Audit Committee of American Vanguard Corporation appointed and the stockholders ratified BDO Seidman, LLP (“BDO”) as the Company’s independent registered public accounting firm for the year ended December 31, 2004.

Aggregate fees for professional services rendered to the Company by BDO for the years ended December 31, 2004 and 2003, were (in thousands):


	2004		2003
Audit	$	251	$	187
Audit related		—		25
Tax		94		81

	$	345	$	293

Audit fees for 2004 and 2003 were for professional services rendered for the audits of the consolidated financial statements of the Company, timely reviews of quarterly financial statements, consents, income tax provision procedures, and assistance with review of documents filed with the SEC.

Audit Related fees for 2003 were primarily for assurance services, accounting consultations in connection with acquisitions, and consultations concerning financial accounting and reporting standards.

Tax fees for 2004 and 2003 were for services related to tax compliance, including the preparation of tax returns and claims for refund, and tax planning and tax advice, including assistance with and representation in tax audits, advice related to acquisitions, and requests for technical advice from tax authorities.

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

PART IV

ITEM 15

EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)

The following documents are filed as part of this report:

(1) Index to Consolidated Financial Statements and Supplementary Data:


Description		Page No.
Financial Statements:
Consolidated Balance Sheets as of December 31, 2004 and 2003		42
Consolidated Statements of Income for the Years Ended December 31, 2004, 2003, and 2002		43
Consolidated Statements of Stockholders’ Equity and Comprehensive Income for the Years Ended December 31, 2004, 2003 and 2002		44
Consolidated Statements of Cash Flows for the Years Ended December 31, 2004, 2003, and 2002		45
Summary of Significant Accounting Policies and Notes to Consolidated Financial Statements		47

(b)

Reports on Form 8-K

Date of the Report: October 7, 2004

Description: On October 7, 2004 American Vanguard Corporation issued a press release announcing that American Vanguard Corporation executed an Amended and Restated Credit Agreement with a syndicate of commercial lenders.

Date of the Report: November 3, 2004

Description: On November 3, 2004 American Vanguard Corporation issued a press release announcing its financial results for the three and nine months ended September 30, 2004. This Report on Form 8-K was furnished under Item 2.02.

Date of the Report: December 6, 2004

Description: On December 6, 2004 American Vanguard Corporation issued a press release announcing that its wholly-owned subsidiary, Amvac Chemical Corporation, entered into an agreement with Bayer CropScience LP., an affiliate of Bayer AG, to market, sell and distribute Bolster 15G.

Date of the Report: December 15, 2004

Description: On December 15, 2004 American Vanguard Corporation issued a press release announcing that its wholly-owned subsidiary, Amvac Chemical Corporation, licensed the trade name Nuvan ^® to Syngenta India Limited, a business unit of Syngenta Crop Protection AG.

(c)

Exhibits:

The exhibits listed on the accompanying Index To Exhibits, page 69 are filed as part of this annual report.

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, American Vanguard Corporation has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


AMERICAN VANGUARD CORPORATION (Registrant)

By:	/s/ E RIC G. W INTEMUTE	By:	/s/ J AMES A. B ARRY
	Eric G. Wintemute		James A. Barry
	President, Chief Executive Officer and Director		Senior Vice President, Chief Financial Officer and Secretary/Treasurer

	March 15, 2005		March 15, 2005

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated.



By:	/s/ H ERBERT A. K RAFT	By:	/s/ G LENN A. W INTEMUTE
	Herbert A. Kraft		Glenn A. Wintemute
	Co-Chairman		Co-Chairman

	March 15, 2005		March 15, 2005

By:	/s/ J OHN B. M ILES	By:	/s/ C ARL R. S ODERLIND
	John B. Miles		Carl R. Soderlind
	Director		Director

	March 15, 2005		March 15, 2005

By:	/s/ J AY R. H ARRIS	By:	/s/ I RVING J. T HAU
	Jay R. Harris		Irving J. Thau
	Director		Director

	March 15, 2005		March 15, 2005

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders

of American Vanguard Corporation

Newport Beach, California

We have audited the accompanying consolidated balance sheets of American Vanguard Corporation as of December 31, 2004 and 2003, the related consolidated statements of income and comprehensive income, shareholders’ equity and cash flows for the three years in the period ended December 31, 2004. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of American Vanguard Corporation at December 31, 2004 and 2003, and the results of its operations and cash flows for the three years in the period ended December 31, 2004 in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of American Vanguard Corporation’s internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 3, 2005 expressed an unqualified opinion thereon.

/s/ BDO Seidman, LLP

Los Angeles, California

March 3, 2005

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31, 2004 and 2003

(Dollars in thousands, except share and per share data)


	2004			2003
Assets (note 2)
Current assets:
Cash	$	457		$	887
Receivables:
Trade		27,773			27,803
Other		532			394

		28,305			28,197

Inventories		43,635			33,389
Prepaid expenses		1,479			1,057
Deferred tax asset (note 4)		140			140

Total current assets		74,016			63,670
Property, plant and equipment, net (note 1)		26,118			21,677
Land held for development		211			211
Intangible assets		21,161			20,307
Other assets		840			869

	$	122,346		$	106,734

Liabilities and Stockholders’ Equity
Current liabilities:
Current installments of long-term debt (note 2)	$	5,107		$	6,374
Accounts payable		12,984			13,030
Accrued program costs		10,335			6,763
Accrued expenses and other payables		5,791			3,778
Accrued royalty obligations (notes 7 and 8)		1,837			1,521
Income taxes payable		1,687			580

Total current liabilities		37,741			32,046
Long-term debt, excluding current installments (note 2)		19,474			22,142
Deferred income taxes (note 3)		1,159			2,212

Total liabilities		58,374			56,400

Commitments and contingent liabilities (notes 2, 5, 7 and 9)
Stockholders’ equity:
Preferred stock, $.10 par value per share; authorized 400,000 shares; none issued		—			—
Common stock, $.10 par value per share; authorized 40,000,000 shares; issued 9,931,144 shares in 2004 and 9,764,415 shares in 2003		993			976
Additional paid-in capital		10,553			9,933
Accumulated other comprehensive loss		(207	)		(207	)
Retained earnings		55,378			42,076

		66,717			52,778
Less treasury stock, at cost, 835,049 shares in 2004 and 824,881 shares in 2003		(2,745	)		(2,444	)

Total stockholders’ equity		63,972			50,334

	$	122,346		$	106,734

See summary of significant accounting policies and notes to consolidated financial statements.

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

AND COMPREHENSIVE INCOME

Years ended December 31, 2004, 2003 and 2002

(Dollars in thousands, except share and per share data)


	2004			2003			2002
Net sales (note 6)	$	150,855		$	124,863		$	100,671
Cost of sales		78,597			65,989			56,796

Gross profit		72,258			58,874			43,875
Operating expenses (note 11)		47,300			42,332			31,996

Operating income		24,958			16,542			11,879
Interest expense		1,310			986			973
Interest income		(13	)		(303	)		(25	)
Interest capitalized		(72	)		(323	)		(347	)

Income before income taxes		23,733			16,182			11,278
Income taxes (note 3)		9,256			5,919			4,229

Net income	$	14,477		$	10,263		$	7,049

Earnings per common share—basic	$	1.61		$	1.16		$	0.81

Earnings per common share—assuming dilution	$	1.51		$	1.10		$	0.78

Weighted average shares outstanding		8,981,698			8,811,303			8,670,301

Weighted average shares outstanding—assuming dilution		9,583,725			9,314,253			9,091,785

See summary of significant accounting policies and notes to consolidated financial statements.

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME

Years ended December 31, 2004, 2003 and 2002

(Dollars in thousands, except per share data)


	Common Stock			Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income			Comprehensive Income			Treasury Stock				Total
	Shares	Amount		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income			Comprehensive Income			Shares	Amount			Total
Balance, January 1, 2002	9,360,000	$	936	$	8,694	$	26,170		$	—			—		763,444	$	(1,842	)	$	33,958
Stocks issued under ESPP	36,661		4		170		—			—			—		—		—			174
Cash dividends on common stock ($0.069 per share)	—		—		—		(599	)		—			—		—		—			(599	)
Foreign currency translation adjustment, net	—		—		—		—			(272	)		(272	)	—		—			(272	)
Treasury stock acquired	—		—		—		—			—			—		46,305		(394	)		(394	)
Stock options exercised	138,889		14		313		—			—			—		—		—			327
Net income	—		—		—		7,049			—			7,049		—		—			7,049

Total comprehensive income	—		—		—		—			—		$	6,777		—		—			—

Balance, December 31, 2002	9,535,550		954		9,177		32,620			(272	)		—		809,881		(2,236	)		40,243
Stocks issued under ESPP	19,956		2		359		—			—			—		—		—			361
Cash dividends on common stock ($0.091 per share)	—		—		—		(807	)		—			—		—		—			(807	)
Foreign currency translation adjustment, net	—		—		—		—			65			65		—		—			65
Treasury stock acquired	—		—		—		—			—			—		15,000		(208	)		(208	)
Stock options exercised	208,909		20		397		—			—			—		—		—			417
Net income	—		—		—		10,263			—			10,263		—		—			10,263

Total comprehensive income	—		—		—		—			—		$	10,328		—		—			—

Balance, December 31, 2003	9,764,415		976		9,933		42,076			(207	)		—		824,881		(2,444	)		50,334
Stocks issued under ESPP	8,438		1		187		—			—			—		—		—			188
Cash dividends on common stock ($0.13 per share)	—		—		—		(1,175	)		—			—		—		—			(1,175	)
Foreign currency translation adjustment, net	—		—		—		—			—			—		—		—			—
Treasury stock acquired	—		—		—		—			—			—		10,168		(301	)		(301	)
Stock options exercised	158,291		16		433		—			—			—		—		—			449
Net income	—		—		—		14,477			—			14,477		—		—			14,477

Total comprehensive income												$	14,477

Balance, December 31, 2004	9,931,144	$	993	$	10,553	$	55,378		$	(207	)		—		835,049	$	(2,745	)	$	63,972

See summary of significant accounting policies and notes to consolidated financial statements.

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31, 2004, 2003 and 2002

(Dollars in thousands)


	2004			2003			2002
Increase (decrease) in cash
Cash flows from operating activities:
Net income	$	14,477		$	10,263		$	7,049
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property, plant and equipment		4,042			2,755			1,392
Amortization of other assets		1,758			1,298			945
Deferred income taxes		(1,053	)		833			1,108
Changes in assets and liabilities associated with operations:
(Increase) decrease in receivables		(108	)		(11,003	)		(79	)
Decrease (increase) in inventories		(10,246	)		(12,161	)		2,802
(Increase) decrease in prepaid expenses		(422	)		(187	)		276
Increase (decrease) in accounts payable		(46	)		7,872			(4,241	)
Increase (decrease) in other payables and accrued expenses		7,008			4,754			(1,093	)

Net cash provided by operating activities		15,410			4,424			8,159

Cash flows from investing activities:
Capital expenditures		(8,483	)		(4,448	)		(7,978	)
Acquisitions of intangible assets		(2,612	)		(5,926	)		(1,774	)
Other noncurrent assets		29			(267	)		(69	)

Net cash used in investing activities		(11,066	)		(10,641	)		(9,821	)

Cash flows from financing activities:
Net (repayments) borrowings under line of credit agreement		(12,200	)		6,200			(4,200	)
Proceeds from issuance of long-term debt		12,065			—			10,000
Payments on long-term debt and capital lease obligations		(3,800	)		(2,199	)		(952	)
Exercise of common stock options and sale of stock under ESSP		637			778			501
Purchase of treasury stock		(301	)		(208	)		(394	)
Payment of cash dividends		(1,175	)		(807	)		(599	)

Net cash provided by (used in) financing activities		(4,774	)		3,764			4,356

Net increase (decrease) in cash		(430	)		(2,453	)		2,694
Cash at beginning of year		887			3,275			853
Effect of exchange rate changes on cash		—			65			(272	)

Cash at end of year	$	457		$	887		$	3,275

Supplemental cash flow information:
Cash paid during the year for:
Interest	$	1,090		$	996		$	879

Income taxes	$	9,402		$	3,620		$	4,731

See summary of significant accounting policies and notes to consolidated financial statements.

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

Supplemental schedule of non-cash investing and financing activities:

On March 16, 2004, the Company announced that the Board of Directors declared a cash dividend of $.12 per share ($.08) as adjusted for a 3 for 2 stock split) as well as a 3 for 2 stock split. Both the cash dividend and stock split were distributed on April 16, 2004 to stockholders of record at the close of business on March 26, 2004. The cash dividend was paid on the number of shares outstanding prior to the 3 for 2 stock split. Stockholders entitled to fractional shares resulting from the stock split received cash in lieu of such fractional share based on the closing price of the Company’s common stock on March 26, 2004.

On April 11, 2003, the Company distributed 3,183,210 shares of common stock in connection with a 3 for 2 stock split to stockholders of record as of March 28, 2003.

During 2003, The Company completed the acquisition of seven product lines, one used in the animal health business, one related to the herbicide business and five related to a pre-harvest crop protection business. In connection with these acquisitions, the Company recorded intangible assets in the amount of $10,726 of which $5,926 was paid in cash during the period.

On April 12, 2002, the Company distributed 1,435,512 shares of common stock in connection with a 4 for 3 stock split to stockholders of record as of March 29, 2002.

See summary of significant accounting policies and notes to consolidated financial statements.

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

(Dollars in thousands, except per share data)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2004, 2003 and 2002

Description of Business and Basis of Consolidation

The Company is primarily a specialty chemical manufacturer that develops and markets safe and effective products for agricultural and commercial uses. The Company manufactures and formulates chemicals for crops, human and animal protection. The consolidated financial statements include the accounts of American Vanguard Corporation (“Company”) and its subsidiaries AMVAC Chemical Corporation (“AMVAC”), GemChem, Inc. (“GemChem”), 2110 Davie Corporation (“DAVIE”), AMVAC Chemical UK Ltd., (“Chemical UK”) and Quimica Amvac de Mexico S.A. de C.V. (“Quimica Amvac”), and Environmental Mediation, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation. The Company operates within a single operating segment.

Based on similar economic and operational characteristics, the Company’s business is aggregated into one reportable segment. Selective enterprise information is as follows:


	2004		2003		2002
Net sales:
Crop	$	122,498	$	104,895	$	79,271
Non-crop		28,357		19,968		21,400

	$	150,855	$	124,863	$	100,671

The Company’s subsidiary, GemChem, Inc., procures certain raw materials used in the Company’s manufacturing operations and is also a distributor of various pharmaceutical and nutritional supplement products.

Because of elements inherent to the Company’s business, such as differing and unpredictable weather patterns, crop growing cycles, changes in product mix of sales and ordering patterns that may vary in timing, measuring the Company’s performance on a quarterly basis (gross profit margins on a quarterly basis may vary significantly) even when such comparisons are favorable, is not as good an indicator as full-year comparisons.

Advertising Expense

The Company expenses advertising costs in the period incurred. Advertising expenses, which include promotional costs, is recognized in operating costs (specifically in selling expenses) in the consolidated statements of income and were $703 in 2004, $1,207 in 2003 and $570 in 2002.

Cost of Goods Sold

In addition to normal centers (i.e., direct labor, raw materials) of cost of goods sold, the Company includes such cost centers as Health and Safety, Environmental, Maintenance and Quality Control in cost of goods sold.

Other Than Cost of Goods Sold—Operating Expenses

Operating expenses include such cost centers as Selling, General and Administrative, Research and Product Development, Regulatory/Registration, Freight, Delivery and Warehousing in operating expenses.

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Freight, Delivery and Warehousing Expense

Freight, delivery and warehousing costs incurred by the Company are reported as operating expenses. All amounts billed to a customer in a sales transaction related to freight, delivery and warehousing are recorded as a reduction in operating expenses. Freight, delivery and warehousing costs were $9,676 in 2004, $8,902 in 2003 and $7,176 in 2002.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out method.

The components of inventories consist of the following:


	2004		2003
Finished products	$	39,244	$	30,159
Raw materials		4,391		3,230

	$	43,635	$	33,389

Long-lived Assets

The carrying values of long-lived assets is reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Measurement of the impairment loss is based on the fair value of the asset. Generally, fair value will be determined using valuation techniques such as the present value of expected future cash flows. Substantially all of the Company’s long-lived assets are held domestically. There was no impairment for the years ended December 31, 2004, 2003 and 2002.

Revenue Recognition

Programs

Effective January 1, 2002, the Company adopted Emerging Issues Task Force Issue No. 01-9, Accounting for Consideration Given by a Vendor to a Customer or a Reseller of the Vendor’s Products (“EITF 01-9”). Upon adoption of EITF 01-9, the Company is required to classify certain payments to its customers as a reduction of sales. The Company engages in various customer programs. The Company accounts for these programs as operating expenses or as a reduction in sales in accordance with EITF 01-9.

Property, Plant and Equipment and Depreciation

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

equipment. Interest costs related to significant construction projects may be capitalized at the Company’s weighted average cost of capital. Expenditures for maintenance and minor repairs are expensed as incurred. When property or equipment is sold or otherwise disposed of, the related cost and accumulated depreciation is removed from the respective accounts and the gain or loss realized on disposition is reflected in earnings. All plant and equipment is depreciated using the straight-line method, utilizing estimated useful property lives. Building lives range from 10 to 30 years; machinery and equipment lives range from 3 to 15 years; office furniture and fixtures lives range from 3 to 10 years, automobile lives range from 3 to 6 years; construction projects and significant improvements to existing plant and equipment lives range from 3 to 15 years when placed in service.

Foreign Currency Translation

The effect of foreign currency exchange gains and losses on transactions that are denominated in currencies other than the entity’s functional currency are remeasured into the functional currency using the end of the period exchange rates. The effects of foreign currency transactions are included in current profit and loss accounts.

The Company had total comprehensive income of $14,477, $10,328 and $6,777 for the years ended December 31, 2004, 2003 and 2002, respectively, which include foreign currency gain (loss) of $0, $65 and $(272) for the years ended December 31, 2004, 2003 and 2002, respectively.

Fair Value of Financial Instruments

The carrying values of cash, receivables and accounts payable approximate their fair values because of the short maturity of these instruments.

The fair value of the Company’s long-term debt and note payable to bank is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities. Such fair value approximates the respective carrying values of the Company’s long-term debt and note payable to bank.

Income Taxes

The Company uses the asset and liability method to account for income taxes, including recognition of deferred tax assets for the anticipated future tax consequences attributable to differences between financial statement amounts and their respective tax bases. Income tax expense is recognized currently for taxes payable. The Company reviews its deferred tax assets for recovery. A valuation allowance is established when the Company believes that it is more likely than not that some portion of its deferred tax assets will not be realized. Changes in valuation allowances from period to period are included in the Company’s tax provision in the period of change.

Per Share Information

Statement of Financial Accounting Standards (“SFAS”) No. 128, Earnings Per Share (“EPS”) requires dual presentation of basic EPS and diluted EPS on the face of all income statements. Basic EPS is computed as net

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

income divided by the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects potential dilution that could occur if securities or other contracts, which, for the Company, consists of options to purchase shares of the Company’s common stock are exercised.

The components of basic and diluted earnings per share were as follows:


	2004		2003		2002
Numerator:
Net income	$	14,477	$	10,263	$	7,049

Denominator:
Weighted averages shares outstanding		8,981,698		8,811,303		8,670,301
Assumed exercise of stock options		602,027		502,950		421,484

		9,583,725		9,314,253		9,091,785

The effect of options to purchase 34,280, 151,575 and 126,563 shares for the years ended December 31, 2004, 2003 and 2002 were excluded from the computation of earnings per dilutive share. The impact of such common stock equivalents are excluded from the calculation of net income per share on a diluted basis as their effect is anti-dilutive.

Accounting Estimates

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

Reclassifications

Certain prior years amounts have been reclassified to conform to the current year’s presentation.

Goodwill and Other Intangible Assets

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

When determining future cash flow estimates, the Company considers historical results adjusted to reflect current and anticipated operating conditions. Estimating future cash flows requires significant judgment by the Company in such areas as future economic conditions, industry-specific conditions, product pricing and necessary capital expenditures. The use of different assumptions or estimates for future cash flows could produce different impairment amounts (or none at all) for long-lived assets, goodwill and identifiable intangible assets. As of January 1, 2002, the Company had an immaterial amount of goodwill and amortization related to the goodwill. As such, the adoption of SFAS 142, did not have a material impact on the Company’s financial statements.

Stock-Based Compensation

The Company has adopted the provisions of SFAS No. 123, “Accounting for Stock-Based Compensation.” In accordance with SFAS No. 123, the Company has elected the disclosure-only provisions related to employee stock options and follows the Accounting Principals Board Opinion (APB) No. 25 in accounting for stock options issued to employees. Under APB No. 25, compensation expense, if any, is recognized as the difference between the exercise price and the fair value of the common stock on the measurement date, which is typically the date of grant, and is recognized over the service period, which is typically the vesting period.

In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure” . SFAS No. 148 amends SFAS No. 123 and provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. SFAS No. 148 also amends the disclosure requirements of SFAS No. 123 to require more prominent and frequent disclosures in financial statements about the effects of stock-based compensation. The Company adopted the disclosure requirements of SFAS No. 148 in the fourth quarter of 2002.

All stock options issued to employees have an exercise price not less than the fair market value of the Company’s common stock on the date of the grant, and in accordance with accounting for such options utilizing the intrinsic value method there is no related compensation expense recorded in the Company’s consolidated financial statements. Had compensation cost for stock-based compensation been determined based on the fair value of the grant dates consistent with the method of FASB 123, the Company’s net income and income per share for the years ended December 31, 2004, 2003 and 2002 would have been adjusted to the pro forma amounts presented:


	2004			2003			2002
Net income attributable to common stockholders	$	14,477		$	10,263		$	7,049
Stock-based employee compensation expense included in reported net income, net of related tax effects	$	-0-		$	-0-		$	-0-
Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects	$	(600	)	$	(446	)	$	(142	)

Pro forma	$	13,877		$	9,817		$	6,907

Earnings per common share	$	1.61		$	1.16		$	0.81
Pro forma	$	1.55		$	1.14		$	0.81
Earnings per common share—assuming dilution, as reported	$	1.51		$	1.10		$	0.78
Pro forma	$	1.45		$	1.08		$	0.78

The fair value of option grants is estimated on the date of grant utilizing the Black-Scholes option-pricing model with the weighted average assumptions for grants in 2004, 2003 and 2002; expected life of options was one to five years, expected volatility of 38%, 43% and 47%, risk-free interest rate of 3.6%, 3.0% and 4.3% and a .26% dividend yield. The weighted average fair value on the date of grants for options granted during 2004, 2003 and 2002 was $11.61, $9.31 and $3.48 per option, respectively.

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Recently Issued Accounting Guidance

Under its bylaws, and written indemnification agreements, the Company has agreed to indemnify its officers and directors for certain events or occurrences arising as a result of the officer or director’s serving in such capacity. The term of the indemnification period is for the officer’s or director’s lifetime. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. However, the Company has a directors’ and officers’ liability insurance policy that reduces its exposure and enables it to recover a portion of any future amounts paid. As a result of its insurance policy coverage, the Company believes the estimated fair value of these indemnification agreements is minimal and has no liability recorded for these agreements as of December 31, 2004.

The Company enters into indemnification provisions under its agreements with other companies in its ordinary course of business (typically customers). Under these provisions the Company generally indemnifies and holds harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of the Company’s activities or, in some cases, as a result of the indemnified party’s activities under the agreement. The indemnification provisions may survive the termination of the underlying agreement. In addition, in some cases, the Company has agreed to reimburse employees for certain expenses and to provide salary continuation during short-term disability. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions may be unlimited. The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the Company believes the estimated fair value of these provisions is minimal. Accordingly, the Company has no liabilities recorded for these agreements as of December 31, 2004.

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The adoption of this statement is not expected to have a material impact on the Company’s financial statements.

(1)

Property, Plant and Equipment

Property, plant and equipment at December 31, 2004 and 2003 consists of the following:


	2004		2003		Estimated useful lives
Land	$	2,441	$	2,441
Buildings and improvements		5,105		4,903	10 to 30 years
Machinery and equipment		44,772		39,273	3 to 15 years
Office furniture, fixtures and equipment		3,378		2,882	3 to 10 years
Automotive equipment		209		124	3 to 6 years
Construction in progress		3,999		1,798

		59,904		51,421
Less accumulated depreciation		33,786		29,744

	$	26,118	$	21,677

The Company began the re-commissioning phase during the third quarter of 2001 of the Axis, Alabama manufacturing facility it acquired in May 2001 from E.I. Du Pont de Nemours. The Company began the commissioning phase of this facility during the third quarter of 2001 and this facility was placed in service in May 2003. As of December 31, 2003, all costs related to the re-commissioning of the Axis, Alabama manufacturing facility have been placed into service and depreciation over their estimated useful lives has commenced.

(2)

Long-Term Debt

Long-term debt of the Company at December 31, 2004 and 2003 is summarized as follows:


	2004		2003
Note payable, secured by certain real property, payable in monthly installments of $9, plus interest at prime (4.75% as of December 31, 2004) plus 2% with remaining unpaid principal due April 30, 2012 (a)	$	2,581	$	1,391
Term loan, secured by personal property, payable in quarterly installments of $1,000 plus interest at prime (4.75% as of December 31, 2004) with remaining unpaid principal due October 7, 2009 (b)		19,000		8,125
Revolving line of credit (b)		2,000		14,200
Obligations under product acquisition agreements		1,000		4,800

		24,581		28,516
Less current installments		5,107		6,374

	$	19,474	$	22,142

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Approximate principal payments on long-term debt, excluding the revolving line of credit, mature as follows:


2005	$	5,107
2006		4,108
2007		4,108
2008		4,108
2009		3,108
Thereafter		2,042

	$	22,581

(a)

This note payable, secured by certain real property, was refinanced effective March 19, 2004 (new financed amount of $2,660). The new loan bears interest at prime, or at the Company’s option, at a fixed rate of interest offered by the bank. The new monthly installments, effective April 2004, are $9, plus interest. The Company will make principal plus interest payments over a seven-year term of the loan (loan matures April 1, 2011), based on a twenty-five-year amortization schedule. The proceeds from the loan, were used to payoff this maturing term loan and repay bank debt (fully-secured revolving line).

(b)

In October 2004, the Company entered into an Amended and Restated Credit Agreement with a syndicate of commercial lenders led by the Company’s primary bank as the administrative agent and a lender, two other banks as lenders and a fourth as a participant, for an $80,000 fully-secured credit facility. This credit facility replaced the Company’s previous credit facility with its primary bank and one other bank entered into in May 2002 and amended in March 2004. The new credit facility consists of a $45,000 revolving line of credit and a $35,000 term loan. These loans bear interest at the prime rate (“Referenced Loans”), or at the Company’s option, a fixed rate of interest offered by the Bank (such as adjusted LIBOR rate plus certain margins, in each case dependent on certain debt ratios (“Fixed Loans”)). The principal payments of the term loan are payable in equal quarterly installments of $1,000 on or before the last business day of each February, May, August and November, commencing November 30, 2004 and in one final installment in the amount necessary to repay the remaining outstanding principal balance of the term loan in full on the maturity date. Interest accruing on the Referenced Loans are payable quarterly, in arrears, on the last day of each March, June, September and December, and on the maturity date of such loan in the amount of interest then accrued but unpaid. Interest accruing on the Fixed Loans are payable on the last day of the interest period, provided that, with an interest period longer than three months, interest is payable on the last day of each three-month period after the commencement of such interest period. The senior secured revolving line of credit and term loan both mature on October 7, 2009 (five years from the closing date) and contain certain covenants (with which the Company is in compliance) as defined in the agreement. The Company had $43,000,000 of availability under its revolving line of credit as of December 31, 2004.

Substantially all of the Company’s assets not otherwise specifically pledged as collateral on existing loans and capital leases are pledged as collateral under the credit agreement.

The average amount outstanding of the senior secured revolving line of credit during the years ended December 31, 2004 and 2003 was $19,400 and $12,800. The weighted average interest rate during the years ended December 31, 2004 and 2003 was 3.40% and 3.45%.

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(3)

Income Taxes

The components of income tax expense are:


	2004			2003		2002
Current:
Federal	$	8,391		$	4,049	$	2,846
State		1,918			1,185		282
Deferred:
Federal		(959	)		613		964
State		(94	)		72		137

	$	9,256		$	5,919	$	4,229

Total income tax expense differed from the amounts computed by applying the U.S. Federal income tax rate of 35% to income before income tax expense as a result of the following:


	2004			2003			2002
Computed tax provision at statutory Federal rates	$	8,307		$	5,648		$	3,834
Increase (decrease) in taxes resulting from:
State taxes, net of Federal income tax benefit		1,241			322			491
Other expenses		(292	)		28			(6	)
Benefit of tax credits		—			(79	)		(90	)

	$	9,256		$	5,919		$	4,229

Temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities that give rise to significant portions of the net deferred tax liability at December 31, 2004 and 2003 relate to the following:


	2004			2003
Current:
Inventories	$	953		$	543
State income taxes		410			372
Vacation pay accrual		161			143
Other		(93	)		(79	)

Net deferred tax asset		1,431			979

Non-Current:
Plant and equipment, principally due to differences in depreciation and capitalized interest		(2,450	)		(3,051	)

Net deferred tax liability		(2,450	)		(3,051	)

Total net deferred tax liability	$	(1,019	)	$	(2,072	)

The Company believes it is more likely than not that the deferred tax assets above will be realized in the normal course of business.

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(4)

Litigation and Environmental

DBCP LAWSUITS

Hawaii Matters

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Corporation, and Del Monte Fresh Produce. (American Vanguard Corporation has not been sued in these actions.) The ten named plaintiffs are citizens of four countries—Guatemala, Costa Rica, Panama, and Ecuador. Punitive damages are sought against each defendant. The plaintiffs were banana workers and allege that they were exposed to DBCP in applying the product in their native countries. The case was also filed as a class action on behalf of other workers so exposed in these four countries. The plaintiffs” allege sterility and other injuries. (The plaintiffs’ attorneys (from South Carolina) have also represented foreign banana workers in the Texas and Mississippi matters discussed below.) For the last seven years, the focus of the case has been on procedural issues. The defendants moved to dismiss under the doctrine of forum non conveniens . Under this doctrine, the foreign plaintiffs would have to sue in their own countries rather than using the United States courts. The plaintiffs wish to keep the cases in the United States and have them remanded to state court. The plaintiffs also contend that the federal court does not have jurisdiction. In September 1998, the court granted defendants’ motion to dismiss based on the grounds of forum non conveniens . A number of conditions were imposed including consent to jurisdiction in the four foreign countries for the ten named plaintiffs, use of discovery taken in the United States, the requirement that the plaintiffs file suits in their home countries by December 9, 1998, and the agreement by defendants to pay any judgment, if any, that might be entered in the foreign countries. The court order also provided that the plaintiffs could return to the United States if the foreign countries refused to accept jurisdiction. The court then dismissed the case on March 8, 1999. The plaintiffs subsequently appealed to the Ninth Circuit Court of Appeal. The Ninth Circuit issued its decision on May 30, 2001, holding that the federal court did not have jurisdiction. A petition for writ of certiorari (a writ of a superior court to call up the records of an inferior court or quasi-judicial body) was filed in United States Supreme Court on October 5, 2001 and the United States Supreme Court subsequently granted a hearing. Oral argument was held on January 22, 2003. On April 22, 2003, the United States Supreme Court issued its decision in favor of the plaintiffs, holding there was no jurisdiction in federal court. This vacates the order dismissing the case under the forum non conveniens doctrine. One September 5, 2003, the U.S. District Court in Honolulu issued an order that the case will be remanded to state court unless there is an objection filed by September 18, 2003. As the U.S. Supreme Court has issued its final decision on the lack of federal court jurisdiction, the case will be remanded to state. Once the case reaches state court, the defendants will have to decide whether they will file a motion to dismiss under forum non conveniens pursuant to state court procedures. No activity took place on this case throughout 2004 or to date as apparently, the suit has not been officially received in the state court upon remand. The plaintiffs’ attorneys reported that the ten plaintiffs filed suit in their home countries by December 9, 1998, alleging in excess of two million United States dollars ($2,000,000) per plaintiff. The suit in Guatemala was served on AMVAC in March 2001, but no defendant has been required to answer. Suits in the other countries have not been served. AMVAC has engaged local attorneys in the countries to defend these foreign suits. No discovery has taken place on the individual claims of the plaintiffs. It is too early to provide any evaluation of the likelihood of an unfavorable outcome at this time. Without such discovery, it is unknown whether any of the plaintiffs was exposed to AMVAC brand DBCP or what statute of limitation defenses may apply. AMVAC intends to contest the cases vigorously.

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Vanguard Corporation, AMVAC Chemical Company (collectively, “AMVAC”), BEI Hawaii and Brewer Environmental Industries Holdings, Inc. (collectively “Brewer”). On or about October 17, 2003, all parties agreed to a tolling of the applicable statute of limitations in order to enter into mediation proceedings. The Company has been advised that the total claim could approximate four million dollars ($4,000,000), inclusive of future expenses for operations and maintenance of filtration devices on the wells. The parties met with an independent mediator on January 14 and 15, 2004 to discuss this claim. On January 15, 2004, the Company reached a settlement with HWSC for fifty-five thousand dollars ($55,000.00), contingent upon obtaining a court order approving the settlement as one made in good faith. The settlement includes future expenses for operations and maintenance. As not all parties settled at the mediation, HWSC filed suit in the Circuit Court of the Second Circuit, State of Hawaii on February 1, 2004. The non-settling parties subsequently removed the case to federal court, which has delayed the filing of motions in state court to approve the settlement as one made in good faith. The case was remanded to state court on January 7, 2005. With the case back in state court, a motion for approval of the good faith settlement will be made. Once the court approves the settlement, the fifty-five thousand dollars ($55,000) will be paid to HWSC to conclude AMVAC’s involvement.

Mississippi Matters

In May 1996, AMVAC was served with five complaints in which it is named as a defendant. (These complaints were filed by the same attorneys representing the Patrickson plaintiffs in Hawaii.) The complaints are entitled Edgar Arroyo-Gonzalez v. Coahoma Chemical Co., Inc., et al, Amilcar Belteton-Rivera v. Coahoma Chemical Co., Inc., et al, Eulogio Garzon-Larreategui v. Coahoma Chemical Co., Inc., et al, Valentin Valdez v. Coahoma Chemical Co., Inc., et al and Carlos Nicanor Espinola-E v. Coahoma Chemical Co., Inc., et al. Other named defendants are: Coahoma Chemical Co. Inc., Shell Oil Company, Dow Chemical Co., Occidental Chemical Co., Standard Fruit Co., Standard Fruit and Steamship Co., Dole Food Co., Inc., Dole Fresh Fruit Co., Chiquita Brands, Inc., Chiquita Brands International, Inc. and Del Monte Fresh Produce, N.A. The cases were filed in the Circuit Court of Harrison County, First Judicial District of Mississippi. Each case alleged damages sustained from injuries caused by plaintiffs’ (who are former banana workers and citizens of a Central American country) exposure to DBCP while applying the product in their native countries. These cases have been removed to U.S. District Court for the Southern District of Mississippi, Southern Division. The federal court granted defense motions to dismiss in each case pursuant to the doctrine of forum non conveniens . Unlike the Patrickson case, the court did not establish detailed procedures or deadlines for the filing of suits in the foreign countries by the five plaintiffs. Defendants have learned that plaintiff Valentin Valdez has filed a suit in Panama, but they have not been served. On January 19, 2001, the court issued an unpublished decision, finding that there was jurisdiction in federal court, but remanded just one case (Espinola) back to the trial court to determine if a stipulation which limited the plaintiff’s recovery to fifty thousand dollars ($50,000) was binding. If the stipulation is binding, that case will be remanded to state court. If the stipulation is not binding, that case will be dismissed along with the others, requiring the plaintiffs to litigate in their native countries. A deposition of the plaintiff Espinola was scheduled but was never taken. The federal court then ordered remand to state court. The attorneys for Dow Chemical Co. filed a motion for reconsideration, explaining that the plaintiffs attorneys did not produce their client for deposition. This motion is still pending. No activity took place on this matter throughout 2004 or to date. No discovery has taken place on the individual claims of these plaintiffs. If the Espinola case is tried in Mississippi state court, the maximum recovery is fifty thousand dollars ($50,000). Without discovery, it is unknown whether any of the plaintiffs were exposed to the Company’s product or what statute of limitation defense may apply. AMVAC intends to contest the cases vigorously. It is too early to provide an evaluation of the likelihood of an unfavorable outcome at this time.

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Louisiana Matters

Texas Matters

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Carcamo, individually and on behalf of all other similarly situated, et al., Juan Ramon Valdez, et al., and Isae Carcamo v. Shell Oil Company, et al. The complaints are for personal injuries from alleged exposure to DBCP. AMVAC was not sued by the plaintiffs but was sued on a third party complaint by Dow Chemical Company. These cases were originally filed in various state courts in Texas and removed by the defendants to federal court. By order dated July 11, 1995, the United States District Court granted defendants’ motion to dismiss pursuant to the doctrine of forum non conveniens , requiring the plaintiffs to sue in their native countries. The court required the defendants to consent to jurisdiction in the foreign countries along with other conditions. As AMVAC had not been sued by the plaintiffs directly, it refused to consent to jurisdiction in the foreign countries for these plaintiffs. In 1995, Dow Chemical Company dismissed its third party complaint against AMVAC without prejudice. Subsequently, Dow Chemical Company and Shell Oil Company settled with these plaintiffs as well as with about fifteen thousand other banana workers represented by the plaintiffs’ law firm (not the firm representing the Patrickson and Mississippi plaintiffs). Dow Chemical Company was then dismissed by the plaintiffs with prejudice in September 1997. Two intervenors (who are represented by the same attorneys as the plaintiffs in the Patrickson and Mississippi cases) have filed a motion in opposition to this dismissal. The plaintiffs appealed to the Fifth Circuit on the order of dismissal under forum non conveniens . In October 2000, the Fifth Circuit found federal court jurisdiction and affirmed the dismissals based on forum non conveniens . The United States Supreme Court refused to accept a hearing at that time. While AMVAC is not presently a party in this lawsuit having been dismissed without prejudice, the case is still pending, with the focus now shifted to the grower defendants. These remaining claims are apparently now being remanded to state courts in Texas.

Nicaragua Matters

In March 2004, twenty-five plaintiffs, all residents of Nicaragua, filed suit in state court in Los Angeles County, California, claiming personal injuries from alleged exposure to DBCP while working on banana plantations in their home country. The complaint is entitled Tellez et al v. Dole Food Company, Inc. et al. The named defendants are: Dole Food Company, Inc., Dole Fresh Fruit Company, Standard Fruit Company, Standard Fruit and Steamship Company, Dow Chemical Company, and AMVAC. American Vanguard Corporation is not named as a defendant. Punitive damages are also sought against all defendants. The plaintiffs claim personal injuries for sterility, reduced sperm counts and other reproductive injuries. They claim exposure from working on banana plantations in Nicaragua from dermal contact with DBCP, inhalation of vapors, and from drinking water allegedly contaminated with DBCP. AMVAC was served with the complaint on April 12, 2004 and filed an answer on May 5, 2004. On May 6, 2004, Dow Chemical removed the case from state court to the United States District Court for the Central District of California. The case was subsequently remanded to state court. On September 2, 2004, the plaintiffs were permitted to file an amended complaint that dropped seven plaintiffs and added eighteen others, for a total of thirty-six plaintiffs. To date, the parties have worked on a comprehensive case management order that would permit obtaining plaintiffs’ medical records in Nicaragua and starting depositions of eighteen of the plaintiffs in Los Angeles and independent medical examination scheduled to take place in May 2005. At a status conference on February 9, 2005, a trial date for July 17, 2006 was scheduled. No discovery has yet taken place on the individual claims of the plaintiffs. Thus, it is unknown as to how many of the thirty-six plaintiffs, if any, actually claim exposure to AMVAC’s product, the nature and extent of their injuries, and whether their claims are barred by applicable statutes of limitation. AMVAC intends to vigorously contest this case. It is too early to provide any evaluation of the likelihood of an unfavorable outcome at this time.

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

these three cases. It has also been reported that a suit seeking damages for personal injuries based on alleged exposure to DBCP in groundwater has been filed in Nicaragua. AMVAC has not been served to date and has not seen the complaints. AMVAC disputes that the Nicaraguan courts have jurisdiction over it. AMVAC intends to vigorously contest these cases. It is too early to provide any evaluation of the likelihood of an unfavorable outcome at this time.

OTHER MATTERS

Environmental

During 2004, AMVAC continued activities to address environmental issues associated with its facility (the Facility) in Commerce, California.

The Company is subject to numerous federal and state laws and governmental regulations concerning environmental matters and employee health and safety at the Commerce, California and Axis, Alabama facilities. The Company continually adapts its manufacturing process to the environmental control standards of the various regulatory agencies. The U.S. EPA and other federal and state agencies have the authority to promulgate regulations that could have an impact on the Company’s operations.

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(5)

Employee Deferred Compensation Plan

The Company maintains a deferred compensation plan (“the Plan”) for all eligible employees. The Plan calls for each eligible employee, at the employee’s election, to participate in an income deferral arrangement under Internal Revenue Code Section 401(k) whereby the Company will match the first $5.00 of weekly employee contributions. The Plan also permits employees to contribute up to an additional 15% of their salaries of which the company will match 50% of the first 6% of the additional contribution. The Company’s contributions to the Plan amounted to $385, $328 and $301 in 2004, 2003 and 2002. Effective January 1, 2005, the Company will match 100% of the elective deferrals of all eligible participants up to a maximum of 5% of compensation.

(6)

Major Customers and Export Sales

In 2004 there were three companies that accounted for 18%, 12% and 11% of the Company’s consolidated sales. In 2003 there were two companies that accounted for 11% each of the Company’s consolidated sales. In 2002 there were three companies that accounted for 22%, 12% and 10% of the Company’s consolidated sales. These companies are distributors of the Company’s products.

The Company primarily sells its products to large distributors and buying cooperatives and extends credit based on an evaluation of the customer’s financial condition. The Company had three significant customers who each accounted for approximately 15%, 12% and 11% of the Company’s receivables as of December 31, 2004. Two customers accounted for 13% of the Company’s receivables as of December 31, 2003. The Company has long-standing relationships with its customers and the Company considers the credit risk to be low.

Worldwide export sales were $10,265, $8,943 and $7,470 for 2004, 2003 and 2002, respectively. For the year ended December 31, 2004, sales to Mexico and Canada accounted for more than 10% of foreign sales, with sales of $1,818 to Mexico and $1,991 to Canada in 2004. Of total foreign sales, sales to Mexico and Canada accounted for more than 10% individually for the years ended December 31, 2003 and 2002, with foreign sales to Mexico of $2,284, and $1,210, respectively and sales to Canada for the same periods of $1,944 and $2,149.

(7) Royalties

The Company has various royalty agreements in place extending through December 2007. These agreements relate to the acquisition of certain products as well as licensing arrangements. One agreement, which expired December 31, 2003, contained a minimum aggregate royalty amount, which had previously been met. No other agreement contains a minimum royalty provision. Certain royalty agreements contain confidentiality covenants. Royalty expenses were $1,733, $1,988 and $1,752, respectively, for 2004, 2003 and 2002.

(8) Product Acquisitions

All product acquisitions have been accounted for as asset purchases and not businesses pursuant to FASB 141 and EITF 98-3.

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In 2004, the Company purchased the rights to sell a pyrethroid insecticide.

In 2003, the Company completed the acquisition of seven product lines, one used in animal health, one related to its herbicides business and five related to pre-harvest crop protection. The assets purchased included, but may not have been limited to, end-use product registrations and data in support of such registrations, trademarks, as well as other intellectual property. One asset purchase was for $5,786 (which included a number of products) and another was for $4,500. In connection with these asset acquisitions, the Company recorded intangible assets in the amount of $10,726, of which $5,926 was paid in cash during the period. The balance due under these asset purchase agreements was $4,800 at December 31, 2003 and is included in long-term debt on the consolidated financial statements (note 2).

In 2002, the Company acquired certain assets associated with a domestic product line from a chemical company. The Company acquired all U.S. EPA end-use product registrations and data in support of such registrations as well as a license to the trademark.

Also in 2002, the Company acquired certain assets associated with a domestic product line from a chemical company. The Company acquired the U.S. EPA end-use product registrations as well as the trademark and product inventories. In addition, the Company negotiated a supply agreement providing for the supply of active ingredient. Access to data in support of the end-use product registration has been assigned to the Company.

In 2001, the Company acquired an international product line from a chemical company. The purchase included all active registrations, access to the underlying data for the registrations and trademarks in 55 countries. The Company has manufactured and formulated the product for the international market since 1985. Additionally, the Company has been the primary data generator and data holder for the product since 1989. The acquisition was for a fixed amount which was paid in 2001.

In 2000, the Company completed the acquisition of a product line from a wholly-owned subsidiary of a large chemical company. The purchase included the worldwide rights including U. S. Environmental Protection Agency (“EPA”) registrations rights and similar regulatory entities in other countries worldwide, manufacturing and process technology, trademarks and all product related intellectual property. In addition, the Company entered into a royalty obligation commencing on or about May 2002 to continue for five years from May 2002.

Additionally in 2000, the Company completed the acquisition of a product line from a large chemical company. The Company acquired all U.S. EPA and state registrations, manufacturing and process technology, trademarks and all product related intellectual property. The acquisition included all rights and obligations to a closed delivery system as well as the seller’s existing finished and semi-finished inventory including the closed delivery system containers.

The primary identifiable intangible assets of the Company relate to product rights associated with its product acquisitions. These rights, for the most part, consist of product registrations and related data filed with the United States Environmental Protection Agency and state regulatory agencies to support such registrations and other supporting data. The amount of goodwill allocated to the product acquisitions has not been material. The following schedule represents intangible assets recognized in connection with product acquisitions (See Summary of Significant Accounting Policies – Goodwill and Other Intangible Assets for the Company’s accounting policy regarding intangible assets):

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following schedule represents intangible assets recognized in connection with product acquisitions (See note 1 for the Company’s accounting policy regarding intangible assets):


	Amount
Intangible assets at December 31, 2001	$	10,049
Acquisitions during fiscal 2002		1,774
Amortization expense		(945	)

Intangible assets at December 31, 2002		10,878
Acquisitions during fiscal 2003		10,726
Amortization expense		(1,297	)

Intangible assets at December 31, 2003		20,307
Acquisitions during fiscal 2004		2,612
Amortization expense		(1,758	)

Intangible assets at December 31, 2004	$	21,161

The above amounts represent the total cash consideration paid during the period for product acquisitions and certain related capitalized expenses incurred in connection with such acquisitions.

The following schedule represents the gross carrying amount and accumulated amortization of the intangible assets recognized in connection with product acquisitions. Intangible assets are amortized over their expected useful lives of 15 years:


	2004			2003
Gross carrying amount	$	27,403		$	24,791
Accumulated amortization		(6,242	)		(4,484	)

	$	21,161		$	20,307

The following schedule represents future amortization charges related to intangible assets recognized in connection with product acquisitions:


Year ending December 31,
2005	$	1,883
2006		1,883
2007		1,883
2008		1,883
2009		1,883
Thereafter		11,746

	$	21,161

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following schedule represents the Company’s obligations under product acquisition agreements:


	Amount
Obligations under acquisition agreements at December 31, 2000		4,203
Additional obligations acquired		422
Payments on existing obligations		(3,725	)

Obligations under acquisition agreements at December 31, 2001		900
Additional obligations acquired		—
Payments on existing obligations		(650	)

Obligations under acquisition agreements at December 31, 2002		250
Additional obligations acquired		10,726
Payments on existing obligations		(6,176	)

Obligations under acquisition agreements at December 31, 2003		4,800
Additional obligations acquired		2,396
Payments on existing obligations		(6,196	)

Obligations under acquisition agreements at December 31, 2004	$	1,000

Future commitments on obligations under product acquisition agreements are due as follows:


December 31	Amount
2005	$	1,000

(9)

Commitments

The Company entered into long-term employment agreements with certain officers. Amounts to be paid under those agreements are summarized as follows:


Year ending December 31,
2005	$	683
2006		468
2007		446

	$	1,597

The Company has various lease agreements for offices as well as a long-term ground lease for its Axis, Alabama facility. The office leases contain provisions to pass through to the Company its pro-rata share of certain of the building’s operating expenses. The long-term ground lease is for twenty years (commencing May 2001) with up to five automatic renewals of three years each for a total of thirty-five years. Rent expense for the years ended December 31, 2004, 2003 and 2002 was $352, $368 and $322. Future minimum lease payments under the terms of the leases are as follows:


Year ending December 31,
2005	$	278
2006		279
2007		255
2008		253
2009		213
Thereafter		120

	$	1,398

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(10)

Research and Development

Research and development expenses were $3,081, $4,669 and $2,940 for the years ended December 31, 2004, 2003 and 2002.

(11)

Stock Options

Incentive Stock Option Plans (“ISOP”)

Under the terms of the Company’s ISOP, under which options to purchase 1,611,000 shares of common stock can be issued, all key employees are eligible to receive non-assignable and non-transferable options to purchase shares. The exercise price of any option may not be less than the fair market value of the shares on the date of grant; provided, however, that the exercise price of any option granted to an eligible employee owning more than 10% of the outstanding common stock may not be less than 110% of the fair market value of the shares underlying such option on the date of grant. No options granted may be exercisable more than ten years after the date of grant. The options granted generally vest evenly over a three to five year period, beginning from the date of the grant.

During 2004 and 2003, the Company granted incentive stock options to purchase an aggregate of 15,500 and 423,750 shares of common stock to key employees. These options are non-assignable and non-transferable, are exercisable over a seven-year period from the date of grant and vest in five equal annual installments commencing one year from the date of grant.

Nonstatutory Stock Options (“NSSO”)

During 2004 and 2003, the Company granted nonstatutory stock options to purchase an aggregate of 21,780 and 26,014 shares of common stock. These options are non-assignable and non-transferable, are exercisable over a five year period from the date of grant and vested upon grant.

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Option activity within each plan is as follows:

Rollforward Table of Option Activity Within Each Plan:


	Incentive Stock Option Plans		Non-Statutory Stock Options Plans		Weighted Average Price Per Share		Exercisable Weighted Average Price Per Share
Balance outstanding, December 31, 2000	416,663		28,622		1.82
Options granted, range from $2.22–$4.70	308,651		19,623		4.70
Options exercised, range from $1.93–$4.59	(4,000	)	(26,000	)	(2.57	)

Balance outstanding, December 31, 2001	721,314		22,245		3.05
Options granted, range from $8.06–$8.51	16,875		18,150		8.34
Options exercised, range from $2.03–$8.06	(129,347	)	(9,542	)	(2.15	)

Balance outstanding, December 31, 2002	608,842		30,853		3.48		3.51

Options granted, range from $9.38–$21.6	423,750		26,014		13.61
Options exercised, range from $1.80–$12.47	(202,860	)	(6,049	)	(4.16	)

Balance outstanding, December 31, 2003	829,732		50,818		9.31		6.38

Options granted, range from $30.12–$38.52	15,500		21,780		36.50
Options exercised, range from $2.22–$21.6	(127,448	)	(6,050	)	(3.15	)
Options expired	(10,260	)	—		(3.07	)

Balance outstanding, December 31, 2004	707,524		66,548		11.61		8.69

Information relating to stock options at December 31, 2004 summarized by exercise price is as follows:


	Outstanding Weighted Average				Exercisable Weighted Average
Exercise Price Per Share	Shares	Life (Months)	Exercise Price		Shares	Exercise Price
Incentive Stock Option Plan:
$4.70	254,400	36	$	4.70	152,640	$	4.70
$8.51	16,874	27	$	8.51	7,594	$	8.51
$9.38–$21.60	420,750	16	$	16.19	211,050	$	11.39
$30.12–$34.50	15,500	6	$	33.65	1,550	$	33.65

	707,524	23	$	12.26	372,834	$	8.69

Nonstatutory Stock Options:
$1.72	3,025	12	$	1.72	3,025	$	1.72
$2.30	3,630	60	$	2.46	3,630	$	2.46
$4.67–$7.00	3,630	12	$	4.58	3,630	$	4.58
$8.58	10,890	12	$	8.07	10,890	$	8.07
$12.467–$18.80	23,595	12	$	12.47	23,595	$	12.47
$38.52	21,780	12	$	38.52	21,780	$	38.52

	66,550	11	$	18.60	66,550	$	18.81

AMERICAN VANGUARD CORPORATION

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(12)

Quarterly Data—Unaudited


Quarterly Data—2004	March 31		June 30		September 30		December 31
Net sales	$	34,219	$	31,492	$	39,624	$	45,520
Gross profit		15,190		13,748		18,446		24,874
Net income		2,203		2,405		3,988		5,881
Basic net income per share		.25		.27		.44		.65
Diluted net income per share		.23		.25		.42		.61

Quarterly Data—2003
Net sales	$	27,342	$	25,944	$	32,948	$	38,629
Gross profit		11,368		11,953		14,857		20,696
Net income		1,224		1,725		2,815		4,499
Basic net income per share		.14		.20		.32		.50
Basic and diluted net income per share		.13		.19		.30		.48

EXHIBIT INDEX

ITEM 15


Exhibit Number		Description of Exhibit
3.1		Amended and Restated Certificate of Incorporation of American Vanguard Corporation (filed as Exhibit 3.1 to the Company’s Form 10-K for the year ended December 31, 2003 and incorporated herein by reference).

3.2		Certificate of Amendment of Amended and Restated Certificate of Incorporation of American Vanguard Corporation (filed as Exhibit 3.2 to the Company’s Form 10-Q/A for the period ended June 30, 2004 and incorporated herein by reference).

3.3		Amended and Restated Bylaws of American Vanguard Corporation (filed as Exhibit 3.2 to the Company’s Form 10-K for the year ended December 31, 2003 and incorporated herein by reference.)

4		Form of Indenture (filed as Exhibit 4 to the Company’s Registration Statement on Form S-3 (File No. 333-122981) and incorporated herein by reference).

10.1		American Vanguard Corporation Employee Stock Purchase Plan (filed as Appendix B to the Company’s Proxy Statement filed with the Securities and Exchange Commission on May 31, 2001 and incorporated herein by reference).

10.2		American Vanguard Corporation Fourth Amended and Restated Stock Incentive Plan (filed as Appendix A to the Company’s Proxy Statement filed with the Securities and Exchange Commission on May 11, 2004 and incorporated herein by reference).

10.3		Form of Incentive Stock Option Agreement under the American Vanguard Corporation Fourth Amended and Restated Stock Incentive Plan.*

10.4		Form of Non-Qualified Stock Option Agreement under the American Vanguard Corporation Fourth Amended and Restated Stock Incentive Plan.*

10.5		Employment Agreement between American Vanguard Corporation and Eric G. Wintemute.*

10.6		Form of Change of Control Severance Agreement, dated effective as of January 1, 2004, between American Vanguard Corporation and its Executive and Senior Officers (filed as Exhibit 10.2 to the Company’s Form 10-Q for the period ended March 31, 2004 and incorporated herein by reference.)

10.7		Form of Indemnification Agreement between American Vanguard Corporation and its Directors.*

10.8		Amended and Restated Credit Agreement, dated as of September 30, 2004, among AMVAC Chemical Corporation, Bank of the West, Harris Trust and Savings and First Bank & Trust.*

21		List of Subsidiaries of the Company.*

23		Consent of BDO Seidman, LLP, Independent Registered Public Accounting Firm.*

31.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

31.2		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

32.1		Certifications Pursuant to 18 U.S.C. Section 1350 as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

*	Filed herewith.

EXHIBIT 10.3

AMERICAN VANGUARD CORPORATION

1994 STOCK INCENTIVE PLAN

INCENTIVE STOCK OPTION AGREEMENT

THIS INCENTIVE STOCK OPTION AGREEMENT (this “Agreement”), effective as of , 200 (the “date of grant”), is entered into by and between American Vanguard Corporation, a Delaware corporation (the “Company”), and (the “Employee”).

RECITALS

A. The Board of Directors of the Company has adopted the 1994 Stock Incentive Plan, as amended and restated (the “Plan”). Capitalized terms used but not defined in this Agreement shall have the meaning assigned to such terms in the Plan.

B. The Plan permits the granting of stock options, including Incentive Stock Options, to Participants to purchase shares of Common Stock in accordance with the provisions of the Plan and subject to such other terms as the Committee may determine in its sole discretion.

C. To provide the Employee with a further incentive for remaining as an employee with the Company or one of its subsidiaries and increasing the Employee’s efforts for the benefit of the Company and its subsidiaries, the Employee has been selected by the Committee to be an eligible Participant under the Plan and to receive an Award subject to the terms and conditions set forth below.

TERMS AND CONDITIONS

In consideration of the foregoing and of the mutual covenants contained herein and other valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:

1. Grant of Option .

(a) Subject to the terms and conditions of the Plan and this Agreement, the Company hereby grants to the Employee, effective as of the date of grant, the right and option to purchase all or any part of ( ) shares of Common Stock (the “Option Shares”), which shall become exercisable pursuant to the Vesting Schedule set forth in Section 2(a) of this Agreement, for an exercise price of Dollars and /100 ($ ) per share (the “Exercise Price”), which is at least the Fair Market Value of each share of Common Stock (or at least 110% of the Fair Market Value of each share of Common Stock if the Employee possesses more than ten percent (10%) of the total combined voting power of all classes of outstanding shares of the Company as determined under the Code) (the “Option”).

(b) The Option is intended to be an Incentive Stock Option as defined in the Plan and within the meaning of Section 422 of the Code.

(c) The Option Shares and the Exercise Price are subject to adjustment under certain circumstances as more fully set forth in the Plan. The term “Option Shares” as used in this Agreement shall include any other class of stock or other securities resulting from such adjustment.

2. Option Exercise Limitations .

(a) Subject to the terms and conditions of this Agreement and the Plan, the Option shall vest and become exercisable in ( ) equal annual installments pursuant to the following vesting schedule (the “Vesting Schedule”): (i) percent ( %) of the Option Shares shall become exercisable on the first anniversary of the date of grant; (ii) percent ( %) of the Option Shares shall become exercisable on the second anniversary of the date of grant; (iii) percent ( %) of the Option Shares shall become exercisable on the third anniversary of the date of grant; (iv) percent ( %) of the Option Shares shall become exercisable on the fourth anniversary of the date of grant; and (v) percent ( %) shall become exercisable on the fifth anniversary of the date of grant. The Option exercise privileges shall be cumulative so that to the extent any Option Share has become exercisable but has not been exercised shall remain exercisable until the earlier of (i) termination of the Option as provided in Section 2(b) of this Agreement or (ii) expiration of the Option Period as specified in Section 2(c) of this Agreement.

(b) Upon Termination of Employment for any reason (other than as a result of death or Disability), to the extent the Option has become exercisable as of the date of Termination of Employment, the Employee must exercise all such exercisable Option within three (3) months after the date of Termination of Employment. Upon Termination of Employment due to the Employee’s death or Disability, to the extent the Option has become exercisable as of the date of Termination of Employment, the Employee or the Employee’s heirs, personal representative, or legal representative, as the case may be, must exercise all such exercisable Option within twelve (12) months after the date of Termination of Employment. Except as specifically provided in this Section 2(b) of this Agreement, the Option shall terminate and shall no longer be exercisable upon Termination of Employment.

(c) Notwithstanding anything to the contrary and subject to earlier termination pursuant to Section 2(b) of this Agreement or to the terms of the Plan, the Option shall expire and automatically terminate at 5:00 p.m. (California time) on the date which is seven (7) years from the date of grant (or five (5) years from the date of grant if the Employee possesses more than ten percent (10%) of the total combined voting power of all classes of outstanding shares of the Company as determined under the Code) (the “Option Period”).

(d) Notwithstanding the Vesting Schedule, the aggregate Fair Market Value (determined as of the date of grant) of the Option Shares with respect to which Incentive Stock Options are exercisable for the first time by the Employee during any calendar year under all stock option plans of the Company may not exceed One Hundred Thousand Dollars ($100,000). If the aggregate Fair Market Value of the Option Shares exceeds $100,000, then the Option shall, to the extent and in the order required by the Regulations (or any other authority having the force of Regulations), automatically be deemed to be Non-Qualified Stock Options, but all other terms and provisions of the Option shall remain unchanged. In the absence of such Regulations (or authority), or in the event such Regulations (or authority) require or permit a designation of the Option which shall cease to constitute Incentive Stock Options, then the Option shall, to the extent of such excess and in the order in which they were granted, automatically be deemed to be Non-Qualified Stock Options, but all other terms and provisions of the Option shall remain unchanged.

(e) If at any time the Option is exercised and the Company does not have in effect, under the 1933 Act, and other applicable securities laws, a registration statement relating to the Option Shares and a prospectus meeting the requirements of the 1933 Act available for delivery to the Employee, the Employee hereby represents, warrants and covenants that the Employee will acquire the Option Shares for investment and not with a view to distribution, sale or resale, and will comply with all applicable laws with regard to resale, including, but not limited to, Rule 144 under the 1933 Act.

(f) No exercise of the Option may be for less than one hundred (100) Option Shares, unless such lesser amount is the entire amount of the Option Shares available under the Option at the time of exercise.

3. Payment of the Exercise Price . At the time of exercise of the Option or any portion thereof, the Exercise Price of the Option Shares as to which the Option is then being exercised shall be tendered to the Company. The Exercise Price of the Option Shares shall be paid to the Company (i) in cash, certified check, bank cashier’s check or wire transfer, (ii) if requested by the Employee and permitted by the Committee in its sole discretion, by cashless means including, without limitation, the surrender to the Company of shares of previously acquired Common Stock or option for Common Stock, which shall be valued at the Fair Market Value as of the date of exercise of the Option, and (iii) if requested by the Employee and permitted by the Committee in its sole discretion, by a combination of the foregoing.

4. Option Exercise Procedure .

(a) Exercise of the Option shall be accomplished by delivery to the Company, pursuant to Section 9 of this Agreement, of (i) a timely and completed written notice of election to exercise in the form attached to this Agreement as Exhibit ”A” (the “Exercise Notice”), (ii) payment of the Exercise Price for the Option Shares to be exercised, and (iii) payment for any applicable withholding taxes as provided in Section 6 of this Agreement.

(b) The Option may be exercised by a broker-dealer acting on behalf of the Employee if (i) the broker-dealer has received from the Employee or the Company a copy of this executed Agreement, and instructions signed by the Employee requesting the Company to deliver the Option Shares to the broker-dealer on behalf of the Employee and specifying the account into which such shares should be deposited, (ii) adequate provision has been made for the payment of any withholding taxes due upon such exercise, and (iii) the broker-dealer and the Employee have otherwise complied with Regulation T as promulgated by the Federal Reserve Board.

(c) As soon as practicable after each timely exercise of the Option and compliance by the Employee with all applicable conditions under this Agreement and the Plan, the Company shall mail or cause to be mailed to the Employee at the address specified in the Exercise Notice one or more stock certificates registered in the name of the Employee for the number of shares of Common Stock which the Employee shall be entitled to receive upon such exercise under the provisions of this Agreement and the Plan.

5. Nontransferability .

(a) The Option and the rights and privileges associated with the Option shall not be transferred, assigned, pledged or hypothecated by the Employee other than by will or by the laws of descent and distribution, or pursuant to a qualified domestic relations order as provided by the Code or Title I of the Employee Retirement Income Security Act. The Option shall be exercisable during the Employee’s lifetime only by the Employee or, in the event of Disability, by the Employee’s personal representative. To the extent exercisable after the Employee’s death, the Option shall be exercisable only by the person or persons entitled to the Option under the Employee’s will or, if the Employee shall fail to make testamentary disposition of the Option, by the Employee’s legal representative. Upon any attempt to sell, transfer, assign, pledge, hypothecate, or otherwise dispose of the Option, or any right or privilege conferred by the Option, contrary to the provisions of this Agreement or the Plan, the Option, including all rights and privileges under the Option, shall immediately become null and void.

(b) Notwithstanding any provision to the contrary in this Agreement, if the Employee is subject to the provisions of Section 16 of the 1934 Act, none of the Option Shares may be sold or otherwise transferred, assigned, pledged or hypothecated for a period of at least six (6) months from the date of exercise.

6. Withholding Taxes . The Company’s obligation to deliver the Option Shares upon the exercise of the Option shall be subject to the Employee’s satisfaction of all applicable federal, state and local tax withholding requirements. The Employee understands and agrees that the Company and/or its subsidiaries may deduct from the amount of any compensation payable to the Employee any taxes required to be withheld with respect to the Option. If the Employee sells, transfers, assigns, or otherwise disposes of any Option Shares within two (2) years after the date of grant or within one (1) year after the date of exercise, the Employee shall promptly notify the Company of such disposition, and the Company shall have the right to demand that the Employee remit to the Company and/or its subsidiaries the amounts, if any, necessary to satisfy any applicable federal, state and local tax withholding requirements imposed by reason of such disposition.

7. Limitation of Rights .

(a) Other than the Option granted under this Agreement, nothing contained in this Agreement or in the Plan shall give or entitle the Employee to any right to receive any option or other award under the Plan or as may be determined by the Committee in its sole discretion, or give the Employee or any other person any interest in any fund or in any specific asset or assets of the Company.

(b) Nothing contained in this Agreement or in the Plan shall confer on the Employee any right to employment or to continue in the employment of the Company, or affect in any way the rights of the Company to terminate the Employee’s employment at any time. Neither the Plan nor this Agreement constitutes evidence of any agreement or understanding, express or implied, that the Company will employ the Employee in any particular position or at any particular rate of remuneration.

(c) Nothing contained in this Agreement or in the Plan shall limit the establishment or continued operation of other incentive compensation plans by the Company, or limit the authority of the Board to establish or amend incentive compensation plans for the Company, or in any way limit or restrict the amount of payments under such incentive compensation plans, or in any way limit the authority of the Board to authorize or make such payments as the Board may determine for any period, or limit or otherwise affect the payment or amount of salaries, wages or special compensation to any employee, including the Employee.

(d) Nothing contained in this Agreement shall affect the Employee’s right to participate and receive benefits under and in accordance with the then-current provisions of any other stock option plan, pension, insurance or other employee welfare plan or program of the Company.

8. Rights of Stockholder . Neither the Employee nor any person claiming under or through the Employee shall be, or have any rights or privileges of, a stockholder of the Company with respect to any of the Option Shares issuable upon the exercise of the Option, unless and until the Company issues one or more certificates representing such shares.

9. Notices . Any notice to be given to the Company or the Committee under the terms of this Agreement shall be addressed to the Company at 4695 MacArthur Court, Suite 1250, Newport Beach, California 92660, Attention: 1994 Stock Incentive Plan Committee in care of the Corporate Secretary, or at such other address as the Company may hereafter designate in writing pursuant to this Section 9. Any notice to be given to the Employee shall be addressed to the Employee at the address set forth beneath the Employee’s signature hereto or the last known address on record with the Company, or at any such other address as the Employee may hereafter designate in writing pursuant to this Section 9. Any such notice shall be deemed to have been duly given when delivered personally (or by messenger) or upon receipt when enclosed in a properly sealed envelope, correctly addressed, registered or certified mail, and deposited, postage prepaid, in the U.S. mail.

10. Acknowledgement . By signing this Agreement, or by accepting or exercising any Option, the Employee acknowledges and agrees that:

(a) The Employee has received and reviewed a copy of the Plan.

(b) The Employee has had the opportunity to make any and all inquiries the Employee may have in connection with the Option, this Agreement and the Plan.

(c) All determinations by the Committee with respect to the resolution of any disputed question arising under the Agreement or the Plan, including questions of construction and interpretation, shall be within the absolute discretion of the Committee and shall be final, binding and conclusive upon all persons, including the Employee. Without limiting the generality of the foregoing, the determination of the Committee as to whether the Employee’s employment has been terminated and the date thereof shall be final, binding and conclusive upon the Employee and all persons.

11. Binding Effect . This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company and, subject to the limitations on transferability contained herein, of the heirs, executors, administrators and legal representatives of the Employee.

12. Governing Law . The validity, construction, interpretation and effect of this Agreement shall be governed by the laws of the State of California without giving effect to the principles of conflicts of laws. This Agreement shall be construed in accordance with the provisions of the Plan unless specifically provided otherwise herein.

13. Gender . As used in this Agreement, the masculine, feminine and neuter gender and the singular or plural numbers shall be deemed to include the others whenever the context so indicates.

14. Compliance with Laws and Regulations . The Option and the obligation of the Company to sell and deliver the Option Shares shall be subject to applicable federal and state laws, rules and regulations, and to such approvals by any government or regulatory agency as may be required.

15. Entire Agreement . This Agreement together with the Plan constitute the entire understanding between the parties regarding the Option and the matters herein. Any prior agreements, commitments or negotiations concerning the Option or the matters herein are superseded. This Agreement may be amended or modified only by a written agreement signed by the parties.

16. Headings . The section or subsection headings contained herein are for the purposes of convenience only and are not intended to define or limit the contents of the provisions contained therein.

17. Facsimile Signature . This Agreement may be executed by a party’s signature transmitted by facsimile, and copies of this Agreement executed and delivered by means of facsimile signatures shall have the same force and effect as copies hereof executed and delivered with original signatures. All parties may rely upon facsimile signatures as if such signatures were originals. Any party executing and delivering this Agreement by facsimile shall promptly thereafter deliver a counterpart signature page of this Agreement containing said party’s original signature.

18. Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

[Remainder of page intentionally left blank; signatures follow.]

IN WITNESS WHEREOF, the parties hereto have executed this Incentive Stock Option Agreement effective as of the date first written above.


AMERICAN VANGUARD CORPORATION, a Delaware corporation

By:

		Name:

		Title:


EMPLOYEE:



Name:

Address:

EXHIBIT A

NOTICE OF EXERCISE


To:	American Vanguard Corporation
	4695 MacArthur Court, Suite 1250
	Newport Beach, CA 92660

	Attention:	1994 Stock Incentive Plan Committee c/o Corporate Secretary

	Subject:	Notice of Intention to Exercise Option under the American Vanguard Corporation 1994 Stock Incentive Plan

I am the “Employee” granted an Incentive Stock Option pursuant to the Incentive Stock Option Agreement entered into with the Company dated , 200 (the “Agreement”). Capitalized terms used but not defined herein shall have the meaning assigned to such terms in the Agreement.

Pursuant to the Agreement, I hereby provide you with official notice that I elect to exercise my Option to purchase the Option Shares under the Option as follows:


Number of Option Shares:

Method of Payment:

Concurrently herewith is payment of the Exercise Price for the Option Shares and, if applicable, amounts to be withheld to satisfy any withholding taxes. I understand and agree that the determination of the Fair Market Value of the Option Shares issued on this exercise of my Option shall be made as of the day that this Notice of Exercise is received by the Company.

I further understand that this election is irrevocable once it is effective in accordance with the terms of the Agreement.

The certificate for the Option Shares should be registered and forwarded as follows:


Name on Certificate:

Address:





Signed:

Print Name:

Date:

EXHIBIT 10.4

AMERICAN VANGUARD CORPORATION

1994 STOCK INCENTIVE PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

(for Non-Employee Directors)

THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this “Agreement”), effective as of , 200 (the “date of grant”), is entered into by and between American Vanguard Corporation, a Delaware corporation (the “Company”), and (the “Director”).

RECITALS

B. The Plan permits the granting of stock options, including Non-Qualified Stock Options, to Participants to purchase shares of Common Stock in accordance with the provisions of the Plan and subject to such other terms as the Committee may determine in its sole discretion.

C. The Director is a member of the Board and is not an officer or employee of the Company.

D. To provide the Director with a further incentive for remaining with the Company and increasing the Director’s efforts for the benefit of the Company, the Director has been selected by the Committee to be an eligible Participant under the Plan and to receive an Award subject to the terms and conditions set forth below.

TERMS AND CONDITIONS

In consideration of the foregoing and of the mutual covenants contained herein and other valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:

1. Grant of Option .

(a) As a separate incentive in connection with the Director’s services as a member of the Board and not in lieu of any other compensation for such services, the Company hereby grants to the Director, subject to the terms and conditions of the Plan and this Agreement, effective as of the date of grant, the right and option to purchase all or any part of ( ) shares of Common Stock (the “Option Shares”) for an exercise price of Dollars and /100 ($ ) per share (the “Exercise Price”), which is at least the Fair Market Value of each share of Common Stock (the “Option”).

(b) The Option is intended to be a Non-Qualified Stock Option and is not intended to be, and will not be treated as, an Incentive Stock Option as defined in the Plan and within the meaning of Section 422 of the Code.

2. Option Exercise Limitations .

(a) The Option is exercisable in whole or in part at any time as of the date of grant but prior to the earlier of (i) termination of the Option as provided in Section 2(b) of this Agreement or (ii) expiration of the Option Period as specified in Section 2(c) of this Agreement.

(b) The Option shall terminate and shall no longer be exercisable upon the date twelve (12) months following the earliest to occur of (i) the termination of the Director’s service on the Board due to the Director’s resignation or failure to be reelected for any reason, (ii) the Director’s death, or (iii) the Director’s Disability.

(d) If at any time the Option is exercised and the Company does not have in effect, under the 1933 Act, and other applicable securities laws, a registration statement relating to the Option Shares and a prospectus meeting the requirements of the 1933 Act available for delivery to the Director, the Director hereby represents, warrants and covenants that the Director will acquire the Option Shares for investment and not with a view to distribution, sale or resale, and will comply with all applicable laws with regard to resale, including, but not limited to, Rule 144 under the 1933 Act.

(e) No exercise of the Option may be for less than one hundred (100) Option Shares, unless such lesser amount is the entire amount of the Option Shares available under the Option at the time of exercise.

3. Payment of the Exercise Price . At the time of exercise of the Option or any portion thereof, the Exercise Price of the Option Shares as to which the Option is then being exercised shall be tendered to the Company. The Exercise Price of the Option Shares shall be paid to the Company (i) in cash, certified check, bank cashier’s check or wire transfer, (ii) if requested by the Director and permitted by the Committee in its sole discretion, by cashless means including, without limitation, the surrender to the Company of shares of previously acquired Common Stock or option for Common Stock, which shall be valued at the Fair Market Value as of the date of exercise of the Option, and (iii) if requested by the Director and permitted by the Committee in its sole discretion, by a combination of the foregoing.

4. Option Exercise Procedure .

(a) Exercise of the Option shall be accomplished by delivery to the Company, pursuant to Section 9 of this Agreement, of (i) a timely and completed written notice of election to exercise in the form attached to this Agreement as Exhibit ”A” (the “Exercise Notice”), (ii) payment of the Exercise Price for the Option Shares to be exercised and (iii) payment for any applicable withholding taxes as provided in Section 6 of this Agreement.

(b) The Option may be exercised by a broker-dealer acting on behalf of the Director if (i) the broker-dealer has received from the Director or the Company a copy of this executed Agreement, and instructions signed by the Director requesting the Company to deliver the Option Shares to the broker-dealer on behalf of the Director and specifying the account into which such shares should be deposited, (ii) adequate provision has been made for the payment of any withholding taxes due upon such exercise, and (iii) the broker-dealer and the Director have otherwise complied with Regulation T as promulgated by the Federal Reserve Board.

(c) As soon as practicable after each timely exercise of the Option and compliance by the Director with all applicable conditions under this Agreement and the Plan, the Company shall mail or cause to be mailed to the Director at the address specified in the Exercise Notice one or more stock certificates registered in the name of the Director for the number of shares of Common Stock which the Director shall be entitled to receive upon such exercise under the provisions of this Agreement and the Plan.

5. Nontransferability .

(a) The Option and the rights and privileges associated with the Option shall not be transferred, assigned, pledged or hypothecated by the Director other than by will or by the laws of descent and distribution, or pursuant to a qualified domestic relations order as provided by the Code or Title I of the Director Retirement Income Security Act. The Option shall be exercisable during the Director’s lifetime only by the Director or, in the event of Disability, by the Director’s personal representative. To the extent exercisable after the Director’s death, the Option shall be exercisable only by the person or persons entitled to the Option under the Director’s will or, if the Director shall fail to make testamentary disposition of the Option, by the Director’s legal representative. Upon any attempt to sell, transfer, assign, pledge, hypothecate, or otherwise dispose of the Option, or any right or privilege conferred by the Option, contrary to the provisions of this Agreement or the Plan, the Option, including all rights and privileges under the Option, shall immediately become null and void.

(b) Notwithstanding any provision to the contrary in this Agreement, if the Director is subject to the provisions of Section 16 of the 1934 Act, none of the Option Shares may be sold or otherwise transferred, assigned, pledged or hypothecated for a period of at least six (6) months from the date of exercise.

6. Withholding Taxes . The Company’s obligation to deliver the Option Shares upon the exercise of the Option shall be subject to the Director’s satisfaction of all applicable federal, state and local tax withholding requirements. The Director understands and agrees that the Company may deduct from the amount of any compensation payable to the Director any taxes required to be withheld with respect to the Option.

7. Limitation of Rights .

(a) Other than the Option granted under this Agreement, nothing contained in this Agreement or in the Plan shall give or entitle the Director to any right to receive any option or other award under the Plan or as may be determined by the Committee in its sole discretion, or give the Director or any other person any interest in any fund or in any specific asset or assets of the Company.

(b) Nothing contained in this Agreement or in the Plan shall confer on the Director any right to continue in the service of the Company.

8. Rights of Stockholder . Neither the Director nor any person claiming under or through the Director shall be, or have any rights or privileges of, a stockholder of the Company with respect to any of the Option Shares issuable upon the exercise of the Option, unless and until the Company issues one or more certificates representing such shares.

9. Notices . Any notice to be given to the Company or the Committee under the terms of this Agreement shall be addressed to the Company at 4695 MacArthur Court, Suite 1250, Newport Beach, California 92660, Attention: 1994 Stock Incentive Plan Committee in care of the Corporate Secretary, or at such other address as the Company may hereafter designate in writing pursuant to this Section 9. Any notice to be given to the Director shall be addressed to the Director at the address set forth beneath the Director’s signature hereto or the last known address on record with the Company, or at any such other address as the Director may hereafter designate in writing pursuant to this Section 9. Any such notice shall be deemed to have been duly given when delivered personally (or by messenger) or upon receipt when enclosed in a properly sealed envelope, correctly addressed, registered or certified mail, and deposited, postage prepaid, in the U.S. mail.

10. Acknowledgement . By signing this Agreement, or by accepting or exercising any Option, the Director acknowledges and agrees that:

(a) The Director has received and reviewed a copy of the Plan.

(b) The Director has had the opportunity to make any and all inquiries the Director may have in connection with the Option, this Agreement and the Plan.

13. Gender . As used in this Agreement, the masculine, feminine and neuter gender and the singular or plural numbers shall be deemed to include the others whenever the context so indicates.

16. Headings . The section or subsection headings contained herein are for the purposes of convenience only and are not intended to define or limit the contents of the provisions contained therein.

18. Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

[Remainder of page intentionally left blank; signatures follow.]

IN WITNESS WHEREOF, the parties hereto have executed this Non-Qualified Stock Option Agreement effective as of the date first written above.


AMERICAN VANGUARD CORPORATION, a Delaware corporation

By:

		Name:

		Title:


DIRECTOR:



Name:

Address:

EXHIBIT A

NOTICE OF EXERCISE


To:	American Vanguard Corporation
	4695 MacArthur Court, Suite 1250
	Newport Beach, CA 92660

	Attention:	1994 Stock Incentive Plan Committee c/o Corporate Secretary

	Subject:	Notice of Intention to Exercise Option under the American Vanguard Corporation 1994 Stock Incentive Plan

I am the “Director” granted the Non-Qualified Stock Option pursuant to the Non-Qualified Stock Option Agreement entered into with the Company dated , 200 (the “Agreement”). Capitalized terms used but not defined herein shall have the meaning assigned to such terms in the Agreement.

Pursuant to the Agreement, I hereby provide you with official notice that I elect to exercise my Option to purchase the Option Shares under the Option as follows:


Number of Option Shares:

Method of Payment:

I further understand that this election is irrevocable once it is effective in accordance with the terms of the Agreement.

The certificate for the Option Shares should be registered and forwarded as follows:


Name on Certificate:

Address:





Signed:

Print Name:

Date:

EXHIBIT 10.5

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) is made effective as of January 15, 2003, by and between AMERICAN VANGUARD CORPORATION, a Delaware corporation (referred to herein as “American Vanguard”) and ERIC G. WINTEMUTE (referred to herein as “Executive”).

NOW, THEREFORE, in consideration of the mutual promises set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1. Statement of Work .

(a) Executive is engaged as President and Chief Executive Officer of American Vanguard and its wholly-owned subsidiary AMVAC Chemical Corporation and agrees to perform such duties, services and responsibilities as are consistent with such positions. Executive’s duties, services and responsibilities will be determined by American Vanguard’s Board of Directors (the “Board of Directors”) and will be performed under the overall supervision of, and consistent with, the policies of the Board of Directors. American Vanguard hereby agrees to employ Executive and Executive hereby accepts employment upon the terms and conditions set forth herein.

(b) Executive shall do his utmost to further enhance and develop the best interests and welfare of American Vanguard. Executive shall perform no acts contrary to the best interests of American Vanguard and American Vanguard shall be entitled to all of the benefits, profits or other results arising from or incident to all work, services and advice of Executive.

(c) Executive agrees to fully comply with reasonable rules and procedures as may be promulgated by American Vanguard in its sole and absolute discretion.

2. Period of Employment .

(a) Term . The term of this Agreement (the “Term”) shall commence on January 15, 2003 (the “Effective Date”) and shall continue through December 31, 2007 (the “Expiration Date”), unless earlier terminated pursuant to Section 2(b).

(b) Early Termination . Notwithstanding the provisions of paragraph 2(a), American Vanguard may terminate this Agreement prior to the Expiration Date in accordance with the provisions of Section 6.

(c) Policies . American Vanguard shall advise Executive of its general corporate policies and procedures as to travel, entertainment and other expenses, and accounting and internal controls, and Executive shall comply with such policies and procedures. If there are any inconsistencies between the terms of this Agreement and American Vanguard’s stated policies and procedures the terms of this Agreement will prevail.

3. Cash Compensation . From the Effective Date through January 15, 2004, Executive’s annual base salary shall be Four Hundred and Thirty Five Thousand Dollars ($435,000.00). Beginning January 15, 2004, Executive’s salary will be Four Hundred and Thirty Five Thousand Dollars ($435,000.00) plus a percentage increase equal to the percentage increase in the Consumer Price Index – All Urban Consumers – Los Angeles – Anaheim – Riverside (1982-84=100) (hereinafter referred to as “CPI”) for calendar year 2003. For each year thereafter, the annual base salary will be the previous year’s base salary plus a percentage increase equal to the percentage increase in the CPI for the previous year. Executive’s annual base salary shall be payable in accordance with the Company’s then existing standard payroll schedule, policies and procedures.

Notwithstanding the foregoing, the Board of Directors retains the right, in its sole and absolute discretion, to award salary increases to Executive in excess of the designated minimum.

4. Incentive Compensation . Executive will receive at the end of each year of employment a bonus in the amount determined by the Board of Directors in its sole and absolute discretion. Executive will be eligible to receive a bonus based upon Executive’s performance against reasonable qualitative and quantitative benchmarks to be established by American Vanguard in its sole discretion.

5. Fringe Benefits . In addition to reimbursable expenses allowable under Section 2(c) above, during the Term, American Vanguard will offer certain employment-related benefits to Executive as follows:

(a) In addition to the payment of salary as described above, during the Term, Executive shall be entitled to all rights and benefits for which Executive may be eligible under any bonus, participation or additional compensation plans, pension or profit-sharing plans, group life, medical, health, dental and/or disability insurance or other benefits American Vanguard may, in its sole discretion, provide for Executive or its employees generally.

(b) During the Term, Executive shall be entitled to four business weeks of vacation time each year without loss of compensation. In the event that Executive is unable to take the total amount of vacation time authorized herein during any year, he shall be deemed to have waived the entitlement for that year.

(d) If Executive should die during the Term, American Vanguard agrees to pay the designated beneficiary any amounts (including salary) and continue any benefits due Executive under this Agreement for a period of twelve (12) months after the date of death.

(e) Executive shall be entitled to be reimbursed for up to $25,000 per calendar year for expenses relating to financial and estate planning, physical exams at major medical centers, cell phone charges, private club dues and expenses and boat expenses.

6. Termination for Certain Causes .

(a) Termination for Cause . Executive may be terminated for cause (as defined in this Section 6(a)) at any time, without prior notice. For these purposes, cause for termination by American Vanguard will include a determination by American Vanguard, acting in good faith based upon actual knowledge at such time, that Executive (i) is or has engaged in a willful or grossly negligent failure to perform duties as an Executive or officer of American Vanguard (other than as a result of incapacity due to disability), (ii) has committed an act of dishonesty, gross carelessness, or other misconduct in connection with his duties under this Agreement, (iii) has committed any act or series of acts without the Board of Directors’ consent which would likely have a direct, substantial and adverse effect on American Vanguard, its business or reputation, (iv) has engaged in habitual misuse of alcohol or any non-prescription drug or intoxicant which has adversely effected the performance of his duties under this Agreement, or (v) conviction in a criminal proceeding against Executive involving a felony (collectively “Cause”). In the event of termination of Executive’s employment for Cause, all rights of Executive (and his spouse and children) under Section 3, 4 and 5 shall cease as of the date of such termination. If termination is “for cause” under this section, the Board of Directors shall, within seven days of such termination provide written notice to Executive of all contractual basis for such termination, and a general statement of the facts allegedly supporting such termination for cause.

(b) Termination Due to Death or Disability . If Executive, due to physical or mental disability or incapacity, is unable substantially to perform his duties hereunder, American Vanguard, at its sole discretion, shall have the right to terminate Executive’s employment hereunder on thirty (30) days’ prior written notice. If Executive is able to and recommences rendering services and performing his duties hereunder within such thirty (30)-day notice period, such notice shall be vitiated. In addition, in the event of Executive’s death or disability, Executive or his personal representatives shall be entitled to receive all earned but unpaid compensation through the date of termination of Executive’s employment (on a prorated basis). In addition, in the event of Executive’s death or disability, Executive of his personal representatives shall be entitled to receive all earned but unpaid compensation up to and including the date of termination of

Executive’s employment and one full year thereafter. Nothing in this section shall affect or offset employee’s right to receive payment pursuant to a disability insurance policy or state/federal disability payments. The Company further agrees that as a part of Executive’s compensation hereunder, it shall continue to provide for the term of this Agreement, for Executive’s benefit a disability insurance policy at least equal to that coverage currently in place.

(c) Termination Without Cause . If American Vanguard terminates Executive’s employment without Cause, and not as a result of Executive’s death or disability pursuant to Section 6(b), American Vanguard shall pay Executive an amount equal to Executive’s current annual base salary or the base salary due for the balance of the Agreement, whichever is higher, as set forth in Section 3, for the remaining term of this Agreement in accordance with American Vanguard’s then existing standard payroll schedule, policies and procedures.

7. Withholdings . American Vanguard shall deduct and withhold from the compensation payable to Executive hereunder any and all applicable federal, state and local income and employment withholding taxes and any other amounts required to be deducted or withheld by American Vanguard under applicable statutes, regulations, ordinances or orders governing or requiring the withholding or deduction of amounts otherwise payable as compensation or wages to Executive.

8. Disclosures and Assignment of Rights . Executive hereby agrees to promptly disclose to American Vanguard, and Executive hereby, without further compensation, agrees to assign and assigns to American Vanguard or its designee, Executive’s entire right, title, and interest in and to all designs, trademarks, logos, business plans, business models, business names, economic projections, product innovations, discoveries, formulae, processes, manufacturing techniques, trade secrets, customer lists, supplier lists, inventions, research, improvements, ideas, patents, service marks, and copyrightable works (collectively, “Inventions”), including all rights to obtain, register, perfect, and enforce these Inventions, which relate to Executive’s work during the period of Executive’s employment with American Vanguard, whether or not during normal working hours, or which are aided by the use of American Vanguard’s experience, time, material, equipment, or facilities. It is further understood that no rights are hereby conveyed in inventions, if any, made by Executive prior to Executive’s employment with American Vanguard.

9. California Labor Code . Executive understands that California Labor Code Section 2870 provides:

(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his rights in an invention to his employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:

(1) Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or

(2) Result from any work performed by the employee for the employer.

(b) To the extent that a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.

10. Notification Pursuant To Labor Code § 2872 . Executive understands, and hereby acknowledges having received notice, that this Agreement does not apply to an invention which qualifies fully under the provisions of Labor Code § 2780, which is set forth in Section 9 of this Agreement.

11. Assistance . Executive agrees to perform, during and after Executive’s employment, all acts deemed necessary or desirable by American Vanguard to permit and assist it, at its expense, including execution of documents and assistance or cooperation in legal proceedings, in obtaining and enforcing the full benefits, enjoyments, rights, and title in the items assigned to American Vanguard as set forth in Section 8 above.

12. Conflicts of Interest . Executive recognizes that Executive owes a primary and fiduciary duty to American Vanguard and that Executive shall not have any interest, financial or otherwise, direct or indirect, or engage in any business or transaction of any nature, which is in conflict with the proper and faithful discharge of Executive’s duties as an employee of American Vanguard. Without limiting the generality of the foregoing, Executive agrees that Executive will not, while employed by American Vanguard, directly or indirectly:

(a) Be employed by or receive any compensation from, a customer, supplier or competitor of American Vanguard; or

(b) Have any ownership or financial interest of any nature in a customer, supplier or competitor of American Vanguard, except where such ownership is stock in a corporation and consists of less than one percent (1%) of the outstanding capital stock of such customer, supplier or competitor and where such stock is publicly held and listed on a recognized stock exchange or actively traded in the over-the-counter market except with Board of Director approval; or

(c) Have or participate in any dealings on behalf of American Vanguard with a customer or supplier that employs, or more than five percent (5%) of whose ownership interest is beneficially held by, Executive’s spouse or any brother, sister, parent, child or grandchild of Executive or Executive’s spouse, or any person living in Executive’s household or the spouse of any of the foregoing persons except with Board of Director approval; or

(d) Engage or participate in any activity, business enterprise, business opportunity, employment, occupation, consulting, or other business activity which American Vanguard shall determine in good faith to be, or reasonably planned to be, in competition with American Vanguard or to interfere with Executive’s duties as an employee of American Vanguard; or

(e) Solicit, accept or receive any gift having a value of Two Hundred Dollars ($200.00) or more, whether in the form of money, service, loan, hospitality (except for ordinary business meals), thing or promise, or in any other form, under circumstances in which it could reasonably be inferred that the gift was intended to influence Executive, in the performance of Executive’s duties on behalf of American Vanguard, or was intended as a reward for any action on Executive’s part on behalf of American Vanguard, unless such fact or activity is fully disclosed in writing to and discussed by the Board of Directors and the Board of Directors approves (and/or ratifies), in writing, of such fact or activity.

13. Information of Others . Executive certifies and acknowledges that Executive will not disclose or utilize in Executive’s work with American Vanguard any secret or confidential information of others (including any prior employers), or any inventions or innovations of Executive’s own which are not included within the scope of this Agreement.

14. Confidential Information . American Vanguard may, from time to time, provide Executive confidential information or trade secrets regarding its business methods, plan, products, pricing, customer lists, and other confidential customer information including, but not limited to, contact names, purchasing authority(ies), product, know-how and/or customer service requirements, buying patterns, and other proprietary information. Executive agrees not to disclose or use any such confidential information concerning American Vanguard or its customer(s) or client(s), however obtained, except in furtherance of American Vanguard’ business, and at its discretion.

Executive agrees that, in addition to those matters specified above, Executive shall not, directly or indirectly, disclose, use, communicate, appropriate or exploit any information, whether of a business or personal nature, of and pertaining to American Vanguard. All information referred to herein is proprietary to American Vanguard and Executive agrees not to disseminate any of the information. Executive shall not speak with or write to the press for the purpose of divulging or disclosing confidential information learned in the context of his employment, including, without limitation, information by, about or concerning American Vanguard, its respective advisors, representatives, independent contractors, employees, vendors, attorneys, friends, agents and licensees.

Executive recognizes and acknowledges that a breach of this Agreement including its covenants, could not reasonably be compensated in damages in an action at law and that American Vanguard shall be entitled to injunctive relief obtainable in a court of competent jurisdiction, which may include but shall not be limited to restraining Executive from rendering any service which would breach this Agreement. However, no remedy conferred by any of the specific provisions of this Agreement (including this Paragraph) is intended to be exclusive of any other remedy, and each and every remedy shall be cumulative and in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute or otherwise. The election of any one or more remedies by American Vanguard shall not constitute a waiver of the right to pursue other available remedies. These obligations shall survive the termination of Executive’s employment.

15. Non-Raiding . Executive will not, either during Executive’s employment or for a period of one (1) year thereafter, either directly or indirectly, hire, solicit, induce or attempt to induce or encourage any of American Vanguard’ employees to leave their employment.

16. Return of Property . Executive agrees that upon request by American Vanguard, and in any event upon termination of employment, Executive shall turn over to American Vanguard all documents, papers or other material in Executive’s possession or under his control which may contain or be derived from confidential information, together with all documents, notes or other work product which is connected with or derived from Executive’s services to American Vanguard, whether or not such material is at the date hereof in Executive’s possession.

17. Enforceability . Should any provision or covenant of this Agreement prove to be invalid or unenforceable, the remaining provisions and covenants hereof shall remain in full force and effect. This Agreement (a) survives Executive’s employment by American Vanguard (except that Sections 1, 2, 3, 4 and 5 shall terminate upon termination of Executive’s employment), (b) does not in any way restrict Executive’s right or the right of American Vanguard to terminate Executive’s employment, (c) inures to the benefit of successors and assigns of American Vanguard, and (d) is binding upon Executive’s heirs and legal representatives.

18. Entire Agreement . This Agreement supersedes all other agreements, either oral or in writing, between the parties hereto with respect to the employment of Executive by American Vanguard and contains all of the covenants and agreements between the parties with respect to such employment. Each party acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by either party, or anyone acting on behalf of either party, that are not embodied in this Agreement and that no other agreement, statement or promise shall be valid or binding. Should any of the terms or conditions of this Agreement conflict with any of the terms and conditions of any of American Vanguard’s Employee Handbook or Manuals, the terms and conditions of this Agreement as to Executive shall govern and control. This Agreement may not be modified or amended unless in writing and signed by both the Board of Directors and Executive.

19. Interpretation . The waiver by American Vanguard of any breach of any provision herein shall not be binding upon American Vanguard unless in writing signed by the Board of Directors, and shall not constitute a continuing waiver or a waiver of any subsequent breach by Executive. No course of conduct or failure or delay in enforcing any provision of this Agreement shall affect the validity, binding effect or enforceability of this Agreement. This Agreement shall be governed by the laws of the State of California. In addition, this Agreement shall be binding upon each party’s heirs, successors, representatives, administrators and assigns. Any provision of this Agreement which creates an obligation of Executive to perform or honor certain covenants or obligations shall survive the dismissal or termination of his employment.

20. Construction . The language in all parts of this Agreement shall in all cases be construed simply, according to its fair meaning, and not strictly for or against any of the parties hereto. Without limitation, there shall be no presumption against any party on the ground that such party was responsible for drafting this Agreement or any part thereof.

21. Arbitration . Except a provided in this Section, any and all disputes between Executive and American Vanguard that arise out of Executive’s employment, including disputes involving the terms of this Agreement, shall be resolved through final and binding arbitration to be conducted in Orange County, California. This shall include, without limitation, disputes relating to this Agreement, Executive’s employment by American Vanguard or the termination thereof, claims for breach of contract or breach of the covenant of good faith and fair dealing, and any claims of discrimination or other claims under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans With Disabilities Act, the California Fair Employment and Housing Act, or any other federal, state or local law or regulation now in existence or hereinafter enacted and as amended from time to time concerning in any way the subject of Executive’s employment with American Vanguard or his termination. The only claims not covered by this Section are claims for equitable relief for violation of Section 8, 11, 12, 13, 14, 15, and/or 16 of this Agreement and claims for benefits under the workers’ compensation or unemployment insurance laws, which will be resolved pursuant to those laws. Notices of requests to arbitrate a covered claim must be made within the applicable statute of limitations. Binding arbitration will be conducted in Orange County, California in accordance with the rules and regulations of the American Arbitration Association (“AAA”). Discovery may be carried out under the supervision of the arbitrator appointed pursuant to the rules of the AAA. Executive will be responsible for paying the same fee to initiate the arbitration that he or she would pay to file a civil lawsuit. American Vanguard will pay any remaining cost of the arbitration filing and hearing fees, including the cost of the arbitrator. The arbitrator will have authority to award attorneys’ fees to the prevailing party.

22. Attorneys’ Fees . In the event that an action or proceeding is brought to enforce this Agreement, the prevailing party shall be entitled to recover its reasonable attorneys’ fees and costs from the non-prevailing party.

23. Headings . The headings contained herein are solely for the purpose of reference, are not part of this Agreement and shall not in any way affect the meaning or interpretation of this Agreement.

24. Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

EXHIBIT 10.7

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (“Agreement”) by and between American Vanguard Corporation, a Delaware corporation (the “Company”), and (“Indemnitee”) and is effective as of the first day of Indemnitee’s service as a director of the Company.

WHEREAS, the Company desires to attract and retain the services of highly qualified individuals, such as Indemnitee, to serve the Company and, in part, in order to induce Indemnitee to continue to provide services to the Company, the Company wishes to provide for the indemnification and advancement of expenses to Indemnitee to the maximum extent permitted by law; and

WHEREAS, in view of the considerations set forth above, the Company desires that Indemnitee shall be indemnified by the Company as set forth herein.

NOW, THEREFORE, the Company and Indemnitee hereby agrees as follows:

1. Indemnification .

a. Indemnification of Expenses . The Company shall indemnify Indemnitee to the fullest extent permitted by law if Indemnitee was or is or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, any threatened, pending or completed action, suit, proceeding or alternative dispute resolution mechanism, or any hearing, inquiry or investigation that Indemnitee in good faith believes might lead to the institution of any such action, suit, proceeding or alternative dispute resolution mechanism, whether civil, criminal, administrative, investigative or other (a “Claim”) by reason of (or arising in part out of) any event or occurrence related to the fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of the Company, or any subsidiary of the Company (regardless of whether it was a subsidiary of the Company at the time of the event giving rise to the Claim), or is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, limited liability company, partnership, joint venture, trust or other enterprise, or by reason of any action or inaction on the part of Indemnitee while serving in such capacity (an “Indemnifiable Event”) against any and all expenses (including attorneys’ fees and all other costs, expenses and obligations incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness in or participate in, any such action, suit, proceeding, alternative dispute resolution mechanism, hearing, inquiry or investigation), judgments, fines, penalties and amounts paid in settlement (if such settlement is approved in advance by the Company, which approval shall not be unreasonably withheld) of such Claim and any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement (collectively, “Expenses”), including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses. Such payment of Expenses shall be made by the Company as soon as practicable but in any event no later than five (5) days after written demand by Indemnitee therefor is presented to the Company.

b. Reviewing Party . Notwithstanding the foregoing: (i) the obligations of the Company under Section 1(a) hereof shall be subject to the condition that the Reviewing Party (as described in Section 10(e) hereof) shall not have determined (in a written opinion, in any case in which the Independent Legal Counsel referred to in Section 1(c) hereof is involved) that Indemnitee would not be permitted to be indemnified under applicable law, and (ii) the obligation of the Company to make an advance payment of Expenses to Indemnitee pursuant to Section 2(a) hereof (an “Expense Advance”) shall be subject to the condition that, if, when and to the extent that the Reviewing Party determines that Indemnitee would not be permitted to be so indemnified under applicable law, the Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all such amounts theretofore paid, provided , however , that if Indemnitee has commenced or

thereafter commences legal proceedings in a court of competent jurisdiction to secure a determination that

Indemnitee should be indemnified under applicable law, any determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and Indemnitee shall not be required to reimburse the Company for any Expense Advance until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed). Indemnitee’s obligation to reimburse the Company for any Expense Advance shall be unsecured and no interest shall be charged thereon. If there has not been a Change in Control (as defined in Section 10(c) hereof), the Reviewing Party shall be selected by the Board of Directors, and if there has been such a Change in Control (other than a Change in Control which has been approved by a majority of the Company’s Board of Directors who were directors immediately prior to such Change in Control), the Reviewing Party shall be the Independent Legal Counsel referred to in Section 1(c) hereof. If there has been no determination by the Reviewing Party or if the Reviewing Party determines that Indemnitee substantively would not be permitted to be indemnified in whole or in part under applicable law, Indemnitee shall have the right to commence litigation seeking an initial determination by the court or challenging any such determination by the Reviewing Party or any aspect thereof, including the legal or factual bases therefor, and the Company hereby consents to service of process and to appear in any such proceeding. Any determination by the Reviewing Party otherwise shall be conclusive and binding on the Company and Indemnitee.

c. Change in Control . The Company agrees that if there is a Change in Control of the Company (other than a Change in Control which has been approved by a majority of the Company’s Board of Directors who were directors immediately prior to such Change in Control) then with respect to all matters thereafter arising concerning the rights of Indemnitee to payments of Expense and Expense Advances under this Agreement or any other agreement or under the Company’s Certificate of Incorporation or Bylaws as now or hereafter in effect, Independent Legal Counsel (as defined in Section 10(d) hereof) shall be selected by Indemnitee and approved by the Company (which approval shall not be unreasonably withheld). Such counsel, among other things, shall render its written opinion to the Company and Indemnitee as to whether and to what extent Indemnitee would be permitted to be indemnified under applicable law and the Company agrees to abide by such opinion. The Company agrees to pay the reasonable fees of the Independent Legal Counsel referred to above and to fully indemnify such counsel against any and all expenses (including attorney’s fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

d. Mandatory Payment of Expenses . Notwithstanding any other provision of this Agreement other than Section 9 hereof, to the extent that Indemnitee has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any action, suit, proceeding, inquiry or investigation referred to in Section 1(a) hereof or in the defense of any claim, issue or matter therein, Indemnitee shall be indemnified against all Expenses incurred by Indemnitee in connection therewith.

2. Expenses: Indemnification Procedure .

a. Advancement of Expenses . The Company shall advance all Expenses incurred by Indemnitee. The advances to be made hereunder shall be paid by the Company to Indemnitee as soon as practicable but in any event no later than five (5) days after written demand by Indemnitee therefor to the Company.

b. Notice/Cooperation by Indemnitee . Indemnitee shall, as a condition precedent to Indemnitee’s right to be indemnified under this Agreement, give the Company notice in writing as soon as practicable of any Claim made against Indemnitee for which indemnification will or could be sought under this Agreement. Notice to the Company shall be directed to the Chief Executive Officer (provided that if the Chief Executive Officer is the Indemnitee, then such notice shall be given to the Chief Financial Officer) pursuant to Section 15 hereof. In addition, Indemnitee shall give the Company such information and cooperation as it may reasonably require and as shall be within Indemnitee’s power.

c. No Presumptions, Burden of Proof . For purposes of this Agreement, the termination of any Claim by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law. In addition, neither the failure of the Reviewing Party to have made a determination as to whether

Indemnitee has met any particular standard of conduct or had any particular belief, nor an actual determination by the Reviewing Party that Indemnitee has not met such standard of conduct or did not have such belief, prior to the commencement of legal proceedings by Indemnitee to secure a judicial determination that Indemnitee should be indemnified under applicable law, shall be a defense to Indemnitee’s claim or create a presumption that Indemnitee has not met any particular standard of conduct or did not have any particular belief. In connection with any determination by the Reviewing Party or otherwise as to whether the Indemnitee is entitled to be indemnified hereunder, the burden of proof shall be on the Company to establish that Indemnitee is not so entitled.

d. Notice to Insurers . If, at the time of the receipt by the Company of a notice of a Claim pursuant to Section 2(b) hereof, the Company has liability insurance in effect which may cover such Claim, the Company shall give prompt notice of the commencement of such Claim to the insurer or insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurer or insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such action, suit, proceeding, inquiry or investigation in accordance with the terms of such policy or policies.

e. Selection of Counsel . In the event the Company shall be obligated hereunder to pay the Expenses of any Claim, the Company shall be entitled to assume the defense of such Claim with counsel approved by Indemnitee, which approval shall not be unreasonably withheld, upon the delivery to Indemnitee of written notice of its election so to do. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same Claim; provided , that : (i) Indemnitee shall have the right to employ Indemnitee’s counsel in any such Claim at Indemnitee’s expense, and (ii) if (A) the employment of counsel by Indemnitee has been previously authorized by the Company, (B) Indemnitee shall have reasonably concluded that there is a conflict of interest between the Company and Indemnitee in the conduct of any such defense, or (C) the Company shall not continue to retain such counsel to defend such Claim, then the fees and expenses of Indemnitee’s counsel shall be at the expense of the Company. The Company shall have the right to conduct such defense as it sees fit in its sole discretion, including the right to settle any claim against Indemnitee without the consent of the Indemnitee.

3. Additional Indemnification Rights; Nonexclusivity .

a. Scope . The Company hereby agrees to indemnify the Indemnitee to the fullest extent permitted by law, notwithstanding that such indemnification is not specifically authorized by the other provisions of this Agreement, the Company’s Certificate of Incorporation (as now or hereafter in effect), the Company’s Bylaws (as now or hereafter in effect), or by statute. In the event of any change after the date of this Agreement in any applicable law, statute or rule which expands the right of a corporation of the Company’s state of incorporation to indemnify a member of its board of directors or an officer, employee, agent or fiduciary, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits afforded by such change. In the event of any change in any applicable law, statute or rule which narrows the right of a corporation of the Company’s state of incorporation to indemnify a member of its board of directors or an officer, employee, agent or fiduciary, such change, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement, shall have no effect on this Agreement or the parties’ rights and obligations hereunder except as set forth in Section 8(a) hereof.

b. Nonexclusivity . The indemnification provided by this Agreement shall be in addition to any rights to which Indemnitee may be entitled under the Company’s Certificate of Incorporation (as now or hereafter in effect), its Bylaws (as now or hereafter in effect), any agreement, any vote of stockholders or disinterested directors, the laws of the Company’s state of incorporation, or otherwise. The indemnification provided under this Agreement shall continue as to Indemnitee for any action Indemnitee took or did not take while serving as provided in Section 1(a) hereof even though Indemnitee may have ceased to serve in such capacity.

4. No Duplication of Payments . The Company shall not be liable under this Agreement to make any payment in connection with any Claim made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy, Certificate of Incorporation (as now or hereafter in effect), Bylaw (as now or hereafter in effect) or otherwise) of the amounts otherwise indemnifiable hereunder.

5. Partial Indemnification . If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses incurred in connection with any Claim, but not, however, for all of the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such Expenses to which Indemnitee is entitled.

6. Mutual Acknowledgment . Both the Company and Indemnitee acknowledge that in certain instances, Federal laws or applicable public policy may prohibit the Company from indemnifying its directors, officers, employees, agents or fiduciaries under this Agreement or otherwise. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the Securities and Exchange Commission to submit the question of indemnification to a court in certain circumstances for a determination of the Company’s rights under public policy to indemnify Indemnitee.

7. Liability Insurance . To the extent the Company maintains liability insurance applicable to directors, officers, employees, agents or fiduciaries, Indemnitee shall be covered by such policies in such a manner as to provide Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Company’s directors, if Indemnitee is a director; or of the Company’s officers, if Indemnitee is not a director; or the Company’s key employees, agents or fiduciaries, if Indemnitee is not an officer or director but is a key employee, agent or fiduciary.

8. Exceptions . Any other provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement:

a. Excluded Action or Omissions . To indemnify Indemnitee for Indemnitee’s acts, omissions or transactions from which Indemnitee may not be relieved of liability under applicable law.

b. Claims Initiated by Indemnitee . To indemnify or advance expenses to Indemnitee with respect to Claims initiated or brought voluntarily by Indemnitee and not by way of defense, except: (i) with respect to proceedings brought to establish or enforce a right to indemnification under this Agreement or any other agreement or insurance policy or under the Company’s Certificate of Incorporation or Bylaws now or hereafter in effect relating to Claims for Indemnifiable Events, (ii) in specific cases if the Board of Directors has approved the initiation or bringing of such suit, or (iii) as otherwise required under the laws of the Company’s state of incorporation, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advance expense payment or insurance recovery, as the case may be.

c. Lack of Good Faith . To indemnify Indemnitee for any expenses incurred by the Indemnitee with respect to any proceeding instituted by Indemnitee to enforce or interpret this Agreement, if a court of competent jurisdiction by final judicial determination (as to which all rights of appeal therefrom have been exhausted or lapsed) determines that each of the material assertions made by the Indemnitee in such proceeding was not made in good faith or was frivolous; or

d. Claims Under Section 16(b) . To indemnify Indemnitee for expenses and the payment of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any similar successor statute.

9. Period of Limitations . No legal action shall be brought and no cause of action shall be asserted by or in the right of the Company against Indemnitee, Indemnitee’s estate, spouse, heirs, executors or personal or legal representatives after the expiration of two (2) years from the date of accrual of such cause of action, and any claim or cause of action of the Company shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such two-year period; provided , however , that if any shorter period of limitations is otherwise applicable to any such cause of action, such shorter period shall govern.

10. Definitions; Construction of Certain Phrases .

a. For purposes of this Agreement, references to the “Company” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees, agents or fiduciaries, so that if Indemnitee is or was serving at the request of such constituent corporation as a director, officer, employee, agent or fiduciary or another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, Indemnitee shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as Indemnitee would have with respect to such constituent corporation if its separate existence had continued.

b. For purposes of this Agreement, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on Indemnitee with respect to an employee benefit plan; and references to “serving at the request of the Company” shall include any service as a director, officer, employee, agent or fiduciary of the Company which imposes duties on, or involves services by, such director, officer, employee, agent or fiduciary with respect to an employee benefit plan, its participants or its beneficiaries; and if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan, Indemnitee shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.

c. For purposes of this Agreement, a “Change in Control” shall be deemed to have occurred if: (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than twenty percent (20%) of the total voting power represented by the Company’s then outstanding Voting Securities, (ii) during any period of two (2) consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Company and any new director whose election by the Board of Directors or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, or (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation other than a merger or consolidation which would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least eighty percent (80%) of the total voting power represented by the Voting Securities of the Company of such surviving entity outstanding immediately after such merger or consolidation, or the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of (in one transaction or a series of transactions) all or substantially all of the Company’s assets.

d. For purposes of this Agreement, “Independent Legal Counsel” shall mean an attorney or firm of attorneys, selected in accordance with the provision of Section 1(c) hereof, who shall not have otherwise performed services for the Company or Indemnitee within the last three (3) years (other than with respect to matters concerning the rights of Indemnitee under this Agreement, or of other indemnitees under similar indemnity agreements).

e. For purposes of this Agreement, a “Reviewing Party” shall mean any appropriate person or body consisting of a member or members of the Company’s Board of Directors or any other person or body appointed by the Board of Directors who is not a party to the particular claim for which Indemnitee is seeking indemnification, or Independent Legal Counsel.

f. For purposes of this Agreement, “Voting Securities” shall mean any securities of the Company that vote generally in the election of directors.

11. Counterparts . This Agreement may be executed in one or more counterparts, each of which shall constitute an original.

12. Binding Effect; Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company, spouses, heirs, and personal and legal representatives. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall continue in effect with respect to Claims relating to Indemnifiable Events regardless of whether Indemnitee continues to serve as a director, officer, employee, agent or fiduciary of the Company or any other enterprise at the Company’s request.

13. Attorney’s Fees . In the event that any action is instituted by Indemnitee under this Agreement or under any liability insurance policy or policies maintained by the Company to enforce or interpret any of the terms hereof or thereof, Indemnitee shall be entitled to be paid all Expenses incurred by Indemnitee with respect to such action, regardless of whether Indemnitee is ultimately successful in such action, and shall be entitled to the advancement of Expenses with respect to such action, unless as a part of such action, a court of competent jurisdiction over such action by final judicial determination (as to which all rights of appeal therefrom have been exhausted or lapsed) determines that each of the materials assertions made by Indemnitee as a basis for such action were not made in good faith or were frivolous. In the event of an action instituted by or in the name of the Company under this Agreement to enforce or interpret any of the terms of this Agreement, Indemnitee shall be entitled to be paid all Expenses incurred by Indemnitee in defense of such action (including costs and expenses incurred with respect to Indemnitee’s counterclaims and cross-claims made in such action), and shall be entitled to the advancement of Expenses with respect to such action, unless, as a part of such action, the court having jurisdiction over such action by final judicial determination (as to which all rights of appeal therefrom have been exhausted or lapsed) determines that each of Indemnitee’s material defenses to such action were made in bad faith or were frivolous.

14. Notice . All notices and other communications required or permitted hereunder shall be in writing, shall be effective when given and shall in any event be deemed to be given: (a) five (5) days after deposit with the U.S. Postal Service or other applicable postal service, if delivered by first class mail, postage prepaid, (b) upon delivery, if delivered by hand, (c) one business day after the business day of deposit with Federal Express or similar overnight courier, freight prepaid, or (d) one day after the business day of delivery by facsimile transmission, if delivered by facsimile transmission, with copy by first class mail, postage prepaid, and shall be addressed if to Indemnitee, at the Indemnitee’s address as set forth beneath Indemnitee’s signature to this Agreement and


If to the Company:		American Vanguard Corporation 4695 MacArthur Court, Suite 1250 Newport Beach, California 92660 Attention: Chief Executive Officer Facsimile: (949) 260-1215

With a copy to:		McDermott, Will & Emery 18191 Von Karman Avenue, Suite 400 Irvine, California 92612 Attention: John B. Miles Facsimile: (949) 851-9348

or at such other address as such party may designate by ten (10) days’ advance written notice to the other party hereto.

15. Severability . The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

16. Choice of Law . This Agreement shall be governed by and its provisions construed and enforced in accordance with the laws of the State of Delaware, as applied to contracts between Delaware residents, entered into and to be performed entirely within the State of Delaware, without regard to the conflict of laws principles thereof.

17. Subrogation . In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights.

18. Amendment and Termination . No amendment, modification, termination or cancellation of this Agreement shall be effective unless it is in writing signed by both the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

19. Integration and Entire Agreement . This Agreement sets forth the entire understanding between the parties hereto and supersedes and merges all previous written and oral negotiations, commitments, understandings and agreements relating to the subject matter hereof between the parties hereto.

20. No Construction as Employment Agreement . Nothing contained in this Agreement shall be construed as giving Indemnitee any right to be retained in the employ of the Company or any of its subsidiaries.

[Signatures Follow]

IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement as of the date first above written.


“Company”

AMERICAN VANGUARD CORPORATION, a Delaware corporation

By:

		Name:

		Title:

AGREED TO AND ACCEPTED AS OF

THE DATE FIRST WRITTEN ABOVE:

“Indemnitee”



By:



Name:

Title:



Address:



Facsimile:

Exhibit 10.8

AMENDED AND RESTATED CREDIT AGREEMENT

THIS AMENDED AND RESTATED CREDIT AGREEMENT (the “ Agreement ”) is made and dated as of the 30th day of September, 2004 by and among BANK OF THE WEST (“ Bank of the West ”), as agent (in such capacity, the “ Administrative Agent ”) and Issuing Bank, Bank of the West and the other Lenders from time to time party hereto (each a “ Lender ” and, collectively, the “ Lenders ”), the Lenders, AMVAC CHEMICAL CORPORATION, a California corporation (the “ Borrower ”), AMERICAN VANGUARD CORPORATION, a Delaware corporation (“ American Vanguard ”), GEMCHEM, INC., a California corporation (“ GemChem ”), and 2110 DAVIE CORPORATION, a California corporation (“ 2110 Davie ”) (American Vanguard, GemChem and 2110 Davie being the Guarantors (as such term and other capitalized terms used, but not otherwise defined, in this Agreement are defined in Paragraph 14 of this Agreement)).

RECITALS

A. Pursuant to that certain Credit Agreement dated as of March 26, 1999 by and among Sanwa Bank California, as predecessor in interest to the Administrative Agent, the lenders party thereto, the Borrower, and the Guarantors (as amended and, subsequently replaced by a Credit Agreement dated May 8, 2002 the “ Existing Credit Agreement ” with United California Bank, as predecessor in interest to the Administrative Agent), credit was extended to the Borrower on the terms and subject to the conditions set forth more particularly therein.

B. The parties to this Agreement desire to amend the Existing Credit Agreement and, for the convenience of the parties, rather than amend, to restate the Existing Credit Agreement in its entirety to read as set forth in this Agreement and, as a result, credit extended under the Existing Credit Agreement will remain outstanding under this Agreement rather than being replaced.

NOW, THEREFORE, in consideration of the above Recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:

AGREEMENT

1. Revolving Credit Facility .

1(a) Revolving Commitment . On the terms and subject to the conditions set forth herein, the Lenders severally agree that they shall from time to time to but not including the Revolving Loan Maturity Date, make revolving loans (the “ Revolving Loans ” or a “ Revolving Loan ”), pro rata in accordance with their respective Percentage Shares, in an aggregate outstanding amount not to exceed the Aggregate Revolving Commitments; provided, however, that, after giving effect to any Revolving Loan, (i) the aggregate principal amount of Revolving Loans outstanding plus all L/C Obligations outstanding shall not exceed the Aggregate Revolving Commitments and (ii) the aggregate Revolving Loans of any Lender plus such Lender’s Percentage Share of L/C Obligations outstanding shall not exceed such Lender’s Revolving Commitment.

1(b) Principal Repayment . On the terms and subject to the conditions set forth herein, the Borrower shall pay the principal amount of each Revolving Loan outstanding on the Revolving Loan Maturity Date. Principal amounts prepaid hereunder may be reborrowed on the terms and subject to the conditions set forth in Paragraph 7(b) below, it being expressly acknowledged and agreed that the credit facility provided under this Paragraph 1 is a revolving facility.

2. Term Loans .

2(a) Initial Term Loans . On the terms and subject to the conditions set forth herein, the Lenders severally agree that on the Closing Date they shall advance, in a single disbursement, their respective Percentage Shares of initial term loans (the “ Initial Term Loans ”) in an aggregate amount, as requested by the Borrower, not to exceed $20,000,000. Once repaid, no portion of an Initial Term Loan may be reborrowed.

2(b) Delayed Draw Loans . On the terms and subject to the conditions set forth herein, so long as such date occurs on or before the Delayed Draw Availability Expiration Date, the Lenders severally agree to make delayed draw term loans (the “ Delayed Draw Loans ” and, collectively, with the Initial Term Loans, the “ Term Loans ”) in accordance with their respective Percentage Shares, in an aggregate principal amount not to exceed the Aggregate Delayed Draw Commitment; provided, however, that, after giving effect to any Delayed Draw Loan, (i) the aggregate principal amount of Delayed Draw Loans made shall not exceed the Aggregate Delayed Draw Commitments and (ii) the aggregate of Delayed Draw Loans made by any Lender shall not exceed such Lender’s Delayed Draw Commitment. Once repaid, no portion of the Delayed Draw Term Loans may be reborrowed.

2(c) Payment of Principal . On the terms and subject to the conditions set forth herein, the principal amount of the Term Loans shall be payable (1) on the last day of each February, May, August and November after the date disbursed (commencing on November 30, 2004 in respect of the Initial Term Loans) in an amount equal to the original principal amount of such Term Loan divided by twenty (20) and (2) one final installment in the amount necessary to repay the remaining outstanding principal balance of the Term Loans in full on the Term Loan Maturity Date.

3. Letter of Credit Facility .

3(a) The Letter of Credit Commitment .

(1) Subject to the terms and conditions set forth herein, (i) the Issuing Bank agrees, in reliance upon the agreements of the other Lenders set forth in this Paragraph 3 (A) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower, and (B) to honor drafts under the Letters of Credit; and (ii) the Lenders severally agree to participate in Letters of Credit issued for the account of the Borrower; provided that the Issuing Bank shall not be obligated to issue, modify or extend any Letter of Credit, and no Lender shall be obligated to participate in any Letter of Credit if (x) the aggregate principal amount of Revolving Loans outstanding plus all L/C Obligations outstanding would exceed the lesser of the Aggregate Revolving Commitments or (y) the outstanding amount of the L/C Obligations would exceed the Letter of Credit Sublimit. Within the foregoing limits and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.

(2) The Issuing Bank shall be under no obligation to issue any Letter of Credit if:

(i) Any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Issuing Bank from issuing such Letter of Credit, or any Requirement of Law applicable to the Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Issuing Bank shall prohibit, or request that the Issuing Bank refrain from, the issuance of letters of credit generally or

such Letter of Credit in particular or shall impose upon the Issuing Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the Issuing Bank is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the Issuing Bank any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the Issuing Bank in good faith deems material to it;

(ii) The expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Lenders have approved such expiry date, and Issuing Bank agrees that it shall not issue any such Letter of Credit unless all the Lenders have approved such expiry date;

(iii) The issuance of such Letter of Credit would violate one or more reasonable and customary policies of the Issuing Bank; or

(iv) Such Letter of Credit is in an initial amount less than $10,000, in the case of a commercial Letter of Credit, or $100,000, in the case of a standby Letter of Credit, or is to be used for a purpose other than the financing of working capital or general corporate purposes or denominated in a currency other than dollars.

(3) The Issuing Bank shall be under no obligation to amend any Letter of Credit if (i) the Issuing Bank would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (ii) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.

3(b) Procedures for Issuance and Amendment of Letters of Credit .

(1) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to the Issuing Bank (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by an Authorized Officer of the Borrower. Such Letter of Credit Application must be received by the Issuing Bank and the Administrative Agent not later than 11:00 a.m. (Pacific time) at least two Business Days (or such later date and time as the Issuing Bank may agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the Issuing Bank: (i) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (ii) the amount thereof; (iii) the expiry date thereof; (iv) the name and address of the beneficiary thereof; (v) the documents to be presented by such beneficiary in case of any drawing thereunder; (vi) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (vii) such other matters as the Issuing Bank may reasonably require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the Issuing Bank (i) the Letter of Credit to be amended; (ii) the proposed date of amendment thereof (which shall be a Business Day); (iii) the nature of the proposed amendment; and (iv) such other matters as the Issuing Bank may reasonably require.

(2) Promptly after receipt of any Letter of Credit Application, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Borrower and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Upon receipt by the Issuing Bank of confirmation from the Administrative Agent that the requested issuance or amendment is permitted in accordance with the terms hereof, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue a Letter of Credit for the account of the Borrower or enter into the applicable

amendment, as the case may be, in each case in accordance with the Issuing Bank’s reasonable and customary business practices. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank a risk participation in such Letter of Credit in an amount equal to the product of such Lender’s Percentage Share times the amount of such Letter of Credit.

(3) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the Issuing Bank will also deliver to the Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.

3(c) Drawings and Reimbursements; Funding of Participations .

(1) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the Issuing Bank shall notify the Borrower and the Administrative Agent thereof. Not later than 11:00 a.m. (Pacific time) on the date of any payment by the Issuing Bank under a Letter of Credit (each such date, an “ Honor Date ”) or, if the Borrower receives notice of the drawing pursuant to the preceding sentence after such time, then not later than 11:00 a.m. (Pacific time) on the next Business Day after the Honor Date, the Borrower shall reimburse the Issuing Bank through the Administrative Agent in an amount equal to the amount of such drawing. If the Borrower fails to so reimburse the Issuing Bank by such time, the Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing (the “ Unreimbursed Amount ”), and the amount of such Lender’s Percentage Share thereof. In such event, the Borrower shall be deemed to have requested a Revolving Loan to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in this Agreement, but subject to the amount of the unutilized portion of the Aggregate Revolving Commitments and the conditions set forth in Paragraph 7(b) below (other than the delivery of a Loan Request). Any notice given by the Issuing Bank or the Administrative Agent pursuant to this Paragraph 3(c)(1) may be given by telephone if immediately confirmed in writing in accordance with Paragraph 13(e)(1) below; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

(2) Each Lender (including the Lender acting as Issuing Bank) shall upon any notice pursuant to Paragraph 3(c)(1) make funds available to the Administrative Agent for the account of the Issuing Bank at the Contact Office in an amount equal to its Percentage Share of the Unreimbursed Amount not later than 1:00 p.m. (Pacific time) on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Paragraph 3(c)(3) , each Lender that so makes funds available shall be deemed to have made a Revolving Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the Issuing Bank.

(3) With respect to any Unreimbursed Amount that is not fully refinanced on the Honor Date by Revolving Loans because the conditions set forth in Paragraph 7(b) cannot be satisfied or for any other reason, the Borrower shall be deemed to have incurred from the Issuing Bank an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Lender’s payment to the Administrative Agent for the account of the Issuing Bank pursuant shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Paragraph 3 .

(4) Until each Lender funds its Percentage Share of the Revolving Loans or L/C Advance pursuant to this Paragraph 3(c) to reimburse the Issuing Bank for any amount drawn under

any Letter of Credit, interest in respect of such Lender’s Percentage Share of such amount shall be solely for the account of the Issuing Bank.

(5) Each Lender’s obligation to make advances or L/C Advances to reimburse the Issuing Bank for amounts drawn under Letters of Credit, as contemplated by this Paragraph 3 , shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against the Issuing Bank, the Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of an Event of Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Lender’s obligation to make advances pursuant to this Paragraph 3 is subject to the conditions set forth in Paragraph 7(b) (other than delivery by the Borrower of a Loan Request). No such making of an L/C Advance shall relieve or otherwise impair the obligation of the Borrower to reimburse the Issuing Bank for the amount of any payment made by the Issuing Bank under any Letter of Credit, together with interest as provided herein.

(6) If any Lender fails to make available to the Administrative Agent for the account of the Issuing Bank any amount required to be paid by such Lender pursuant to the foregoing provisions of this Paragraph 3 by the time specified herein, the Issuing Bank shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Issuing Bank at a rate per annum equal to the Federal Funds Rate from time to time in effect. A certificate of the Issuing Bank submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this subparagraph (6) shall be conclusive absent manifest error.

3(d) Repayment of Participations .

(1) At any time after the Issuing Bank has made a payment under any Letter of Credit and has received from any Lender such Lender’s L/C Advance in respect of such payment in accordance with this Paragraph 3 , if the Administrative Agent receives for the account of the Issuing Bank any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the applicable Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will promptly distribute to such Lender its Percentage Share thereof (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s L/C Advance was outstanding) in the same funds as those received by the Administrative Agent.

(2) If any payment received by the Administrative Agent for the account of the Issuing Bank pursuant to this Paragraph 3 is required to be returned (including pursuant to any settlement entered into by the Issuing Bank in its discretion), each Lender shall pay to the Administrative Agent for the account of the Issuing Bank its Percentage Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect.

3(e) Obligations Absolute . The obligation of the Borrower to reimburse the Issuing Bank for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

(1) Any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;

(2) The existence of any claim, counterclaim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the Issuing Bank or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

(3) Any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

(4) Any payment by the Issuing Bank under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the Issuing Bank under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any debtor relief law; or

(5) Any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower.

The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower’s instructions or other irregularity, the Borrower will promptly notify the Issuing Bank.

3(f) Role of Issuing Bank . Each Lender and the Borrower agree that, in paying any drawing under a Letter of Credit, the Issuing Bank shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the Issuing Bank, the Administrative Agent or any of the Administrative Agent’s Affiliates, officers or directors nor any of the respective correspondents, participants or assignees of the Issuing Bank shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Letter of Credit Application. The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude the Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or in equity under any other agreement or based on any other grounds. None of the Issuing Bank, Administrative Agent, the Administrative Agent’s Affiliates nor any of the respective correspondents, participants or assignees of the Issuing Bank (collectively, the “ Issuing Bank Parties ”), shall be liable or responsible for any of the matters described in subparagraphs (1) through (5) of Paragraph 3(e) ; provided, however, that anything in such clauses to the contrary notwithstanding, the Borrower may have claims against the Issuing Bank Parties, and the Issuing Bank Parties may be liable to the Borrower, to the extent such claims arise from any Issuing Bank Party’s willful misconduct or gross negligence or the Issuing Bank’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, the Issuing Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, and the Issuing Bank shall not be

responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

3(g) Cash Collateral . Upon the request of the Administrative Agent, (i) if the Issuing Bank has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of the Letter of Credit Expiration Date, any Letter of Credit may for any reason remain outstanding and partially or wholly undrawn, the Borrower shall immediately Cash Collateralize the then outstanding amount of all L/C Obligations (in an amount equal to such outstanding amount determined as of the date of such L/C Borrowing or the Letter of Credit Expiration Date, as the case may be). For purposes hereof, “ Cash Collateralize ” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the Issuing Bank and the Lenders, as collateral for the L/C Obligations, cash or deposit account balances pursuant to documentation in form and substance satisfactory to the Administrative Agent and the Issuing Bank (which documents are hereby consented to by the Lenders). Derivatives of such term have corresponding meanings. The Borrower hereby grants to the Administrative Agent, for the benefit of the Issuing Bank and the Lenders, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing. Cash Collateral shall be maintained in blocked, non-interest bearing deposit accounts at Bank of the West.

3(h) Applicability of ISP98 and UCP . Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued, (i) the rules of the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each standby Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce (the “ ICC ”) at the time of issuance (including the ICC decision published by the Commission on Banking Technique and Practice on April 6, 1998 regarding the European single currency (euro)) shall apply to each commercial Letter of Credit.

3(i) Letter of Credit Fees . The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Percentage Share a Letter of Credit fee for each standby Letter of Credit equal to the Applicable Rate of the daily maximum amount available to be drawn under such Letter of Credit (whether or not such maximum amount is then in effect under such Letter of Credit). Letter of Credit fees for standby Letters of Credit shall be computed on a monthly basis in arrears and shall be due and payable on the last Business Day of each month, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand.

3(j) Fronting Fee and Documentary and Processing Charges Payable to Issuing Bank . The Borrower shall pay directly to the Issuing Bank for its own account a fronting fee with respect to each Letter of Credit calculated at the rate set forth in any letter agreement between the Borrower and the Administrative Agent referencing this Agreement. In addition, the Borrower shall pay directly to the Issuing Bank for its own account the reasonable and customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the Issuing Bank relating to Letters of Credit as from time to time in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.

3(k) Conflict with Letter of Credit Application . In the event of any conflict between the terms hereof and the terms of any Letter of Credit Application, the terms hereof shall control.

4. Pricing Provisions; Requests for Loans; Prepayment .

4(a) Calculation and Payment of Interest .

(1) The Borrower shall pay interest on Loans outstanding hereunder from the date disbursed to but not including the date of payment, at a rate per annum equal to, at the option of and as selected by the Borrower from time to time (subject to the other provisions of Paragraph 4 below): (1) the Prime Rate plus the Applicable Rate in effect from time to time during the applicable calculation period or (2) Adjusted LIBOR for the relevant Interest Period plus the Applicable Rate; provided, however, that (i) if the Borrower shall fail to elect to have a Loan bear interest as a LIBOR Loan, such Loan shall be a Prime Rate Loan; (ii) the Borrower may not elect to have a Loan bear interest as a LIBOR Loan so long as a Potential Default or Event of Default has occurred and is continuing and (iii) at the election of the Administrative Agent, upon the occurrence of a Potential Default or an Event of Default, all LIBOR Loans then outstanding shall immediately be converted to Prime Rate Loans.

(2) Interest accruing on Prime Rate Loans outstanding hereunder shall be payable quarterly, in arrears, on the last day of each March, June, September and December, on the date paid and on the maturity date of such Loan in the amount of interest that accrued and unpaid. Interest accruing on LIBOR Loans shall be payable on the last day of the Interest Period relating thereto; provided that, with respect to each LIBOR Loan with an Interest Period longer than three months, interest shall be payable on the last day of each three month period after the commencement of such Interest Period and on the last day of such Interest Period.

4(b) Funding of Loans; Conversion Options, Etc .

(1) Funding of Loans . Subject to the other terms and subject to the conditions set forth in this Agreement, until the Revolving Maturity Date, the Borrower, from time to time, may request Revolving Loans and, until the Delayed Draw Availability Expiration Date, may request Delayed Draw Loans, by giving the Administrative Agent irrevocable written notice of such request no later than: (i) in the case of a LIBOR Loan, 9:00 a.m. (Pacific time) on the third LIBOR Business Day preceding the proposed funding date for such Loans, and (iii) in the case of a Prime Rate Loan, 9:00 a.m. (Pacific time) on the requested funding date for such Loans. The principal amount of each LIBOR Loan shall be in the minimum amount of $1,000,000 and in increments of $100,000 in excess thereof. No more than eight (8) LIBOR Loans with different Interest Periods shall be outstanding at any one time hereunder. The principal amount of each other Loan shall be in the minimum amount of $500,000 and in increments of $100,000 in excess thereof.

(2) Conversion of Loans . The Borrower may elect from time to time to convert Loans outstanding: (i) as LIBOR Loans to Prime Rate Loans by giving the Administrative Agent irrevocable notice of such election no later than 9:00 a.m. (Pacific time) on the last day of the Interest Period for such LIBOR Loan or (ii) as Prime Rate Loans to LIBOR Loans by giving the Administrative Agent irrevocable notice of such election no later than 9:00 a.m. (Pacific time) on the third LIBOR Business Day preceding the proposed conversion date; provided, that, no more than eight (8) Interest Periods may be in effect at any one time; provided further that in the case of conversion of Prime Rate Loans to LIBOR Loans, the principal amount shall be in the minimum amount of $1,000,000 and in increments of $100,000 in excess thereof; provided, finally, that in the case of conversion to Prime Rate Loans, the principal amount of each such Loan shall be in a minimum amount of $500,000 and in increments of $100,000 in excess thereof. Any conversion of LIBOR Loans may only be made on the last day of the applicable Interest Period. No Prime Rate Loan may be converted into a LIBOR Loan if an Event of Default or Potential Default has occurred and is continuing at the requested conversion date. All or any part of outstanding Loans may be converted as provided herein, provided that partial conversions

shall be in an amount not less than the amount required pursuant to the second sentence of this subparagraph (2) .

(3) Continuation of LIBOR Loans . The Borrower may elect from time to time to have any LIBOR Loan continued as such upon the expiration of the Interest Period applicable thereto by giving the Administrative Agent irrevocable notice of such election no later than 9:00 a.m. (Pacific time) on the third LIBOR Business Day preceding the last day of such Interest Period; provided, however, that no LIBOR Loan may be continued as such when any Event of Default or Potential Default has occurred and is continuing, but shall be automatically converted to a Prime Rate Loan on the last day of the Interest Period applicable thereto. The Administrative Agent shall notify the Borrower promptly that any such automatic conversion will occur. If the Borrower shall fail to give notice of its election to continue a LIBOR Loan as such as provided above, the Borrower shall be deemed to have elected to convert the affected LIBOR Loan to a Prime Rate Loan on the last day of the applicable Interest Period.

(4) Loan Requests . Each request for the funding, continuation or conversion of a Loan shall be evidenced by the timely delivery by the Borrower to the Administrative Agent of a duly executed Loan Request or Continuation or Conversion Request , as the case may be (which delivery may be by facsimile transmission). Upon receipt of a Loan Request for the funding of a Loan, the Administrative Agent shall promptly notify each Lender of such Lender’s Percentage Share thereof and whether a Revolving or Delayed Draw Loan has been requested as a LIBOR Loan or Prime Rate Loan. No later than 1:00 p.m. (Pacific time), each Lender shall make its Percentage Share of such Loan available to the Administrative Agent, in same-day funds, on the funding date at the Contact Office of the Administrative Agent, ABA #121100782 for the Administrative Agent’s Account #239855332 such other account as the Administrative Agent shall designate. The failure of any Lender to deliver to the Administrative Agent its Percentage Share of a proposed Loan shall not relieve any other Lender of its obligation hereunder to advance its Percentage Share thereof, but no Lender shall be responsible for the failure of any other Lender to make any such advance. Nothing contained herein shall be deemed to constitute a waiver by the Borrower of any rights, powers and remedies that it may have against any Lender for failure of such Lender to fund its Percentage Share of Loans as required by the Loan Documents.

(5) Funding by Lenders, etc . Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with subparagraph (4) above and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and (ii) in the case of a payment to be made by the Borrower, the interest rate applicable to Prime Rate Loans. If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

(6) Payments by Borrower; Presumptions by Administrative Agent . Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or the Issuing Bank, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

(7) Place of Funding . Each Lender shall be entitled to fund all or any portion of its Loans in any manner it may determine in its sole discretion, including, without limitation, in the Grand Cayman inter-bank market, in the London inter-bank market and within the United States.

4(c) Prepayment premium; Illegality; Requirements of Law .

(1) Prepayment Premium . In addition to all other payment obligations hereunder, in the event: (1) any Loan which is outstanding as a LIBOR Loan is prepaid prior to the last day of the applicable Interest Period or (2) the Borrower shall fail to borrow, continue or to make a conversion to a LIBOR Loan after the Borrower has given notice thereof as provided in Paragraph 4(b) above, then the Borrower shall immediately pay to the Lenders holding the Loans prepaid or not made, continued or converted, through the Administrative Agent, an additional premium sum compensating each Lender for losses, costs and expenses incurred by such Lender in connection with such prepayment or such failure to borrow, continue or convert. The Borrower acknowledges that such losses, costs and expenses are difficult to quantify and that, in the case of the prepayment of or failure to continue or convert to a LIBOR Loan, the following formula represents a fair and reasonable estimate of such losses, costs and expenses:

LOGO

(2) Illegality . Notwithstanding any other provisions herein, if any law, regulation, treaty or directive or any change therein or in the interpretation or application thereof, shall make it unlawful for any Lender to make or maintain LIBOR Loans as contemplated by this Agreement: (1) the commitment of such Lender hereunder to make or to continue LIBOR Loans or to convert Prime Rate Loans to LIBOR Loans shall forthwith be canceled and (2) such Lender’s Percentage Share of Loans then outstanding as LIBOR Loans, if any, shall be converted automatically to Prime Rate Loans at the end of their respective Interest Periods or within such earlier period as may be required by law. In the event of a conversion of any such Loan prior to the end of its applicable Interest Period, the Borrower hereby agrees promptly to pay any Lender affected thereby, upon demand, the amounts required pursuant to Paragraph 4(d)(1) below, it being agreed and understood that such conversion shall constitute a prepayment for all purposes hereof. The provisions hereof shall survive the termination of this Agreement and payment of the outstanding Loans and all other amounts payable hereunder.

4(d) Increased Costs Generally . If any Change in Law shall:

(1) Impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in Adjusted LIBOR) or the Issuing Bank;

(2) Subject any Lender or the Issuing Bank to any tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or any LIBOR Loan made by it, or change the basis of taxation of payments to such Lender or the Issuing Bank in respect thereof (except for Indemnified Taxes or Other Taxes covered by Paragraph 4(g) below and the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender or the Issuing Bank); or

(3) Impose on any Lender or the Issuing Bank or the London interbank market any other condition, cost or expense affecting this Agreement or LIBOR Loans made by such Lender or any Letter of Credit or participation therein; and

(4) The result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any LIBOR Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or the Issuing Bank hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or the Issuing Bank, the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered.

4(e) Capital Requirements . If any Lender or the Issuing Bank determines that any Change in Law affecting such Lender or the Issuing Bank or any lending office of such Lender regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s or the Issuing Bank’s capital as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction suffered.

4(f) Certificates for Reimbursement . A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or the Issuing Bank, as the case may be, as specified in Paragraphs 4(d) or 4(e) above, together with the calculations thereof in reasonable detail, and delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof. Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to Paragraphs 4(d) or 4(e) shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender or the Issuing Bank pursuant to such Paragraphs for any increased costs incurred or reductions suffered more than six (6) months prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the Issuing Bank’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six (6)-month period referred to above shall be extended to include the period of retroactive effect thereof).

4(g) Taxes .

(1) Payments Free of Taxes . Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes, provided that if the Borrower shall be required by applicable law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Paragraph) the Administrative Agent, Lender or Issuing Bank, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

(2) Payment of Other Taxes by the Borrower . Without limiting the provisions of subparagraph (1) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(3) Indemnification by the Borrower . The Borrower shall indemnify the Administrative Agent, each Lender and the Issuing Bank, within 10 days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Paragraph) paid by the Administrative Agent, such Lender or the Issuing Bank, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or the Issuing Bank (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive absent manifest error.

(4) Evidence of Payments . As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(5) Status of Lenders . Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan Document shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.

(6) Foreign Lenders . Without limiting the generality of the foregoing, in the event that the Borrower is resident for tax purposes in the United States of America, any Foreign Lender shall deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of the Borrower or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable: (i) duly completed copies of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States of America is a party, (ii) duly completed copies of Internal Revenue Service Form W-8ECI, (iii) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (x) a certificate to the effect that such Foreign Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue Service Form W-8BEN, or (iv) any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in United States Federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower to determine the withholding or deduction required to be made.

(7) Treatment of Certain Refunds . If the Administrative Agent, a Lender or the Issuing Bank determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Paragraph, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Paragraph with respect to the Taxes or Other Taxes giving rise to such refund), net of all reasonable out-of-pocket expenses of the Administrative Agent, such Lender or the Issuing Bank, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Borrower, upon the request of the Administrative Agent, such Lender or the Issuing Bank, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent, such Lender or the Issuing Bank in the event the Administrative Agent, such Lender or the Issuing Bank is required to repay such refund to such Governmental Authority. This Paragraph shall not be construed to require the Administrative Agent, any Lender or the Issuing Bank to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.

4(h) Mitigation Obligations, Replacement of Lenders .

(1) Designation of a Different Lending Office . If any Lender requests compensation under Paragraph 4(f) , or requires the Borrower to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Paragraph 4(g) , then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Paragraphs 4(f) or 4(g) , as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(2) Replacement of Lenders . If any Lender requests compensation under Paragraph 4(f) , or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Paragraph 4(g) , or if any Lender defaults in its obligation to fund Loans hereunder, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Paragraph 13(g) ), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that: (i) the Borrower shall have paid to the Administrative Agent the assignment fee specified in Paragraph 13(g) ; (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in L/C Obligations and accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts); (iii) in the case of any such assignment resulting from a claim for compensation under Paragraph 4(f) or payments required to be made pursuant to Paragraph 4(g) , such assignment will result in a reduction in such compensation or payments thereafter; and (iv) such assignment does not conflict with applicable law. A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

4(i) Commitment and Certain Other Fees .

(1) The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Percentage Share of the Aggregate Revolving Commitments and the Aggregate Delayed Draw Commitments unused commitment fees equal to (i) the Applicable Rate times the actual daily amount by which the Aggregate Revolving Commitments exceed the sum of the outstanding Revolving Loans and outstanding L/C Obligations in respect of standby Letters of Credit plus (ii) the Applicable Rate times the actual daily amount by which the Aggregate Delayed Draw Commitments exceed the sum of the Delayed Draw Loans outstanding. The unused commitment fees shall accrue at all times, including at any time during which one or more conditions in Paragraph 7 below is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, on Delayed Draw Availability Expiration Date (in the case of fees calculated on the Aggregate Delayed Draw Commitments) and on the Revolving Loan Maturity Date (in the case of fees calculated on the delayed Aggregate Delayed Draw Commitments). The unused commitment fee shall be calculated quarterly in arrears and, if there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect.

(2) The Borrower shall pay to the Administrative Agent such fees as shall be set forth in a fee letter from time to time by the Borrower and the Administrative Agent with reference to this Agreement.

4(j) Default Interest . Notwithstanding anything to the contrary contained herein, on any date that there shall have occurred and be continuing an Event of Default, any and all Obligations outstanding shall bear interest at a per annum rate equal to three percent (3%) in excess of the Prime Rate (the “ Default Rate ”).

4(k) Computations . All computations of interest and fees payable hereunder shall be based upon a year of three hundred and sixty (360) days for the actual number of days elapsed. Except as otherwise provided in the definition of “ Interest Period ,” any payment due on a day that is not a Business Day shall be due and payable on the next succeeding Business Day and accrue interest and fees until paid.

5. Miscellaneous Provisions .

5(a) Open Book Account . The Loans and L/C Borrowings of each Lender shall be evidenced by, and the obligation of the Borrower to make payments in respect thereof and other amounts payable hereunder, shall be evidenced by a notation on the books and records of the Administrative Agent and each Lender. Unless the Borrower delivers written notice to the Administrative Agent within 30 days after the Administrative Agent sends written notice to the Borrower of the contents of its or a Lender’s accounts or records, the contents thereof shall be conclusive absent manifest error of the amount of each Loan or L/C Borrowing of the Lenders to the Borrower and the interest and payments thereon. The failure of the Administrative Agent or any Lender to make any such notation shall not affect in any manner or to any extent the Borrower’s Obligations hereunder. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a note which shall evidence such Lender’s Loans. In addition to the accounts and records referenced in this Paragraph 5(a) , each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the sales and purchases of participations in Letters of Credit. In the event of any

conflict between such accounts and records maintained by the Administrative Agent and by any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

5(b) Nature and Place of Payments . All payments made on account of the Obligations shall be made by the Borrower to the Administrative Agent for the account of the Lenders or the Administrative Agent, as applicable, without setoff or counterclaim, in lawful money of the United States of America in immediately available same day funds, free and clear of and without deduction for any taxes, fees or other charges of any nature whatsoever imposed by any taxing authority and must be received by the Administrative Agent by 12:00 noon (Pacific time) on the day of payment, it being expressly agreed and understood that if a payment is received after 12:00 noon (Pacific time) by the Administrative Agent, such payment will be considered to have been made by the Borrower on the next succeeding Business Day and interest thereon shall be payable by the Borrower at the then applicable rate during such extension. All such payments on account of the Obligations shall be made (and such Directions for Payment shall be delivered) to the Administrative Agent through its Contact Office, and payments shall be applied in accordance with the directions of the Borrower (unless a Potential Default or Event of Default has occurred and is continuing). If any payment required to be made by the Borrower hereunder becomes due and payable on a day other than a Business Day, the due date thereof shall be extended to the next succeeding Business Day and interest thereon shall be payable at the then applicable rate during such extension.

5(c) Late Payment Fee . If any payment of principal or interest, or any portion thereof, under this Agreement is not paid within ten (10) calendar days after it is due, a late payment charge equal to two percent (2%) of such past due payment may be assessed and shall be paid immediately.

5(d) Mandatory Prepayment of Principal .

(1) On receipt of Net Cash Proceeds of any Equity Offering, the Borrower shall prepay the Loans in an amount equal to 50% of such Net Cash Proceeds. Any such prepayment shall be applied to the Term Loans in payment of the required monthly installments of principal in the inverse order of maturity, and after the Term Loans have been repaid in full, shall next be applied to the Revolving Loans. In addition, the Borrower shall make a mandatory prepayment on account of Revolving Loans outstanding on any date upon which the aggregate amount of outstanding Revolving Loans, Outstanding Letters of Credit and unrepaid L/C Borrowings exceeds the Aggregate Revolving Commitments on such date, said mandatory prepayment to be in the amount of such excess.

(2) From time to time, the Borrower shall (i) immediately repay Revolving Loans or, if all Revolving Loans have been repaid, Cash Collateralize Letters of Credit in the amount by which the aggregate principal amount of Revolving Loans outstanding plus all L/C Obligations is greater than the Aggregate Revolving Commitments and (ii) immediately prepay Delayed Draw Loans in the amount by which the aggregate principal amount of Delayed Draw Loans outstanding is greater than the Aggregate Delayed Draw Commitments.

(3) Each mandatory prepayment under this Paragraph 5(d) as well as any other prepayment of LIBOR Loans made prior to the last day of the relevant Interest Period shall be accompanied by a prepayment premium calculated as set forth in Paragraph 4(c) above as well as any other amounts payable under this Agreement in connection with such payment.

5(e) Prepayments and Reduction of Aggregate Revolving Commitments .

(1) The Borrower may prepay (i) Prime Rate Loans in whole or in part at any time and (ii) LIBOR Loans in whole or in part (provided that the amount of each LIBOR Loan remaining after giving effect to such prepayment is not less than $1,000,000 and increments of $100,000 in excess thereof) on the last day of the Interest Period therefor. If notwithstanding anything herein to the contrary, LIBOR Loans are prepaid prior to the last day of their Interest Period, such LIBOR Loans shall be accompanied by a prepayment premium calculated as set forth in Paragraph 4(c) above. Loans that are Prime Rate Loans may be prepaid in whole or in part at any time without prepayment penalty. Each prepayment of LIBOR Loans that are Revolving Loans shall be in a minimum principal amount of $1,000,000 and in increments of $100,000 in excess thereof. Each prepayment of Prime Rate Loans that are Revolving Loans and each prepayment of any Term Loans shall be in an amount not less than $100,000 and $100,000 increments in excess thereof. Once repaid, the Term Loans may not be reborrowed. Each prepayment of Term Loans shall be applied to the most remote installment payable on the Term Loans.

(2) At least one Business Day prior to any proposed prepayment of Term Loans, the Borrower shall give notice to the Administrative Agent (which notice may be given telephonically and confirmed by facsimile transmission) of the date, amount of the proposed payment and whether such prepayment is to be applied to Prime Rate Loans or LIBOR Loans.

(3) The Borrower may, upon notice to the Administrative Agent, terminate the Aggregate Revolving Commitments or from time to time permanently reduce the Aggregate Revolving Commitments or the Aggregate Delayed Draw Commitments; provided that (i) such notice shall be received by the Administrative Agent not later than 11:00 a.m. (Pacific time) ten (10) Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $1,000,000 or whole increments of $100,000 in excess thereof, (iii) the Borrower shall not terminate or reduce the Aggregate Revolving Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the aggregate principal amount of Revolving Loans outstanding plus all L/C Obligations outstanding exceeds the Aggregate Revolving Commitments as so reduced and (iv) if after giving effect to any such termination or reduction, the Letter of Credit Sublimit exceeds the amount of the Aggregate Revolving Commitments, such sublimit shall automatically be reduced by the amount of such excess. The Administrative Agent shall promptly notify the Lenders of any such notice, and any such reduction shall be applied to the Percentage Shares of the Lenders on a pro rata basis, and concurrently with any such reduction, the Revolving Commitment and Delayed Draw Commitment of each Lender shall be reduced accordingly.

(4) The Borrower shall pay in connection with any prepayment hereunder all interest accrued but unpaid on Loans to which such prepayment is applied, and any additional amounts, as may be required to be paid under the other provisions of this Agreement concurrently with payment to the Administrative Agent of any principal amounts.

5(f) Allocation of Payments Received . Except as provided in Paragraphs 5(d) and (e) above or as otherwise expressly provided herein, prior to the occurrence of an Event of Default and acceleration of the Obligations, all amounts received by the Administrative Agent on account of the Loans shall be applied against Loans in such order as the Borrower may direct in writing, subject to the requirement that disbursements to the Lenders shall be in accordance with their respective Percentage Shares. Such amounts shall be disbursed by the Administrative Agent to the Lenders pro rata in accordance with their respective Percentage Shares by wire transfer on the date of receipt if received by the Administrative Agent before 12:00 noon (Los Angeles time) or if received later, by 12:00 noon (Los Angeles time) on the next succeeding Business Day, without further interest payable by the Administrative Agent. Following the occurrence of an Event of Default and acceleration of the

Obligations, all amounts received by the Administrative Agent on account of the Secured Obligations shall be disbursed by the Administrative Agent as follows:

(1) First, to the payment of expenses incurred by the Administrative Agent in the performance of its duties and enforcement of its rights and the rights of the Lenders under the Loan Documents, including, without limitation, all costs and expenses of collection, attorneys’ fees (including all allocated costs of internal counsel), court costs and foreclosure expenses;

(2) Then, to the Lenders, pro rata in accordance with their respective Percentage Shares, until all outstanding Loans and L/C Obligations have been paid in full; in such order as the Administrative Agent and the Lenders shall determine;

(3) Then, ratably to the Secured Parties until all other outstanding Secured Obligations have been paid in full, in such order as the Administrative Agent and such Secured Parties shall agree;

(4) Then, to such Persons as may be legally entitled thereto.

5(g) Telephonic/Facsimile Communications . Any agreement of the Administrative Agent and the Lenders herein to receive certain notices by telephone or facsimile is solely for the convenience and at the request of the Borrower. The Administrative Agent and the Lenders shall be entitled to rely on the authority of any Person purporting to be an authorized Person, and the Administrative Agent and the Lenders shall not have any liability to the Borrower or other Person on account of any action taken or not taken by the Administrative Agent or the Lenders in reliance upon such telephonic or facsimile notice, other than actions or inactions constituting gross negligence or willful misconduct on the part of the Administrative Agent and the Lenders. The obligation of the Borrower to repay the Obligations shall not be affected in any way or to any extent by any failure by the Administrative Agent and the Lenders to receive written confirmation of any telephonic or facsimile notice or the receipt by the Administrative Agent and the Lenders of a confirmation which is at variance with the terms understood by the Administrative Agent and the Lenders to be contained in the telephonic or facsimile notice.

5(h) Increase in Commitments .

(1) Request for Increase . Provided there exists no Event of Default or Potential Default, upon notice to the Administrative Agent (which shall promptly notify the Lenders), the Borrower may, at any time on or prior to the fourth anniversary of the Closing Date, request an increase in the Delayed Draw Commitments by an amount not to exceed $25,000,000; provided that any such request for an increase shall be in a minimum amount of $5,000,000. At the time of sending such notice, the Borrower (in consultation with the Administrative Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Lenders).

(2) Lender Elections to Increase . Each Lender shall notify the Administrative Agent within such time period whether or not it agrees to increase its Commitment and, if so, whether by an amount equal to, greater than, or less than its Percentage Share of such requested increase. Any Lender not responding within such time period shall be deemed to have declined to increase its Commitment.

(3) Notification by Administrative Agent; Additional Lenders . The Administrative Agent shall notify the Borrower and each Lender of the Lenders’ responses to each

request made hereunder. To achieve the full amount of a requested increase and subject to the approval of the Administrative Agent and the Issuing Bank (which approvals shall not be unreasonably withheld), the Borrower may also invite additional Eligible Assignees to become Lenders pursuant to a joinder agreement in form and substance satisfactory to the Administrative Agent and its counsel.

(4) Effective Date and Allocations . If the Aggregate Delayed Draw Commitments are increased in accordance with this Paragraph, the Administrative Agent and the Borrower shall determine the effective date (the “ Increase Effective Date ”) and the final allocation of such increase. The Administrative Agent shall promptly notify the Borrower and the Lenders of the final allocation of such increase and the Increase Effective Date.

(5) Conditions to Effectiveness of Increase . As a condition precedent to such increase, the Borrower shall deliver to the Administrative Agent a certificate of the Borrower and each Guarantor dated as of the Increase Effective Date (in sufficient copies for each Lender) signed by an Authorized Officer of each such Person (i) certifying and attaching the resolutions adopted by such Person approving or consenting to such increase, and (ii) in the case of the Borrower, certifying that, before and after giving effect to such increase, (A) the representations and warranties contained in Paragraph 8 and the other Loan Documents are true and correct on and as of the Increase Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and except that for purposes of this Paragraph 5(h) , the representations and warranties contained in Paragraph 8 shall be deemed to refer to the most recent statements furnished pursuant to subparagraphs (1) and (2) of Paragraph 9(a) , and (B) no Event of Default or Potential Default exists. The Borrower shall prepay any Loans outstanding on the Increase Effective Date (and pay any additional amounts required pursuant to Paragraph 4(c)) to the extent necessary to keep the outstanding Loans ratable with any revised Percentage Shares arising from any nonratable increase in the Commitments under this Paragraph 5(h) .

(6) Conflicting Provisions . This Paragraph shall supersede any provisions in Paragraphs 4 above or 13(q) below.

5(i) Use of Proceeds . The proceeds of (1) the initial Loans hereunder shall be applied to refinance outstanding obligations of the Borrower under the Existing Credit Agreement, (2) subsequent Revolving Loans shall be used for general corporate purposes and (3) Delayed Draw Loans shall be used to finance Permitted Acquisitions.

6. Collateral Security; Guaranties; Additional Documents .

6(a) Initial Security Documents and Guaranties . Pursuant to the Existing Credit Agreement, the Borrower and its Subsidiaries delivered those Security Documents and other Loan Documents (as such terms are defined in the Existing Credit Agreement), including, without limitation, the Borrower Security Agreement appearing as Exhibit A to this Agreement (the “ Initial Security Agreement ”), the Guarantor Security Agreement appearing as Exhibit B to this Agreement (the “ Initial Guarantor Security Agreement ”), the Subsidiary Guaranty appearing as Exhibit C to this Agreement (the “ Initial Guaranty ”), and the other documents described on Schedule 6(a) to this Agreement (collectively with the Borrower Security Agreement, the Initial Guarantor Security Agreement, the Initial Guaranty and the other Loan Documents executed in connection with the Existing Credit Agreement, the “ Initial Security Documents ”). The Borrower and each such Guarantor (i) agrees that all references in the Initial Security Documents to the Existing Credit Agreement and the Obligations and the Agent thereunder shall be construed as references to the Existing Credit Agreement as amended and restated by this Agreement and to the Secured Obligations and Administrative Agent, respectively, (ii) ratifies and reaffirms each

such document as though executed and delivered as of the date of this Agreement, (iii) represents and warrants to the Administrative Agent and each of the Lenders that each such Initial Security Document and Initial Subsidiary Guaranty remain in full force and effect as of the date of this Agreement and (iv) except as otherwise permitted in this Agreement and the other Loan Documents, the Initial Security Documents give to the Administrative Agent for the benefit of the Secured Parties a first priority perfected security interest in all Collateral in which a security interest can be perfected under the California Uniform Commercial Code and such other Collateral as shall be described therein. The Initial Security Documents and such other collateral documents as shall be delivered from time to time pursuant to this Agreement or any other Loan Documents are referred to as “ Security Documents ”.

6(b) Additional Documents . The Borrower agrees to execute and deliver or cause to be executed and delivered:

(1) Promptly after a Person becomes a Subsidiary of American Vanguard (other than an Immaterial Subsidiary), cause such Person to become a party to this Agreement by executing a joinder substantially in the form of Exhibit D to this Agreement and to execute and deliver to the Administrative Agent, a Guaranty, a Guarantor Security Agreement, together with such landlord waivers, bailee agreements and supplemental security agreements as shall be required thereby pursuant to which the Administrative Agent shall be granted a first priority perfected security interest in the Collateral of such Guarantor for the ratable benefit of the Secured Parties, together with copies of the Organization Documents and good standing certificates of such Person and resolutions or other authorizing documents authorizing the execution and delivery of such agreements and documents.

(2) Within ninety (90) days after the Borrower or a Guarantor leases new space or agrees to warehouse goods with a bailee, landlord waiver agreements and bailee letters in form and substance satisfactory to the Administrative Agent.

(3) Any and all further documents, financing statements, agreements and instruments and take all further action (including filing Uniform Commercial Code and other financing statements, opinions, mortgages and deeds of trust) that may be required under applicable law or that the Required Lenders or the Administrative Agent may reasonably request in order to effectuate the transactions contemplated by the Loan Documents and in order to grant, preserve, protect and perfect the validity and first priority of the security interest created or intended to be created by the Security Documents.

(4) Notwithstanding anything in this Agreement or any Loan Document to the contrary, in the case of Equity Interests in any Foreign Subsidiary (including, without limitation, any Material Foreign Subsidiary) that is a “controlled foreign corporation” under Section 957 of the Code, the Collateral shall include not more than 65% of the issued and outstanding Equity Interests in such Foreign Subsidiary.

7. Conditions Precedent .

7(a) First Credit Event . As conditions precedent to the funding of the initial Loan or issuance of Letters of Credit hereunder:

(1) The Borrower shall have delivered or shall have had delivered to the Administrative Agent, in form and substance reasonably satisfactory to the Administrative Agent and its counsel, each of the following (with sufficient copies for each of the Lenders):

(i) A duly executed copy of this Agreement;

(ii) Such credit applications, financial statements, authorizations and such information concerning the Borrower and its business, operations and condition (financial and otherwise) as the Administrative Agent may reasonably request;

(iii) A certificate of an Authorized Officer of the Borrower and each Guarantor certifying (a) the names and true signatures of the officers of such party authorized to sign the Loan Documents to which it is a party; (b) the authenticity and completeness of the Organization Documents and resolutions of such party attached thereto, (c) that the attached good standing certificate(s) of such party attached thereto has been issued by the appropriate Governmental Authority, and (d) no event has occurred that would be a Potential Default or Event of Default under this Agreement;

(iv) A Compliance Certificate, duly executed by an Authorized Officer;

(v) An opinion of counsel to the Borrower and the Guarantors substantially in the form delivered with respect to the Existing Credit Agreement;

(vi) Evidence that the Borrower has executed one or more interest rate swap agreements that are Permitted Hedges effective for a period of not less than three (3) years from the Closing Date in a notional amount not less than one-half of the Term Loans outstanding as of the Closing Date;

(vii) Evidence satisfactory to the Administrative Agent that all fees, costs and expenses payable on or before the Closing Date have been, or will on the Closing Date be, paid in full.

(viii) Loss payee endorsements, additional insured certificates and other certificates of insurance acceptable to the Administrative Agent evidencing the insurance required to be maintained by the Borrower and the Guarantors pursuant to this Agreement.

(2) All acts and conditions (including, without limitation, the obtaining of any necessary regulatory approvals and the making of any required filings, recordings or registrations) required to be done and performed and to have happened precedent to the execution, delivery and performance of the Loan Documents and to constitute the same legal, valid and binding obligations, enforceable in accordance with their respective terms, shall have been done and performed and shall have happened in due and strict compliance with all applicable laws.

(3) All documentation, including, without limitation, documentation for corporate and legal proceedings in connection with the transactions contemplated by the Loan Documents, shall be reasonably satisfactory in form and substance to the Administrative Agent and its counsel.

7(b) Ongoing Credit Events . As conditions precedent to each Lender’s obligation to advance its Percentage Share of any Loan, including the initial loan and including the conversion of any Loan to another type of Loan or the continuation of any LIBOR Loan after the end of its applicable Interest Period, or to issue Letters of Credit at and as of the date of such advance, conversion, continuation or issuance:

(1) The Borrower shall have delivered to the Administrative Agent and, in the case of a Letter of Credit, the Issuing Bank, a Loan Request (or, in the case of a Letter of Credit, a Letter of Credit Application) and such other documents as shall be required under this Agreement;

(2) The representations and warranties of the Borrower contained in the Loan Documents shall be accurate and complete in all material respects as if made on and as of the date of such advance, conversion or continuance;

(3) There shall not have occurred an Event of Default or Potential Default;

(4) Following the making of such Loan or the issuance of such Letter of Credit, the aggregate amount of Loans and Letters of Credit outstanding under this Agreement will not exceed the amounts otherwise permitted hereunder; and

(5) No event shall have occurred that could reasonably be expected to have a Material Adverse Effect.

By delivering a Loan Request to the Administrative Agent hereunder, the Borrower shall be deemed to have represented and warranted the accuracy and completeness of the statements set forth in subparagraphs (b)(2) through (b)(5) above.

8. Representations and Warranties of the Borrower .

As an inducement to the Administrative Agent and each Lender to enter into this Agreement and to make Loans and issue Letters of Credit as provided herein, the Borrower and each Guarantor represents and warrants to the Administrative Agent and each Lender that:

8(a) Financial Condition . The financial statements, dated the Statement Date and the Interim Date, copies of which have heretofore been furnished to each Lender, are complete and correct and present fairly in accordance with GAAP the financial condition of American Vanguard and its consolidated Subsidiaries at such dates and the consolidated and consolidating results of their operations and cash flows for the fiscal periods then ended.

8(b) No Change . Since the Statement Date, no event, to the Borrower’s or any Guarantor’s knowledge, has occurred that could have a Material Adverse Effect. Since the Statement Date, neither American Vanguard nor the Borrower has entered into, incurred or assumed any material long-term debt, mortgages, leases or oral or written commitments, nor commenced any significant project, nor made any purchase or acquisition of any significant property not previously disclosed to the Administrative Agent.

8(c) Corporate Existence; Compliance with Law . The Borrower and each Guarantor: (1) is duly organized, validly existing and in good standing as a corporation under the laws of the state of its organization and is qualified to do business in each jurisdiction where its ownership of property or conduct of business requires such qualification and where failure to qualify would have a Material Adverse Effect, (2) has the corporate power and authority and the legal right to own and operate its property and to conduct business in the manner in which it does and proposes so to do, and (3) is in compliance, in all material respects, with all Requirements of Law and Contractual Obligations.

8(d) Corporate Power; Authorization; Enforceable Obligations . The Borrower and each Guarantor has the corporate power and authority and the legal right to execute, deliver and perform the Loan Documents to which it is a party and has taken all necessary corporate action to authorize the execution, delivery and performance of the Loan Documents to which it is a party. The Loan Documents have been duly executed and delivered on behalf of the Borrower and the Guarantors and constitute legal, valid and binding obligations of such Persons enforceable against them in accordance with their respective terms, subject to the effect of applicable bankruptcy and other similar laws affecting the rights

of creditors generally and the effect of equitable principles whether applied in an action at law or a suit in equity.

8(e) No Legal Bar . The execution, delivery and performance of the Loan Documents, the borrowing hereunder and the use of the proceeds thereof, will not violate, in any material respect, any Requirement of Law or any Contractual Obligation of the Borrower or any Guarantor or create or result in the creation of any Lien on any assets of the Borrower or any Guarantor other than in favor of the Administrative Agent for the benefit of the Lenders pursuant to the Security Documents.

8(f) No Material Litigation . Except as disclosed in the most recent Form 10-K, Form 10-Q or Form 8-K filed by American Vanguard with the Securities and Exchange Commission, there is no material litigation, investigation or proceeding (including, without limitation, Environmental Claims) of or before any arbitrator or Governmental Authority pending or, to the knowledge of the Borrower, threatened by or against American Vanguard or any of its Subsidiaries or against any of such parties’ properties or revenues.

8(g) Taxes . American Vanguard and each of its Subsidiaries have filed or caused to be filed all tax returns, or timely extensions, that are required to be filed and have paid all taxes shown to be due and payable on said returns or on any assessments made against them or any of their property other than taxes which are being contested in good faith by appropriate proceedings and as to which American Vanguard or applicable Subsidiary has established adequate reserves in conformity with GAAP.

8(h) Investment Company Act . Neither American Vanguard nor any of its Subsidiaries is an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

8(i) Subsidiaries . Attached hereto as Exhibit E is an accurate and complete list of all presently existing Subsidiaries of American Vanguard (other than Immaterial Subsidiaries that are not Material Foreign Subsidiaries), their respective jurisdictions of incorporation and qualifications and the percentage of their capital stock owned by American Vanguard, the Borrower or other Subsidiaries of American Vanguard. All of the issued and outstanding shares of capital stock of the Borrower and each such Subsidiary have been duly authorized and issued and are fully paid and non-assessable.

8(j) Federal Reserve Board Regulations . Neither American Vanguard nor any of its Subsidiaries is engaged or will engage, principally or as one of its important activities, in the business of extending credit for the purpose of “purchasing” or “carrying” any “margin stock” within the respective meanings of such terms under Regulation U. No part of the proceeds of any Loan issued hereunder will be used for “purchasing” or “carrying” “margin stock” as so defined or for any purpose which violates, or which would be inconsistent with, the provisions of the Regulations of the Board of Governors of the Federal Reserve System.

8(k) ERISA . (1) No Prohibited Transactions, Accumulated Funding Deficiencies, withdrawals from Multiemployer Plans or Reportable Events have occurred with respect to any Plans or Multiemployer Plans that, in the aggregate, could subject American Vanguard or any of its Subsidiaries to any tax, penalty or other liability where such tax, penalty or liability is not covered in full, for the benefit of the Borrower, American Vanguard or any of its other Subsidiaries, as applicable, by insurance; (2) no notice of intent to terminate a Plan has been filed, nor has any Plan been terminated under Section 4041 of ERISA, nor has the PBGC instituted proceedings to terminate, or appoint a trustee to administer, a Plan, and no event has occurred or condition exists which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan; (3) the present

value of all benefit liabilities (as defined in section 4001(a)(16) of ERISA) under all Plans (based on the actuarial assumptions used to fund the Plans) does not exceed the assets of the Plans; and (4) the execution, delivery and performance by the Borrower of this Agreement and the other Loan Documents and the use of the proceeds of the Loans will not involve any Prohibited Transactions.

8(l) Assets . Each of American Vanguard, the Borrower and their respective Subsidiaries has good and marketable title to all property and assets reflected in the financial statements referred to in Paragraph 8(a) above, except property and assets sold or otherwise disposed of in the ordinary course of business subsequent to the respective dates thereof and except for property and assets specifically pledged as collateral for Capital Lease Obligations. Neither the Borrower nor any of its Subsidiaries has outstanding Liens on any of its properties or assets nor are there any security agreements to which American Vanguard, the Borrower or any of their respective Subsidiaries is a party, or title retention agreements, whether in the form of leases or otherwise, of any personal property except as reflected in the financial statements referred to in Paragraph 8(a) above or as permitted under Paragraph 10(a) below.

8(m) Securities Acts . Neither American Vanguard nor any of its Subsidiaries has issued any unregistered securities in violation of the registration requirements of Section 5 of the Securities Act of 1933, as amended, or any other law, and is not violating any rule, regulation or requirement under the Securities Act of 1933, as amended, or the Securities and Exchange Act of 1934, as amended. Neither American Vanguard nor any of its Subsidiaries is required to qualify an indenture under the Trust Indenture Act of 1939, as amended, in connection with its execution and delivery of this Agreement.

8(n) Consents, Etc. No consent, approval, authorization of, or registration, declaration or filing with any Governmental Authority is required on the part of American Vanguard or any of its Subsidiaries in connection with the execution and delivery of the Loan Documents or the performance of or compliance with the terms, provisions and conditions hereof or thereof.

8(o) Hazardous Materials . To the best of its knowledge, the operations of American Vanguard and each of its Subsidiaries comply substantially, and during the term of this Agreement will at all times comply substantially, in all respects with all applicable Environmental Laws; American Vanguard and each of its Subsidiaries has obtained licenses, permits, authorizations and registrations required under applicable Environmental Law (“ Environmental Permits ”) and necessary for its ordinary operations, all such Environmental Permits are in good standing, and American Vanguard and each of its Subsidiaries is in compliance with all material terms and conditions of such Environmental Permits; neither American Vanguard nor any of its Subsidiaries nor any of their respective present properties or operations are subject to any outstanding written order from or agreement with any Governmental Authority nor subject to any judicial or docketed administrative proceeding, respecting any Environmental Law, Environmental Claim or Hazardous Material not previously disclosed; there are no Hazardous Materials or other conditions or circumstances existing, or arising from operations prior to the date of this Agreement, with respect to any property of American Vanguard or any of its Subsidiaries that would reasonably be expected to give rise to Environmental Claims; provided, however, that with respect to property leased from an unrelated third party, the foregoing representation is made to the best knowledge of the Borrower. In addition (i) neither American Vanguard nor any of its Subsidiaries has or maintains any underground storage tanks which are not properly registered or permitted under applicable Environmental Laws or which are leaking or disposing of Hazardous Materials off-site, and (ii) each of American Vanguard and its Subsidiaries has notified all of its employees of the existence, if any, of any health hazard arising from the conditions of their employment and have met all notification requirements under Title III of CERCLA and all other applicable Environmental Law.

8(p) Security Documents . The Security Documents are effective to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral and, when duly recorded or filed, the Liens granted under the Security Documents shall constitute a fully perfected first priority Lien on, and security interest in, all right, title and interest of the grantors thereunder in such Collateral, subject to the effect of applicable bankruptcy and similar laws affecting the rights of creditors generally and the effect of equitable principles which applied in an action at law or a suit at equity.

8(q) Solvency . American Vanguard and each of its Subsidiaries is Solvent after giving effect to each of the Loan Documents.

9. Affirmative Covenants . The Borrower and each Guarantor hereby covenants and agrees with the Administrative Agent and each Lender that, as long as any Obligations remain unpaid or any Lender has any obligation to advance its Percentage Share of Loans or issue Letters of Credit hereunder, it shall, and shall cause each of its Subsidiaries, to:

9(a) Financial Statements; SEC Reports . Furnish or cause to be furnished to the Administrative Agent and to each of the Lenders directly:

(1) Within ninety (90) days after the last day of each fiscal year of American Vanguard, Form 10K as filed by American Vanguard with the Securities and Exchange Commission for such year together with consolidated statements of income, stockholders’ equity and statements of cash flows of American Vanguard and its Subsidiaries for such year and the related balance sheets of American Vanguard and its Subsidiaries as of the end of such fiscal year presented fairly in accordance with GAAP and accompanied by an unqualified report of a firm of independent certified public accountants acceptable to the Administrative Agent and, upon issuance, a copy of any management letter issued in connection therewith by such certified public accountants;

(2) Within forty-five (45) days after the end of each of the first three fiscal quarters of American Vanguard (and within ninety (90) days after the last fiscal quarter in each fiscal year) consolidated and consolidating statements of income, stockholders’ equity and cash flows for American Vanguard and its Subsidiaries for the period just ended together with the related balance sheet of American Vanguard and its Subsidiaries as of the end of such period prepared by American Vanguard, together with a certificate of the chief financial officer of American Vanguard stating to the best of his (her)knowledge and belief that such financial statements are presented in accordance with GAAP, subject to normal year end adjustments;

(3) Within forty-five (45) days after the end of each fiscal quarter except for fiscal quarters ending in December, the Form 10-Q of American Vanguard as filed with the Securities and Exchange Commission,

(4) Within one hundred and twenty (120) days after the end of each fiscal year, a company-prepared budget for the then current year in form and detail satisfactory to the Administrative Agent.

(5) Concurrently with the delivery of the financial statements referred to in subparagraphs (1) and (2) above, a Compliance Certificate of the chief financial officer of the Borrower, demonstrating in detail satisfactory to the Administrative Agent the Borrower’s compliance with the financial covenants set forth in Paragraphs 10(h) and 10(i) below at and as of the date of such financial statements.

9(b) Reports; Other Information . Furnish or cause to be furnished to the Administrative Agent and each of the Lenders directly:

(1) Within sixty (60) days after the last day of each fiscal quarter of American Vanguard, an accounts receivable and accounts payable aging report of American Vanguard and its Subsidiaries as of the last day of such fiscal quarter, in form and substance satisfactory to the Administrative Agent;

(2) Promptly, copies of all regular, periodic and special reports which American Vanguard or any of its Subsidiaries files, or is required to file, with the Securities and Exchange Commission or any governmental authority which may be substituted therefor, or with any national securities exchange; and

(3) Promptly, such additional financial and other information, including, without limitation, financial statements of the Borrower, any Guarantor or any other Affiliate of the Borrower or any Guarantor, as the Administrative Agent or any Lender (through the Administrative Agent) may from time to time reasonably request.

9(c) Payment of Indebtedness . Pay, discharge or otherwise satisfy at or before maturity or before it becomes delinquent, defaulted or accelerated, as the case may be, all its Indebtedness (including taxes), except Indebtedness being contested in good faith and for which provision is made to the satisfaction of the Administrative Agent for the payment thereof in the event American Vanguard or any of its Subsidiaries is found to be obligated to pay such Indebtedness and which Indebtedness is thereupon promptly paid by such Person.

9(d) Maintenance of Existence and Properties . Maintain its corporate existence and maintain all rights, privileges, licenses, approvals, franchises, properties and assets necessary or desirable in the normal conduct of its business, and comply with all Contractual Obligations and Requirements of Law. Any violation of a Requirement of Law shall be corrected within thirty (30) days (or such other period as agreed upon by the Lenders) of the earlier of receipt of a citation or knowledge of such violation by the Borrower or any Guarantor.

9(e) Inspection of Property; Books and Records; Discussions . Subject to the provisions of Paragraph 13(r) below, permit representatives and independent contractors of the Administrative Agent and each of the Lenders to visit and inspect any of its properties to examine its corporate, financial and operating records and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrower; provided, however, that when an Event of Default exists, the Administrative Agent and any Lender (and any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and without advance notice.

9(f) Notices . Give prompt written notice to the Administrative Agent of:

(1) The occurrence of any Potential Default or Event of Default;

(2) The use of any fictitious trade style, indicating the trade style and state(s) of its use;

(3) Any litigation or proceeding affecting American Vanguard or any of its Subsidiaries which could have a Material Adverse Effect; and

(4) The occurrence of any other event that has a Material Adverse Effect.

9(g) Expenses . Pay or reimburse all costs and expenses required to be paid pursuant to Section 13(l) of this Agreement. The obligations of the Borrower and Guarantors under this Paragraph 9(g) shall be effective and enforceable whether or not any Loan is funded hereunder and shall survive payment of all other Obligations.

9(h) Loan Documents . Comply with and observe all terms and conditions of the Loan Documents to which it is a party.

9(i) Insurance . Obtain and maintain insurance with responsible companies in such amounts and against such risks as are usually carried by corporations engaged in similar businesses similarly situated, including, without limitation, product liability insurance with a coverage amount of not less than $20,000,000.00, and furnish the Administrative Agent on request full information as to all such insurance. The Administrative Agent for the benefit of the Lenders shall be named as loss payee and an additional insured on all policies of insurance maintained as required hereunder.

9(j) Environmental Compliance .

(1) Conduct its operations and keep and maintain all its Properties in compliance with all applicable Environmental Laws.

(2) Give prompt written notice to the Administrative Agent, but in no event later than ten days after becoming aware, of the following: (i) any enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against American Vanguard or any of its Subsidiaries or any of their respective properties pursuant to any applicable Environmental Laws, (ii) all other Environmental Claims, and (iii) any environmental or similar condition on any real property adjoining or in the vicinity of the property of American Vanguard or any of its Subsidiaries that could reasonably be anticipated to cause such property or any part thereof to be subject to any restrictions on the ownership, occupancy, transferability or use of such property under any Environmental Laws.

(3) Upon the written request of the Administrative Agent, each of the Borrower and the Guarantors shall submit to the Administrative Agent, at the Borrower’s or such Guarantor’s sole cost and expense, at reasonable intervals, a report providing an update of the status of any environmental, health or safety compliance, hazard or liability issue identified in any notice required pursuant to this section.

(4) At all times indemnify and hold harmless the Administrative Agent and the Lenders from and against all liability arising out of any Environmental Claims, except those Environmental Claims caused as a primary and direct result of the gross negligence or willful misconduct of the Administrative Agent or any of the Lenders.

9(k) ERISA . Furnish to the Administrative Agent:

(1) Promptly and in any event within ten (10) days after the Borrower or a Guarantor knows or has reason to know of the occurrence of a Reportable Event with respect to a Plan with regard to which notice must be provided to the PBGC, a copy of such materials required to be filed with the PBGC with respect to such Reportable Event and in each such case a statement of the chief

financial officer of the Borrower or such Guarantor setting forth details as to such Reportable Event and the action which the Borrower or such Guarantor proposes to take with respect thereto;

(2) Promptly and in any event within ten (10) days after the Borrower or a Guarantor knows or has reason to know of any condition existing with respect to a Plan which presents a material risk of termination of the Plan, imposition of an excise tax, requirement to provide security to the Plan or incurrence of other liability by the Borrower, any Guarantor or any ERISA Affiliate, a statement of the chief financial officer of the Borrower or such Guarantor describing such condition;

(3) At least ten (10) days prior to the filing by a plan administrator of a Plan of a notice of intent to terminate such Plan, a copy of such notice;

(4) Promptly and in no event more than ten (10) days after the filing thereof with the Secretary of the Treasury, a copy of any application by the Borrower, a Guarantor or an ERISA Affiliate for a waiver of the minimum funding standard under Section 412 of the Code;

(5) Promptly and in any event within ten (10) days after the Borrower or any Guarantor knows or has reason to know of any event or condition which might constitute grounds under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, a statement of the chief financial officer of the Borrower or such Guarantor describing such event or condition;

(6) Promptly and in no event more than ten (10) days after receipt thereof by the Borrower, any Guarantor or any ERISA Affiliate, a copy of each notice received by the Borrower, such Guarantor or ERISA Affiliate concerning the imposition of any withdrawal liability under section 4202 of ERISA; and

(7) Promptly after receipt thereof a copy of any notice the Borrower, any Guarantor or any ERISA Affiliate may receive from the PBGC or the Internal Revenue Service with respect to any Plan or Multiemployer Plan; provided, however, that this subparagraph (7) shall not apply to notices of general application promulgated by the PBGC or the Internal Revenue Service.

9(l) Permitted Hedges . Until the third annual anniversary after the Closing Date, maintain in effect Permitted Hedges that are interest rate swap agreements for a notional amount not less than one-half of the principal amount of the Term Loans from time to time outstanding and that are otherwise acceptable to the Administrative Agent.

10. Negative Covenants . The Borrower and each Guarantor hereby agrees that, as long as any Obligations remain unpaid or any Lender has any obligation to advance its Percentage Share of Loans or issue Letters of Credit hereunder, neither the Borrower nor any Guarantor shall, nor will it permit any of its Subsidiaries, directly or indirectly to:

10(a) Liens . Create, incur, assume or suffer to exist any Lien upon the Collateral except Liens in favor of the Administrative Agent for the benefit of the Lenders, or create, incur, assume or suffer to exist any Lien upon any of its other property and assets except:

(1) Liens or charges for current taxes, assessments or other governmental charges which are not delinquent or which remain payable without penalty, or the validity of which are contested in good faith by appropriate proceedings upon stay of execution of the enforcement thereof, provided that the Borrower or the relevant Guarantor shall have set aside on its books and shall maintain adequate reserves for the payment of same in conformity with GAAP;

(2) Liens, deposits or pledges made to secure statutory obligations, surety or appeal bonds, or bonds for the release of attachments or for stay of execution, or to secure the performance of bids, tenders, contracts (other than for the payment of borrowed money), leases or for purposes of like general nature in the ordinary course of the Borrower’s or the relevant Guarantor’s business;

(3) Purchase money security interests for property, conditional sale agreements, or other title retention agreements; provided, however, that no such security interest or agreement shall extend to any property other than the property acquired in connection with the grant of such security interest; and

(4) Other Liens securing Indebtedness permitted under Paragraph 10(b)(5) below.

10(b) Indebtedness . Create, incur, assume or suffer to exist, or otherwise become or be liable, or cause any Subsidiary to create, incur, assume or suffer to exist, or otherwise become or be liable, in respect of any Indebtedness except:

(1) The Obligations;

(2) Indebtedness reflected in the financial statements referred to in Paragraph 8(a) above;

(3) Trade accounts payable and accrued obligations incurred in the ordinary course of business;

(4) Indebtedness secured by Liens permitted under Paragraph 10(a)(1), (2) and (3) above; and

(5) Other Indebtedness in an aggregate amount of not more than $4,000,000.00 at any time outstanding.

10(c) Consolidation and Merger . Liquidate or dissolve or enter into any consolidation, merger, partnership, joint venture, syndicate or other combination, except that (1) the Borrower may consolidate or merge if the Borrower is the surviving entity; (2) any Domestic Wholly Owned Subsidiary may merge with another Domestic Wholly Owned Subsidiary, (3) any Foreign Wholly Owned Subsidiary may merge with another Foreign Wholly Owned Subsidiary and (4) any Immaterial Subsidiary (other than a Material Foreign Subsidiary) may liquidate, dissolve or enter into any consolidation, merger, partnership, joint venture, syndicate or other combination.

10(d) Acquisitions . Make any Acquisitions other than (1) Acquisitions permitted pursuant to Paragraphs 10(e) and 10(k) below, and (2) Permitted Acquisitions; provided, that (i) at least seven (7) Business Days prior to consummating a Permitted Acquisition the Borrower shall deliver or cause to be delivered to the Administrative Agent a Compliance Certificate prepared on a Pro Forma Basis and projections, each in form and substance satisfactory to the Administrative Agent, demonstrating that, after giving effect to such Acquisition, no Potential Default or Event of Default will have occurred or is reasonably expected to occur prior to repayment in full of the Loans on the Revolving and Term Loan Maturity Dates and (ii) concurrently with such Acquisition, the Borrower shall deliver or cause to be delivered to the Administrative Agent any Loan Documents required by this Agreement and the other Loan Documents, including, without limitation, pursuant to Paragraph 6(b) above.

10(e) Investments; Advances . Make or commit to make any advance, loan or extension of credit or capital contribution to, or purchase any stock, bonds, notes, debentures or other securities of, or make any other investment in, any Person, except that.

(1) the Guarantors and the Domestic Wholly-Owned Subsidiaries of the Borrower and the Guarantors may make loans and advances in the ordinary course of business to the Borrower; provided that any promissory notes evidencing such intercompany loans advances shall be pledged and delivered to the Administrative Agent under the Security Documents;

(2) the Borrower, the Guarantors and their Subsidiaries may establish and make additional investments in Domestic Wholly Owned Subsidiaries that are Guarantors and in Immaterial Subsidiaries (other than Material Foreign Subsidiaries);

(3) the Borrower, the Guarantors and their Subsidiaries may establish and make investments in Material Foreign Subsidiaries in an aggregate amount not to exceed $5,000,000;

(4) the Borrower, the Guarantors and their Subsidiaries may make investments in Cash Equivalents; and

(5) the Borrower, the Guarantors and their Subsidiaries may make loans and advances in the ordinary course of business to their respective employees so long as the aggregate principal amount thereof at any one time outstanding (determined without regard to any write downs or write offs) shall not exceed $500,000

10(f) Sale of Assets . Sell, lease, assign, transfer or otherwise dispose of any of its assets (other than obsolete or worn out property), whether now owned or hereafter acquired, other than in the ordinary course of business as presently conducted and at fair market value.

10(g) ERISA .

(1) Terminate or withdraw from any Plan so as to result in any material liability to the PBGC;

(2) Engage in or permit any person to engage in any Prohibited Transaction involving any Plan which would subject the Borrower to any material tax, penalty or other liability;

(3) Incur or suffer to exist any material Accumulated Funding Deficiency, whether or not waived, involving any Plan;

(4) Allow or suffer to exist any event or condition which presents a risk of incurring a material liability to the PBGC;

(5) Amend any Plan so as to require the posting of security under section 401(a)(29) of the Code; or

(6) Fail to make payments required under section 412(m) of the Code and section 302(e) of ERISA which would subject the Borrower to any material tax, penalty or other liability.

10(h) Financial Covenants .

(1) Permit the Consolidated Funded Debt Ratio as of the end of any fiscal quarter to exceed the ratio set next to such fiscal quarter below:


As of the following date:		Not permit the ratio to exceed:
As of the last day of any fiscal quarter ending on or prior to September 30, 2005		3.00 to 1.00

As of December 31, 2005 and the last day of each fiscal quarter thereafter until and including December 31, 2006		2.75 to 1.00

As of the last day of any fiscal quarter thereafter		2.50 to 1.00

(2) Permit the Consolidated Fixed Charge Coverage Ratio as of the last day of any fiscal quarter to be less than 1.35 to 1.00.

(3) Permit the Modified Current Ratio as of the last day of any fiscal quarter to be less than 1.75 to 1.00.

10(i) Capital Expenditures . Permit American Vanguard and its Subsidiaries, on a consolidated basis, to make Capital Expenditures in any fiscal year in an aggregate amount in excess of $12,000,000. If Capital Expenditures made in any year are less than such sum, the differential will not increase the amount of Capital Expenditures that may be made in any succeeding year.

10(j) Hedge Agreements . Except for Permitted Hedges maintained pursuant to Paragraph 9(l) above, enter into any Other Hedging Agreements.

10(k) Transactions with Affiliates; Creation of Subsidiaries .

(1) Enter into any transaction (including, without limitation, the purchase or sale of any property or service) with, or make any payment or transfer to, any Affiliate except in the ordinary course of business and pursuant to the reasonable requirements of the Borrower’s and Guarantors’ business and upon fair and reasonable terms no less favorable to the Borrower or such Guarantor than would be obtainable in a comparable arms-length transaction;

(2) Establish, create, acquire or suffer to exist any Subsidiaries (except Immaterial Subsidiaries that are not Material Foreign Subsidiaries) other than Domestic Wholly Owned Subsidiaries that are Guarantors.

11. Events of Default . Upon the occurrence of any of the following events (an “ Event of Default ”):

11(a) The Borrower shall fail to pay any principal on the Loans on the date when due or fail to pay within five days of the date when due any other Obligation under the Loan Documents; or

11(b) Any representation or warranty made by the Borrower or any Guarantor in any Loan Document shall be inaccurate or incomplete in any material respect on or as of the date made or deemed made; or

11(c) Except as otherwise permitted under this Agreement, the Borrower or any Guarantor shall fail to maintain its corporate existence or shall default in the observance or performance of any covenant or agreement contained in Paragraph 9(d) or Paragraph 10 above or in any Security Document; or

11(d) The Borrower or any Guarantor shall fail to observe or perform any other term or provision contained in the Loan Documents and such failure shall continue for thirty (30) days following notice thereof given by the Administrative Agent; or

11(e) The Borrower or any Guarantor shall default in any payment of principal of or interest on any Indebtedness (other than the Obligations) or any other event shall occur, the effect of which is to permit such Indebtedness to be declared or otherwise to become due prior to its stated maturity; or

11(f) (1) The Borrower, any Guarantor or any of their respective Subsidiaries shall commence any case, proceeding or other action (i) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (ii) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets, or the Borrower, any Guarantor or any of their respective Subsidiaries shall make a general assignment for the benefit of its creditors; or (2) there shall be commenced against the Borrower, any Guarantor or any of their respective Subsidiaries any case, proceeding or other action of a nature referred to in clause (1) above which (i) results in the entry of an order for relief or any such adjudication or appointment, or (ii) remains undismissed, undischarged or unbonded for a period of sixty (60) days; or (3) there shall be commenced against the Borrower, any Guarantor or any of their respective Subsidiaries, any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or substantially all of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, stayed, satisfied or bonded pending appeal within sixty (60) days from the entry thereof; or (4) the Borrower, any Guarantor or any of their respective Subsidiaries shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in (other than in connection with a final settlement), any of the acts set forth in clause (1), (2) or (3) above; or (5) the Borrower, any Guarantor or any of their respective Subsidiaries shall generally not, or shall be unable to, or shall admit in writing its inability to pay its debts as they become due; or

11(g) (1) Any Reportable Event or a Prohibited Transaction shall occur with respect to any Plan; or (2) a notice of intent to terminate a Plan under section 4041 of ERISA shall be filed; or (3) a notice shall be received by the plan administrator of a Plan that the PBGC has instituted proceedings to terminate a Plan or appoint a trustee to administer a Plan; or (4) any other event or condition shall exist which might, in the opinion of the Administrative Agent, constitute grounds under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan; or (5) the Borrower, any Guarantor or any ERISA Affiliate shall withdraw from a Multiemployer Plan under circumstances which the Administrative Agent determines could have a Material Adverse Effect; or

11(h) One or more judgments or decrees shall be entered against the Borrower, any Guarantor or any of their respective Subsidiaries and all such judgments or decrees shall not have been vacated, discharged, stayed, satisfied or bonded pending appeal within sixty (60) days from the entry thereof or in any event later than five days prior to the date of any proposed sale thereunder; or

11(i) The Borrower or any Guarantor shall voluntarily suspend the transaction of business for more than five days in any calendar year; or

11(j) Any Guarantor shall fail to observe or comply with any term or condition of its Guaranty or Guarantor Security Agreement or shall attempt to rescind or revoke its Guaranty, with respect to future transactions or otherwise; or

11(k) An event shall occur that has a Material Adverse Effect;

THEN, automatically upon the occurrence of an Event of Default under Paragraph 11(f) above, and, in all other cases, the Administrative Agent may and, at the option of the Required Lenders, shall:

(i) Terminate the agreement of the Lenders to extend credit to or for the account of the Borrower pursuant to this Agreement.

(ii) Declare the Loans and/or L/C Obligations to be immediately due and payable and/or require that the L/C Obligations be Cash Collateralized without demand upon or presentment to the Borrower or any other Person, all of which are expressly waived hereby.

(iii) Exercise any rights and remedies under this Agreement, the Security Documents and the other Loan Documents.

(iv) Exercise any other rights and remedies available under law or any other agreement.

12. The Administrative Agent .

12(a) Appointment and Authority . Each of the Lenders and the Issuing Bank hereby irrevocably appoints Bank of the West to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Paragraph 12 are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Bank, and the Borrower shall not have rights as a third party beneficiary of any of such provisions.

12(b) Rights as a Lender . The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “ Lender ” or “ Lenders ” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

12(c) Exculpatory Provisions . The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent:

(1) Shall not be subject to any fiduciary or other implied duties, regardless of whether an Event of Default has occurred and is continuing;

(2) Shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law; and

(3) Shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances) or (ii) in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Potential Default or Event of Default unless and until notice describing such Potential Default or Event of Default is given to the Administrative Agent by the Borrower, a Lender or the Issuing Bank.

The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Paragraph 7 above or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

12(d) Reliance by Administrative Agent . The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the Issuing Bank, the Administrative Agent may presume that such condition is satisfactory to such Lender or the Issuing Bank unless the Administrative Agent shall have received notice to the contrary from such Lender or the Issuing Bank prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not

be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

12(e) Delegation of Duties . The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Paragraph 12 shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

12(f) Resignation by and Removal of Administrative Agent . The Administrative Agent may at any time give notice of its resignation to the Lenders, the Issuing Bank and the Borrower, and the Required Lenders may remove the Administrative Agent. Upon receipt of any such notice of resignation or removal, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in California, or an Affiliate of any such bank with an office in California. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring or removed Administrative Agent gives notice of its resignation or is notified of its removal, then the retiring or removed Administrative Agent may on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent meeting the qualifications set forth above provided that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation or removal shall nonetheless become effective in accordance with such notice and (1) the retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any Collateral security held by the Administrative Agent on behalf of the Lenders or the Issuing Bank under any of the Loan Documents, the retiring or removed Administrative Agent shall continue to hold such Collateral security until such time as a successor Administrative Agent is appointed) and (2) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the Issuing Bank directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this paragraph. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired or removed) Administrative Agent, and the retiring or removed Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this paragraph). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring or removed Administrative Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Paragraph 12 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Administrative Agent was acting as Administrative Agent.

12(g) Non-Reliance on Administrative Agent and Other Lenders . Each Lender, the Issuing Bank acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender, the Issuing Bank also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own

decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

12(h) Collateral and Guaranty Matters . The Lenders and the Issuing Bank irrevocably authorize the Administrative Agent, at its option and in its discretion, (1) to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (i) upon termination of the Aggregate Commitments and payment in full of all Obligations (other than contingent indemnification obligations) and the expiration or termination of all Letters of Credit, (ii) that is sold or to be sold as part of or in connection with any sale permitted hereunder or under any other Loan Document, (iii) if the release of such Lien is otherwise permitted by this Agreement or (iv) if approved, authorized or ratified in writing in accordance with Section 13(b)(9); (2) to subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by this Agreement; and (3) to release any Guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder. Upon request by the Administrative Agent at any time, the Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Subsidiary Guaranty pursuant to this Paragraph 12(h) .

13. Miscellaneous Provisions .

13(a) Binding on Successors and Assigns . The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of Paragraph 13(b) of this Agreement, (ii) by way of participation in accordance with the provisions of this Agreement or (iii) by way of pledge or assignment of a security interest subject to the restrictions of this Agreement (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in Paragraph 13(q) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

13(b) Amendment . This Agreement may not be amended or terms or provisions hereof waived unless such amendment or waiver is in writing and signed by the Required Lenders, the Administrative Agent and, except in the case of a waiver, the Borrower and, as applicable, the Guarantors; provided, however , that, except as expressly as provided in the following clauses, the agreement of the Required Lenders shall not be required and no amendment or waiver shall be effective to (1) waive any condition set forth in Paragraph 7(a) without the written consent of all the Lenders, (2) extend or increase or reinstate any Delayed Draw Commitment or Revolving Commitment of a Lender without the consent of such Lender, (3) postpone any date fixed by this Agreement or any Loan Document for any payment of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any of the Loan Documents without the written consent of each Lender directly affected thereby; (4) reduce the principal of, or the rate of interest specified hereon on, any Loan or L/C Borrowing (except the Default Rate) or any fees or other amounts payable hereunder or any other Loan Documents without the written consent of each Lender directly affected thereby, (5) extend the Revolving Loan Maturity Date or Delayed Draw Availability Expiration Date without the consent of all the Lenders, (6) except as provided in Paragraph 4(h) , 5(h) or 13(q) , modify any Lender’s Percentage Share without the consent of all the Lenders, (7) modify any provision of the Loan Documents requiring all of the

Lenders to act without the consent of each Lender, (8) modify the definition of “Required Lenders” without the consent of each Lender, (9) except as may otherwise be expressly permitted by this Agreement, release all or substantially all of the Guarantors or the Collateral or Subsidiary Guaranties except upon final payment in full of the Obligations secured thereby without the consent of each Lender holding such Obligations, (10) amend this Paragraph 13(b) without the consent of each Lender or (11) except as provided in Paragraph 5(h) , increase the Aggregate Delayed Draw Commitments or Aggregate Revolving Commitments without the consent of each Lender; provided however , that (i) no amendment, waiver or consent shall, unless in writing and signed by the Issuing Bank in addition to the Lenders required above, affect the rights or duties of the Issuing Bank under this Agreement or any Letter of Credit Application relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; and (iii) any letter between the Administrative Agent or the Issuing Bank and the Borrower relating to fees payable to it may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto. Notwithstanding anything to the contrary herein, no Lender in default of its obligations under this Agreement shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the consent of such Lender.

13(c) Cumulative Rights; No Waiver . The rights, powers and remedies of the Administrative Agent and the Lenders hereunder are cumulative and in addition to all rights, power and remedies provided under any and all agreements with the Borrower and any of such Persons relating hereto, at law, in equity or otherwise. Any delay or failure by the Administrative Agent or the Lenders to exercise any right, power or remedy shall not constitute a waiver thereof by such Persons, and no single or partial exercise by any of such Persons of any right, power or remedy shall preclude other or further exercise thereof or any exercise of any other rights, powers or remedies.

13(d) Survival . All representations, warranties, covenants and agreements herein contained on the part of the Borrower shall survive the termination of this Agreement and shall be effective until the Obligations are paid and performed in full or longer as expressly provided herein.

13(e) Notices .

(1) Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subparagraph (2) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier to (i) if to the Borrower, the Administrative Agent or the Issuing Bank, the addresses of the parties set forth on Schedule 1 to this Agreement, as the same may be modified from time to time in accordance with this Agreement and (ii) if to a Lender, to such address (or telecopier number) on Schedule 1 or as set forth in its Administrative Questionnaire. Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent with confirmation of successful transmission or delivery (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices delivered through electronic communications to the extent provided in subparagraph (2) below, shall be effective as provided in said subparagraph (2).

(2) Electronic Communications . Notices and other communications to the Lenders and the Issuing Bank hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the

Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or the Issuing Bank if such Lender or the Issuing Bank, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Paragraph by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications. Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

(3) Change of Address, Etc . Any party hereto may change its address or telecopier number for notices and other communications hereunder by notice to the other parties hereto.

13(f) Governing Law . This Agreement shall be governed by and construed in accordance with the internal laws of the State of California without giving effect to its choice of law rules.

13(g) Counterparts; Integration; Effectiveness, Etc. .

(1) Counterparts; Integration; Effectiveness . This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents, and any separate letter agreements referencing this Agreement with respect to fees payable to the Administrative Agent, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Paragraph 7 , this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.

(2) Electronic Execution of Assignments . The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

13(h) Sharing of Payments . If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or other obligations hereunder resulting in such Lender’s receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or other such obligations greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so

that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them, provided that: (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and (ii) the provisions of this paragraph shall not be construed to apply to (x) any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in L/C Obligations to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

13(i) Consent to Jurisdiction, Waiver of Venue; Service of Process .

(1) The Borrower irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the courts of the State of California sitting in Los Angeles County and of the United States District Court of the Southern District of California, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such State court or, to the fullest extent permitted by applicable law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or in any other Loan Document shall affect any right that the Administrative Agent, any Lender or the Issuing Bank may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or its properties in the courts of any jurisdiction

(2) Waiver of Venue . The Borrower irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in subparagraph (1) above. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(3) Service of Process . Each party hereto irrevocably consents to service of process in the manner provided for notices in Paragraph 13(e) . Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by applicable law.

13(k) Waiver of Jury Trial . EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND

(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH.

13(l) Expenses, Indemnity; Damages Waiver .

(1) Costs and Expenses . The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent), and shall pay all fees and time charges and disbursements for attorneys who may be employees of the Administrative Agent, in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, any Lender or the Issuing Bank (including the fees, charges and disbursements of any counsel for the Administrative Agent or the Issuing Bank), and shall pay all fees and time charges for attorneys who may be employees of the Administrative Agent, any Lender or the Issuing Bank, in connection with the enforcement or protection of its rights (i) in connection with this Agreement and the other Loan Documents, including its rights under this Paragraph 13(l) , or (ii) in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

(2) Indemnification by the Borrower . The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender and the Issuing Bank, and each Related Party of any of the foregoing Persons (each such Person being called an “ Indemnitee ”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the reasonable fees, charges and disbursements of any counsel for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from all reasonable allocated fees and time charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Claims related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower, and regardless of whether any Indemnitee is a party thereto, provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses that result from (x) the gross negligence or willful misconduct of such Indemnitee or (y) a claim brought by the Borrower against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document.

(3) Reimbursement by Lenders . To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under subparagraph (1) or (2) of this Paragraph to be paid by it to the Administrative Agent (or any sub-agent thereof), the Issuing Bank Lender or any Related

Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the Issuing Bank or such Related Party, as the case may be, such Lender’s Percentage Share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or the Issuing Bank in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or Issuing Bank in connection with such capacity. The obligations of the Lenders under this paragraph (c) are subject to the other provisions of this Agreement.

(4) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in Paragraph 13(l)(2) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby. This subparagraph (4) shall not apply to losses, claims, damages and liabilities that (x) result from the gross negligence or willful misconduct of any Indemnitee or (y) result from a claim brought by the Borrower or any Guarantor against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document.

(5) Payments . All amounts due under this Paragraph 13(1) shall be payable on demand therefor.

13(m) Marshalling; Payments Set Aside . Neither the Administrative Agent nor the Lenders shall be under any obligation to marshal any assets in favor of the Borrower or any other Person or against or in payment of any or all of the Obligations. To the extent that the Borrower makes a payment or payments to the Administrative Agent or the Lenders (through the Administrative Agent), or the Administrative Agent on behalf of the Lenders enforces their Liens or exercise their rights of set-off, and such payment or payments or the proceeds of such enforcement or set-off or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent in its discretion) to be repaid to a trustee, receiver or any other party in connection with any insolvency proceeding, or otherwise, then (1) to the extent of such recovery the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or set-off had not occurred, and (2) each Lender severally agrees to pay to the Administrative Agent upon demand its ratable share of the total amount so recovered from or repaid by the Administrative Agent.

13(n) Set-off . If an Event of Default shall have occurred and be continuing, each Lender, the Issuing Bank, and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender or the Issuing Bank to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower and the Guarantors now or hereafter existing under this Agreement or any other Loan Document to such Lender or the Issuing Bank, irrespective of whether or not such Lender or the Issuing Bank shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrower may be contingent or unmatured or are owed to a branch or office of such Lender or the Issuing

Bank different from the branch or office holding such deposit or obligated on such indebtedness. The rights of each Lender and the Issuing Bank under this Paragraph 13(n) are in addition to other rights and remedies (including other rights of setoff) that such Lender and the Issuing Bank may have. Each Lender and the Issuing Bank agrees promptly to notify the Borrower and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.

13(o) Severability . The illegality or unenforceability of any provision of this Agreement or any other Loan Document or any instrument or agreement required hereunder or thereunder shall not in any way affect or impair the legality or enforceability of the remaining provisions hereof or thereof.

13(p) No Third Parties Benefited . This Agreement and the other Loan Documents are made and entered into for the sole protection and legal benefit of the Borrower, the Guarantors, the Lenders, and the Administrative Agent, and their permitted successors and assigns, and no other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any of the other Loan Documents. None of the Administrative Agent, the Borrower, the Guarantors or any Lender shall have any obligation to any Person not a party to this Agreement or other Loan Documents.

13(q) Assignments and Participations .

(1) Assignments by Lenders . Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that

(i) Except in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Acceptance, as of the Trade Date) shall not be less than $5,000,000 each of the Administrative Agent and, so long as no Event of Default or Potential Default has occurred and is continuing, the Borrower otherwise consent (each such consent not to be unreasonably withheld or delayed);

(ii) Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Commitment assigned;

(iii) Any assignment of a Commitment must be approved by the Administrative Agent and the Issuing Bank unless the Person that is the proposed assignee is itself a Lender with a Commitment (whether or not the proposed assignee would otherwise qualify as an Eligible Assignee); and

(iv) The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500 , and the Eligible Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to this Paragraph, from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Paragraphs 4(c) , 4(d) , 4(g) and 13(l) with respect to facts and circumstances occurring prior to the effective date of such assignment. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with this Paragraph 13(q) .

(2) Register . The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices in California a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “ Register ”). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(3) Participations . Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural person or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a “ Participant ”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the Lenders and Issuing Bank shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to (i) forgive principal or interest on any Loan, (ii) postpone any date fixed for the payment of principal of, or interest on, any Loan, (iii) decrease the rates at which interest or fees payable to such Lender are payable or (iv) release of all or substantially all of the Collateral. Subject to subparagraph (5) of this Paragraph, the Borrower agrees that each Participant shall be entitled to the benefits of Paragraphs 4(c) , 4(d) and 4(g) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to this Paragraph. To the extent permitted by law, each Participant also shall be entitled to the benefits of Paragraph 13(n) as though it were a Lender, provided such Participant agrees to be subject to Paragraph 13(h) as though it were a Lender.

(4) Limitations upon Participant Rights . A Participant shall not be entitled to receive any greater payment under Paragraphs 4(c) , 4(d) and 4(g) than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that

would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Paragraph 4(g) unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Paragraph 4(g) as though it were a Lender.

(5) Certain Pledges . Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

13(r) Confidentiality . Each of the Administrative Agent, the Lenders and the Issuing Bank agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Paragraph, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Borrower or (h) to the extent such Information becomes publicly available other than as a result of a breach of this Paragraph 13(r) .

For purposes of this Paragraph 13(r) , “ Information ” means all information received from American Vanguard or any of its Subsidiaries relating to American Vanguard or any of its Subsidiaries or any of their respective businesses; provided, however that “Information” does not mean such Information as (x) becomes publicly available other than as a result of a breach of this Paragraph 13(r) or other violation by a Lender, Issuing Bank, Administrative Agent of any other obligation or duty of confidentiality or (y) is or becomes available to the Administrative Agent, any Lender or the Issuing Bank on a nonconfidential basis from a source other than American Vanguard and its Subsidiaries.

13(s) USA PATRIOT Act Notice . Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ Act ”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordance with the Act.

13(t) Other Interpretative Provisions . The definitions of terms shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context otherwise requires, (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referred to such agreement, instrument or other document as from time to time amended,

supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Paragraphs, Sections, Subparagraphs, Exhibits and Schedules shall be construed to refer to Paragraphs, Sections, Subparagraphs, Exhibits and Schedules to this Agreement, (e) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time and (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

13(u) Accounting Terms . All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent except as may be otherwise specifically prescribed herein. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Administrative Agent shall so request, the Lenders and the Administrative Agent shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders), provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

13(v) Rounding . Any financial ratios required to be maintained by the Loan Parties pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

13(w) Amendment of Security Documents; Effect of Amendment and Restatement .

(1) For purposes of loans, letters of credit and other obligations of the Borrower and Guarantors outstanding under the Existing Credit Agreement as of the Closing Date, this Agreement replaces the Existing Credit Agreement and other loan documents thereunder (the “ Existing Loan Documents ”) only to the extent inconsistent therewith. All such loans, letters of credit and obligations shall remain outstanding under this Agreement, bearing interest and being payable as set forth in this Agreement beginning as of the Closing Date but being construed as having been incurred when and as incurred under the Existing Credit Agreement. All references to the Existing Credit Agreement and to the terms thereof contained in the Existing Loan Documents shall be construed as references to this Agreement and to the correlative terms hereof. Without limiting the generality of the foregoing, all Loan Documents providing for Collateral securing or guarantying (or in effect guarantying) the “Obligations” shall, from and after the Closing Date, be read to secure the “Secured Obligations.” Each of the parties hereto agrees that the grant of the security interests in the Collateral pursuant to the Security Documents is not intended to, nor shall it be construed, as constituting a release of any prior security interests granted by the Borrower or any Subsidiary of the Borrower in favor of the Administrative Agent in or to any Collateral but is intended to constitute a restatement and confirmation of prior security interests together with a grant of a security interest in any additional Collateral contemplated by the Loan Documents.

(2) On the Closing Date, and without regard to any provisions of Paragraph 13(q) above to the contrary, Lenders holding Loans and risk participations in Letters of Credit under the Existing Credit Agreement shall concurrently make assignments, and Lenders shall make purchases, thereof in amounts such that, after giving effect thereto, all Loans and risk participations under this Agreement are held by the Lenders proportionately as contemplated by this Agreement.

14. Definitions . Unless otherwise specified herein or therein, all terms defined in this Agreement shall have the defined meanings when used in any certificate or any other Loan Document made or delivered pursuant hereto. For purposes of this Agreement, the terms set forth below shall have the following meanings:

“ Accumulated Funding Deficiency ” shall mean a funding deficiency described in section 302 of ERISA.

“ Acquisition ” shall mean any transaction, or any series of related transactions, consummated on or after the Closing Date, by American Vanguard or any of its Subsidiaries which, directly or indirectly, acquires (a) any going business or all or substantially all of the assets of any Person or division thereof, whether through purchase of assets, merger, or otherwise or (b) in one transaction or as the most recent transaction in a series of transactions a majority (in number of votes) of the Equity Interests of a Person which has ordinary voting power for the election of directors or other similar management personnel of a Person (other than Equity Interests having such power only by reason of the happening of a contingency) or a majority of the outstanding Equity Interests of a Person.

“ Adjusted Consolidated EBITDA ” shall mean, for any period with respect to American Vanguard and its Subsidiaries, Consolidated EBITDA during such period minus Maintenance CAPEX during such period minus taxes paid during such period minus Distributions made during such period.

“ Adjusted CPLTD ” shall mean, as of the last day of any fiscal quarter with respect to American Vanguard and its Subsidiaries, (i) the Current Portion of Consolidated Funded Indebtedness plus (ii) the Current Portion of Capital Lease Obligations plus (iii) the Current Portion of Amounts Outstanding Under Product Acquisition Agreements plus (iv) Consolidated Interest Expense paid during the four quarters just ended.

“ Adjusted LIBOR ” shall mean, with respect to any LIBOR Loan for the Interest Period applicable to such LIBOR Loan, the rate per annum (rounded upward, if necessary, to the next higher 1/100th of one percent) calculated as of the first day of such Interest Period in accordance with the following formula:


Adjusted LIBOR =		LR
		1-LRP

where


LR = LIBO Rate
LRP = LIBOR Reserve Percentage

“ Administrative Questionnaire ” shall mean an Administrative Questionnaire in form and substance satisfactory to the Administrative Agent.

“ Affiliate ” shall mean, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“ Aggregate Delayed Draw Commitments ” shall mean the Delayed Draw Commitments of all of the Lenders.

“ Aggregate Revolving Commitments ” shall mean the Revolving Commitments of all the Lenders.

“ Aggregate Commitments ” shall mean the sum of the Aggregate Delayed Draw Commitments and Aggregate Revolving Commitments.

“ Agreement ” shall mean this Agreement, as the same may be amended, extended or replaced from time to time.

“ American Vanguard ” shall mean American Vanguard Corporation, a Delaware corporation, the sole shareholder of the Borrower.

“ Amounts Outstanding Under Product Acquisition Agreements ” of a Person shall mean (a) all obligations of such Person under conditional sale or other title retention agreements relating to property or assets purchased by such Person, (b) all obligations of such Person incurred, issued or assumed as the deferred purchase price of property (including, without limitation, intellectual property) or services (excluding trade accounts payable and accrued obligations incurred in the ordinary course of business), and (c) all such obligations of others guaranteed by such Person or for which such Person has granted a Lien on its assets as security for the payment thereof.

“ Applicable Rate ” shall mean, from time to time, the following percentages per annum as set forth below: “ Applicable Rate ” means, from time to time, the following percentages per annum, based upon the Leverage Ratio as set forth in the most recent Compliance Certificate delivered pursuant to Paragraph 9(a) :


Applicable Rate
Pricing Level	Consolidated Funded Debt Ratio	Commitment Fee		LIBOR Rate +		Prime Rate +
Pricing Level	Consolidated Funded Debt Ratio	Commitment Fee		Standby Letter of Credit Fees		Prime Rate +
1	³ 2.50:1.00	0.300	%	2.500	%	0.250	%
2	<2.50 :1.00 but ³ 2.00:1.00	0.250	%	2.250	%	0.000	%
3	<2.00 :1.00 but ³ 1.50:1.00	0.200	%	2.000	%	0.000	%
4	<1.50	0.150	%	1.750	%	0.000	%

Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated Funded Debt Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Paragraph 9(a) ; provided , however , that if a Compliance Certificate is not delivered when due in accordance with such Section, then Pricing Level 1 shall apply as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered. The Applicable Rate in effect from the Closing Date through the first date on which there is a change in the Applicable Rate pursuant to the preceding sentence shall be determined based upon Pricing Level 3.

“ Approved Bank Fund ” shall mean any Person (other than a nature person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business and that is an Affiliate of an existing Lender.

“ Assignment and Assumption ” shall mean an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Paragraph 13(q)) and accepted by the Administrative Agent, substantially in the form attached hereto as Exhibit F or any other form approved by the Administrative Agent.

“ Attributable Indebtedness ” shall mean, on any date, (a) in respect of any Capital Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Off-Balance Sheet Liabilities, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a Capital Lease.

“ Authorized Officer ” shall mean any of the chief financial officer, executive vice president—finance, president, chief executive officer or chief operating officer of the Borrower or a Guarantor, as applicable.

“ Borrowing ” shall mean a borrowing of Loans.

“ Business Day ” shall mean any day other than a Saturday, a Sunday or a day on which banks in Los Angeles, California are authorized or obligated to close their regular banking business.

“ Capital Expenditures ” shall mean, for any period, the aggregate of all expenditures by a Person for the acquisition or leasing of fixed or capital assets or additions to equipment (including replacements, capitalized repairs and improvements during such period) which should be capitalized under GAAP on a consolidated balance sheet of such Person less net proceeds from sales of fixed or capital assets received by such Person or any of its Subsidiaries during such period. For the purpose of this definition, the purchase price of equipment which is purchased simultaneously with the trade-in of existing equipment owned by a Person or an Affiliate of such Person or with insurance proceeds shall be included in Capital Expenditures only to the extent of the gross amount of such purchase price less the credit granted by the seller of such equipment for such equipment being traded in at such time, or the amount of such proceeds, as the case may be.

“ Capital Lease ” shall mean any lease of property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with GAAP.

“ Capital Lease Obligations ” shall mean the Attributable Indebtedness with respect to Capital Leases.

“ Cash ” shall mean money, currency or a credit balance in any demand, deposit or securities account.

“ Cash Collateral ” shall mean Collateral comprised of cash or Cash Equivalents.

“ Cash Collateralize ” shall have the meaning set forth in Paragraph 3(g) above.

“ Cash Equivalents ” shall mean:

(a) short-term obligations of, guaranteed by, or backed by the full faith and credit of, the United States of America;

(b) investments in commercial paper with a maturity date not more than 45 days from the date of purchase rated A-1 or better by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, or any successor thereto, or P-1 or better from Moody’s Investors Service, Inc. or any successor thereto;

(c) demand deposit accounts maintained in the ordinary course of business, certificates of deposit issued by and time deposits with commercial banks (whether domestic or foreign) having capital and surplus in excess of $100,000,000;

(d) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) of this definition and entered into with a financial institution satisfying the criteria described in clause (c) of this definition;

(e) investments in money market funds substantially all the assets of which are comprised of securities of the types described in clauses (a) through (d) of this definition.

“ Change in Law ” shall mean the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority

“ Closing Date ” shall mean the date on which the Administrative Agent shall have acknowledged in writing that all the conditions precedent in Paragraph 7(a) have been satisfied or waived in accordance with this Agreement.

“ Code ” shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations issued thereunder as from time to time in effect.

“ Collateral ” shall mean the personal property (tangible and intangible) and fixtures which are covered by the Security Agreement.

“ Compliance Certificate ” shall mean a certificate substantially in the form of Exhibit G hereto of an Authorized Officer of the Borrower, (i) stating that any financial statements delivered therewith in accordance with Paragraph 9(a) above are presented fairly in accordance with GAAP, (ii) confirming that, as of the last day of fiscal period covered by such financial statements, all representations and warranties (except those that specifically relate to a specific date) of the Borrower set forth in the Loan Documents are true and accurate in all material respects, (iii) setting forth detailed calculations of the financial covenants of the Borrower in Paragraph 10(j) above evidencing compliance with the terms thereof, and (iv) stating that, to his knowledge, there does not exist a Potential Default or an Event of Default hereunder.

“ Consolidated EBITDA ” shall mean, for any period, for American Vanguard and its Subsidiaries on a consolidated basis, an amount equal to (a) Consolidated Net Income for such period plus (b) the following to the extent deducted in calculating such Consolidated Net Income: (i) Consolidated Interest Expense for such period, (ii) the provision for federal, state, local and foreign income taxes payable by American Vanguard and its Subsidiaries for such period, (iii) the amount of depreciation and amortization expense for such period, (iv) non-cash charges and (v) losses on the sale of fixed assets. Extraordinary items and gains (but no losses) on (and proceeds from) sales or dispositions of

assets outside of the ordinary course of business shall be excluded in the calculation of Consolidated EBITDA.

“ Consolidated Fixed Charge Coverage Ratio ” shall mean, as of the end of any fiscal quarter, the ratio of: (a) Adjusted Consolidated EBITDA during the four fiscal quarters just ended to (b) Adjusted CPLTD as of such date.

“ Consolidated Funded Debt Ratio ” shall mean, as of the last day of any fiscal quarter of American Vanguard, the ratio of (i) Consolidated Funded Indebtedness as of such date to (ii) Consolidated EBITDA for the four fiscal quarters just ended.

“ Consolidated Funded Indebtedness ” shall mean, for any Person, without duplication: (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind (other than deposits or advances constituting a portion of the purchase price for goods to be delivered), all obligations of such person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interests charges are customarily paid (excluding trade accounts payable and accrued obligations incurred in the ordinary course of business), (d) all obligations of such Person under conditional sale or other title retention agreements relating to property or assets purchased by such Person, (e) all obligations of such Person issued or assumed as the deferred purchase price of property or services (excluding trade accounts payable and accrued obligations incurred in the ordinary course of business), (f) all Indebtedness of others that is of the type described in other clauses of this definition and is Guaranteed or secured by assets of such Person, (g) all Contingent Obligations of such Person, (h) all Capital Lease Obligations of such Person and all Attributable Indebtedness of such Person in respect of Off-Balance Sheet Liabilities, and (i) all obligations of such Person as an account party in respect of letters of credit and bankers’ acceptances. The Consolidated Funded Indebtedness of any Person includes the Consolidated Funded Indebtedness of any other Person in which such Person is a general partner or joint venturer unless such Consolidated Funded Indebtedness is expressly non-recourse to such Person.

“ Consolidated Interest Expense ” shall mean, for any period, for American Vanguard and its Subsidiaries on a consolidated basis, the sum of all interest, premium payments and debt discount of American Vanguard and its Subsidiaries in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP.

“ Consolidated Net Income ” shall mean, for any period, for American Vanguard and its Subsidiaries on a consolidated basis, the net income of American Vanguard and its Subsidiaries (excluding extraordinary gains but including extraordinary losses) for that period.

“ Contact Office ” shall mean the office of the Administrative Agent located at California Plaza, 300 South Grand Avenue, SC-CAL-05-F, Los Angeles, CA 90071, Attention: Agency Services, or such other office as the Administrative Agent may notify the Borrower and the Lenders from time to time in writing.

“ Continuation or Conversion Request ” shall mean a Continuation or Conversion Request substantially in the form of Exhibit H hereto.

“ Contractual Obligation ” shall mean, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or undertaking to which such Person is a party or by which it or any of its property is bound.

“ Control ” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “Controlling” and “Controlled” shall have meanings correlative thereto.

“ Current Liability ” shall have the meaning given such term in accordance with GAAP, but shall not include Revolving Loans.

“ Current Portion ” of any liability shall mean that portion of such liability which is required to be shown as a Current Liability on the balance sheet in accordance with GAAP.

“ Default Rate ” shall have the meaning given such term in Paragraph 4(j) above.

“ Delayed Draw Availability Expiration Date ” shall mean the Term Loan Maturity Date.

“ Delayed Draw Commitment ” shall mean, as to each Lender, its obligation to make Delayed Draw Loans to the Borrower pursuant to Paragraph 2(b) in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement, including, without limitation, pursuant to Paragraph 5(i) .

“ Delayed Draw Loan ” shall have the meaning given to such term in Paragraph 2(b) .

“ Directions for Payment ” shall mean a direction substantially in the form of Exhibit I to this Agreement.

“ Distribution ” shall mean, with respect to any Person, that such Person has declared or paid a dividend or returned any equity capital to its equity holders or authorized or made any other distribution, payment or delivery of property (other than Equity Interests of such Person) or cash to its equity holders as such, or redeemed, retired, purchased or otherwise acquired, directly or indirectly, for a consideration any shares of its capital Equity Interests outstanding on and after the Closing Date (or any options or warrants issued by such Person with respect to such Equity Interests) or set aside any funds for any of the foregoing purposes, or shall have permitted any of its Subsidiaries to purchase or otherwise acquire for a consideration any of the Equity Interests of such Person outstanding on or after the Closing Date (or any options or warrants issued by such Person with respect to such Equity Interests). Without limiting the generality of the foregoing, “ Distribution ” shall include all payments made or required to be made by a Person with respect to any stock appreciation rights, plans, equity incentive or achievement plans or any similar plans or setting aside of any funds for the foregoing purposes.

“ Domestic Subsidiaries ” shall mean all Subsidiaries of a Person incorporated or organized under the laws of the United States of America, any State thereof or the District of Columbia.

“ Domestic Wholly Owned Subsidiary ” shall mean any Domestic Subsidiary of a Person that is a Wholly Owned Subsidiary of such Person.

“ Eligible Assignee ” shall mean (i) a Lender, (b) an Affiliate of a Lender, (iii) an Approved Bank Fund, and (iv) any other Person (other than a natural person) approved by (a) the Administrative Agent, (b) the Issuing Bank, and (c) unless an Event of Default has occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed); provided that,

notwithstanding the foregoing, “Eligible Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or Subsidiaries.

“ Environmental Claims ” shall mean all claims, however asserted, by any governmental authority or other person alleging potential liability or responsibility for violation of any Environmental Law or for release or injury to the environment or threat to public health, personal injury (including sickness, disease or death), property damage, natural resources damage, or otherwise alleging liability or responsibility for damages (punitive or otherwise), cleanup, removal, remedial or response costs, restitution, civil or criminal penalties, injunctive relief, or other type of relief, resulting from or based upon (i) the presence, placement, discharge, emission or release (including intentional and unintentional, negligent and non-negligent, sudden or non-sudden, accidental or non-accidental placement, spills, leaks, discharges, emissions or releases) of any Hazardous Materials at, in, or from property owned, operated or controlled by the Borrower, or (ii) any other circumstances forming the basis of any violation, or alleged violation, of any Environmental Law.

“ Environmental Laws ” shall mean all federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all administrative orders, directed duties, requested, licenses, authorizations and permits of, and agreements with, any governmental authorities, in each case relating to environmental, health, safety and land use matters; including the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), the Clean Air Act, the Federal Water Pollution Control Act of 1972, the Solid Waste Disposal Act, the Federal Resource Conservation and Recovery Act, the Toxic Substances Control Act, the Emergency Planning and Community Right-to-Know Act, the California Waste Control Law, the California Solid Waste Management, Resource, Recovery and Recycling Act, the California Water Code and the California Health and Safety Code.

“ Environmental Permits ” shall have the meaning given such term in Paragraph 8(o) above.

“ Equity Interests ” shall mean shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person.

“ Equity Offering ” shall mean, in respect of any Person, any offering, issuance, sale or distribution of any Equity Interest (other than pursuant to any employee stock or stock option compensation plan) in such Person, regardless of whether authorized as of the Closing Date or registered on any securities exchange.

“ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations issued thereunder as from time to time in effect.

“ ERISA Affiliate ” shall mean each trade or business, including the Borrower, whether or not incorporated, which together with the Borrower would be treated as a single employer under section 4001 of ERISA.

“ Event of Default ” shall have the meaning given such term in Paragraph 11 of this Agreement.

“ Excluded Taxes ” shall mean, with respect to the Administrative Agent, any Lender, the Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however denominated) and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political

subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which the Borrower is located and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Paragraph 4(h) above) any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new lending office) or is attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with Paragraph 4(h) above, except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Paragraph 4(h) .

“ Existing Credit Agreement ” shall have the meaning given such term in the Recitals to this Agreement.

“ Federal Funds Rate ” shall mean, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank on the Business Day next succeeding such day; provided that (i) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (ii) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of the West on such day on such transactions as determined by the Administrative Agent.

“ Foreign Lender ” shall mean any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

“ Foreign Subsidiary ” shall mean, at any time, any Subsidiary of the Borrower organized under the laws of a country or subdivision of a country other than the United States, its possessions and territories.

“ Foreign Wholly Owned Subsidiary ” shall mean any Wholly Owned Subsidiary that is a Foreign Subsidiary.

“ GAAP ” shall mean generally accepted accounting principles in the United States of America in effect from time to time consistently applied.

“ GemChem ” shall mean GemChem, Inc., a California corporation and a wholly owned Subsidiary of American Vanguard.

“ Governmental Authority ” shall mean any nation or government, any state or other political subdivision thereof, or any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

“ Guarantee ” shall mean, as to any Person, any (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “ Primary Obligor ”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to

purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

“ Guarantor Security Agreement ” shall mean a security agreement in the form of that attached hereto as Exhibit B that, except in the case of the Initial Security Documents, is modified specifically to refer to this Agreement, the Administrative Agent, the Secured Obligations and as otherwise appropriate to accommodate reference to this Agreement.

“ Guarantors ” shall mean, severally, each of American Vanguard, GemChem, 2110 Davie and each other Person that, from time to time, executes and delivers a Guaranty in accordance with the terms of this Agreement.

“ Guaranty ” shall mean a guaranty in the form of that attached hereto as Exhibit C that, except in the case of the Initial Security Documents, is modified specifically to refer to this Agreement, the Administrative Agent, the Secured Obligations and as otherwise appropriate to accommodate reference to this Agreement.

“ Hazardous Materials ” shall mean:

(a) “Hazardous substances,” “hazardous wastes,” “hazardous materials,” “toxic substances,” and similar items defined in any of the Environmental Laws;

(b) Any pollutant or contaminant, or hazardous, dangerous or toxic chemical, material, waste or substance (“pollutant”) which Environmental Laws prohibit, limit or otherwise regulate as to use, exposure, release, generation, manufacture, sale, transport, handling, storage, treatment, reuse, presence, disposal or recycling;

(d) Any radioactive material, including any source, special nuclear or by-product material, as defined at 42 U.S.C. §2011 et seq ., and amendments thereto and reauthorizations thereof;

(e) Asbestos-containing materials in any form or condition; and

(f) Polychlorinated biphenyls.

“ Hedge Obligations ” shall mean all unpaid obligations of the Borrower in respect of Permitted Hedges, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other monetary obligations of the Borrower in respect of Permitted Hedges.

“ Honor Date ” shall have the meaning set forth in Paragraph 3(c)(1) above.

“ Immaterial Subsidiary ” shall mean, at any time any Subsidiary of American Vanguard or any of its Subsidiaries that (a) when consolidated (together with its Subsidiaries) with American Vanguard and its Subsidiaries does not cause the consolidated net assets of American Vanguard owned by Subsidiaries that are not Guarantors to exceed 5% of such consolidated net assets or (b) is a Foreign Subsidiary.

“ Indebtedness ” of any Person shall mean all items of indebtedness which, in accordance with GAAP, would be included in determining liabilities as shown on the liability side of a statement of condition of such Person as of the date as of which indebtedness is to be determined and all indebtedness and liabilities of others assumed or guaranteed by such Person or in respect of which such Person is secondarily or contingently liable (other than by endorsement of instruments in the course of collection) whether by reason of any agreement to acquire such indebtedness or to supply or advance sums or otherwise.

“ Indemnified Taxes ” shall mean Taxes other than Excluded Taxes.

“ Initial Security Agreement ,” “ Initial Security Documents ,” “ Initial Guarantor Security Agreement ,” and “ Initial Guaranty ” shall have the meanings set forth in Paragraph 6(a) above.

“ Initial Term Loans ” shall have the meaning given such term in Paragraph 2(a) of this Agreement.

“ Interest Period ” shall mean with respect to any Loan which is being maintained as a LIBOR Loan, the period commencing on the date such Loan is advanced and ending one, two, three or six months thereafter, as designated in the related Loan Request or Continuation or Conversion Request; provided, however, that (a) any Interest Period which would otherwise end on a day which is not a LIBOR Business Day shall be extended to the next succeeding LIBOR Business Day unless by such extension it would fall in another calendar month, in which case such Interest Period shall end on the immediately preceding LIBOR Business Day, (b) any Interest Period which begins on a day for which there is no numerically corresponding day in the calendar month in which such Interest Period is to end shall, subject to the provisions of clause (a) above, end on the last day of such calendar month, and (c) no Interest Period shall end after, in the case of a Loan being maintained as a LIBOR Loan, the regularly scheduled Revolving Maturity Date.

“ Interim Date ” shall mean June 30, 2004.

“ Issuing Bank ” shall mean Bank of the West, in its capacity as issuer of Letters of Credit hereunder, or such other Lender as the Borrower may from time to time select as the Issuing Bank hereunder pursuant to Paragraph 12(f) above.

“ L/C Advance ” shall mean with respect to each Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Percentage Share.

“ L/C Borrowing ” shall mean an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Revolving Loan.

“ L/C Obligations ” shall mean, as at any date of determination, the aggregate undrawn amount of all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings.

“ Lenders ” shall mean the Lenders from time to time party hereto and, as the context may require, the Issuing Bank and the Administrative Agent.

“ Letter of Credit ” shall mean any letter of credit issued hereunder.

“ Letter of Credit Application ” shall mean an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the Issuing Bank.

“ Letter of Credit Expiration Date ” shall mean the day that is seven days prior to the Revolving Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).

“ Letter of Credit Sublimit ” shall mean $5,000,000. The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Revolving Commitments.

“ LIBOR Business Day ” shall mean a Business Day upon which commercial banks in London, England are open for domestic and international business.

“ LIBOR Loans ” shall mean Loans outstanding hereunder at such time as they are made and/or being maintained at a rate of interest based upon Adjusted LIBOR.

“ LIBO Rate ” shall mean, with respect to any LIBOR Loan for any Interest Period, the rate per annum determined by the Administrative Agent to be the rate as of approximately 11:00 a.m. (London time) on the date that is two LIBOR Business Days prior to the beginning of the relevant Interest Period quoted as the British Bankers’ Association Interest Settlement Rate for deposits in dollars (as set forth in any service selected by the Administrative Agent which has been nominated by the British Bankers’ Association as an authorized information vendor for purposes of displaying such rates) for a period equal to such Interest Period; provided that, to the extent an interest rate is not ascertainable pursuant to the foregoing provisions of this definition, the “LIBO Rate” shall be the interest rate per annum determined by the Administrative Agent to be the average of the rates per annum at which deposits in dollars are offered for such relevant Interest Period to major banks in the London interbank market in London, England by an Affiliate of the Administrative Agent at approximately 11:00 a.m. (London time) on the date that is two LIBOR Business Days prior to the beginning of such Interest Period.

“ LIBOR Reserve Percentage ” shall mean with respect to an Interest Period for a LIBOR Loan, the maximum aggregate reserve requirement (including all basic, supplemental, marginal and other reserves and taking into account any transitional adjustments) which is imposed under Regulation D on eurocurrency liabilities.

“ Lien ” shall mean any security interest, mortgage, pledge, lien, claim on property, charge or encumbrance (including any conditional sale or other title retention agreement), any lease in the nature

thereof, and the filing of or agreement to give any financial statement under the Uniform Commercial Code of any jurisdiction.

“ Loan Documents ” shall mean this Agreement, any notes, the Guaranties, the Security Documents and each other document, instrument or agreement executed by the Borrower or the Guarantor in connection herewith or therewith, as any of the same may be amended, extended or replaced from time to time.

“ Loan Request ” shall mean a request for a Loan in substantially the form of Exhibit J attached hereto.

“ Loans ” shall mean, collectively and severally, the Revolving Loans and the Term Loan.

“ Maintenance CAPEX ” shall mean Capital Expenditures that American Vanguard and its Subsidiaries reasonably have projected and incurred in the ordinary course of business to replace and maintain their respective properties in substantially the same condition and manner as in effect on the Closing Date. “Maintenance CAPEX” does not include Capital Expenditures projected or incurred that materially expand or improve properties.

“ Material Adverse Effect ” shall mean a material adverse effect on (i) the business, Property, condition (financial or otherwise) or results of operations, of either the Borrower or American Vanguard and its Subsidiaries, taken as a whole, (ii) the ability of the Borrower or any Guarantor to perform its obligations under the Loan Documents to which it is a party, or (iii) the validity or enforceability of any material portion of the Loan Documents or the rights or remedies of the Administrative Agent or the Lenders thereunder.

“ Material Foreign Subsidiary ” shall mean, at any time any Foreign Subsidiary of American Vanguard or any of its Subsidiaries that when consolidated (together with its Subsidiaries) with American Vanguard and its Subsidiaries causes the consolidated net assets of American Vanguard owned by Subsidiaries that are not Guarantors to exceed 5% of such consolidated net assets.

“ Modified Current Ratio ” shall mean, with respect to American Vanguard and its Subsidiaries, as of any date, the ratio of (i) trading accounts receivable and inventory (disregarding any inventory that would result in the ratio of inventory to trading accounts receivable to exceed 1.35 to 1.00) to (ii) the aggregate amount of outstanding Revolving Loans and L/C Obligations.

“ Multiemployer Plan ” shall mean a Plan described in section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is required to contribute on behalf of any of its employees.

“ Net Cash Proceeds ” shall mean, when used in respect of any Equity Offerring, the gross Cash proceeds of such offerring, when and as received, less (i) all direct costs and expenses incurred or to be incurred in connection with such sale, offering or issuance (including, without limitation, reasonable and customary brokerage commissions, underwriting fees, discounts and expenses, legal fees and expenses and similar out-of-pocket costs) and (ii) all Federal, state, local and foreign taxes or levies incurred, paid or assessed, or to be incurred, paid or assessed, in connection with such offering.

“ Obligations ” shall mean any and all debts, obligations and liabilities of the Borrower to the Lenders arising out of or related to the Loan Documents, whether principal, interest, fees or otherwise, whether now existing or hereafter arising, whether voluntary or involuntary, whether or not jointly owed with others, whether direct or indirect, absolute or contingent, contractual or tortious, liquidated or unliquidated, arising by operation of law or otherwise, whether or not from time to time decreased or

extinguished and later increased, created or incurred and whether or not extended, modified, rearranged, restructured, refinanced or replaced, including without limitation, modifications to interest rates or other payment terms of such debts, obligations or liabilities.

“ Off-Balance Sheet Liabilities ” shall mean, with respect to any Person, (i) any repurchase obligation or liability, contingent or otherwise, of such Person with respect to all amounts or notes receivables sold, transferred or otherwise disposed of by such Person, (ii) any repurchase obligation or liability, contingent or otherwise, of such Person with respect to property or assets leased by such Person as lessee and (iii) all obligations, contingent or otherwise, of such Person under any synthetic lease, tax retention operating lease, off balance sheet loan or similar off-balance sheet financing if the transaction giving rise to such obligation (a) is considered indebtedness for borrowed money for tax purposes but is classified as an operating lease under GAAP or (b) does not (and is not required to) appear as a liability on the consolidated balance sheet of such Person and its Affiliates, but in any case excluding any obligations that are liabilities of any such Person as lessee under any operating lease so long as the terms of such operating lease do not require any payment by or on behalf of such Person at termination of such operating lease pursuant to a required purchase by or on behalf of such Person of the property or assets subject to such operating lease or under any arrangement pursuant to which such Person guarantees or otherwise assures any other Person of the value of the property or assets subject to such operating lease.

“ Organization Documents ” shall mean (i) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constituent documents with respect to any non-United States jurisdiction); (ii) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (iii) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

“ Other Hedging Agreement ” shall mean any foreign exchange contracts, currency swap agreements, commodity agreements, interest rate swaps or any other derivative or similar agreements or arrangements.

“ Other Taxes ” shall mean all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document (other than Excluded Taxes).

“ Outstanding ” shall mean with respect to Letters of Credit, any Letter of Credit which has not been cancelled, expired unutilized or fully drawn upon.

“ Participant ” shall have the meaning set forth in Paragraph 13(q) .

“ PBGC ” shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA and any successor thereto.

“ Percentage Share ” shall mean, with respect to any Lender, the percentage of the Aggregate Revolving Commitments, Aggregate Delayed Draw Commitments and Term Loans represented by such Lender’s Revolving Commitment, Delayed Draw Commitment and outstanding Term Loans. If the all of the Aggregate Commitments have terminated or expired, the Percentage Shares

shall be determined based on the percentage of the outstanding Loans and participations in L/C Obligations most recently in effect, giving effect to any assignments.

“ Permitted Acquisitions ” shall mean Acquisitions by American Vanguard and/or one or more of its Subsidiaries for aggregate consideration not to exceed $15,000,000 where:

(a) The Board of Directors or authorized management committee of American Vanguard or of the applicable Subsidiary and of the Person whose assets or Equity Interests are being acquired has approved such Acquisition;

(b) The business or assets acquired in such Acquisition is or are similar, related, incidental, or complementary to the business of American Vanguard or one or more if its Subsidiaries;

(c) Both before and after giving effect to such Acquisition and the Loans and Letters of Credit (if any) requested to be made in connection therewith, each of the representations and warranties in the Loan Documents is true and correct in all material respects (except (i) any such representation or warranty which relates to a specified prior date and (ii) to the extent the Administrative Agent has been notified in writing by the Borrower that any representation or warranty is not correct and the Required Lenders have explicitly waived in writing compliance with such representation or warranty) and no Default or Event of Default exists, will exist, or would result therefrom;

(d) After giving effect to the Acquisition, the Borrower will continue to be compliance with the covenants in this Agreement, determined on a Pro Forma Basis; and

(e) If such Acquisition results in a Subsidiary of American Vanguard being created or acquired (other than an Immaterial Subsidiary), such Subsidiary joins in this Agreement and delivers the Guaranty and other documents required by Paragraph 6(b) of this Agreement.

“ Permitted Hedges ” shall mean foreign exchange transactions, interest rate transactions, and other over-the-counter derivatives executed by the Borrower with a Lender or an Affiliate of a Lender that are permitted under this Agreement and are entered into in the ordinary course of business for the purpose of hedging currency or interest rate risks of the Borrower and not for speculation.

“ Person ” shall mean any corporation, natural person, firm, joint venture, partnership, limited liability company, trust, unincorporated organization, government or any department or agency of any government.

“ Plan ” shall mean any plan (other than a Multiemployer Plan) subject to Title IV of ERISA maintained for employees of the Borrower or any ERISA Affiliate (and any such plan no longer maintained by the Borrower or any of its ERISA Affiliates) to which the Borrower or any of its ERISA Affiliates has made or was required to make any contributions during the five years preceding the date on which such plan ceased to be maintained.

“ Potential Default ” shall mean an event which but for the lapse of time or the giving of notice, or both, would constitute an Event of Default.

“ Prime Rate ” shall mean the fluctuating per annum rate announced from time to time by Bank of the West as its “price rate”. The Prime Rate is a rate set by Bank of the West based upon various factors including Bank of the West’s costs and desired return, general economic conditions, and other

factors, and is used as a reference point for pricing some loans, which may be priced at, below or above the Prime Rate.

“ Prime Rate Loan ” shall mean any Loan bearing interest with reference to the Prime Rate.

“ Pro Forma Basis ” shall mean, with respect to compliance with any test or covenant hereunder, compliance with such covenant after giving effect to an Acquisition (including pro forma adjustments arising out of events which are directly attributable to the Investment, are factually supportable and are expected to have a continuing impact, in each case determined on a basis consistent with application of GAAP and Requirements of Law; such pro forma adjustments may include cost savings resulting from head count reductions, closure of facilities and similar restructuring charges or integration activities or other adjustments based on reasonable assumptions by an Authorized Officer of the Borrower, together with such other pro form adjustments certified as based on reasonable assumptions by an Authorized Officer of the Borrower using, for purposes of determining such compliance, the historical financial statements of the Borrower, its Subsidiaries and any asset acquired with such Investment).

“ Prohibited Transaction ” shall mean any transaction described in section 406 of ERISA which is not exempt by reason of section 408 of ERISA or the transitional rules set forth in section 414(c) of ERISA and any transaction described in section 4975(c)(1) of the Code which is not exempt by reason of section 4975(c)(2) or section 4975(d) of the Code, or the transitional rules of section 2003(c) of ERISA.

“ Property ” shall mean, collectively and severally, any and all real property, including all improvements and fixtures thereon, owned or occupied by the Borrower.

“ Related Parties ” shall mean, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s affiliates.

“ Reportable Event ” shall mean any of the events set forth in section 4043(b) of ERISA or the regulations thereunder, a withdrawal from a Plan described in section 4063 of ERISA, a cessation of operations described in section 4068(f) of ERISA, an amendment to a Plan necessitating the posting of security under section 401(a)(29) of the Code, or a failure to make a payment required by section 412(m) of the Code and section 302(e) of ERISA when due.

“ Required Lenders ” shall mean not less than two (2) Lenders who, collectively, hold not less than sixty-six and two thirds percent (66.667%) of the Percentage Shares.

“ Requirements of Law ” shall mean as to any Person the Certificate of Incorporation and ByLaws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation, or a final and binding determination of an arbitrator or a determination of a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“ Revolving Commitment ,” shall mean, as to each Lender, its obligation to (a) make Revolving Loans to the Borrower pursuant to Paragraph 1(a) and (b) purchase participations in L/C Obligations, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2 or in the Assignment and Assumption pursuant to

which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

“ Revolving Loan ” shall have the meaning given such term in Paragraph 1(a) of this Agreement.

“ Revolving Loan Maturity Date ” shall mean the earlier of: (a) five (5) years from the Closing Date or (b) the date the Lenders terminate their obligation to make further Loans hereunder pursuant to Paragraph 11 of this Agreement.

“ Secured Obligations ” shall mean the Obligations and the Hedge Obligations.

“ Secured Parties ” shall mean, collectively, the Administrative Agent, the Issuing Bank, the Lenders, each Lender party to, and its capacity as counterparty to, Permitted Hedges.

“ Security Agreement ” shall mean a security agreement in the form of that attached hereto as Exhibit A .

“ Security Documents ” shall have the meaning set forth in Paragraph 6(a) of this Agreement.

“ Solvent ” shall mean, as to any Person at any time, that (i) the fair value of the property of such Person is greater than the amount of such Person’s liabilities (including disputed liabilities evaluated for purposes of Section 101(31) of the United States Bankruptcy Code and, in the alternative, for purposes of the California Uniform Fraudulent Transfer Act); (ii) the present fair salable value of the property of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured; (iii) such Person is able to realize upon its property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business; (iv) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature; and (v) such Person is not engaged in business or a transaction, for which such Person’s property would constitute unreasonably small capital.

“ Statement Date ” shall mean December 31, 2003.

“ Subsidiary ” shall mean with respect to any Person, (a) any corporation more than fifty percent (50%) of the stock of which having by the terms thereof ordinary voting power to elect the board of directors, managers or trustees of such corporation shall, at the time as of which any determination is being made, be owned by such Person, either directly or through Subsidiaries of such Person (irrespective of whether or not at the time stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency), and (b) any Person other than a corporation, including, without limitation, any partnership, joint venture or other business combination, whose management and policies are controlled by or under common control with such Person or any of the Subsidiaries of such Person.

“ Taxes ” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“ Term Loan ” shall have the meaning given such term in Paragraph 2 of this Agreement.

“ Term Loan Maturity Date ” shall mean Revolving Loan Maturity Date.

“ Unreimbursed Amount ” shall have the meaning set forth in Paragraph 3(c)(1) of this Agreement.

“ Wholly Owned Subsidiary ” shall mean, as to any Person (a) any corporation 100% of whose Equity Interests (other than director’s and national citizen qualifying shares) is at the time owned by such Person and/or one or more Wholly Owned Subsidiaries of such Person and (b) any partnership, association, joint venture, limited liability company or other entity in which such Person and/or one or more Wholly Owned Subsidiaries of such Person has a 100% Equity Interest at such time.

“ 2110 Davie ” shall mean 2110 Davie Corporation, a California corporation and a wholly owned subsidiary of American Vanguard.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written.


AMVAC CHEMICAL CORPORATION, a California corporation

By:
Name:
Title:


AMERICAN VANGUARD CORPORATION, a Delaware corporation

By:
Name:
Title:


GEMCHEM, INC., a California corporation

By:
Name:
Title:


2110 DAVIE CORPORATION, a California corporation

By:
Name:
Title:


BANK OF THE WEST, as Administrative Agent

By:
Name:
Title:


BANK OF THE WEST, as a Lender

By:
Name:
Title:


HARRIS TRUST AND SAVINGS BANK, as a Lender

By:
Name:
Title:


FIRST BANK & TRUST, as a Lender

By:
Name:
Title:

EXHIBIT 21

AMERICAN VANGUARD CORPORATION AND SUBSIDIARIES

LISTING OF SUBSIDIARIES

Subsidiaries of the Company and the jurisdiction in which each company was incorporated are listed below. Unless otherwise indicated parenthetically, 100% of the voting securities of each subsidiary are owned by the Company. All companies indicated with an asterisk (*) are subsidiaries of AMVAC. All of the following subsidiaries are included in the Company’s consolidated financial statements:


AMVAC Chemical Corporation		California

GemChem, Inc.		California

2110 Davie Corporation (formerly ABSCO Distributing)		California

AMVAC Chemical UK Ltd.*		Surrey, England

Agroservicios Amvac, SA de CV		Mexico

Quimica Amvac de Mexico SA de CV		Mexico

Environmental Mediation, Inc.		California

Calhart Corporation		California

Manufacturers Mirror & Glass Co., Inc.		California

Todagco (80%)*		California

American Vanguard Corporation of Imperial Valley (90%)*		California

AMVAC Ag-Chem*		California

AMVAC Chemical Corporation-Nevada*		Nevada

Exhibit 23

Consent of Independent Registered Public Accounting Firm

Board of Directors

American Vanguard Corporation

Newport Beach, CA

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (Nos. 333-122981, 333-109320 and 333-62612) and Form S-8 (Nos. 333-102381, 333-76218 and 333-64220) of American Vanguard Corporation of our reports dated March 3, 2005, relating to the consolidated financial statements, and the effectiveness of American Vanguard Corporation internal control over financial reporting, which appear in this Form 10-K.

/s/ BDO S EIDMAN , LLP

Los Angeles, California

March 15, 2005

Exhibit 31.1

AMERICAN VANGUARD CORPORATION

CHIEF EXECUTIVE OFFICER CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Eric G. Wintemute, certify that:

1.	I have reviewed this report on Form 10-K of American Vanguard Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosures controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

(a)

all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: March 15, 2005				/s/ E RIC G. W INTEMUTE
				Eric G. Wintemute
				Chief Executive Officer

Exhibit 31.2

AMERICAN VANGUARD CORPORATION

CHIEF FINANCIAL OFFICER CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, James A. Barry, certify that:

1.	I have reviewed this report on Form 10-K of American Vanguard Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(a)

(b)

(c)

(d)

5.	The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

(a)

(b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: March 15, 2005				/s/ J AMES A. B ARRY
				James A. Barry
				Chief Financial Officer

Exhibit 32.1

AMERICAN VANGUARD CORPORATION

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of American Vanguard Corporation (the “Company”) on Form 10-K for the period ending December 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Executive Officer and Chief Financial Officer of the Company hereby certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002 that based on their knowledge (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (2) the information contained in the Report fairly represents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.

/s/ E RIC G. W INTEMUTE

Eric G. Wintemute,

Chief Executive Officer

/s/ J AMES A. B ARRY

James A. Barry

Chief Financial Officer

March 15, 2005

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to American Vanguard Corporation and will be retained by American Vanguard Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished to the Securities and Exchange Commission as an exhibit to the Form 10-K and shall not be considered filed as part of the Form 10-K.