S&W Seed Company (SANW)

[flemsnopes]

Information about "related party" transactions should always be carefully examined, in my opinion.

Transactions with Related Parties

Grover T. Wickersham, our Chairman of the Board, also serves as the Chairman of the Board of Triangle T Partners, LLC (“Triangle T Partners”) and is a member of the board of directors of Triangle T Ranch, Inc. (“Triangle T Ranch” and, collectively with Triangle T Partners, “Triangle T”). Mr. Wickersham indirectly owns a controlling interest in Triangle T Partners. Michael Nordstrom, one of our directors, is also a director of Triangle T Partners and Triangle T Ranch. Until October 2010, Mark S. Grewal, our President and Chief Executive Officer, as well as a member of our board, also served as President and Chief Executive Officer and was on the boards of Triangle T Partners and Triangle T Ranch. He no longer holds these positions.

Triangle T is one of our alfalfa seed growers and is also a customer. We enter into annual alfalfa seed production contracts with Triangle T on the same commercial terms and conditions as with the other growers with whom we contract for alfalfa seed production. For the fiscal years ended June 30, 2009 and 2010, we purchased from Triangle T $488,949 and $832,486, respectively, of alfalfa seed Triangle T grew and sold to us under one-year production agreements. We entered into agreements with Triangle T to plant 893 acres of various alfalfa seed varieties as part of our calendar 2010 production for which we will pay Triangle T the same price we have agreed to pay our other growers. None of Mr. Wickersham, Mr. Grewal nor Mr. Nordstrom personally received any portion of these funds.

As one of our customers, Triangle T purchases milled alfalfa seed from us to plant alfalfa on its own property for the production of alfalfa hay and to grow alfalfa seed for us. We sell milled alfalfa seed to Triangle T under the same commercial terms and conditions as other alfalfa seed customers in the San Joaquin Valley. For the fiscal years ended June 30, 2009 and 2010, we sold milled alfalfa seed in the amount of $197,858 and $405,601, respectively, to Triangle T. None of Mr. Wickersham, Mr. Grewal nor Mr. Nordstrom personally received any portion of these funds.

Triangle T also works with us as the initial provider of stevia leaf for our pilot stevia cultivation program. We paid Triangle T $102,000 in fiscal 2010 for its services and costs in connection with our stevia cultivation program. None of Mr. Wickersham, Mr. Grewal nor Mr. Nordstrom personally received any portion of these funds. Through September 2010, we paid Triangle T $15,000 per month for management services, plus reimbursement of its direct and indirect costs in connection with our stevia cultivation program. In October 2010, this arrangement was modified to provide a monthly payment of $2,500 plus reimbursement of costs. The arrangement changed because, with Triangle T’s consent, S&W has directly hired the key Triangle T people who are working on the stevia project.

We have entered into indemnity agreements with each of our executive officers and directors providing, among other things, that we will indemnify such officers or directors, under the circumstances and to the extent provided for therein, for expenses, damages, judgments, fines and settlements they may be required to pay in actions or proceedings to which they are or may be made a party by reason of their positions as directors, officers or other agents of us, and otherwise to the full extent permitted under Delaware law and our By-laws.