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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )*
FLORAFAX INTERNATIONAL, INC.
(Name of Issuer)
COMMON STOCK
(Title of Class of Securities)
33982510
(CUSIP Number)
WILLIS H. WAGNER, SV CAPITAL MANAGEMENT, INC., 200 CONCORD, SUITE 620,
SAN ANTONIO, TEXAS 78216 (210) 930-1251
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
FEBRUARY 29, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box |_|.
Check the following box if a fee is being paid with the statement |X|. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7).
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
SEC 1746 (12-91)
Page 1 of 4 Pages
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SCHEDULE 13D
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CUSIP NO. 33982510 PAGE 2 OF 4 PAGES
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1 NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
SV Capital Partners, L.P. 74-2761311
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A)|_|
(b)|_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
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NUMBER OF 7 SOLE VOTING POWER
SHARES 544,500
------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 544,500
------------------------------------------------
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
544,500
- ------------------------------------------------------------------------------
12 CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
9.04%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
<PAGE> 3
SCHEDULE 13D
Item 1. Security and Issuer.
This statement relates to shares of common stock, $.01 par value
("Common Stock"), of Florafax International, Inc., a Delaware corporation (the
"Issuer"). The principal executive offices of the Issuer are located at 8075
20th Street, Vero Beach, Florida 32966.
The shares reported on this statement relate to a 7% Convertible
Promissory Note convertible into shares of Common Stock (the "Note") and
warrants to purchase shares of Common Stock (the "Warrants").
Item 2. Identity and Background.
SV Capital Partners, L.P., a Texas limited partnership ("SVCP"), is a
private investment fund. The principal business address of SVCP is 200 Concord
Plaza, Suite 620, San Antonio, Texas 78216.
SV Capital Management, Inc., a Delaware corporation ("SVCM"), is the
general partner of SVCP. Christopher Goldsbury, Jr. is the president, sole
director and controlling stockholder of SVCM and a significant majority limited
partner of SVCP. Willis H. Wagner and Eric S. Foultz are each executive
officers of SVCM. The business address for Messrs. Goldsbury, Wagner and
Foultz is 200 Concord Plaza, Suite 620, San Antonio, Texas 78216. The
principal occupation of Mr. Goldsbury is the management of his personal
investments and investments held by his affiliates. The principal occupation of
Mr. Wagner is the management of SVCM and the principal occupation of Mr. Foultz
is the management of Silver Ventures, Inc., a Texas corporation controlled by
Mr. Goldsbury.
During the last five years, neither SVCP, SVCM, Mr. Goldsbury, Mr.
Wagner nor Mr. Foultz has been convicted in any criminal proceeding (excluding
traffic violations or similar misdemeanors). During the last five years,
neither SVCP, SVCM, Mr. Goldsbury, Mr. Wagner nor Mr. Foultz has been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
Messrs. Goldsbury, Wagner and Foultz are citizens of the United States.
Item 3. Source and Amount of Funds or Other Consideration.
The $500,000 used for the purchase of the Note and the Warrants came
from the current working capital of SVCP funded by its limited partners,
including Mr. Goldsbury.
Item 4. Purpose of Transaction.
The purpose of the transaction is an investment in the Note and the
Warrants, with the possible conversion and/or exercise of such securities from
time to time for shares of Common Stock.
SVCP intends to review continuously its investment in the Issuer.
Depending upon future evaluations of the business prospects of the Issuer and
upon other developments, including, but not limited to, general economic and
business conditions and stock market conditions, SVCP may determine from time
to time to convert the Note and/or exercise the Warrants and dispose of all or
a portion of any shares of Common Stock acquired upon such conversion or
exercise events.
Item 5. Interest in Securities of the Issuer.
The Warrants are exercisable for up to 130,000 shares of Common Stock
and the principal of the Note is convertible into up to 400,000 shares of
Common Stock. In addition, accrued interest on the Note is convertible into
shares of Common Stock. Accrued interest on the Note for the period ending 60
days after the date of this statement would be convertible into approximately
an additional 14,500 shares of Common Stock.
Page 3 of 5 Pages
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Based upon the foregoing, SVCP beneficially owns approximately 544,500
shares of Common Stock (which includes shares issuable upon conversion of
accrued interest on the Note through the next 60 days) (the "Shares"), or 9.04%
of the outstanding shares of Common Stock. As a result of SVCM being the
general partner of SVCP and Mr. Goldsbury being the sole director and
controlling stockholder of SVCM, both SVCM and Mr. Goldsbury are indirect
beneficial owners of the Shares. SVCP has the sole power to vote and dispose of
the Shares. As a result of the relationships of SVCM and Mr. Goldsbury to SVCP,
SVCM and Mr. Goldsbury may also be deemed to have the power to vote and dispose
of the Shares.
Dividends and proceeds of sale received by SVCP with respect to the
Shares may be distributed to the partners of SVCP in the discretion of SVCM, as
the general partner of SVCP. As a result of Mr. Goldsbury's control over SVCM,
Mr. Goldsbury has the power to direct the receipt of such dividends or proceeds
to himself as a significant majority limited partner of SVCP.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
Effective as of February 29, 1996, SVCP entered into a First Amendment
to Agreement of Purchase and Sale with the Issuer pursuant to which the Issuer
sold to SVCP the Note and the Warrants. The Purchase Agreement includes
restrictions on the transfer of the shares of Common Stock issuable upon
conversion of the Note or upon exercise of the Warrants, except in compliance
with the Securities Act of 1933, as amended. Effective as of the same date,
SVCP also entered into a Registration Rights Agreement with the Issuer pursuant
to which the Issuer agreed to use its best efforts to file, within 60 days
thereafter, a registration statement on Form S-1, S-2 or S-3 covering the
resale of the shares of Common Stock issuable upon conversion of the Note or
upon exercise of the Warrants, and the Issuer granted SVCP certain piggyback
registration rights.
In April, 1996, Mr. Wagner, an executive officer of SVCM, became a
director of St. James Capital Corp., the general partner of St. James Capital
Partner, L.P. ("St. James"), which beneficially owns 1,732,178 shares of Common
Stock, or 22.4% of the outstanding shares of Common Stock (based upon Schedule
13D filed by St. James Capital Corp. on June 17, 1996; SEC file no. 005-30476).
On March 29, 1996, SVCP became a minority limited partner of St. James.
Mr. Goldsbury is a significant majority limited partner of SVCP and the
controlling stockholder of SVCM. Messrs. Wagner and Foultz, both executive
officers of SVCM, are special limited partners of SVCP. SVCM and the limited
and special limited partners of SVCP are entitled to all dividends and proceeds
of sale with respect to the Shares.
Item 7. Material to be Filed as Exhibits.
Exhibit A* Registration Rights Agreement dated February 29,
1996, among Florafax International, Inc.,
SV Capital Partners, L.P. and St. James Capital
Partners, L.P.
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* Filed herewith.
Page 4 of 5 Pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
Date: June 27, 1996 SV CAPITAL PARTNERS, L.P.
-----------------
BY: SV Capital Management, Inc., its
general partner
/s/ Willis H. Wagner
Willis H. Wagner, Managing Director
and Vice President
<PAGE> 6
INDEX TO EXHIBITS
Exhibit A* Registration Rights Agreement dated February 29,
1996, among Florafax International, Inc.,
SV Capital Partners, L.P. and St. James Capital
Partners, L.P.
<PAGE> 1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Registration Rights
Agreement") is made effective as of February 29, 1996 by and between Florafax
International, Inc., a Delaware corporation (the "Company") and SV Capital
Partners, L.P. (the "Holder").
WHEREAS, Holder holds a 7% Convertible Promissory Note (the "Note"),
payable by the Company, in the original principal amount of $500,000, which is
convertible into a number of shares as set forth in the Note (the "Note
Shares") of the Company's common stock, par value $0.01 per share ("Common
Stock");
WHEREAS, the Holder hold Common Stock Purchase Warrants (the
"Warrants") which may be exercised to acquire a certain number of shares of
the Common Stock, subject to adjustment (the "Warrant Shares"; the Note Shares
and the Warrant Shares are collectively referred to as the "Shares");
WHEREAS, the Company wishes to gant the Holder certain registration
nights in respect of the Shares, as set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the parties hereby agree as follows:
ARTICLE I
Definitions
As used in this Agreement, the following terms shall have the
meanings set forth below:
1.1 "Commission" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
1.2 "Holder" shall mean SV Capital Partners, L.P.
1.3 "Registrable Securities" shall mean (i) the Shares; and (11) any
Common Stock issued or issuable at any time or from time to time in respect of
the Shares upon a stock split, stock dividend, recapitalization or other
similar event involving the Company until such Shares and Common Stock are
sold pursuant to a Registration Statement or an exemption from registration
under the Securities Act.
1.4 The terms "register, " "registered," and "registration" refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering by the
Commission of the effectiveness of such registration statement.
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1.5 "Registration Expenses" shall mean all expenses, other than
Selling Expenses (as defined below), incurred by the Company in complying with
this Registration Rights Agreement, including, without limitation, all
registration, qualification AND filing fees, exchange listing fees, printing
expenses, escrow fees, fees and disbursements of counsel for the Company and
for the Holder, blue sky fees and expenses, the expense of any special audits
incident to or required by any such registration (but excluding the
compensation of regular employees of the Company which shall be paid in any
event by the Company).
1.6 "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
1.7 "Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered
by the Holder.
1.8 "Underwritten Public Offering" shall mean a public offering in
which the Common Stock is offered and sold on a firm commitment basis through
one or more underwriters, all pursuant to an underwriting agreement between
the Company and such underwriters.
ARTICLE II
Registration Rights
2.1 Demand Registration.
2.1.1 Within 60 days of the issuance of the Note to the
Holder, the Company shall use its best efforts to file with the Securities and
Exchange Commission a shelf registration statement covering the resale of the
Shares on Form S-1, S-2, or S-3 (the "Registration Statement") which shall
remain effective until the earlier to occur of- (i) 3 years, or (ii) until
such time as the Holder does not beneficially own any Registrable Securities.
The Company shall use its reasonable best efforts to cause such Registration
Statement to become effective as soon as practicable and to cause the Shares
to be qualified in such state jurisdictions as the Holder may request.
2.1.2 Except as set forth herein and subject to the
limitations of Section 2.1.1, the Company shall take all reasonable steps
necessary to keep the Registration Statement current and effective until all
Shares have been distributed by the Holder including any necessary refiling of
additional registration statements.
2.1.3 The Company shall be entitled to require that the
parties refrain from effecting any public sales or distributions of the
Registrable Securities pursuant to a Registration Statement that has been
declared effective by the Commission or otherwise, if the
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<PAGE> 3
board of directors of the Company reasonably determines that such public sales
or distributions would interfere in any material respect with any transaction
involving the Company that the board of directors reasonably determines to be
material to the Company. The board of directors shall, as promptly as
practicable, give the Holder written notice of any such development. In the
event of a request by the board of directors of the Company that the Holder
refrain from effecting any public sales or distributions of the Registrable
Securities, the Company shall be required to lift such restrictions regarding
effecting public sales or distributions of the Registrable Securities as soon
as reasonably practicable after the 91 board of directors shall reasonably
determine public sales or distributions by the Holder of the Registrable
Securities shall not interfere with such transaction, provided, that in no
event shall any requirement that the Holder refrain from effecting public
sales or distributions in the Registrable Securities extend for more than 90
days.
2.2 Piggyback Registration.
2.2.1 Subject to the terms hereof, if: (1) at any time or
from time to time the Company or any shareholder of the Company shall
determine to register any of its securities (except for registration
statements relating to employee benefit plans or exchange offers), either for
its own account or the account of a security holder; and (ii) the Holder is
the beneficial owner of any Registrable Securities; the Company will promptly
give to the Holder written notice thereof no less than 10 days prior to the
filing of any registration statement; and 'include in such registration (and
any related qualification under blue sky laws or other compliance), and in the
underwriting involved therein, if any, such Registrable Securities as Holder
may request in a writing delivered to the Company within 20 days after
Holder's receipt of Company's written notice.
2.2.2 The Holder may participate in any number of
registrations until all of the Shares held by such Holder have been
distributed pursuant to a registration.
2.2.3 If any registration statement is an Underwritten
Public Offering, the right of the Holder to registration pursuant to this
Section shall be conditioned upon such Holder's participation in such
reasonable underwriting arrangements as the Company shall make regarding the
offering, and the inclusion of Registrable Securities IN the underwriting
shall be limited to the extent provided herein. The Holder and all other
shareholders proposing to distribute their securities through such
underwriting shall (together with the Company and the other holders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the managing underwriter
selected for such underwriting by the Company. Notwithstanding any other
provision of this Section, if the managing underwriter concludes in its
reasonable judgment that the number of shares to be registered for selling
stockholders (including the Holder) would materially adversely effect such
offering, the number of Shares to be registered, together with the number of
shares of Common Stock or other securities held by other stockholders proposed
to be registered in such offering, shall be reduced on a pro rata basis based
on the number of Shares
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proposed to be sold by the Holder as compared to the number of shares proposed
to be sold by all stockholders. If the Holder disapproves of the terms of any
such underwriting, it may elect to withdraw therefrom by written notice to the
Company and the managing underwriter, delivered not less than ten days before
the effective date. The Registrable Securities excluded by the managing
underwriter or withdrawn from such underwriting shall be withdrawn from such
registration, and shall not be transferred in a public distribution prior to
120 days after the effective date of the registration statement relating
thereto, or such other shorter period of time as the underwriters may require.
2.2.4 The Company shall have the right to terminate or
withdraw any registration initiated by it under this Section prior to the
effectiveness of such registration whether or not the Holder has elected to
include securities in such registration.
2.3 Expenses of Registration. All Registration Expenses shall be
borne by the Company. Unless otherwise stated herein, all Selling Expenses
relating to securities registered on behalf of the Holder shall be borne by
the Holder.
2.4 Best Registration Rights. If, on or after the date of this
Registration Rights Agreement, the Company grants to any person with respect
to any security issued by the Company or any of its Subsidiaries registration
rights that provide for terms that are in any manner more favorable to the
holder of such registration nights than the terms granted to the Holder (or if
the Company amends or waives any provision of any Agreement providing
registration rights of others or takes any other action whatsoever to provide
for terms that are more favorable to other holders than the terms provided to
the Holder) then this Registration Fights Agreement shall immediately be
deemed amended to provide the Holder with any (or all) of such more favorable
terms as the Holder shall elect to include herein.
2.5 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this
Registration Rights Agreement, the Company will keep the Holder advised in
writing as to the initiation of each registration, qualification and
compliance and as to the completion thereof At its expense, the Company will:
2.5.1 Prepare and file with the Commission a registration
statement with respect to such securities and use its commercially reasonable
efforts to cause such registration statement to become and remain effective
until the distribution described in such registration statement has been
completed;
2.5.2 Furnish to each underwriter such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as such
underwriter may reasonably request in order to facilitate the public sale of
the shares by such underwriter, and promptly
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furnish to each underwriter and the Holder notice of any stop-order or similar
notice issued by the Commission or any state agency charged with the
regulation of securities, and notice of any Nasdaq or securities exchange
listing.
2.5.3 Cause the Shares to be listed on the Nasdaq Stock
Market's OTC Bulletin Board and each Securities Exchange on which the Common
Stock is approved for listing.
2.6 Indemnification.
2.6.1 To the extent permitted by law, the Company will
indemnify the Holder, each of its officers and directors and partners, and
each person controlling the Holder within the meaning of Section 15 of the
Securities Act, with respect to which registration, qualification or
compliance has been effected pursuant to this Agreement, and each underwriter,
if any, and each person who controls any underwriter within the meaning of
Section 15 of the Securities Act, against all expenses, claims, losses,
damages or liabilities (or actions in respect thereof), including any of the
foregoing incurred in settlement of any litigation, commenced or threatened,
to the extent such expenses, claims, losses, damages or liabilities arise out
of or are based on any untrue statement (or alleged untrue statement) of a
material fact contained in any registration statement, prospectus, offering
circular or other similar document, or any amendment or supplement thereto,
incident to any such registration, qualification or compliance, or based on
any omission (or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading, or any violation by
the Company of the Securities Act or any rule or regulation promulgated under
the Securities Act applicable to the Company in connection with any such
registration, qualification or compliance, and the Company will reimburse
Holder, each of its officers and directors and partners, and each person
controlling Holder, each such underwriter and each person who controls any
such underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action; provided, however, that the indemnity contained
herein shall not apply to amounts paid in settlement of any claim, loss,
damage, liability or expense if settlement is effected without the consent of
the Company (which consent shall not unreasonably be withheld); provided,
further, that the Company will not be liable in any such case to the extent
that any such claim, loss, damage, liability or expense arises out of or is
based on any untrue statement or omission or alleged untrue statement or
omission, made in reliance upon and in conformity with written information
furnished to the Company by or on behalf of Holder, such controlling person or
such underwriter specifically for use therein or the violation of the
Securities Act or any rule or regulation promulgated thereunder by any such
person. Notwithstanding the foregoing, insofar as the foregoing indemnity
relates to any such untrue statement (or alleged untrue statement) or omission
(or alleged omission) made in the preliminary prospectus but eliminated or
remedied in the amended prospectus on file with the Commission at the time the
registration statement becomes effective or in the final prospectus filed with
the Commission pursuant to the
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applicable rules of the Commission or in any supplement or addendum thereto,
the indemnity agreement herein shall not inure to the benefit of any
underwriter if a copy of the final prospectus filed pursuant to such rules,
together with all supplements and addenda thereto, was not furnished to the
person or entity asserting the loss, liability, claim or damage at or prior to
the time such famishing is required by the Securities Act.
2.6.2 To the extent permitted by law, the Holder will, if
securities held by the Holder are included in the securities as to which such
registration, qualification or compliance is being effected pursuant to terms
hereof, indemnify the Company, each of its directors and officers, each
underwriter, if any, of the Company's securities covered by such a
registration statement, each person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities Act, and each
other person selling the Company's securities covered by such registration
statement, each of such person's officers and directors and each person
controlling such persons within the meaning of Section 15 of the Securities
Act, against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by Holder of any rule or regulation promulgated under the Securities
Act applicable to Holder and relating to action or inaction required of Holder
in connection with any such registration, qualification or compliance, and
will reimburse the Company, such other persons, such directors, officers,
persons, underwriters or control persons for any legal or other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action, in each case to the extent, but only
to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by such Holder
specifically for use therein; provided, however, that the indemnity contained
herein shall not apply to amounts paid in settlement of any claim, loss,
damage, liability or expense if settlement is effected without the consent of
such Holder (which consent shall not be unreasonably withheld).
Notwithstanding the foregoing, the liability of such Holder under this
subsection (b) shall be limited in an amount equal to the net proceeds from
the sale of the shares sold by Holder, unless such liability arises out of or
is based on willful conduct by Holder. In addition, insofar as the foregoing
indemnity relates to any such untrue statement (or alleged untrue statement)
or omission (or alleged omission) made in the preliminary prospectus but
eliminated or remedied in the amended prospectus on file with the Commission
at the time the registration statement becomes effective or in the final
prospectus filed pursuant to applicable rules of the Commission or in any
supplement or addendum thereto, the indemnity agreement herein shall not inure
to the benefit of the Company or any underwriter if a copy of the final
prospectus filed pursuant to such rules, together with all supplements and
addenda thereto, was not furnished to the person or entity asserting the loss,
liability, claim or damage at or prior to the time such furnishing is required
by the Securities Act.
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<PAGE> 7
2.6.3 Notwithstanding the foregoing paragraphs (a) and (b) of this
Section, each party entitled to indemnification under this Section (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of any such
claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement unless the failure
to give such notice is materially prejudicial to an Indemnifying Party's
ability to defend such action and provided further, that the Indemnifying
Party shall not assume the defense for matters as to which there is a conflict
of interest or as to which the Indemnifying Party is asserting separate or
different defenses, which defenses are inconsistent with the defenses of the
Indemnified Party. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent
to entry of any judgment
or enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability in respect to such claim or litigation. No
Indemnified Party shall consent to entry of any Judgment or enter into any
settlement without the consent of each Indemnifying Party.
2.6.4 If the indemnification provided for in this Section is
unavailable to an Indemnified Party in respect of any losses, claims, damages
or liabilities referred to therein, then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amoung paid or
payable by such Indemnified Party as amount payable by such Indemnified Party
as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and all shareholders offering securities in the
offering (the "Selling Security Holders") on the other from the offering of
the Company's securities, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Selling
Security Holders on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Selling Security Holders on the other shall be
the net proceeds from the offering (before deducting expenses) received by the
Company on the one hand and the Selling Security Holders on the other. The
relative fault of the Company on the one hand and the Selling Security Holders
on the other shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or by the Selling
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Security Holders and the parties' relevant intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Selling Security Holders agree that it would not be just
and equitable if contribution pursuant to this Section were based solely upon
the number of entities from whom contribution was requested or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this Section. The amount paid or payable
by an Indemnified Party as a result of the losses, claims, damages and
liabilities referred to above in this Section shall be deemed to include any
legal or other expenses reasonably incurred by such Indemnified Party in
connection with investigating or defending any such action or claim, subject
to the provisions hereof Notwithstanding the provisions of this Section, no
Selling Shareholder shall be required to contribute any amount or make any
other payments under this Agreement which in the aggregate exceed the proceeds
received by such Selling Shareholder unless such losses, claims, damages or
liabilities are based on conduct which such Selling Shareholder actually knows
to be in controversion of the Securities Act. No person guilty of fraudulent
misrepresentation (within the meaning of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation.
2.7 Certain Information.
2.7.1 The Holder agrees, with respect to any Registrable
Securities included in any registration, to furnish to the Company such
information regarding Holder, the Registrable Securities and the distribution
proposed by the Holder as the Company may reasonably request in writing and as
shall be required in connection with any registration, qualification or
compliance referred to herein.
2.7.2 The failure of the Holder to furnish the information
requested pursuant to this Section shall not affect the obligation of the
Company to the other Selling Security Holders who furnish such information
unless, in the reasonable opinion of counsel to the Company or the
underwriters, such failure impairs or may impair the legality of the
Registration Statement or the underlying offering.
2.8 Rule 144 Reporting. With a view to making available the benefits
of certain rules and regulations of the Commission which may at any time
permit the sale of Restricted Securities (used herein as defined in Rule 144
under the Securities Act) to the public without registration, the Company
agrees to use its best lawful efforts to:
2.8.1 Make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities Act, at all
times during which the Company is subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act");
2.8.2 File with the Commission in a timely manner all
reports and other documents required of the Company under the Securities Act
and the Exchange Act (at all times during which the Company is subject to such
reporting requirements); and
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2.8.3 So long as the Holder owns any Restricted Securities
(as defined in Rule 144 promulgated under the Securities Act), to furnish to
Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 and with regard to
the Securities Act and the Exchange Act (at all times during which the Company
is subject to such reporting requirements), a copy of the most recent annual
or quarterly report of the Company, and such other reports and documents of
the Company and other information in the possession of or reasonably
obtainable by the Company as the Holder may reasonably request in availing
itself of any rule or regulation of the Commission allowing the Holder to sell
any such securities without registration.
2.9 Transferability. The rights conferred by this Agreement shall be
freely transferable to a recipient of Registrable Securities who agree in
writing to assume the obligations of Holder hereunder, and to be bound by the
provisions hereof.
2.10 Governing Law. This Agreement shall be governed in all
respects by the laws of the State of Texas.
2.11 Entire Agreement; Amendment. This Agreement constitutes the full
and entire understanding and agreement between the parties with regard to the
subject hereof. This Agreement, or any provision hereof, may be amended,
waived, discharged or terminated upon the written consent of the Company and
the Holder.
2.12 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by
messenger including Federal Express or similar courier service, addressed (a)
if to the Holder: SV Capital Partners, L.P., 200 Concord Plaza, Suite 620, San
Antonio, Texas 78216, or at such other address as the Holder shall have
furnished to the Company in writing, or (b) if to the Company: to Florafax
International, Inc., 8075 20th Street, Vero Beach, FL 32966 or at such other
address as the Company shall have furnished to the Holder. Each such notice or
other communication shall for all purposes of this Agreement be treated as
effective upon receipt.
2.13 Delays or Omissions. Except as expressly provided herein, no
delay or omission to exercise any right, power or remedy accruing to any party
to this Agreement shall impair any such right, power or remedy of such party
nor shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of
any party of any breach or default under this Agreement, or any waiver on the
part of any party of any provisions or conditions of this Agreement, must be
in writing and shall be effective only to the extent specifically set forth in
such writing. All remedies, either under this Agreement or by law or otherwise
afforded to any party to this Agreement, shall be cumulative and not
alternative.
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2.14 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
2.15 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in frill force and effect
without said provision.
2.16 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not considered in construing
or interpreting this Agreement.
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THE COMPANY'S SIGNATURE PAGE
IN WITNESS WHEREOF, the Company has executed this agreement effective
upon the date first set forth above.
FLORAFAX INTERNATIONAL, INC.
James H. West, President
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THE HOLDER'S SIGNATURE PAGE
IN WITNESS WHEREOF, the Holder has signed this Agreement as of the
date first written above.
SV CAPITAL PARTNERS, L.P.
William H. Wagner
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