-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UnHedzmNfCVZsSV+vUMzxtt6UGh+zbpB2mTNNFYRtNN+oiJMH1UCKljlk16vj9aK BufUvXmJKBGXiZ5s/qzQsg== 0000950129-96-001377.txt : 19960629 0000950129-96-001377.hdr.sgml : 19960629 ACCESSION NUMBER: 0000950129-96-001377 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19960627 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FLORAFAX INTERNATIONAL INC CENTRAL INDEX KEY: 0000037525 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 410719035 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-30476 FILM NUMBER: 96587292 BUSINESS ADDRESS: STREET 1: 8075 20TH STREET CITY: VERO BEACH STATE: FL ZIP: 32966 BUSINESS PHONE: 4075630263 MAIL ADDRESS: STREET 1: 8075 20TH STREET CITY: VERO BEACH STATE: FL ZIP: 32966 FORMER COMPANY: FORMER CONFORMED NAME: SPOTTS FLORAFAX CORP DATE OF NAME CHANGE: 19740924 FORMER COMPANY: FORMER CONFORMED NAME: SPOTTS CORP DATE OF NAME CHANGE: 19671205 FORMER COMPANY: FORMER CONFORMED NAME: SPOTTS MAILING CORP DATE OF NAME CHANGE: 19671205 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SV CAPITAL PARTNERS LP CENTRAL INDEX KEY: 0001017548 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 742761311 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 200 CONCORD PLAZA STREET 2: STE 620 CITY: SAN ANTONIO STATE: TX ZIP: 78216 BUSINESS PHONE: 2109301251 MAIL ADDRESS: STREET 1: 200 CONCORD PLAZA STREET 2: STE 620 CITY: SAN ANTONIO STATE: TX ZIP: 78216 SC 13D 1 SV CAPITAL PARTNERS, L.P. FOR FLORAFAX INT'L 1 --------------------------------- OMB APPROVAL --------------------------------- OMB Number 3235-0145 Expires: October 31, 1994 Estimated average burden hours per response.........14.90 --------------------------------- 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 2 SCHEDULE 13D - ------------------------ ----------------- CUSIP NO. 33982510 PAGE 2 OF 4 PAGES - ------------------------------------------------------------------------------ 1 NAME OF REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON SV Capital Partners, L.P. 74-2761311 - ------------------------------------------------------------------------------ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A)|_| (b)|_| - ------------------------------------------------------------------------------ 3 SEC USE ONLY - ------------------------------------------------------------------------------ 4 SOURCE OF FUNDS* WC - ------------------------------------------------------------------------------ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| - ------------------------------------------------------------------------------ 6 CITIZENSHIP OR PLACE OF ORGANIZATION Texas - ------------------------------------------------------------------------------ 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 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 4 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. - ------------------- * Filed herewith. Page 4 of 5 Pages 5 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 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. EX-99.A 2 REGISTRATION RIGHTS AGREEMENT 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. -1- 2 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 -2- 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 -3- 4 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 -4- 5 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 -5- 6 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. -6- 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 -7- 8 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 -8- 9 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. -9- 10 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. -10- 11 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 -11- 12 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 -12- -----END PRIVACY-ENHANCED MESSAGE-----