As filed with the Securities and Exchange Commission on August 31, 1998
Registration Statement No. 333-37217
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
PRE-EFFECTIVE AMENDMENT NO. 5
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-------------------------
WASTE SYSTEMS INTERNATIONAL, INC.
(f/k/a BIOSAFE INTERNATIONAL, INC.)
(Exact name of Registrant as specified in its charter)
Delaware 95-4203626
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Lexington Office Park
420 Bedford Street, Suite 300
Lexington, MA 02173
(781) 862-3000
(Address, including zip code, and telephone number, including area code of
Registrant's principal executive offices)
-------------------------------
PHILIP W. STRAUSS
President
WASTE SYSTEMS INTERNATIONAL, INC.
Lexington Office Park
420 Bedford Street, Suite 300
Lexington, MA 02173
(781) 862-3000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------------------
With a copy to:
THOMAS P. STORER, P.C.
GOODWIN, PROCTER & HOAR LLP
Exchange Place
Boston, Massachusetts 02109-2881
(617) 570-1000
----------------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the Registration Statement becomes effective.
-----------------------------
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.|_|
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. |_|
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
7,122,569 Shares
WASTE SYSTEMS INTERNATIONAL, INC.
Common Stock
-------------------
All of the shares of common stock, $.01 par value per share (the "Common
Stock"), offered hereby (the "Shares") are being registered for the account of
certain stockholders of Waste Systems International, Inc. (f/k/a BioSafe
International, Inc.) ("Waste Systems" or the "Company"), or their pledgees,
named herein (collectively, the "Selling Stockholders"). See "Plan of
Distribution" and "Selling Stockholders." Of the 7,122,569 Shares offered
hereby, (i) 610,844 Shares were issued to the certain Selling Stockholders upon
the election of such Selling Stockholders to convert their shares of Series A
Preferred Stock, $.001 par value per share (the "Series A Preferred Stock"), of
the Company into shares of Common Stock (ii) 6,312,272 Shares were issued on
August 4, 1998 to certain Selling Stockholders when the Company exercised its
right to convert all of the remaining outstanding shares of the Series A
Preferred Stock into shares of Common Stock and (iii) 199,453 Shares were issued
to certain Selling Stockholders in connection with various transactions. The
Company is registering the Shares to fulfill its obligations under a certain
Registration Rights Agreement, dated as of June 30, 1997 (the "Registration
Rights Agreement"), and under certain other agreements with certain Selling
Stockholders. See "Registration Obligations." The registration of the shares of
Common Stock offered hereby does not necessarily mean that any shares of Common
Stock will be offered or sold by the Selling Stockholders.
See "Risk Factors" on pages 3 to 6 for a discussion of certain material
factors that should be considered in connection with an investment in the Common
Stock offered hereby.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is August 31, 1998
<PAGE>
Each of the Selling Stockholders, directly or through agents, dealers or
underwriters designated from time to time, may sell all or a portion of the
Shares offered hereby from time to time on terms to be determined at the time of
sale. To the extent required by law, the specific Shares to be sold, the names
of the Selling Stockholders, the respective purchase prices and public offering
prices, the names of any such agent, dealer or underwriter, and any applicable
commissions or discounts with respect to a particular offer will be set forth in
an accompanying Prospectus Supplement. See "Plan of Distribution." Each Selling
Stockholder reserves the sole right to accept and, together with such Selling
Stockholder's agents, dealers or underwriters from time to time, to reject, in
whole or in part, any proposed purchase of Shares to be made directly or through
agents, dealers or underwriters.
The aggregate proceeds to the Selling Stockholders from the sale of the
Shares offered hereby (the "Offering") will be the purchase price of the Shares
sold less the aggregate agents' commissions and underwriters' discounts, if any,
and other expenses of issuance and distribution not borne by the Company. The
Company will pay all of the expenses of the Offering other than agents'
commissions and underwriters' discounts with respect to the Shares offered
hereby and transfer taxes, if any. The Company will not receive any proceeds
from the sale of the Shares offered hereby by the Selling Stockholders.
The Selling Stockholders and any agents, dealers or underwriters that
participate with the Selling Stockholders in the distribution of the Shares may
be deemed to be "underwriters" within the meaning of the Securities Act of 1933,
as amended (the "Securities Act"), in which case any commissions received by
such agents, dealers or underwriters and any profit on the resale of the Shares
purchased by them may be deemed underwriting commissions or discounts under the
Securities Act. See "Plan of Distribution" for indemnification arrangements
between the Company and the Selling Stockholders.
The Common Stock is traded on The Nasdaq SmallCap Market (the "Nasdaq
Market") under the symbol "WSII." On August 27, 1998, the last reported sales
price for the Common Stock on the Nasdaq Market was $7.25 per share.
2
<PAGE>
RISK FACTORS
This Prospectus contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The Company intends such
forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995, and is including this statement for purposes of complying with
these safe harbor provisions. Forward-looking statements, which are based on
certain assumptions and describe future plans, strategies and expectations of
the Company are generally identifiable by use of the words "believe," "expect,"
"intend," "anticipate," "estimate," "project" or similar expressions. The
Company's ability to predict results or the actual effect of future plans or
strategies is inherently uncertain. Factors which could have a material adverse
affect on the operations and future prospects of the Company include, but are
not limited to, changes in: economic conditions generally and the waste
management industry specifically and legislative/regulatory changes (including
changes to laws governing the waste management industry). These risks and
uncertainties, together with those stated below should be considered in
evaluating forward-looking statements and undue reliance should not be placed on
such statements.
Prospective investors should carefully consider the following factors,
in addition to other matters set forth or incorporated in this Prospectus, prior
to making an investment decision regarding the shares of Common Stock offered
hereby.
History of Losses. During the fiscal years ending December 31, 1997,
1996 and 1995, the Company suffered net losses (including non-recurring charges)
of approximately ($5,589,000), ($13,890,000) and ($7,880,000), respectively, on
revenues of $3,458,000, $1,496,000, and $1,344,000, respectively. From its
inception through June 30, 1998, Waste Systems suffered a net loss of
approximately $(31,709,000) on revenues of approximately $11,598,000. Waste
Systems had an accumulated operating deficit of $(16,041,000) at June 30, 1998.
Prospects for future profitability are heavily dependent upon the success of the
Company's acquisition strategy and in its ability to continue to build
integrated solid waste management operations. There can be no assurance that
Waste Systems will generate sufficient revenue to be profitable or, if
profitable, to maintain profitability in future years.
The Independent Auditors' Report of KPMG Peat Marwick LLP from the
Company's Annual Report on Form 10-K for each of the fiscal years ended December
31, 1996 and December 31, 1997 states that the Company must raise substantial
additional capital and must achieve a level of revenues adequate to support its
cost structure, which raises substantial doubt about the Company's ability to
continue as a going concern. In addition to immediate capital needs, the Company
must raise substantial additional capital to bring to commercial viability all
of its currently planned projects and must achieve a level of revenues adequate
to support its cost structure. There can be no assurance about the Company's
ability to raise additional capital, achieve an adequate level of revenues or
continue as a going concern.
Uncertain Ability to Finance the Company's Growth. The Company has
limited liquidity in relation to its short-term capital commitments and
operating cash requirements. Additionally, Waste Systems will require
substantial funds to complete and bring to commercial viability all of its
currently planned projects. The Company also anticipates that any future
business acquisitions will be financed through cash from operations, borrowings
under its bank line of credit, the issuance of its Common Stock or seller
financing, or additional equity or debt financings. Therefore, Waste Systems'
ability to satisfy its capital commitments and operating requirements are
dependent on a number of pending or future financing activities, none of which
are assured successful completion. Any failure of the Company to obtain
sufficient financing in the short run would have a materially adverse effect on
the Company's financial condition and operations.
3
<PAGE>
Dependence on Management. The Company's future success is highly
dependent upon the services of its executive officers, particularly, Philip
Strauss, Chairman, Chief Executive Officer and President of the Company, and
Robert Rivkin, Executive Vice President--Acquisitions, Chief Financial Officer,
Treasurer and Secretary of the Company. The loss of the services of Mr. Strauss
or Mr. Rivkin could have a material adverse effect on the Company's business,
financial condition and results of operations. Waste Systems does not currently
maintain key man insurance on any of its personnel.
The Company's future success is also highly dependent upon its
continuing ability to identify, hire, train and motivate highly qualified
personnel. Waste Systems faces competition for hiring such personnel from other
companies, government entities and other organizations. There can be no
assurance that Waste Systems will be successful in attracting and retaining
qualified personnel as required for its projected operations. The inability to
attract and retain qualified personnel could have a material adverse effect upon
the Company's business, financial condition and results of operations.
Ability to Manage Growth. The Company's objective is to continue to grow
by expanding its services in markets where it can be one of the largest and most
profitable fully-integrated solid waste management companies. Accordingly, the
Company may experience periods of significant rapid growth. Such growth, if it
were to occur, could place a significant strain on the Company's management and
its operational, financial and other resources. Any failure to expand its
operational and financial systems and controls or to recruit appropriate
personnel in an efficient manner at a pace consistent with such growth could
have a material adverse effect on the Company's business, financial condition
and results of operations.
Ability to Identify, Acquire and Integrate Acquisition Targets. The
future success of the Company is highly dependent upon the Company's continued
ability to successfully identify, acquire and integrate additional solid waste
collection, recycling, transfer and disposal businesses. As competition for
acquisition candidates increases within the solid waste management industry, the
availability of suitable candidates at terms favorable to the Company decreases.
The Company competes for acquisition candidates with larger, more established
companies that may have significantly greater capital resources, which can
further decrease the availability of suitable acquisition candidates. There can
be no assurance that the Company will be able to identify suitable acquisition
candidates and, if available, obtain necessary financings at a price or on terms
and conditions favorable to the Company, or to successfully integrate the
acquisitions with current operations.
The Company believes that a significant factor in its ability to
consummate acquisitions will be the attractiveness of the Company's Common Stock
as consideration for potential acquisition targets. This attractiveness may, in
large part, be dependent upon the relative market price and capital appreciation
prospects of the Company's equity securities as compared to the equity
securities of its competitors. If the market price of the Company's Common Stock
were to decline, the Company's acquisition program could be materially adversely
affected.
Competition. The solid waste management industry is highly competitive,
very fragmented and requires substantial labor and capital resources.
Competition exists for collection, recycling, transfer and disposal services,
and acquisition targets. The markets the Company competes or is likely to
compete in are usually served by one or more of the large national, regional or
local solid waste companies who may have accumulated substantial goodwill and/or
have greater financial, marketing or technical resources than those available to
Waste Systems. The Company also competes with counties, municipalities and
operators of alternative disposal facilities that operate their own waste
collection and disposal facilities. The availability of user fees, charges or
tax revenues and the availability of tax-exempt financing may provide a
competitive advantage to the public sector. Additionally, alternative disposal
facilities such as recycling and incineration may reduce the demand for the
disposal of solid waste in landfills. Competition for waste collection and
disposal business is based on the quality of operation, price and geographical
location. From time to time, competitors may reduce the price of their services
in an effort to expand or maintain market share or to win competitively bid
contracts. There can be no assurance that the Company will be able to
successfully bid such contracts or compete with the larger and better
capitalized companies.
4
<PAGE>
Limitations on Landfill Permitting and Expansion. The Company's
operations depend on its ability to expand the landfills it owns or operates and
develop new landfill sites. There can be no assurance that the Company will be
successful in obtaining new landfill sites or expanding the permitted capacity
of its landfill. The process of obtaining required permits and approvals to
operate and expand landfills and transfer stations has become increasingly
difficult and expensive. The process can take several years and involves
hearings and compliance with zoning, environmental and other requirements. There
can be no assurance that the Company will be successful in obtaining and
maintaining required permits. Even when granted, final permits to expand are
often not approved until the remaining capacity of the landfill is very low. In
the event the Company exhausts its permitted capacity at its landfill, the
Company's ability to expand internally will be limited and the Company will be
required to cap and close the landfill. In addition, the Company could be forced
to dispose of its waste at landfills operated by its competitors. The additional
costs could have a material adverse effect on the Company's business.
Geographic Concentration of Operations. The Company has established
integrated solid waste management operations in Vermont and central
Pennsylvania, and is developing integrated solid waste management operations in
Massachusetts. Since the Company's current primary source of revenues will be
concentrated in these geographic locations, the Company's business, financial
condition and results of operations could be materially affected by, without
limitation, the following: (i) downturns in the local economy, (ii) severely
harsh weather conditions and (iii) state regulations. Additionally, the growing
competition within the local economies for waste streams may make it
increasingly difficult to expand within these regions. There can be no assurance
that the Company will be able to continue to increase the waste stream to its
landfills or be able to expand its geographic markets to lessen the effects of
adverse events that may occur in these regions.
Seasonality. The Company's revenues and results of operations tend to
vary seasonally. The winter months of the fourth and first quarters of the
calendar year tend to yield lower revenues than those experienced in the warmer
months of the second and third quarters. The primary reasons for lower revenues
in the winter months include, without limitation: (i) harsh winter weather
conditions can interfere with collection and transportation, (ii) construction
and demolition activities which generate landfill waste are primarily performed
in the warmer seasons and (iii) the volume of waste in the region is generally
higher in warmer months. The Company believes that the seasonality of the
revenue stream will not have a material adverse effect on the Company's
business, financial condition and results of operations on an annualized basis.
Environmental and Government Regulations. The Company and its customers
operate in a highly regulated environment, and in general the Company's landfill
projects will be required to have federal, state and/or local government permits
and approvals. Any of these permits or approvals may be subject to denial,
revocation or modification under various circumstances. In addition, if new
environmental legislation or regulations are enacted or existing legislation or
regulations are amended or are interpreted or enforced differently, Waste
Systems or its customers may be required to obtain additional operating permits
or approvals. There can be no assurance that Waste Systems will meet all of the
applicable regulatory requirements. Any delay in obtaining required permits or
approvals will tend to cause delays in the Company's ability to obtain bond or
other project financing, resulting in increases in the Company's need to invest
working capital in projects prior to obtaining more permanent financing, and
will also tend to reduce project returns by deferring the receipt of project
revenues. In the event that the Company is required to cancel any planned
project as a result of the inability to obtain required permits or other
regulatory impediments, the Company may lose any investment it has made in the
project up to that point, and the cancellation of any landfill projects may have
a materially adverse effect on the Company's financial condition and results of
operations.
Potential Environmental Liability and Adverse Effect of Environmental
Regulation. Waste Systems' business exposes it to the risk that it will be held
liable if harmful substances escape into the environment and cause damages or
injuries as a result of its operating activities. Moreover, federal, state and
local environmental legislation and regulations require substantial expenditures
and impose significant liabilities for noncompliance.
5
<PAGE>
Potential Adverse Community Relations. The potential exists for
unexpected delays, costs and litigation resulting from community resistance and
concerns relating to specific projects in various communities.
Performance or Surety Bonds and Letters of Credit. The Company may be
required to post a performance bond, surety bond or letter of credit to ensure
proper closure and post-closure monitoring and maintenance at its landfills and
transfer stations. Failure to obtain performance bonds, surety bonds or letters
of credit in sufficient amounts or at acceptable rates may have a material
adverse effect on the Company's business, financial condition and results of
operations.
Limits on Insurance. The Company has obtained environmental impairment
liability insurance covering claims for the sudden or gradual onset of
environmental damage. If the Company were to incur a liability for environmental
damage in excess of its insurance limits, its financial condition could be
adversely affected. The Company carries a comprehensive general liability
insurance policy which management considers adequate at this time to protect its
assets and operations from other risks.
Adequacy of Accruals for Closure and Post-Closure Costs. The Company has
material financial obligations relating to closure and post-closure costs of its
existing landfills and any landfill it may purchase or operate in the future.
The Company estimates and accrues closure and post-closure costs based on
engineering estimates of airspace usage and remaining airspace capacity. There
can be no assurances that the Company's financial obligations for closure and
post-closure costs will not exceed the amount accrued, and that this may have a
material adverse effect on the Company's business, financial condition and
results of operations.
Capital Expenditures. The Company capitalizes, in accordance with
generally accepted accounting principles, certain expenditures and advances
relating to acquisitions, pending acquisitions and landfill projects. The
Company's policy is to expense in the current period all unamortized capital
expenditures and advances relating to any operation that is permanently shut
down or any acquisition that will not be consummated and any landfill project
that is terminated. Thus, the Company may be required to incur a charge against
earnings in future periods that could have a material adverse effect on the
Company's business, financial conditions and results of operations.
Dilution of Existing Stockholders. As of August 24, 1998, there were
11,255,290 shares of the Company's Common Stock issued and outstanding. As of
the same date, the Company had outstanding stock options exercisable for 412,604
shares of the Company's Common Stock and subordinated notes convertible into
6,000,000 shares of the Company's Common Stock. The exercise and/or conversion
of such stock options and subordinated notes would dilute the net tangible book
value per share of the Company's Common Stock.
6
<PAGE>
THE COMPANY
General
Waste Systems is a regional integrated non-hazardous solid waste
management company that provides solid waste collection, recycling, transfer and
disposal services to commercial, industrial, residential and municipal
customers.
The Company currently owns and operates solid waste landfills in
Moretown, Vermont and Hopewell, Pennsylvania and three transfer stations and
collection facilities, which function as an integrated solid waste operation,
serving over 25,000 commercial, industrial, residential and municipal customers
in Vermont and central Pennsylvania.
Waste Systems' objective is to expand the current geographic scope of
its operations primarily within the Northeast and Mid-Atlantic regions of the
United States and to become one of the leading providers of non-hazardous solid
waste management in each market that it serves. The Company's primary growth
strategy is to acquire landfills in or near urban metropolitan areas and to
secure dedicated waste streams for such landfills through the acquisition and
development of collection operations and transfer stations. The internalization
of waste is a major component of the Company's strategy. The Company believes
that significant opportunities exist to expand its operations in each of its
current and targeted markets.
The Company's principal executive offices are located at Lexington
Office Park, 420 Bedford Street, Suite 300, Lexington, MA 02173; its telephone
number is (781) 862-3000. The Company was incorporated in Nevada in 1989 as Zoe
Capital Corp. and had no operations until March 29, 1995. On that date, the
Company acquired BioSafe, Inc., a Delaware corporation, through a merger with a
subsidiary of the Company, and changed its name to "BioSafe International, Inc."
In October 1997, the Company was reincorporated as "Waste Systems International,
Inc." under the laws of the State of Delaware, pursuant to a reincorporation
merger.
The Series A Preferred Stock Offering
On June 30, 1997, the Company closed a Regulation "D" private placement
of Series "A" Convertible Preferred Stock which raised net proceeds of
approximately $9.2 million. As part of the private placement, and included in
the $9.2 million, the Company converted approximately $570,000 in bank debt into
Series A Preferred Stock and acquired the minority interest in its Vermont
operations for $850,000 of Series A Preferred Stock. On August 3, 1998, the
Company exercised its right to convert all of the remaining outstanding shares
of the Series A Preferred Stock into shares of Common Stock
Recent Developments
7
<PAGE>
Going Concern Qualification. The Independent Auditor's Report of KPMG
Peat Marwick LLP from the Company's Annual Report on Form 10-K for each of the
fiscal years ended December 31, 1997 and 1996 states that "the Company must
raise substantial additional capital and must achieve a level of revenues
adequate to support the Company's cost structure, which raises substantial doubt
about the Company's ability to continue as a going concern." The factors causing
the going concern opinion were the Company's accumulated operating deficit, its
working capital deficit and its need to raise substantial additional capital to
satisfy existing and pending commitments. Waste Systems had an accumulated
operating deficit at December 31, 1996 and 1997 of approximately $23.2 million
and $28.8 million, respectively, on operating revenues of approximately $2.8
million and $6.3 million, respectively. In addition, the Company had a working
capital deficit of $4.5 million and working capital of approximately $1.5
million and cash balances of $265,000 and $2,965,000 at December 31, 1996 and
1997, respectively. To respond to the operating and financial issues, the
Company took action in 1996 to conserve cash and working capital, which included
the restructuring of the Company's operations to focus its resources and
activities on the development of a solid waste management operation.
In 1997 and 1998, the Company took and has taken further measures to
address its ability to continue as a going concern, including the continued
implementation of its 1996 restructuring. In addition, the Company raised
approximately $9.7 million of capital in June of 1997 and, on May 13, 1998, the
Company closed on an offering of $60.0 million in subordinated notes which
resulted in net proceed to the Company of approximately $58.3 million. Although
the Company is generating revenues and cash flows from its Vermont and
Pennsylvania operations, substantial additional financing will be necessary to
satisfy existing and pending commitments. The Company's alternatives in this
regard include the issuance of additional equity or long-term debt. The Company
believes that, through a combination of internally generated funds and future
financings, it will be able to satisfy its anticipated working capital
requirements for at least the next twelve months. The Company is engaged in
discussions with various parties and believes it will be successful in obtaining
additional capital. However, no assurance can be given that the Company will be
able to obtain necessary financing, and the failure to raise additional capital
could have a material adverse effect on the Company's financial condition and
operations.
Acquisitions. The Company currently has two landfill projects at
different stages of development. In June 1998, Waste Systems signed a definitive
agreement to acquire the Mosteller Landfill a 513-acre solid waste landfill in
Somerset County, Pennsylvania. This transaction is expected to close by the end
of August 1998.
Additionally, the Company has entered into a contract to operate and
remodel an existing 30-acre municipal landfill in South Hadley, Massachusetts.
On March 16, 1998, the Company filed its draft environmental impact report with
the Massachusetts Department of Environmental Protection and anticipates
receiving all of its permits during the third or fourth quarter of 1998 which
would allow Waste Systems to begin accepting solid waste at the first 6-acre
lined cell by the first or second quarter of 1999. The South Hadley landfill
project is currently expected to have approximately 2 million cubic yards of new
capacity for future disposal.
During the first six months of 1998, the Company acquired 10 collection
companies and a transfer station in the State of Vermont and four collection
companies in Pennsylvania. These acquired companies generated combined revenues
of approximately $16 million in fiscal 1997.
The Company currently is, and at any given time will be involved in
potential acquisitions that are in various stages of negotiation and
consummation (ranging from initial discussions to the execution of definitive
agreements), some of which may be material. No assurance can be given that the
Company will be able to complete any such acquisitions.
REGISTRATION OBLIGATIONS
The registration of the shares of Common Stock pursuant to the
Registration Statement of which this Prospectus is a part will discharge certain
of the Company's obligations under the terms of the Registration Rights
Agreement with certain Selling Stockholders and under certain other agreements
with certain Selling Stockholders.
8
<PAGE>
Pursuant to the Registration Rights Agreement, the Company has agreed to
pay all expenses of effecting the registration of such shares of Common Stock
(other than brokerage and underwriting commissions). The Company also has agreed
to indemnify each Selling Stockholder under the Registration Rights Agreement
and its officers, directors and other affiliated persons and any person who
controls any Selling Stockholder against all losses, claims, damages and
expenses arising under the securities laws or otherwise in connection with the
Registration Statement or this Prospectus or any amendment or supplement thereto
or hereto, subject to certain limitations. In addition, the Selling Stockholders
under the Registration Rights Agreement agreed to indemnify the Company and its
directors, officers and any person who controls the Company against any losses,
claims, damages and expenses arising under the securities laws in connection
with the Registration Statement or this Prospectus or any amendment or
supplement thereto or hereto, but only to the extent such loss, claim, damage or
expense relates to written information furnished to the Company by such Selling
Stockholder expressly for use in the Registration Statement or this Prospectus
or any amendment or supplement thereto or hereto.
SELLING STOCKHOLDERS
The following table sets forth certain information known to the Company
with respect to the Selling Stockholders, including the number of shares of
Common Stock beneficially owned by each Selling Stockholder, the number of
Shares registered hereby, and the number and percentage of shares of Common
Stock held by each Selling Stockholder before the Offering and, assuming the
sale of all registered Shares, after the Offering. There can be no assurance
that all or any of the Shares offered hereby will be sold. If any are sold, each
Selling Stockholder will receive all of the net proceeds from the sale of his,
her or its respective Shares offered hereby. The amounts set forth are to the
best of the Company's knowledge.
<TABLE>
Shares Beneficially Shares to be
Owned Prior to Registered and Shares Beneficially
Offering Sold in Owned After Offering
Beneficial Owner Number(1) Percent(2) Offering Number(1) Percent(2)
<C> <C> <C> <C> <C> <C>
Nomura International Trust Co........... 106,667 * 106,667 0 0
IFTCO................................... 213,333 1.2% 213,333 0 0
Herb Stein.............................. 80,000 * 80,000 0 0
Richard Brothers........................ 304,426 1.7% 304,426 0 0
FDIC-for Boston Trade Bank in liquidation 497,777 2.8% 497,777 0
0
Fritas AS............................... 213,333 1.2% 213,333 0 0
Simone Haggiag.......................... 17,777 * 17,777 0 0
Banca Del Gottardo...................... 264,462 1.5% 264,462 0 0
J&C Resources Limited................... 355,555 2.0% 355,555 0 0
B III Capital Partners, L.P............. 3,567,406 20.2% 3,555,555 11,851 *
James McCarthy Jr....................... 1,280 * 1,280 0 0
First Dunbar Associates, Inc............ 11,520 * 11,520 0 0
First Dunbar Securities Corp............ 8,533 * 8,533 0 0
Richard Banakus......................... 71,111 * 71,111 0 0
Cass & Co. - Magnum U.S. Equity Fund.... 71,111 * 71,111 0 0
Cass & Co. - Magnum Tech Fund........... 17,777 * 17,777 0 0
Cass & Co. - Magnum Turbo Growth Fund... 35,555 * 35,555 0 0
Cass & Co. - Magnum Opportunity Fund.... 17,777 * 17,777 0 0
Cass & Co. - Magnum Capital Growth Fund. 71,111 * 71,111 0 0
Rosebud Capital Growth Fund............. 71,111 * 71,111 0 0
Stanley Hollander c/o Cohen & Co........ 17,777 * 17,777 0 0
Robert Rivkin........................... 198,670 1.1% 17,780 180,890 1.0%
Philip W. Strauss....................... 198,495 1.1% 17,780 180,715 1.0%
Joseph Motzkin.......................... 28,230 * 17,780 10,450 *
Bostar A/S.............................. 87,736 * 3,413 84,323 *
Egger and Compan/Union Banque........... 32,209 * 3,840 28,369 *
Nelson Partners......................... 2,986 * 2,986 0 0
Olympus Securities, Ltd................. 213 * 213 0 0
Demachy Worms & Co. International Ltd... 6,826 * 6,826 0 0
Lars E. Bernsten........................ 426 * 426 0 0
Birger Dalen............................ 213 * 213 0 0
Svein Ekjord............................ 3,213 * 213 3,000 *
Per Flring.............................. 1,280 * 1,280 0 0
Nicolai M. Gram......................... 25,888 * 1,280 24,608 *
Nils Otto Holmen........................ 1,066 * 1,066 0 0
Harold Norman........................... 853 * 853 0 0
Ellen Jaer Obargaard.................... 213 * 213 0 0
Peter Spiten............................ 213 * 213 0 0
Svein Erik Stiansen..................... 5,213 * 213 5,000 *
9
<PAGE>
Ellen og Lars H. Thorklldsen............ 1,013 * 213 800 *
Bjorn Tueter............................ 2,213 * 213 2,000 *
Roton and Co............................ 62,791 * 62,791 0 0
Skips A/S `Lodd'........................ 14,222 * 14,222 0 0
Barnfield Limited....................... 44,000 * 44,000 0 0
Heritage Finance & Trust Company........ 24,000 * 24,000 0 0
Banque Privee Edmond de Rothschild S.A.. 48,000 * 40,000 8,000 *
Comptoir Prive de Gestion S.A........... 14,000 * 14,000 0 0
Arbinter Omnivalor S.A.................. 50,000 * 50,000 0 0
The Prudential Insurance Company........ 591,611 3.6% 513,351 78,260 *
The Paine Webber High Income Fund....... 544,421 3.1% 106,667 437,754 2.5%
Harvey Tauman........................... 21,333 * 21,333 0 0
Egger and Company....................... 80,213 * 80,213 0 0
Rich Golub.............................. 20,480 * 20,480 0 0
Corner Bank............................. 32,384 * 32,284 0 0
Carl Bailin............................. 19,666 * 18,666 1,000 *
TOTAL................................... 8,179,589 46.4% 7,122,569 1,057,020 6.0%
- - ----------------
</TABLE>
* Less than 1%
(1) Except as indicated in the other footnotes to this table or as described
below with respect to the relationships of the Selling Stockholders in
the Company, based on information provided by such persons and subject
to applicable community property laws, the persons named in the table
above have sole voting and investment power with respect to all of the
shares of Common Stock shown as beneficially owned by them.
(2) Percentage of ownership is based on 17,667,894 shares of common share
equivalents outstanding on August 24, 1998, consisting of 11,255,290
shares of issued and outstanding Common Stock, 412,604 shares of Common
Stock issuable upon the exercise of stock options that may be exercised
within 60 days of August 24, 1998 and 6,000,000 shares of Common Stock
issuable upon the conversion of outstanding subordinated notes. Shares
of Common Stock that may be issued upon the exercise of stock options
that are exercisable within 60 days of August 24, 1998 are deemed
outstanding for computing the percentage of the person or group holding
such options, but are not deemed outstanding for computing the
percentage of any other person or group.
The relationships of the Selling Stockholders to the Company are as follows:
Name Relationship
Philip W. Strauss Chairman of the Board of Directors, Chief Executive
Officer and President.
Robert Rivkin Director, Chief Financial Officer, Executive Vice
President--Acquisitions, Treasurer and Secretary.
Joseph E. Motzkin Vice President.
B III Capital Partners, L.P. DDJ Capital Management, LLC ("DDJ") serves as
the investment manager to B III Capital Partners,
L.P. ("B III") and an affiliate of DDJ
acts as the general partner of B III. Two
Directors of Waste Systems, Judy K. Mencher and
David J. Breazzano, are managing members of DDJ.
International Capital
Growth Limited A Director of Waste Systems, Jay J. Matulich, is a
managing director of International Capital Growth
Limited.
PLAN OF DISTRIBUTION
10
<PAGE>
The Shares of Common Stock offered hereby may be offered and sold from
time to time by the Selling Stockholders listed above, or by pledgees, donees,
transferees or other successors in interest. The Company will not receive any of
the proceeds from this Offering. The Shares offered hereby may be sold from time
to time on the Nasdaq Market on terms to be determined at the time of such
sales. The Shares of Common Stock may be sold by one or more of the following:
(a) a block trade in which the broker or dealer so engaged will attempt to sell
the Shares of Common Stock as agent but may position and resell a portion of the
block as principal to facilitate the transaction; (b) purchases by a broker or
dealer as principal and resale by such broker or dealer for its account pursuant
to this Prospectus; (c) ordinary brokerage transactions and transactions in
which the broker solicits purchasers; (d) private sales directly or through a
broker or brokers; and (e) to or through underwriters, dealers or agents, who
may receive consideration in the form of discounts and commissions; such
compensation, which may be in excess of ordinary brokerage commissions, may be
paid by the Selling Stockholders and/or the purchasers of the Shares offered
hereby for whom such underwriters, dealers or agents may act. The Selling
Stockholders and any dealers or agents that participate in the distribution of
the Shares offered hereby may be deemed to be "underwriters" as defined in the
Securities Act, and any profit on the sale of such Shares offered hereby by them
and any discounts, commissions or concessions received by any such dealers or
agents might be deemed to be underwriting discounts and commissions under the
Securities Act. The aggregate proceeds to the Selling Stockholders from sales of
the Shares offered by the Selling Stockholders hereby will be the purchase price
of such Common Stock less any broker's commissions.
To the extent required, the specific shares of Common Stock to be sold,
the names of the Selling Stockholders, the respective purchase prices and public
offering prices, the names of any such agent, dealer or underwriter, and any
applicable commissions or discounts with respect to a particular offer will be
set forth in an accompanying Prospectus Supplement
The Shares offered hereby may be sold from time to time in one or more
transactions at a fixed offering price, which may be changed, or at varying
prices determined at the time of sale or at negotiated prices.
In order to comply with the securities laws of certain states, if
applicable, the Shares offered hereby will be sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
states Shares may not be sold unless they have been registered or qualified for
sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.
In the event of a "distribution" of the shares, the Selling
Stockholders, any selling broker-dealer or agent and any "affiliated purchasers"
may be subject to Regulation M under the Exchange Act, which would prohibit,
with certain exceptions, each such person from bidding for, purchasing or
attempting to induce any person to bid for or purchase any security which is the
subject of such distribution until his participation in that distribution is
completed. In addition, Regulation M under the Exchange Act prohibits certain
"stabilizing bids" or "stabilizing purchases" for the purpose of pegging, fixing
or maintaining the price of Common Stock in connection with this Offering.
The Company will pay substantially all the expenses incurred by the
Selling Stockholders and the Company incident to the Offering and sale of the
Shares to the public, but excluding any underwriting discounts, commissions or
transfer taxes. The Company has agreed to indemnify the Selling Stockholders
against certain liabilities, including liabilities under the Securities Act.
AVAILABLE INFORMATION
11
<PAGE>
The Company is subject to the informational requirements of the Exchange
Act and, in accordance therewith, files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). The
Registration Statement, as well as such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's Regional Offices at 7
World Trade Center, Suite 1300, New York, New York 10048 and Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 606612511. Copies
of such material can also be obtained from the Public Reference Section of the
Commission at Room 1024, Judiciary Plaza, 450 West Fifth Street, N.W.,
Washington, D.C. 20549, and at its public reference facilities at New York, New
York and Chicago, Illinois at prescribed rates. The Commission also maintains a
Web site at http://www.sec.gov containing reports, proxy and information
statements and other information regarding registrants, including the Company,
that file electronically with the Commission. In addition, the Company's Common
Stock is listed on Nasdaq Market, and the aforementioned materials may also be
inspected at the offices of The Nasdaq Stock Market, Inc. at 1735 K Street,
N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on
Form S-3 (the "Registration Statement," which term shall include all amendments,
exhibits, annexes and schedules thereto) pursuant to the Securities Act, and the
rules and regulations promulgated thereunder, covering the Common Stock being
offered hereby. For further information with respect to the Company and the
shares of Common Stock being offered by this Prospectus, reference is hereby
made to such Registration Statement, including the exhibits filed as part
thereof. Statements contained in this Prospectus concerning the provisions of
certain documents filed with, or incorporated by reference in, the Registration
Statement are not necessarily complete, each such statement being qualified in
all respects by such reference. Copies of all or any part of the Registration
Statement, including the documents incorporated by reference therein or exhibits
thereto, may be obtained upon payment of the prescribed fees at the offices of
the Commission set forth above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company with the
Commission pursuant to the Exchange Act are incorporated in this Prospectus by
reference: (i) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997, as amended by the Company's Annual Report on Form
10-K/A, as further amended by the Company's Annual Report on Form 10-K/A
(Amendment No. 2); (ii) the Company's Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 1998; (iii) the Company's Quarterly Report on
Form 10-Q for the quarterly period ended June 30, 1998, as amended by the
Company's Quarterly Report on Form 10-Q/A; (iv) the Company's Current Report on
Form 8-K, as filed with the Commission on May 27, 1998; (v) the Company's
Current Report on Form 8-K, as filed with the Commission on June 5, 1998, as
amended by the Company's Current Report on Form 8-K/A, as filed with the
Commission on June 12, 1998, as further amended by the Company's Current Report
on Form 8-K/A (Amendment No. 2), as filed with the Commission on August 4, 1998,
as further amended by the Company's Current Report on Form 8-K/A (Amendment No.
3), as filed with the Commission on August 28, 1998 ; (vi) the description of
the Company's Common Stock contained in its Registration Statement on Form 8-A
(Commission File No. 0-25998) as filed on April 28, 1995 under Section 12 of the
Exchange Act; and (vii) the description of the Company's Series A, Series C,
Series D, Series E and Placement Agent Warrants contained in its Registration
Statement on Form 8-A (Commission File No. 0-25998) as filed on June 26, 1995
under Section 12 of the Exchange Act.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the filing of a post-effective amendment hereto that indicates that all
securities offered hereunder have been sold or that deregisters all such
securities then remaining unsold shall be deemed to be incorporated by reference
in this Prospectus and to be a part hereof from the date of filing of such
documents.
Any statement contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
(or in an applicable Prospectus Supplement) or in any subsequently filed
document that is incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed to
constitute a part of this Prospectus or any Prospectus Supplement, except as so
modified or superseded.
12
<PAGE>
The Company will provide, without charge, to each person, including any
owner of Common Stock, to whom a copy of this Prospectus is delivered, at the
written or oral request of such person, a copy of any or all of the documents
incorporated herein by reference (other than exhibits thereto, unless such
exhibits are specifically incorporated by reference into such documents).
Requests for such copies should be directed to Robert Rivkin, Chief Financial
Officer, Waste Systems International, Inc., Lexington Office Park, 420 Bedford
Street, Suite 300, Lexington, MA 02173, telephone (781) 862-3000.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby has been
passed upon for the Company and the Selling Stockholders by Goodwin, Procter &
Hoar LLP, Boston, Massachusetts.
EXPERTS
The consolidated financial statements of Waste Systems International,
Inc. as of December 31, 1997 and 1996, and for each of the years in the
three-year period ended December 31, 1997, incorporated herein by reference to
the Company's Annual Report on Form 10-K for the year ended December 31, 1997,
have been so incorporated in reliance on the report of KPMG Peat Marwick LLP,
independent certified public accountants, given on the authority of that firm as
experts in accounting and auditing. The report of KPMG Peat Marwick LLP covering
the consolidated financial statements is incorporated by reference herein and
contains an explanatory paragraph that states that the Company must raise
substantial additional capital and must achieve a level of revenues adequate to
support the Company's cost structure which raises substantial doubt about its
ability to continue as a going concern. The consolidated financial statements of
Waste Systems International, Inc., incorporated by reference herein, do not
include any adjustments that might result from the outcome of that uncertainty.
13
<PAGE>
No person has been authorized in connection with the offering made hereby
to give any information or to make
any representation not contained in this Prospectus and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company, any Selling Stockholder or any other person. This Prospectus
does not constitute an offer to sell or a solicitation of an offer to buy any of
the securities offered hereby to any person or by anyone in any jurisdiction in
which it is unlawful to make such offer or solicitation. Neither the delivery of
this Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that the information contained herein is correct as of
any date subsequent to the date hereof.
TABLE OF CONTENTS
Page
Risk Factors................................... 3
The Company.................................... 7
Registration Obligations....................... 8
Selling Stockholders........................... 9
Plan of Distribution........................... 10
Available Information.......................... 11
Incorporation of Certain Documents
by Reference................................... 12
Legal Matters.................................. 13
Experts........................................ 13
7,122,569 Shares
WASTE SYSTEMS
INTERNATIONAL, INC.
Common Stock
PROSPECTUS
August 31, 1998
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth an itemized statement of all expenses
expected to be incurred in connection with the issuance and distribution of the
securities being registered (all of which are estimated, other than the filing
fee of the Securities and Exchange Commission):
Securities and Exchange Commission filing fee............. $ 8,091
Legal fees and expenses................................... 7,500
Accounting fees and expenses.............................. 2,000
Blue sky fees and expenses................................ 5,000
Miscellaneous............................................. $ 5,000
$ 27,591
Item 15. Indemnification of Directors and Officers.
The Delaware General Corporation Law (the "DGCL") empowers a corporation
to indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation) by reason of the fact that that person is
or was a director, officer, employee or agent of the corporation or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise (including employee benefits plans) against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by that person in connection with that action, suit or
proceeding, to the extent that that person (i) acted in good faith and in a
manner that that person reasonably believed to be in or not opposed to the best
interests of the corporation (including with respect to any employee benefit
plan actions in good faith and in a manner reasonably believed to be in the
interests of the beneficiaries of that employee benefit plan), and (ii) with
respect to any criminal action or proceeding, had no reasonable cause to believe
that the conduct was unlawful.
The DGCL also empowers a corporation to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that the person acted in any of the
capacities set forth above (that is, a derivative action or suit) against
expenses (including attorneys' fees) actually and reasonably incurred by that
person in connection with the defense or settlement of such an action or suit if
that person acted under similar standards, except that no indemnification may be
made in respect of any claim, issue or matter as to which that person has been
adjudged to be liable to the corporation unless and to the extent that the Court
of Chancery or the court in which the action or suit was brought determines
that, despite the adjudication of liability but in view of all the circumstances
of the case, that person is fairly and reasonably entitled to indemnity for such
expenses as the court deems proper.
II-1
<PAGE>
The DGCL further provides that (i) to the extent a director, officer,
employee or agent of a corporation has been successful in the defense of any
action, suit or proceeding referred to above or in the defense of any claim,
issue or matter in any such action, suit or proceeding, that person shall be
indemnified against expenses (including attorney's fees) actually and reasonably
incurred by that person in connection with that claim, issue or matter, (ii)
indemnification provided for by the DGCL shall not be deemed exclusive of any
other rights to which the indemnified party may be entitled, and (iii) a
corporation may purchase and maintain insurance on behalf of a director,
officer, employee or agent of a corporation against any liability asserted
against that person or incurred by that person in any such capacity or arising
out of that person's status as such whether or not the corporation would have
the power to indemnify against such liabilities under the DGCL.
The DGCL also provides that determinations with respect to
indemnification shall be made (i) by the board of directors of a corporation by
a majority vote of a quorum consisting of directors who were not parties to the
action, suit or proceeding, (ii) by independent legal counsel in a written
opinion in cases where a quorum is not obtainable, or, even if obtainable when a
quorum of disinterested directors so directs, or (iii) by the stockholders of
the corporation.
The DGCL contains express limitations on the ability to limit or
eliminate liability to a corporation or its stockholders. Under these
limitations, a director remains potentially liable for monetary damages to the
corporation or the stockholders for (i) breach of the director's duty of
loyalty, (ii) acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) an improper payment of a
dividend or an improper repurchase of the corporation's stock and (iv) any
transaction from which a director derives an improper personal benefit.
Article VII of the Company's Amended and Restated Certificate of
Incorporation (the "Charter") provides that directors of the Company shall not
be personally liable to the Company or its stockholders for monetary damages for
breach of fiduciary duty, except to the extent that the elimination or
limitation of liability is not permitted under the DGCL as in effect when such
liability is determined. Article X of the Charter provides that the Company
shall, to the fullest extent permitted by the DGCL, as amended from time to
time, indemnify each person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, administrative or investigative, by reason of the fact that such
person is or was, or has agreed to become, a director or officer of the Company,
or is or was serving, or has agreed to serve, at the request of the Company, as
a director, officer or trustee of, or in a similar capacity with, another
corporation, partnership, joint venture, trust or other enterprise, from and
against all expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by such person or on his or
her behalf in connection with such action, suit or proceeding and any appeal
therefrom. Indemnification may include payment by the Company of expenses in
defending an action or proceeding in advance of the final disposition of such
action or proceeding upon receipt of any undertaking by the person indemnified
to repay such payment if it is ultimately determined that such person is not
entitled to indemnification, which undertaking may be accepted without reference
to the financial ability of such person to make such payments. The Company shall
not indemnify any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person unless the initiation
thereof was approved by the Board of Directors of the Company.
II-2
<PAGE>
Pursuant to the Company's Bylaws, each officer and non-officer employee
of the Company shall be indemnified and held harmless by the Company to the
fullest extent authorized by the DGCL, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Company to provide broader rights than said law permitted
the Company to provide prior to such amendment), against any and all expenses
incurred by such officer or non-officer employee in connection with any
proceeding in which such officer or non-officer employee is involved as a result
of serving or having served (a) as an officer or employee of the Company, (b) as
a director, officer or employee of any subsidiary of the Company, or (c) in any
capacity with any other corporation, organization, partnership, joint venture,
trust or other entity at the written request or direction of the Company,
including service with respect to employee or other benefit plans, and shall
continue as to an officer or non-officer employee after he or she has ceased to
be an officer or non-officer employee and shall inure to the benefit of his or
her heirs, executors, administrators and personal representatives; provided,
however, that the Company shall indemnify any such officer or non-officer
employee seeking indemnification in connection with a proceeding initiated by
such officer or non-officer employee only if such proceeding was authorized by
the Board of Directors of the Company; and further provided that no
indemnification shall be provided to an officer or to a non-officer employee
with respect to a matter as to which such person shall have been finally
adjudicated in any proceeding not to have acted in good faith and in a manner
her or she reasonably believed to be in, and not opposed to, the best interests
of the Company, and, with respect to any criminal proceeding, had not reasonable
cause to believe his or her conduct was unlawful. In the event that a proceeding
is compromised or settled prior to final adjudication so as to impose any
liability or obligation upon an officer or non-officer employee, no
indemnification shall be provided to said officer or non-officer employee with
respect to a matter if there be a determination that with respect to such matter
such person did not act in good faith and in a manner he or she reasonably
believed to be in, or not opposed to, the best interests of the Company, and,
with respect to any criminal proceeding, had no reasonable cause to believe his
or her conduct was unlawful. The determination contemplated by the preceding
sentence shall be made by (i) a majority vote of those Directors who are not
involved in such proceeding (the "Disinterested Directors"); (ii) by the
stockholders; or (iii) if directed by a majority of Disinterested Directors, by
independent legal counsel in a written opinion. However, if more than half of
the Directors are not Disinterested Directors, the determination shall be made
by (i) a majority vote of a committee of one or more Disinterested Director(s)
chosen by the Disinterested Director(s) at a regular or special meeting; (ii) by
the stockholders; or (iii) by independent legal counsel chosen by the Board of
Directors in a written opinion.
The Company has entered into an indemnification agreement with one of
its directors, William B. Philipbar. The indemnification agreement requires,
among other things, that the Company indemnify Mr. Philipbar to the fullest
extent permitted by law and advance to Mr. Philipbar all related expenses. Under
this agreement, the Company must also indemnify and advance all expenses
incurred by Mr. Philipbar seeking to enforce his rights under the
indemnification agreement, provided Mr. Philipbar prevails. Although the form of
indemnification agreement offers substantially the same scope of coverage
afforded by law, it provides additional assurance to Mr. Philipbar that
indemnification will be available because, as a contract, it cannot be modified
unilaterally in the future by the Board of Directors or the stockholders to
eliminate the rights it provides. It is the position of the Commission that
indemnification of directors and officers for liabilities under the Securities
Act is against public policy and unenforceable pursuant to Section 14 of the
Securities Act.
Item 16. Exhibits
4.1 Superseded Articles of Incorporation of the Registrant(Nevada)
(previously filed as an exhibit to Registrant's Registration
Statement on Form S-1, No. 33-93966).
4.2 Articles of Amendment to superseded Articles of Incorporation
of the Registrant (Nevada) (previously filed as an exhibit to
Registrant's Registration Statement on Form S-1, No.
33-93966) .
4.3 Amended and Restated Certificate of Incorporation of the
Registrant (Delaware) (Previously Filed).
4.4 Superseded Bylaws of the Registrant (Nevada) (previously filed
as an exhibit to Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1995).
4.5 Bylaws of the Registrant (Delaware) (Previously Filed).
5.1 Opinion of Goodwin, Procter & Hoar llp as to the legality of
the Common Stock being registered.
23.1 Consent of KPMG Peat Marwick LLP, Independent Accountants.
23.2 Consent of Goodwin, Procter & Hoar llp (included in Exhibit
5.1 hereto).
II-3
<PAGE>
23.3 Consent of KPMG Peat Marwick LLP, Independent Accountants
24.1 Power of Attorney (Previously Filed).
Item 17. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of
the Registration Statement (or the most recent
post-effective amendment thereof)
which, individually or in the aggregate, represent
a fundamental change in the information set forth
in the Registration Statement. Notwithstanding
the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value
of securities offered would not exceed that which
was registered) and any deviation
from the low or high and of the estimated maximum
offering range may be reflected in
the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the
aggregate, the change in volume and price represent
no more than 20 percent change in
the maximum aggregate offering price set forth in
the "Calculation of Registration
Fee" table in the effective Registration Statement
; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed
in the Registration Statement or any material
change to such information in the Registration
Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) herein do
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the undersigned Registrant pursuant to Section 13 or Section 15(d) of
the Exchange Act that are incorporated by reference in the Registration
Statement;
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement
relating to the securities offered therein, and the
offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each
filing of the Registrant's annual report pursuant to Section
13(a) or 15(d) of the Exchange Act that is incorporated by
reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to
directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the
opinion of the Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a
director, officer, or controlling
person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted
by such director, officer or controlling person in connection
with the securities being registered,
the Registrant will, unless in the opinion of its counsel
the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such
indemnification by it is against public policy as expressed
in the Securities Act and will be
governed by the final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boston, The Commonwealth of Massachusetts, on August
31, 1998.
WASTE SYSTEMS INTERNATIONAL, INC.
By: /s/ Philip W. Strauss
----------------
Philip W. Strauss
President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the date indicated.
Signature Title Date
/s/ Philip W. Strauss
----------------- President, Chief Executive Officer and August 31, 1998
Philip W. Strauss Director (Principal Executive Officer)
/s/ Robert Rivkin Executive Vice President, Chief Financial August 31, 1998
Robert Rivkin Officer and Director (Principal Financial
Officer and Accounting Officer)
* Director August 31, 1998
David Breazzano
* Director August 31, 1998
Charles Johnston
* Director August 31, 1998
Jay Matulich
* Director August 31, 1998
Judy Mencher
* Director August 31, 1998
William B. Philipbar
*By: /s/ Philip W. Strauss
----------------
Philip W. Strauss
Attorney-in-Fact
<PAGE>
Index of Exhibits
4.1 Superseded Articles of Incorporation of the Registrant (Nevada)
(previously filed as an exhibit to
Registrant's Registration Statement on Form S-1, No. 33-93966).
4.2 Articles of Amendment to superseded Articles of Incorporation of the
Registrant (Nevada) (previously
filed as an exhibit to Registrant's Registration Statement on Form S-1,
No. 33-93966) .
4.3 Amended and Restated Certificate of Incorporation of the Registrant
(Delaware) (Previously Filed).
4.4 Superseded Bylaws of the Registrant (Nevada) (previously filed as an
exhibit to Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995).
4.5 Bylaws of the Registrant (Delaware) (Previously Filed).
5.1 Opinion of Goodwin, Procter & Hoar llp as to the legality of the Common
Stock being registered.
23.1 Consent of KPMG Peat Marwick L.L.P., Independent Accountants.
23.2 Consent of Goodwin, Procter & Hoar llp (included in Exhibit 5.1 hereto)
23.3 Consent of KPMG Peat Marwick LLP, Independent Accountants
24.1 Power of Attorney (Previously Filed).
<PAGE>
Exhibit 5.1
August 31, 1998
Waste Systems International, Inc.
Lexington Office Park
420 Bedford Street, Suite 300
Lexington, MA 02173
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
This opinion is rendered to you in connection with the preparation of
the Registration Statement on Form S-3 (File No. 333-37217) (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
relating to the proposed issuance and sale, from time to time, by certain
selling stockholders of Waste Systems International, Inc. (the "Company") of up
to 7,122,569 shares (the "Shares") of the Company's common stock, $.01 par value
per share (the "Common Stock").
We have acted as counsel to the Company in connection with the
preparation of the Registration Statement. For purposes of this opinion, we have
examined the Certificate of Incorporation and Bylaws, as amended and restated,
of the Company; such records of the corporate proceedings of the Company as we
have deemed material; the Registration Statement and all exhibits thereto; and
such other documents as we have deemed necessary to enable us to render this
opinion.
In rendering the opinions expressed herein, we assume that all steps
necessary to comply with the registration requirements of the Securities Act and
with applicable requirements of state law regulating the sale of securities will
be duly taken.
Based upon and subject to the foregoing, and having regard for such
legal considerations as we have deemed relevant, it is our opinion that the
Shares have been authorized for issuance and are validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our name in the Registration
Statement and the Prospectuses contained therein.
Very truly yours,
/s/ Goodwin, Procter & Hoar llp
GOODWIN, PROCTER & HOAR LLP
<PAGE>
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
To the Board of Directors
Waste Systems International, Inc.:
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus. Our report
dated March 26, 1998 includes an explanatory paragraph that states that the
Company must raise substantial additional capital and must achieve a level of
revenues adequate to support its cost structure, which raises substantial doubt
about its ability to continue as a going concern. The consolidated financial
statements incorporated by reference herein do not include any adjustments that
might result from the outcome of that uncertainty.
KPMG Peat Marwick LLP
Boston, Massachusetts
August 31, 1998
<PAGE>
Exhibit 23.3
Independent Auditors' Consent
Board of Directors
Eagle Recycling, Inc. and Subsidiary:
We consent to the inclusion of our report dated June 5, 1998 with respect to the
consolidated balance sheets of Eagle Recycling, Inc. and Subsidiary as of
December 31, 1997 and 1996, and the related consolidated statements of income
and retained earnings, and cash flows for the years then ended, which report
appears in the Form 8-K of Waste Systems International, Inc. dated May 22, 1998.
KPMG Peat Marwick LLP
Harrisburg, Pennsylvania
August 31, 1998
