As filed with the Securities and Exchange Commission on September 29, 1998
Registration Statement No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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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)
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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)
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With a copy to:
THOMAS P. STORER, P.C.
GOODWIN, PROCTER & HOAR LLP
Exchange Place
Boston, Massachusetts 02109-2881
(617) 570-1000
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after the Registration Statement becomes effective.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.o
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. o
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. o
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. o
CALCULATION OF REGISTRATION FEE
<TABLE>
<C> <C> <C> <C> <C>
- ----------------------------- ----------------------- ------------------------- ------------------------- ------------------
Title of Each Class of Amount to be Proposed Maximum Proposed Maximum Amount of
Securities Being Registered Registered Offering Price Per Aggregate Offering Registration Fee
Share (1) Price (1)
- ----------------------------- ----------------------- ------------------------- ------------------------- ------------------
- ----------------------------- ----------------------- ------------------------- ------------------------- ------------------
Common Stock, par value 7,205,022 $6.01 $43,302,182 $12,775.00
$.01 per share. . . . . .
. . . . . . . . .
- ----------------------------- ----------------------- ------------------------- ------------------------- ------------------
</TABLE>
(1) Based upon the average of the high and low sale prices reported on The
Nasdaq SmallCap Market on September 24, 1998, and estimated solely for
the purpose of calculating the registration fee pursuant to Rule 457(c)
of the Securities Act of 1933, as amended.
(2) Plus such additional shares as may be offered or issued to prevent
dilution resulting from stock splits, stock dividends, reverse stock
splits, split-ups, recapitalizations or other similar events.
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>
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SUBJECT TO COMPLETION, DATED SEPTEMBER 29, 1998
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of any
such State.
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PRELIMINARY PROSPECTUS
7,205,022 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 7,205,022 Shares offered
hereby, (i) 6,000,000 Shares will be issued to holders of the Company's 7%
Convertible Subordinated Notes due 2005 (the "Subordinated Notes"), (ii) 647,776
Shares were issued on or about May 14, 1998 to certain Selling Stockholders when
the Company exercised its right to convert all of the outstanding shares of its
Series B Convertible Preferred Stock, $.001 par value per share (the "Series B
Preferred Stock"), into shares of Common Stock and (iii) 557,246 Shares were
issued to certain Selling Stockholders in connection with various transactions.
The Company is registering the Shares to fulfill its obligations pursuant to:
(i) a certain Exchange Agreement, dated as of December 30, 1997, relating to the
Series B Preferred Stock (the "Exchange Agreement"), (ii) a certain Registration
Rights Agreement, dated as of May 13, 1998, relating to the Subordinated Notes
(the "Registration Rights Agreement") and (iii) certain other agreements. 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.
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 date of this Prospectus is September 29, 1998.
1.
<PAGE>
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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 September 24, 1998, the last reported sales
price for the Common Stock on the Nasdaq Market was $6-3/8 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, central Pennsylvania,
Massachusetts and upstate New York. 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 September 24, 1998, there were
11,711,212 shares of the Company's Common Stock issued and outstanding. As of
the same date, the Company had outstanding stock options exercisable for 418,854
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, Hopewell, Pennsylvania and Somerset County, 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, central Pennsylvania, upstate
New York and Massachusetts.
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 B Preferred Stock Offering
On December 30, 1997, the Company issued 40,488 shares of the Series B
Preferred Stock in a private placement in exchange for outstanding convertible
notes of the Company. The Series B Preferred Stock returned a 6.0% annual
cumulative dividend and was convertible into shares of the Company's Common
Stock at a conversion price of $6.25 per share of such Common Stock. The
dividend was payable in cash or in additional shares of Series B Preferred Stock
at the Company's option. The Series B Preferred Stock was also redeemable (i) at
the Company's option for shares of the Company's Common Stock if the average
closing price of the Company's Common Stock for 20 consecutive trading days
equaled or exceeded $6.25 and (ii) at the Company's option for cash equal to the
redemption price as set forth in the Certificate of Designation of the Series B
Preferred Stock if any shares of Series B Preferred Stock were outstanding on
October 6, 2000. On May 14, 1998, the Company exercised its right to convert all
of the issued and outstanding shares of Series B Preferred Stock into shares of
Common Stock pursuant to clause (i) of the previous sentence.
The Subordinated Notes Offering
On May 13, 1998, the Company closed an offering of $60.0 million in
Subordinated Notes, which resulted in net proceeds to the Company of
approximately $58.3 million. The Subordinated Notes will mature in May 2005, and
bear interest at 7.0% per annum, payable semi-annually in arrears on each June
30 and December 31, commencing June 30, 1998. The Subordinated Notes and any
accrued but unpaid interest are convertible into Common Stock at a conversion
price of $10.00 per share at the option of the holder at any time, and can be
mandatorily converted by the Company after two years if the Company's Common
Stock closing price equals or exceeds the conversion price of $10.00 per share
for a period of 20 consecutive trading days.
7.
<PAGE>
Recent Developments
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 of Subordinated Notes which
resulted in net proceeds 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 September 1998, Waste Systems closed the
acquisition of the Mosteller Landfill, a 513-acre solid waste landfill in
Somerset County, Pennsylvania.
Additionally, the Company has entered into a contract to operate 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 fourth quarter of 1998 which would allow Waste
Systems to begin accepting solid waste at the first 6-acre lined cell during the
first half 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 nine months of 1998, the Company acquired 10 collection
companies and a transfer station in the State of Vermont, five collection
companies in Pennsylvania, seven collection companies and a transfer station in
upstate New York and a collection company and transfer station in
Western/Central Massachusetts. These acquired companies generated combined
revenues of approximately $35 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.
8.
<PAGE>
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 Exchange Agreement, the
Registration Rights Agreement and certain other agreements.
Pursuant to the Exchange Agreement, the Company agreed to pay all
expenses (other than underwriting commissions and the fees and expenses of any
counsel for the Selling Stockholders) of effecting the registration of the
shares of Common Stock with respect to which the Series B Preferred Stock were
converted. The obligations of the Company with respect to the registration of
shares of the Company's Common Stock issued upon the conversion of the shares of
the Series B Preferred Stock will expire and terminate at such time as the
Selling Stockholders are entitled to sell the shares of Common Stock issued upon
the conversion of the shares of Series B Preferred Stock without restriction and
without a need for the filing of a registration statement under the Securities
Act.
Pursuant to the Registration Rights Agreement, the Company agreed to pay
all expenses (other than underwriting discounts and commissions) of effecting
the registration of the shares of Common Stock with respect to which the
Subordinated Notes may be converted. The obligations of the Company with respect
to the registration of shares of the Company's Common Stock issued upon the
conversion of the Subordinated Notes will expire and terminate upon the earlier
of (i) two years after the last date of original issuance of the Subordinated
Notes and (ii) such time as the Selling Stockholders are entitled to sell the
shares of Common Stock issued upon the conversion of the Subordinated Notes
without restriction and without a need for the filing of a registration
statement under the Securities Act.
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>
<C> <C> <C> <C> <C> <C>
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)
Corner Bank Ltd......................... 73,376 * 40,992 32,384 *
Napier Brown Holdings Ltd............... 24,608 * 24,608 0 *
Patrick George Ridgewill
c/o Napier Brown holdings, Ltd....... 16,400 * 16,400 0 *
Banca Del Gottardo...................... 338,254 1.9 73,792 264,462 1.5
Bostar AS............................... 149,923 * 32,800 84,323 *
Nomura International Securities......... 127,163 * 20,496 106,667 *
The RR Fund............................. 20,496 * 20,496 0 *
Swiss American Securities............... 106,592 * 106,592 0 *
Gerlach & Co............................ 4,096 * 4,096 0 *
Hillside Holdings Ltd................... 24,608 * 24,608 0 *
Republic National Bank of New York
(Luxembourg SA)....................... 4,096 * 4,096 0 *
Republic National Bank of New York
(France) SA........................... 4,096 * 4,096 0 *
W&P Bank and Trust Company.............. 24,600 * 24,600 0 *
Julius Baer Securities.................. 82,000 * 82,000 0 *
Bangholm Enterprises Ltd................ 4,096 * 4,096 0 *
Republic National Bank of New York
(Suisse) SA........................... 20,496 * 20,496 0 *
AS Corona............................... 12,304 * 12,304 0 *
Nicolai Gram............................ 50,496 * 24,608 25,888 *
David Anthony Rees...................... 16,400 * 16,400 0 *
Peter Spiten............................ 4,309 * 4,096 213 *
BFI Banque de Financement & d'Investissment57,408 * 57,408 0 *
Harry K. Benjamin....................... 55,555 * 55,555 0 *
Jacques Khodara......................... 55,555 * 55,555 0 *
John J. Hastings........................ 227,961 1.3 227,961 0 *
Terrence J. Hastings.................... 227,961 1.3 227,961 0 *
John Hancock Advisors...................1,150,000 6.3 1,150,000 0 *
BEA Associates.......................... 700,000 3.9 700,000 0 *
Dawson Samberg Capital Management, Inc.. 150,000 * 150,000 0 *
The Prudential Insurance Company
of America 1,591,611 8.8 1,000,000 591,611 3.3
B III Capital Partners, L.P.............5,567,406 30.1 2,011,851 3,555,555 19.6
Roton & Co.............................. 1,544,421 8.5 1,002,963 541,458 3.0
---------- -------------------------- -------------------
TOTAL...................................12,355,581 68.1% 7,205,022 5,202,561 28.7%
========== =============================== ====================
</TABLE>
9.
<PAGE>
- ----------------
* 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 18,130,066 shares of common share
equivalents outstanding on September 24, 1998, consisting of 11,711,212
shares of issued and outstanding Common Stock, 418,854 shares of Common
Stock issuable upon the exercise of stock options that may be exercised
within 60 days of September 24, 1998 and 6,000,000 shares of Common
Stock issuable upon the conversion of the outstanding Subordinated
Notes. Shares of Common Stock that may be issued upon the exercise of
stock options that are exercisable within 60 days of September 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
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.
10.
<PAGE>
PLAN OF DISTRIBUTION
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
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.
11.
<PAGE>
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.
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.
12.
<PAGE>
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>
II-6
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....................... 9
Selling Stockholders........................... 9
Plan of Distribution........................... 10
Available Information.......................... 11
Incorporation of Certain Documents
by Reference................................... 12
Legal Matters.................................. 12
Experts........................................ 13
7,205,022 Shares
WASTE SYSTEMS
INTERNATIONAL, INC.
Common Stock
PROSPECTUS
__________, 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............ $ 12,625
Legal fees and expenses.................................. 7,500
Accounting fees and expenses............................. 2,000
Blue sky fees and expenses............................... 5,000
Miscellaneous............................................ $ 5,000
----------
$ 32,125
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 Amended and Restated Certificate of Incorporation of the
Registrant (previously filed as an exhibit to Registrant's
Registration Statement on Form S-3, No. 333-37217).
4.2 Bylaws of the Registrant (previously filed as an exhibit to
Registrant's Registration Statement on Form S-3,
No. 333-37217).
4.3 Exchange Agreement, dated as of December 30, 1997, regarding
10% Convertible, Redeemable, Subordinated Notes due October 6,
2000.
4.4 Registration Rights Agreement, dated as of May 13, 1998.
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 L.L.P., Independent Accountants.
24.1 Power of Attorney (included in the signature page hereto).
II-3
<PAGE>
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
September 28, 1998.
WASTE SYSTEMS INTERNATIONAL, INC.
By: /s/ Philip W. Strauss
------------------
Philip W. Strauss
President
Known all men by these presents, that each person whose signature
appears below constitutes and appoints Philip W. Strauss and Robert Rivkin, each
acting singly, as his or her true and lawful attorney-in-fact and agent, with
full power of substitution, and from him and in his name, place and stead, in
any and all capacities, to sign any and all amendments or post-effective
amendments to this Registration Statement, and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto each of said attorneys-in-fact
and agents, full power and authority to do and perform each and every act and
thing requisite or necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitutes may
lawfully do or cause to be done by virtue thereof.
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 Director September 28, 1998
Philip W. Strauss (Principal Executive Officer)
/s/ Robert Rivkin
--------------- Executive Vice President -
Aquisitions, Chief September 28, 1998
Robert Rivkin Financial Officer and Director
(Principal Financial Officer and
and Accounting Officer)
/s/ David Breazzano
--------------- Director September 28, 1998
David Breazzano
/s/ Charles Johnston
---------------- Director September 28, 1998
Charles Johnston
/s/ Jay Matulich
-------------- Director September 28, 1998
Jay Matulich
/s/ Judy Mencher
-------------- Director September 28, 1998
Judy Mencher
/s/ William B. Philipbar Director September 28, 1998
--------------------
William B. Philipbar
<PAGE>
Index of Exhibits
4.1 Amended and Restated Certificate of Incorporation of the Registrant
(previously filed as an exhibit to
Registrant's Registration Statement on Form S-3, No. 333-37217).
4.2 Bylaws of the Registrant (previously filed as an exhibit to
Registrant's Registration Statement on Form
S-3, No. 333-37217).
4.3 Exchange Agreement, dated as of December 30, 1997, regarding 10%
Convertible, Redeemable, Subordinated Notes due October 6, 2000.
4.4 Registration Rights Agreement, dated as of May 13, 1998.
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 L.L.P., Independent Accountants.
24.1 Power of Attorney (included in the signature page hereto).
<PAGE>
- ---------------
EXHIBIT 4.3
- ---------------
WASTE SYSTEMS INTERNATIONAL, INC.
(formerly known as BioSafe, Inc.)
EXCHANGE AGREEMENT
To: Waste Systems International, Inc.
10 Fawcett Street
Cambridge, MA 02138
Re: 10% Convertible, Redeemable, Subordinated Notes Due October 6, 2000
-------------------------------------------------------------------
Reference is made to the above-captioned Notes (the "Notes") issued by
BioSafe, Inc., formerly a Nevada corporation and re-incorporated in Delaware
corporation as Waste Systems International, Inc. effective October 27, 1997
(referred to in either case herein as the "Company") in the aggregate principal
amount of $8,375,000. You have advised the undersigned that the Company has
offered to certain accredited investors who are holders of Notes, to exchange
such Notes for shares of Series B Convertible Preferred Stock, $.001 par value
per share (the "Series B Preferred Stock"), of the Company (the "Series B
Shares"), at an exchange price of $100 per Series B Share (the "Exchange
Price"), for consideration payable in principal amount of and unpaid interest
accrued to the Closing Date (as defined herein) and calculated on a pro rata
basis (the "Pro Rata Interest") on, the 10% Convertible, Redeemable,
Subordinated Notes due October 6, 2000 (the "Notes") to a holder exchanging
Notes for Series B Shares (an "Investor") pursuant to the terms and conditions
described herein and in the Confidential Private Exchange Offering Memorandum
dated December [ ], 1997 and accompanying this Agreement (the "Exchange Offering
Memorandum" which, together with together with this Agreement constitute the
"Exchange Offer") The Exchange Offer will remain open from December [ ], 1997
until [ ], unless extended, by the Company (such date, as extended, if at all,
the "Expiration Date").
Based on the foregoing and subject to the terms and conditions of this
Exchange Agreement (the "Exchange Subscription"), the undersigned agrees with
you as follows:
1. Exchange Subscription.
<PAGE>
The undersigned hereby tenders this Exchange Subscription and Notes in
the principal amount set forth on the signature page hereof, in minimum
increments of $25,000, in exchange for a number of Series B Shares equal to (a)
the sum of such principal amount of Notes so tendered plus the Pro Rata Interest
thereon divided by (b) the exchange price of 100 per Series B Share (the
"Exchange Price"). In lieu of any fractional Series B Shares, which will not be
issued, the Company will pay the undersigned at the Closing cash in an amount
equal to the amount of consideration described in clause (a) above remaining
after determining the integral number of Series B Shares issuable to such
Investor in the manner described above.
2. Acceptance of Exchange Subscription.
It is understood and agreed that this Exchange Subscription is made
subject to the following terms and conditions:
(a) The Company shall have the right to accept or reject this
Exchange Subscription, in whole or in part, for any reason, including the
inability of the undersigned to meet the standards imposed by Regulation D
promulgated by the Securities and Exchange Commission under the Securities Act
of 1933, as amended (the "Securities Act"), the ineligibility of the undersigned
to meet the standards imposed by applicable state or foreign securities laws, or
for any other reason, or for no reason. If this Exchange Subscription is
rejected, the Notes tendered pursuant to Section 1 hereof will be returned to
the address set forth on the signature page by the undersigned together with
interest, if any, accrued thereon and payable between the date of such tender
and the date such Notes are returned to the undersigned. Upon such return of
Notes (and payment of interest as described in the preceding sentence, if any),
the undersigned will have no further liability to the Company other than to
return to the Company the Exchange Offering Memorandum and other documents, if
any, furnished to the undersigned by or on behalf of the Company in connection
with the Exchange Offer, and the Company will have no further liability to the
undersigned arising from the Exchange Offer. Accordingly, if Notes are tendered
by the undersigned and returned by the Company during any period in which there
is no interest payment date arising under the Notes, the Company will have no
liability to the undersigned arising from the Exchange Offer other than the
return of Notes to the undersigned as described in this paragraph, and the
undersigned will continue to be entitled receive interest payments under the
terms of the Notes.
(b) Two copies of this Agreement are being executed by the
undersigned. If accepted, one copy of this Agreement will be retained by the
Company and one copy of this Agreement, after execution by the Company, shall be
delivered to the undersigned.
3. Closing of Exchange Offer; Withdrawal of Exchange Offer or
Exchange Subscription.
<PAGE>
(a) The consummation of the Exchange Offer and the closing of
the Exchange (the "Closing"), including delivery of the certificates
representing the Series B Shares and payment of cash in lieu of fractional
Series B Shares with respect to Notes tendered and accepted by the Company in
the Exchange Offer, shall take place on or about [ ], but in any event not later
than one business day after the Expiration Date (as so extended, if at all, the
"Closing Date"), at the offices of the Company. All Notes tendered to the
Company in connection with the Exchange Offer shall be held unexchanged until
the Closing Date, at which time the Company shall either: (i) accept any Note
tendered hereby and issue Series B Shares and make payment of cash in lieu of
fractional Series B Shares, if any, to the undersigned; or (ii) reject any Note
tendered hereby and return it to the undersigned, together with interest, if
any, accrued thereon and payable between the date of such tender and the date
such Notes are returned, in each case pursuant to the terms and conditions of
the Exchange Offer.
(b) The Exchange Offer hereunder may be withdrawn by the
Company for any reason or for no reason. If the Exchange Offer is withdrawn by
the Company, the Company shall promptly return to the holders any and all Notes
previously tendered to the Company hereunder, and the Company will have no
further liability to the undersigned arising from the Exchange Offer upon its
return to the undersigned of such Notes (together with interest, if any, accrued
thereon and payable between the date of such tender and the date such Notes are
returned to the undersigned).
4. Representations and Warranties of the Undersigned.
The undersigned hereby represents and warrants to the Company as
follows:
(a) all information provided and representations made by the
undersigned in the Prospective Investor Questionnaire (the "Questionnaire") of
the Company, a form of which Questionnaire is attached hereto as Exhibit A, are
true and correct in all respects as of the date hereof.
(b) The address set forth at the foot of this Subscription is
the address of the undersigned's principal residence or place of business, and
the undersigned has no present intention of becoming a resident of any other
country, state or jurisdiction.
(c) Unless the undersigned shall have notified the Company to
the contrary in writing prior to or together with the tendering of this Exchange
Subscription, the undersigned acknowledges that the undersigned has not relied
upon the advice of a "Purchaser Representative" (as defined in the
aforementioned Regulation D) in evaluating the risks and merits of this
investment.
(d) The undersigned has received and read or reviewed and is
familiar with the Exchange Offering Memorandum and its Exhibits, and the
undersigned confirms that all documents, records, and books pertaining to the
investment in the Company and requested by the undersigned have been made
available or delivered to the undersigned.
(e) The undersigned has had an opportunity to ask questions of
and receive answers from the Company, or a person or persons acting on the
Company's behalf, concerning the terms and conditions of this investment.
<PAGE>
(f)The undersigned understands and acknowledges the following:
(i) the securities for which the undersigned hereby
subscribes in this Exchange Offer (including any securities into which
such securities may be converted) have not been registered under the
Securities Act or under the securities laws of any state or other
jurisdiction in reliance upon exemptions for private offerings, and
that this Exchange Offer has not been passed upon or the merits thereof
endorsed or approved by any state or federal authorities;
(ii) while the Company may in the future register such
securities (or any securities into which such securities may be
converted), it is under no obligation to do so, except as provided
herein;
(iii) such securities (including any securities into
which such securities may be converted) cannot be resold unless
registered under the Securities Act and any applicable securities law
of any state or other jurisdiction, or an exemption from registration
is available;
(iv) there can be no assurance that any public market
for such securities (including any securities into which such
securities may be converted) which may currently exist will continue to
exist in the future;
(v) the undersigned is purchasing such securities
without being furnished any offering literature or prospectus other
than the Exchange Offering Memorandum (and the exhibits thereto), and
is relying only on the information contained therein in evaluating the
risks and merits of this investment; and
(vi) no person or entity has been authorized to give
any information or make any representations in connection with this
investment other than that contained in the Exchange Offering
Memorandum (and the exhibits thereto).
(g) The securities for which the undersigned hereby subscribes
pursuant to the Exchange Offer are being acquired solely for the undersigned's
own account, for investment and not with a view to or for the resale,
distribution, subdivision, or fractionalization thereof; the undersigned has no
present plans to enter into any contract, undertaking, agreement, or arrangement
relating thereto.
(h) The undersigned has such knowledge and experience that the
undersigned is capable of evaluating the matters set forth in the Exchange
Offering Memorandum (and the exhibits thereto) and the risks and merits relating
thereto.
(i)The undersigned acknowledges and is aware of the following:
<PAGE>
(i) the securities offered hereby are a speculative investment
which involves a high degree of risk of loss by the
undersigned of the undersigned's entire investment in the
Company; and
(ii) no assurances have been given that the undersigned will
realize any gain from the undersigned's exchange of Notes
for Series B Shares pursuant to the Exchange Offer and
the undersigned may lose the undersigned's entire
investment in the Series B Shares.
(j) The undersigned, if it is a corporation or other entity,
acknowledges that it, through the officer(s) and/or director(s) and/or other
employees responsible for making an investment decision with regard to this
Exchange Subscription, has such knowledge and experience in financial and
business matters that it is capable of evaluating the relative risks and merits
of this investment, and further acknowledges that the representations and
warranties contained in this Section 4 are true and accurate with respect to it.
The foregoing representations and warranties are true and accurate as
of the date hereof and shall be true and accurate as of the date of acceptance
of this Exchange Subscription and delivery of the securities purchased hereunder
and shall survive such delivery.
5. Transferability.
This Exchange Subscription, or any of the undersigned's interest
herein, may not be transferred or assigned, and any sale, assignment or transfer
of the securities acquired pursuant to the Exchange hereunder shall be made only
in accordance with applicable securities laws.
6. Revocation.
The undersigned agrees that the undersigned shall not cancel, terminate
or revoke this Exchange Subscription or any agreement of the undersigned made
hereunder except as may be required by applicable law, and that this Exchange
Subscription shall survive the death or disability of the undersigned.
7. Registration Rights.
The Company hereby grants the following rights with respect to the
shares of Common Stock issuable upon conversion of the Series B Shares to be
issued to the undersigned in connection with this Exchange Subscription:
<PAGE>
(a) "S-3" Registrations. The Company shall use its best
efforts to continue to qualify at all times for registration of its capital
stock on a Registration Statement on Form S-3 under the Securities Act ("Form
S-3") or a comparable successor form, and to file within 90 days from the
Closing Date a registration statement on Form S-3 (or on such other form as the
Company is then eligible to use under the Securities Act) for the registration
of all shares of Common Stock issuable upon conversion of the Series B Shares
issued pursuant to the Exchange Offer. The Company shall take such steps as are
required to register such Registrable Securities for sale on a delayed or
continuous basis under Rule 415, and to keep such registration effective until
all of such holder's Registrable Securities registered thereunder are sold.
Notwithstanding the foregoing:
(i) the Company shall have no obligation to keep any
registration effective more than 120 days after the
initial date of effectiveness of such registration;
and
(ii) the Company may postpone the filing of any
registration statement required hereunder for a
reasonable period of time, not to exceed 90 days, if
the Company determines in good faith that such filing
would require the disclosure of a material
transaction or other factor and the Company
determines reasonably and in good faith that such
disclosure would have a material adverse effect on
the Company.
The obligations of the Company under this Section 7 shall expire and
terminate at such time as the holder of Registrable Securities shall be entitled
to sell such securities without restriction and without a need for the filing of
a registration statement under the Securities Act, including without limitation,
for any resales of restricted securities made pursuant to Rule 144 as
promulgated by the Securities and Exchange Commission. For purposes of this
Section 7, "Registrable Securities" shall mean and include the shares of Common
Stock of the Company issuable upon conversion of the Series B Shares, pursuant
to the terms of the Series B Preferred Stock, issued to the undersigned pursuant
to the terms of this Exchange Offer.
(b) Expenses. In the case of a registration under this Section
7, the Company shall bear all costs and expenses of each such registration,
including, but not limited to, printing, legal and accounting expenses;
provided, however, that the Company shall have no obligation to pay or otherwise
bear any portion of the underwriters' commissions or discounts attributable to
the Registrable Securities being offered and sold by the holders of Registrable
Securities or the fees and expenses of any counsel for the selling holders of
Registrable Securities in connection with the registration of the Registrable
Securities.
8. Miscellaneous.
(a) No Waiver; Cumulative Remedies. No failure or delay on the
part of any party to this Exchange Subscription, in exercising any right, power
or remedy hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy
hereunder. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
<PAGE>
(b) Addresses for Notices, etc. All notices requests,
demands and other communications
provided for hereunder shall be in writing and
mailed, telecommunicated or delivered:
If to the Company, to the address set forth above, Telecopier: (617)
497-6355, Attention: Chief Financial Officer, or at such other address as shall
be designated by the Company in a written notice to the undersigned complying as
to delivery with the terms of this Section 8. A copy of all notices, demands and
other communications to the Company shall be sent to the offices of Goodwin,
Procter & Hoar LLP, Exchange Place, Boston, Massachusetts 02109, Attention:
Thomas P. Storer, P.C.,Telecopier: (617) 523-1231.
If to the undersigned, at its address as set forth on the signature
page hereof or at such other address as shall be designated by the undersigned
in a written notice to the Company complying as to delivery with the terms of
this Section 8.
All such notices, requests, demands and other communications shall,
when mailed, registered or certified mail, return receipt requested, postage
prepaid, telecommunicated, telegraphed or telexed, respectively, be effective
when deposited in the mails, confirmed received by telecommunication or
delivered to the telegraph or telex company, respectively, addressed as
aforesaid.
(c) Severability. The invalidity or unenforceability of
any provision hereof shall in no way affect the
validity or enforceability of any other provision.
(d) Governing Law. This Exchange Subscription shall be
governed by, and construed in accordance with, the
laws of The Commonwealth of Massachusetts, without
regard to the choice of law principles thereunder.
(e) Entire Agreement; Amendments. This Exchange Agreement
together with all Exhibits and amendments hereto constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof and
may only be amended by a writing executed by all parties.
(f) Certification. The undersigned certifies that he has
read the entire Exchange Agreement and every statement on his part and set forth
herein is true and complete.
[Remainder of Page Intentionally Left Blank]
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed and sworn to this
Exchange Subscription this ______ day of ____________, 1997.
- --------------------------------- ------------------------------------
Name of Investor (Please print) Signature of Investor
and Capacity in Which
Exchange Subscription is Made
Address of Investor:
- --------------------------------- ------------------------------------
Number Street Signature of Co-Investor, if Any
- ---------------------------------
City State Zip Code
Tel. No. ( ) ___________________
- ---------------------------------
Social Security Number for
Individual or other Taxpayer
Identification Number
Notes: $___________ Principal Amount of Notes tendered in Exchange Offer at a
Per Series B Share Exchange Price of $100:
ACCEPTED BY WASTE SYSTEMS INTERNATIONAL, INC.,
this ____ day of ______________, 199__
By:_______________________________________
Name:
Title:
Series B Shares: __________ Series B Shares Issued in the Exchange
Offer for the Notes tendered in the
principal amount set forth above at an Exchange Price
of $100 (Note: calculated on
aggregate consideration equal to the sum of
$__________ principal amount of and
$__________ in Pro Rata Interest on such Notes)
Cash: $_____ Cash, if any, issued in lieu of fractional
Series B Shares otherwise issuable in exchange for the
Notes tendered in the principal amount set
forth above at an Exchange Price of $100
<PAGE>
EXHIBIT A
NAME OF INVESTOR:
PROSPECTIVE INVESTOR QUESTIONNAIRE
Waste Systems International, Inc.
10 Fawcett Street
Cambridge, MA 02138
The securities of Waste Systems International, Inc. (the "Company")
offered by the Company through the Exchange Offer of which the Exchange Offering
Memorandum is a part, are being offered in reliance on Regulation D under the
Securities Act of 1933, as amended ("Regulation D"), and similar provisions of
state law. To satisfy the requirements of Regulation D and applicable state law,
the Company must determine whether a prospective investor (the "Investor") meets
Regulation D and the state law definitions of "accredited investor" before
selling (or, in some states, offering) securities to such person. This
Questionnaire is designed to assist the Company in making this determination.
Please complete, execute and date this Prospective Investor
Questionnaire and deliver it along with an executed Exchange Agreement to the
Company at the address set forth above. Your answers will, at all times, be kept
confidential except as necessary to establish that the offer and sale of the
securities will not result in a violation of applicable law.
1) To establish the basis of the Investor's status as an accredited
investor, please answer the questions
set forth below.
a) Is the Investor an individual with a net worth (or net worth
with his or her spouse) in excess of $1 million:
Yes No
b) If the Investor is an individual, will his or her acquisition
of securities of the Company in the offering exceed 25% of the
Investor's net worth (or net worth with his or her spouse).
For purposes of this Section 1(b), "net worth" excludes the
value of the Investor's principal residence and its
furnishings.
Yes No
<PAGE>
c) Is the Investor an individual with net income (without
including any net income of the Investor's spouse) in excess
of $200,000, or joint income with the Investor's spouse in
excess of $300,000, in each of the two most recent years, and
does the Investor reasonably expect to reach the same income
level in the current year?
Yes No
d) Is the Investor an employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974
(hereinafter "ERISA") whose decision to invest in the Company
is being made by a plan fiduciary which is either a bank,
savings and loan association, insurance company or registered
investment adviser or, alternatively, does the employee
benefit plan have total assets in excess of $5,000,000 or is
the employee benefit plan "self-directed" with investment
decisions made solely by person(s) who are accredited
investors(s)?
Yes No
e) Is the Investor a plan established and maintained by a state,
its political subdivisions, or any agency or instrumentality
of a state or its political subdivisions for the benefit of
its employees with total assets in excess of $5,000,000?
Yes No
f) Is the Investor a trust (including an individual retirement
arrangement formed as a trust or a tax-qualified pension and
profit sharing plan (e.g., a Keough Plan) formed as a trust
but not subject to ERISA) with total assets in excess of
$5,000,000 that was not formed for the specific purpose of
acquiring securities of the Company and whose purchase is
directed by a person with such knowledge and experience in
financial and business matters that such person is capable of
evaluating the merits and risks of the prospective investment?
Yes No
<PAGE>
g) Is the Investor a corporation, partnership, Massachusetts or
similar business trust or an organization described in Section
501(c)(3) of the Internal Revenue Code that was not formed for
the specific purpose of acquiring securities of the Company
and whose total assets exceed $5,000,000?
Yes No
h) Is the Investor one of the following entities:
(i) A "bank" as defined in Section 3(a)(2) of the
Securities Act or any "savings and loan association"
or other institution as defined in Section 3(a)(5)(A)
of the Securities Act whether acting in an individual
or fiduciary capacity;
(ii) A "broker/dealer" registered pursuant to Section 15
of the Securities Exchange Act of 1934;
(iii) An "insurance company," as defined in Section 2(13)
of the Securities Act;
(iv) An "investment company" registered under the
Investment Company Act of 1940 or a "business
development company" as defined in Section 2(a)(48)
of the Investment Company Act of 1940;
(v) A "Small Business Investment Company" licensed by the
U.S. Small Business
Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958; or
(vi) A "Private Business Development Company" as defined
in Section 202(a)(22) of the Investment Advisers Act
of 1940?
Yes No
If yes, then which entity (i.e., (h)(i) through (vi)
above)?
<PAGE>
i) Is the Investor an entity (other than a trust but including a
grantor trust and including an investment retirement account,
the investment of which is directed by the beneficiary) in
which all of the equity owners or the beneficiary, as the case
may be, can answer "Yes" to any one question set forth in
Sections 1(a) through 1(h) immediately above?
Yes No
2) Is the Investor acquiring securities of the Company as a principal for
the purpose of investment and not with a view to resale or distribution?
Yes No
3) By signing this Questionnaire, the Investor hereby confirms the
following statements:
a) The Investor shall immediately provide the Company with
corrected information in the event any
information given herein was untrue.
b) The Investor acknowledges that any delivery to the Investor of
a Confidential Private Exchange Offering Memorandum and other
information relating to the Company, prior to the
determination by the Company of the suitability of the
Investor as an investor in the Company, shall not constitute
an offer of securities of the Company until such determination
of suitability shall be made.
c) The answers of the Investor to the foregoing questions are
true and complete to the best of the information and belief of
the undersigned, and the Company shall be notified promptly of
any changes in the foregoing answers.
[Remainder of Page Intentionally Left Blank]
<PAGE>
Signature of Investor Signature of Investor
(or duly authorized agent) (or duly authorized agent)
Title: Title:
Print Name Signed Above Print Name Signed Above
Date Signed Date Signed
<PAGE>
- -------------
EXHIBIT 4.4
- -------------
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made
and entered into as of May 13, 1998, by and between Waste Systems International,
Inc., a Delaware corporation (the "Company"), and First Albany Corporation (the
"Initial Purchaser") who has purchased or has the right to purchase up to
$60,000,000 in aggregate principal amount of the Company's 7% Subordinated Notes
due May 13, 2005 (the "Notes") which shall be convertible into Common Stock upon
the occurrence of certain conditions described therein.
This Agreement is made pursuant to the Purchase Agreement,
dated May 7, 1998, between the Company and the Initial Purchaser (the "Purchase
Agreement"). In order to induce the Initial Purchaser to enter into the Purchase
Agreement, the Company has agreed to provide the registration rights provided
for in this Agreement to the Initial Purchaser and its respective direct and
indirect transferees (i) for the benefit of the Initial Purchaser, (ii) for the
benefit of the Holders from time to time of the Notes (including the Initial
Purchaser) and the Holders from time to time of the Common Stock issuable or
issued upon conversion of the Notes and (iii) for the benefit of the securities
constituting the Transfer Restricted Securities (as such term is defined below).
The execution of this Agreement is a condition to the closing of the
transactions contemplated by the Purchase Agreement.
<PAGE>
The parties hereby agree as follow:
1. Definitions. As used in this Agreement, the following terms shall have the
following meanings:
Advice: As defined in Section 2(d) hereof.
Affiliate: An affiliate of any specified person shall mean any
other person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified person. For the purposes of this
definition, "control," when used with respect to any person, means the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise and
the terms "affiliated," "controlling" and "controlled" have meanings correlative
to the foregoing.
Agreement: This Registration Rights Agreement, as the
same may be amended, supplemented or modified from time to time in accordance
with the terms hereof.
Business Day: Each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
Closing Date: May 13, 1998.
Common Stock: Common Stock, $.01 par value, of the Company and
any other shares of common stock as may constitute "Common Stock" for purposes
of the Notes, in each case, as issuable or issued upon conversion of the Notes.
Company: Waste Systems International, Inc., a Delaware
corporation, and any successor corporation thereto.
Controlling Person: As defined in Section 6(a) hereof.
Effectiveness Period: As defined in Section 2(a) hereof.
Effectiveness Target Date: The 180th day following the receipt
of the Stockholder Approval.
Exchange Act: The Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC pursuant thereto.
Filing Date: The 60th day after the receipt of the
Stockholder Approval.
Holder: Each owner of any Transfer Restricted Securities.
Indemnified Person: As defined in Section 6(a) hereof.
Initial Purchaser: As defined in the first paragraph hereof.
Notes: As defined in the first paragraph hereof.
Proceeding: An action, claim, suit or proceeding
(including, without limitation, an investigation or partial proceeding,
such as disposition), whether commenced or threatened.
Prospectus: The prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
Registration Statement in reliance upon Rule 430A promulgated pursuant to the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the resale of any of the Transfer Restricted Securities covered by
such Registration Statement, and all other amendments and supplements to any
such prospectus, including post-effective amendments, and all materials
incorporated by reference or deemed to be incorporated by reference, if any, in
such prospectus.
<PAGE>
Purchase Agreement: As defined in the second paragraph hereof.
Registration Statement: Any registration statement of the
Company filed with the SEC pursuant to the Securities Act that covers the resale
of any of the Transfer Restricted Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement or Prospectus (including pre- and post-effective
amendments), all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference, if any, in such registration statement.
Rule 144: Rule 144 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any successor
rule or regulation.
Rule 144A: Rule 144A promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any successor
rule or regulation.
Rule 158: Rule 158 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any successor
rule or regulation.
Rule 174: Rule 174 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any successor
rule or regulation.
Rule 415: Rule 415 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any successor
rule or regulation.
Rule 424: Rule 424 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any successor
rule or regulation.
Sale Notice: As defined in Section 2(d) hereof.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended,
and the rules and regulations promulgated by the SEC thereunder.
Shelf Registration Statement: As defined in Section 2(a)
hereof.
Special Counsel: Such special counsel as the Holders of
Transfer Restricted Securities may from time to time appoint.
Stockholder Approval. The approval of the Company's
stockholders of the terms of the Notes which permit conversion of the Notes
into Common Stock.
Transfer Restricted Securities: The shares of Common Stock
into which the Notes are converted or convertible (including any shares of
Common Stock issued or issuable thereon upon any stock split, stock
combinations, stock dividend or the like), upon original issuance thereof, and
at all times subsequent thereto, and associated related rights, if any, until,
in the case of any such shares of Common Stock (and associated rights) (i) the
date on which the resale thereof has been registered effectively pursuant to the
Securities Act and such shares have been disposed of in accordance with the
Registration Statement relating thereto, (ii) the date on which the shares of
Common Stock issued upon conversion of such Note are distributed to the public
pursuant to Rule 144 (or any similar provisions then in effect) or are salable
pursuant to Rule 144(k) promulgated by the SEC pursuant to the Securities Act or
(iii) the date on which such shares cease to be outstanding, whichever date is
earliest.
<PAGE>
Underwritten Registration or Underwritten Offering: A
registration in connection with which securities of the Company are sold to an
underwriter for reoffering to the public pursuant to an effective Registration
Statement.
References herein to the term "Holders of a majority in
aggregate principal amount of Transfer Restricted Securities" or words to a
similar effect shall mean, with respect to any request, notice, demand,
objection or other action by the holders of Transfer Restricted Securities
hereunder or pursuant hereto (each, an "Act"), registered holders of a number of
shares of then outstanding Common Stock constituting Transfer Restricted
Securities and an aggregate principal amount of then outstanding Notes
constituting Transfer Restricted Securities, such that the sum of such shares of
Common Stock and the shares of Common Stock issuable upon conversion of such
Notes constitute in excess of 50% of the sum of all of the then outstanding
shares of Common Stock constituting Transfer Restricted Securities and the
number of shares of Common Stock issuable upon conversion of then outstanding
Notes constituting Transfer Restricted Securities. For purposes of the
immediately preceding sentence, (i) any Holder may elect to take any Act with
respect to all or any portion of Transfer Restricted Securities held by it and
only the portion as to which such Act is taken shall be included in the
numerator of the fraction described in the preceding sentence and (ii) Transfer
Restricted Securities owned, directly or indirectly, by the Company or its
direct or indirect subsidiaries shall be deemed not to be outstanding.
2. Shelf Registration Statement.
(a) The Company agrees to file with the SEC as soon as practicable after receipt
of the Stockholder Approval, but in no event later than the Filing Date, a
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415 covering the resale of all of the Transfer Restricted Securities
(the "Shelf Registration Statement"). The Shelf Registration Statement shall be
on Form S-3 under the Securities Act or another appropriate form selected by the
Company permitting registration of such Transfer Restricted Securities for
resale by the Holders in the manner or manners reasonably designated by them
(including, without limitation, one or more underwritten offerings). The Company
shall not permit any securities other than the Transfer Restricted Securities or
persons holding registration rights in connection with the Company's Preferred
Stock who exercise those rights in order to be included in the Shelf
Registration Statement. The Company shall use all reasonable efforts to cause
the Shelf Registration Statement to be declared effective pursuant to the
Securities Act as promptly as practicable following the filing thereof and to
keep the Shelf Registration Statement continuously effective under the
Securities Act for 24 months (or 48 months in the case of any Transfer
Restricted Securities held by anyone who may be deemed to be an affiliate as
defined in the Act for purposes of Rule 144 under the Act) after the Closing
Date (subject to extension pursuant to Sections 2(a), 2(b) and 2(d) hereof) (the
"Effectiveness Period"), or such shorter period ending when there ceases to be
outstanding any Transfer Restricted Securities; provided that the Company shall
not be deemed to have kept a Registration Statement effective during the
applicable period if it voluntarily takes or fails to take any action that
results in selling Holders covered thereby not being able to sell such Transfer
Restricted Securities pursuant to Federal securities laws during that period
(and the time period during which such Registration Statement is required to
remain effective hereunder shall be extended by the number of days during which
such selling Holders are not able to sell Transfer Restricted Securities).
<PAGE>
(b) Supplements and Amendments. The Company shall use its reasonable efforts to
keep the Shelf Registration Statement continuously effective by supplementing
and amending the Shelf Registration Statement if required by the rules,
regulations or instructions applicable to the registration form used for such
Shelf Registration Statement, if required by the Securities Act, or if
reasonably requested by the Holders of a majority in aggregate principal amount
of the Transfer Restricted Securities or by any underwriter of such Transfer
Restricted Securities; provided that the Effectiveness Period shall be extended
to the extent required to permit dealers to comply with the applicable
prospectus delivery requirements of Rule 174 and as otherwise provided herein.
(c) Selling Securityholder Information. The Company may require each Holder of
Transfer Restricted Securities to be sold pursuant to the Shelf Registration
Statement to furnish to the Company such information regarding the Holder and
the distribution of the Transfer Restricted Securities as the Company may from
time to time reasonably require for inclusion in the Shelf Registration
Statement, and the Company may exclude from such registration the Transfer
Restricted Securities of any Holder who unreasonably fails to furnish such
information within a reasonable time after receiving such request. Each Holder
of Transfer Restricted Securities to be sold pursuant to a Shelf Registration
Statement further agrees to furnish to the Company all information required to
be disclosed in order to make the information previously furnished to the
Company by such Holder not misleading. (d) Certain Notices; Suspension of Sales.
Each Holder agrees by its acquisition of such Transfer Restricted Securities to
notify the Company (a "Sale Notice") not later than three (3) Business Days
prior to any proposed sale by such Holder of Transfer Restricted Securities
pursuant to the Shelf Registration Statement, which notice shall be effective
for five (5) Business Days. The Company may, upon written notice to such Holder,
suspend such Holder's use of the Prospectus (which is part of the Shelf
Registration Statement) for a reasonable period not to exceed sixty (60) days if
the Company in its reasonable judgment believes it may possess material
non-public information the disclosure of which at that point in time in its
reasonable judgment would have a material adverse effect on the Company and its
subsidiaries taken as a whole. Each Holder further agrees by acquisition of such
Transfer Restricted Securities that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 4(c)(ii),
4(c)(iii), 4(c)(v) or 4(c)(vi) hereof, such Holder will forthwith discontinue
disposition of such Transfer Restricted Securities covered by such Registration
Statement or Prospectus (other than in transactions exempt from the registration
requirements under the Securities Act) until such Holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 4(j) hereof,
or until it is advised in writing (the "Advice") by the Company that the use of
the applicable Prospectus may be resumed, and, in either case, has received
copies of any additional or supplemental filings that are incorporated or deemed
to be incorporated by reference in such Prospectus. If the Company shall give
any such notice, the Effectiveness Period shall be extended by the number of
days during such period from and including the date of the giving of such notice
to and including the date when each Holder shall have received (x) the copies of
the supplemented or amended Prospectus contemplated by Section 4(j) hereof or
(y) the Advice, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus. (e) Compliance. The Company shall cause the Shelf
Registration Statement and the Prospectus and any amendment or supplement
thereto, as of the effective date of the Shelf Registration Statement, amendment
or supplement, (i) to comply in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the SEC and
(ii) except with respect to information provided by any Holder, not to contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. (f) As a condition to its receipt of the benefits conferred under
this Agreement, each Holder shall agree (a) to cooperate with the Company and to
furnish to the Company all such information in connection with the preparation
of the Registration Statement and any filings with any state securities
commissions as the Company may reasonably request, (b) to the extent required by
the Securities Act, to deliver or cause delivery of the prospectus contained in
the Registration Statement to any purchaser of the shares covered by the
Registration Statement from the Holder, and (c) to notify the Company of any
sale of Transfer Restricted Securities by such Holder. (g) If (i) the
Registration Statement required by this Agreement is not filed with the SEC on
or prior to the Filing Date, (ii) the Registration Statement has not been
declared effective by the SEC on or prior to the Effectiveness Target Date, or
(iii) the Registration Statement required by this Agreement is filed and
declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose prior to the expiration of the applicable time
period specified by this Agreement without being succeeded immediately by a
post-effective amendment to such Registration Statement that cures such default
that is itself declared effective immediately (each such event referred to in
clauses (i) through (iii), a "Registration Default", and each period during
which a Registration Default has occurred and is continuing, a "Registration
Default Period"), then the Company shall pay to each holder of Notes or Transfer
Restricted Securities related to such Notes effective thereby liquidated damages
("Liquidated Damages") in addition to the base interest that would otherwise
accrue on such Notes, with respect to the first 90-day period immediately
following the occurrence of the first Registration Default, an amount equal to
$.05 per week per $1,000 principal amount of Notes held by such Holder. The
amount of Liquidated Damages will increase by an additional $.05 per week per
$1,000 principal amount of Notes with respect to each subsequent 90-day period
until all Registration Defaults have been cured up to a maximum amount of
Liquidated Damages of $.50 per week per $1,000 principal amount of Notes.
Notwithstanding anything to the contrary set forth herein, (x) upon filing of
the Registration Statement in the case of (i) above, (y) upon the effectiveness
of the Registration Statement, in the case of (ii) above, or (z) upon the filing
of a post-effective amendment to the Registration Statement or an additional
Registration Statement that causes the Registration Statement to again be
declared effective or made usable in the case of (iii) above, the accrual of
Liquidated Damages payable with respect to the Notes or Transfer Restricted
Securities with respect thereto as a result of such cause (i), (ii) or (iii), as
applicable, shall cease. All accrued Liquidated Damages will be paid by the
Company to the Holders entitled thereto, in the manner and at such times as
provided for the payment of interest as more fully set forth in the Notes.
Notwithstanding the fact that any securities for which Liquidated Damages are
due cease to be Transferred Restricted Securities, all obligations of the
Company to pay Liquidated Damages with respect to securities shall survive until
such time as such obligations with respect to such securities shall have been
satisfied in full.
<PAGE>
3. Suspension of Rights. If, and for so long as (a) the Shelf Registration
Statement is not filed with the Commission on or prior to the Filing Date or (b)
the Shelf Registration Statement has not been declared effective by the
Commission on or prior to the Effectiveness Target Date (each such event
referred to in clauses (a) and (b) of this paragraph, a "Registration Default"),
then the Notes will not be subject to mandatory conversion in accordance with
the terms of the Notes; provided, however, that upon the effectiveness of the
Shelf Registration Statement, the Notes will become subject to mandatory
conversion in accordance with the terms of the Notes.
4. Registration Procedures. In connection with the Company's registration
obligations hereunder, the Company shall effect such registrations on the
appropriate form selected by the Company available for the sale of the Transfer
Restricted Securities to permit the sale of Transfer Restricted Securities in
accordance with the intended method(s) of disposition thereof, and pursuant
thereto the Company shall as expeditiously as possible: (a) No fewer than five
Business Days prior to the initial filing of a Registration Statement or
Prospectus and no fewer than two Business Days prior to the filing of any
amendment or supplement thereto (including any document that would be
incorporated or deemed to be incorporated therein by reference), furnish, upon
request, to the registered (as of the most recent reasonably practicable date
which shall not be more than two Business Days prior to the date such notice is
personally delivered, delivered to a next-day courier, deposited in the mail or
telecopied, as the case may be) Holders, and to the Special Counsel and the
managing underwriters, if any, copies of all such documents proposed to be
filed, which documents (including those incorporated or deemed to be
incorporated by reference) will be subject to the review of such Holders,
Special Counsel and such underwriters, if any. The Company shall not file any
such Registration Statement or related Prospectus or any amendments or
supplements thereto to which the Holders of a majority in aggregate principal
amount of the Transfer Restricted Securities, Special Counsel, or the managing
underwriters, if any, shall reasonably object within five Business Days of
receipt of all documents proposed to be filed in the event of an initial filing
and within two Business Days of such receipt in the event of amendments or
supplemental filing.
(b) Prepare and file with the SEC such amendments, including posteffective
amendments, to each Registration Statement as may be necessary to keep such
Registration Statement continuously effective for the applicable time period set
forth in Section 2(a) hereof; and cause the related Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in force) and the
Exchange Act with respect to the disposition of all securities covered by such
Registration Statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in such Registration
Statement as so amended or in such Prospectus as so supplemented; (c) Notify the
registered (as of the most recent reasonably practicable date which shall not be
more than two Business Days prior to the date such notice is personally
delivered, delivered to a next-day courier, deposited in the mail or telecopied,
as the case may be) Holders of Transfer Restricted Securities to be sold or
Special Counsel and the managing underwriters, if any, promptly (and in the case
of an event specified by clause (i)(A) of this paragraph in no event fewer than
two Business Days prior to such filing), and (if requested by any such person),
confirm such notice in writing, (i)(A) when a Prospectus or any Prospectus
supplement or post-effective amendment is proposed to be filed, and, (B) with
respect to a Registration Statement or any post-effective amendment, when the
same has become effective, (ii) of any request of the SEC or any other Federal
or state governmental authority for amendments or supplements to a Registration
Statement or related Prospectus or for additional information related thereto,
(iii) of the issuance by the SEC, any state securities commission, any other
governmental agency or any court of any stop order, order or injunction
suspending or enjoining the use or the effectiveness of a Registration Statement
or the initiation of any proceedings for that purpose, (iv) if at any time any
of the representations and warranties of the Company contained in any agreement
(including any underwriting agreement) contemplated by Section 4(1) hereof are
not true and correct in all material respects, (v) of the receipt by the Company
of any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Transfer Restricted Securities for
sale in any jurisdiction, or the initiation or threatening of any proceeding for
such purpose, and (vi) of the existence of any fact and the happening of any
event that makes any statement made in such Registration Statement or related
Prospectus untrue in any material respect, or that requires the making of any
changes in such Registration Statement or Prospectus so that in the case of the
Registration Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and that, in the case of
the Prospectus, such Prospectus will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; (d) Use all reasonable efforts to avoid
the issuance of, or, if issued, obtain the withdrawal of any order enjoining or
suspending the use or effectiveness of a Registration Statement or the lifting
of any suspension of the qualification (or exemption from qualification) of any
of the Transfer Restricted Securities for sale in any jurisdiction, at the
earliest practicable moment; (e) Subject to Section 2(c) hereof, if reasonably
requested by the managing underwriters, if any, or the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities being sold in
connection with such offering, (i) promptly incorporate in a Prospectus
supplement or post-effective amendment such information as the managing
underwriters, if any, and such Holders agree should be included therein, and
(ii) make all required filings of such Prospectus supplement or such
post-effective amendment as soon as practicable after the Company has received
notification of the matters to be incorporated in such Prospectus supplement or
post-effective amendment; provided, however, that the Company shall not be
required to take any action pursuant to this Section 4(e) that would, in the
opinion of counsel for the Company, create substantial risk of violation of
applicable law; (f) Furnish to each Holder who so requests, Special Counsel and
each managing underwriter, if any, without charge, at least one conformed copy
of each Registration Statement and each amendment thereto, including financial
statements (but excluding schedules, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits, unless requested in writing
by such Holder, counsel or managing underwriter); (g) Deliver to each Holder who
so requests, Special Counsel, and the underwriters, if any, without charge, as
many copies of the Prospectus or Prospectuses (including each form of
prospectus) and each amendment or supplement thereto as may reasonably be
requested and, unless the Company shall have given notice to such Holder
pursuant to Sections 4(c)(ii), (iii), (v) or (vi), the Company hereby consents
to the use of such Prospectus and each amendment or supplement thereto by each
of the selling Holders of Transfer Restricted Securities and the underwriters,
if any, in connection with the offering and sale of the Transfer Restricted
Securities covered by such Prospectus and any amendment or supplement thereto;
(h) Prior to any public offering of Transfer Restricted Securities, use all
reasonable efforts to register or qualify, or cooperate with the Holders of
Transfer Restricted Securities to be sold, the managing underwriters, if any,
and such underwriters' counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of, such
Transfer Restricted Securities for offer and sale under the securities or Blue
Sky laws of such jurisdictions within the United States as any Holder or
underwriter reasonably requests in writing, keep each such registration or
qualification (or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and do any and all other
acts or things reasonably necessary legally to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the applicable
Registration Statement; provided, however that the Company shall not be required
to qualify generally to do business in any jurisdiction where it is not then so
qualified or take any action that would subject it to general service of process
in any such jurisdiction where it is not then so subject; (i) In connection with
any sale or transfer of Transfer Restricted Securities that will result in such
securities no longer being Transfer Restricted Securities, and unless any
Transfer Restricted Securities shall be in only book-entry form, cooperate with
the Holders and the managing underwriters, if any, to (A) facilitate the timely
preparation and delivery of certificates representing Transfer Restricted
Securities to be sold, which certificates shall not bear any restrictive
legends, shall bear a CUSIP number different from the CUSIP number for the
Transfer Restricted Securities and shall be in a form eligible for deposit with
The Depository Trust Company and (B) enable such Transfer Restricted Securities
to be in such denominations and registered in such names as the managing
underwriters, if any, or Holders may request at least two Business Days prior to
any sale of Transfer Restricted Securities; (j) Upon the occurrence of any event
contemplated by Section 4(c)(vi) hereof, as promptly as practicable, prepare a
supplement or amendment, including, if appropriate, a post-effective amendment,
to each Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference, and
file any other required document so that, as thereafter delivered, such
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; (k) Prior to the effective date of the first Registration
Statement relating to the Transfer Restricted Securities, to provide a CUSIP
number for the Transfer Restricted Securities to be sold pursuant to the
Registration Statement; (l) Enter into such agreements (including an
underwriting agreement in form, scope and substance as is customary in
underwritten offerings) reasonably satisfactory to the Company and take all such
other reasonable actions in connection therewith (including those reasonably
requested by the managing underwriters, if any, or the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities being sold) in
order to expedite or facilitate the disposition of such Transfer Restricted
Securities, and in such connection, if an underwriting agreement is entered into
and the registration is an underwritten registration, (i) make such
representations and warranties to the Holders of such Transfer Restricted
Securities and the underwriters, if any, with respect to the business of the
Company and its subsidiaries (including with respect to businesses or assets
acquired or to be acquired by any of them), and the Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be incorporated by
reference therein, in each case, in form, substance and scope as are customarily
made by issuers to underwriters in underwritten offerings and reasonably
acceptable to the Company, and confirm the same if and when requested; (ii) seek
to obtain opinions of counsel to the Company and updates thereof which counsel
and opinions (in form, scope and substance) shall be reasonably satisfactory to
the managing underwriters, if any, and Special Counsel to the Holders of the
Transfer Restricted Securities being sold, addressed to each selling Holder of
Transfer Restricted Securities and each of the underwriters, if any, covering
the matters customarily covered in opinions requested in underwritten offerings
(including any such matters as may be reasonably requested by such Special
Counsel and underwriters); (iii) use all reasonable efforts to obtain customary
"cold comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired
or to be acquired by the Company for which financial statements and financial
data is, or is required to be, included in the Registration Statement),
addressed (where reasonably possible) to each selling Holder of Transfer
Restricted Securities and each of the underwriters, if any, such letters to be
in customary form and covering matters of the type customarily covered in "cold
comfort" letters in connection with underwritten offerings; (iv) if an
underwriting agreement is entered into, the same shall contain indemnification
provisions and procedures no less favorable to the selling Holders of Transfer
Restricted Securities and the underwriters, if any, than those set forth in
Section 6 hereof (or such other provisions and procedures acceptable to Holders
of a majority in aggregate principal amount of the Transfer Restricted
Securities covered by such Registration Statement and the managing underwriters
as required by law); and (v) deliver such documents and certificates as may be
reasonably requested by the Holders of a majority in aggregate principal amount
of the Transfer Restricted Securities being sold, Special Counsel or the
managing underwriters, if any, to evidence the continued validity of the
representations and warranties made pursuant to clause (i) of this Section 4(l)
and to evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement(s) entered into by the Company;
provided, however, notwithstanding the foregoing, the Company shall not be
required to enter into more than two underwriting agreements. (m) Make available
for inspection by a representative of the Holders of Transfer Restricted
Securities being sold, any underwriter participating in any such disposition of
Transfer Restricted Securities, if any, and any attorney, consultant or
accountant retained by such selling Holders or underwriter, at the offices where
normally kept, during reasonable business hours, all financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries as they may reasonably request and as shall be reasonably necessary
to enable them to exercise their due diligence responsibility (including with
respect to business and assets acquired or to be acquired to the extent that
such information is available to the Company), and cause the officers,
directors, agents and employees of the Company and its subsidiaries (including
with respect to business assets acquired or to be acquired to the extent that
such information is available to the Company) to supply all information in each
case reasonably requested by any such representative, underwriter, attorney,
consultant or accountant and as shall be reasonably necessary to enable them to
exercise their due diligence responsibility in connection with such Registration
Statement; provided, however, that any information that is reasonably and in
good faith designated by the Company in writing as confidential at the time of
delivery of such information shall be kept confidential by such persons (and
such persons shall so agree in writing), unless (i) disclosure of such
information is required by court or administrative order or is necessary to
respond to inquiries of regulatory authorities, (ii) disclosure of such
information is required by law (including any disclosure requirements pursuant
to Federal securities laws in connection with the filing of any Registration
Statement or the use of any prospectus referred to in this Agreement), (iii)
such information becomes generally available to the public other than as a
result of a disclosure or failure to safeguard by any such person or (iv) such
information becomes available to any such person from a source other than the
Company and such source is not bound by a confidentiality agreement; (n) Comply
with applicable rules and regulations of the SEC and make generally available to
its security holders earning statements satisfying the provisions of Section
11(a) of the Securities Act and Rule 158 (or any similar rule promulgated under
the Securities Act), no later than 45 days after the end of any 12-month period
(or 90 days after the end of any 12-month period if such period is a fiscal
year), commencing on the first day of the first fiscal quarter after the
effective date of a Registration Statement, which statement shall cover said
period, consistent with the requirements of Rule 158; and (o) (i) list all
Common Stock covered by such Registration Statement on any securities exchange
on which the Common Stock is then listed or (ii) authorize for quotation on The
Nasdaq Small-Cap System (or the principal market on which the Common Stock is
then trading) all Common Stock covered by such Registration Statement if the
Common Stock is then so authorized for quotation. 5. Registration Expenses.
<PAGE>
(a) All fees and expenses incident to the performance of or compliance with this
Agreement by the Company shall be borne by the Company whether or not any
Registration Statement is filed or becomes effective and whether or not any
securities are issued or sold pursuant to any Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filings fees (including without limitation,
fees and expenses incurred (A) with respect to filings required to be made with
the National Association of Securities Dealers, Inc. and (B) in compliance with
securities or Blue Sky laws, (ii) printing expenses (including, without
limitation, expenses of printing certificates for Transfer Restricted Securities
in a form eligible for deposit with The Depository Trust Company and of printing
Prospectuses if the printing of Prospectuses is required by the managing
underwriters, if any, or by the Holders of a majority in aggregate principal
amount of the Transfer Restricted Securities included in any Registration
Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company and Special Counsel for the Holders
(plus any local counsel reasonably deemed appropriate by the Holders of a
majority in aggregate principal amount of the Transfer Restricted Securities) in
accordance with the provisions of Section 5(b) hereof, (v) fees and
disbursements of all independent certified public accountants referred to in
Section 4(1)(iii) (including, without limitation, the expenses of any special
audit and "cold comfort" letters required by or incident to such performance),
(vi) Securities Act liability insurance, if the Company so desires such
insurance, and (vii) fees and expenses of all other persons retained by the
Company. In addition, the Company shall pay its internal expenses, the expense
of an annual audit, and the fees and expenses incurred in connection with the
listing of the securities to be registered on any securities exchange.
Notwithstanding the foregoing or anything in this Agreement to the contrary,
each Holder shall pay all underwriting discounts and commissions of any
underwriters and taxes of any kind (including transfer taxes) with respect to
any Transfer Restricted Securities sold by it.
(b) In connection with any registration hereunder, the Company shall reimburse
the Holders of the Transfer Restricted Securities being registered in such
registration for the fees and disbursements of not more than one firm of
attorneys representing the selling Holders (in addition to any local counsel),
which firm shall be chosen by the Holders of a majority in aggregate principal
amount of the Transfer Restricted Securities. Brown, Rudnick, Freed & Gesmer
shall be Special Counsel for all purposes hereof unless and until another
Special Counsel shall have been selected by a majority in aggregate principal
amount of the Transfer Restricted Securities and notice hereof shall have been
given to the Company. 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless (i) the Initial Purchaser,
(ii) each Holder of Transfer Restricted Securities, (iii) each person, if any,
who controls (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) any of the foregoing (any of the persons referred to in
this clause (iii) being hereinafter referred to as a "controlling person"), and
(iv) the respective officers, directors, partners, employees, representatives
and agents of the Initial Purchaser, each Holder of Transfer Restricted
Securities, or any controlling person (any person referred to in clause (i),
(ii), (iii) or (iv) may hereinafter be referred to as an "Indemnified Person"),
from and against any and all losses, claims, damages, liabilities, expenses and
judgments caused by any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement, Prospectus or form of
Prospectus or in any amendment or supplement thereto or in any preliminary
Prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein (in the case of any Prospectus or form of Prospectus or supplement
thereto, in light of the circumstances under which they were made) not
misleading, except insofar as such losses, claims, damages, liabilities,
expenses or judgments are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Indemnified Person furnished in writing to the Company by or on behalf of such
Indemnified Person expressly for use therein; provided that the foregoing
indemnity with respect to any preliminary Prospectus shall not inure to the
benefit of any Indemnified Person from whom the person asserting such losses,
claims, damages, liabilities, expenses and judgments purchased securities if
such untrue statement or omission or alleged untrue statement or omission made
in such preliminary Prospectus is eliminated or remedied in the Prospectus and a
copy of the Prospectus shall not have been furnished to such person in a timely
manner, unless such Prospectus was not furnished because the Company failed to
provide the Indemnified Person with sufficient copies of such corrected
Prospectus within the time period required.
(b) In case any action shall be brought against any Indemnified Person, based
upon any Registration Statement or any such Prospectus or any amendment or
supplement thereto and with respect to which indemnity may be sought against the
Company, such Indemnified Person shall promptly notify the Company in writing
and the Company shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to such Indemnified Person and payment of all
fees and expenses. Any Indemnified Person shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Person, unless (i) the employment of such counsel shall have been
specifically authorized in writing by the Company, (ii) the Company shall have
failed to assume the defense and employ counsel or (iii) such Indemnified Person
or Persons shall have been advised by counsel that there may be a conflict
between the positions of the indemnifying party or parties and of the
indemnified party or parties in conducting the defense of such action or
proceeding or that there may be legal defenses available to such Indemnified
Person or Persons different from or in addition to those available to the
indemnifying party or parties (in which case the Company shall not have the
right to assume the defense of such action on behalf of such Indemnified Person,
it being understood, however, that the Company shall not, in connection with any
one such action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) for all such Indemnified Persons, which firm
shall be designated in writing by such Indemnified Persons, and that all such
fees and expenses shall be reimbursed as they are incurred). The Company shall
not be liable for any settlement of any such action effected without its written
consent, but if settled with the written consent of the Company, the Company
agrees to indemnify and hold harmless any Indemnified Person from and against
any loss or liability by reason of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
<PAGE>
(c) In connection with any Registration Statement in which a Holder is
participating, such Holder agrees, severally, and not jointly, to indemnify and
hold harmless the Company, its directors, its officers and any person
controlling the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, to the same extent as the foregoing indemnity
from the Company to each Indemnified Person, but only with reference to
information relating to such Indemnified Person furnished in writing by or on
behalf of such Indemnified Person expressly for use in such Registration
Statement. In case any action shall be brought against the Company, any of its
directors, any such officer or any person controlling the Company based on such
Registration Statement and in respect of which indemnity may be sought against
any Indemnified Person, the Indemnified Person shall have the rights and duties
given to the Company (except that if the Company shall have assumed the defense
thereof, such Indemnified Person shall not be required to do so, but may employ
separate counsel therein and participate in defense thereof but the fees and
expenses of such counsel shall be at the expense of such Indemnified Person),
and the Company, its directors, any such officers and any person controlling the
Company shall have the rights and duties given to the Indemnified Person by
Section 6(b) hereof. (d) If the indemnification provided for in this Section 6
is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities, expenses or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities, expenses and judgments (i) in such
proportion as is appropriate to reflect the relative faults by the Company on
the one hand and each Indemnified Person on the other hand from the offering of
the Transfer Restricted 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 faults referred to in clause (i)
above but also the relative benefits received by the Company and each such
Indemnified Person in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities, expenses or judgments, as well as
any other relevant equitable considerations. The relative fault of the Company
and each such Indemnified Person shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the
Company or such Indemnified Person and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Initial Purchaser agree that it would not
be just and equitable if contribution pursuant to this Section 6(d) were
determined by pro rata allocation (even if the Indemnified Person were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities, expenses or judgments
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 6, no Indemnified Person shall be required to contribute any amount in
excess of the amount by which the total net proceeds received by it in
connection with the sale of the Transfer Restricted Securities pursuant to this
Agreement exceeds the amount of any damages which such Indemnified Person has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Indemnified Persons' obligations to contribute
pursuant to this Section 6(d) are several, and not joint, in proportion to the
respective amount of Transfer Restricted Securities included in and sold
pursuant to any such Registration Statement by each Indemnified Person.
(e) The agreements contained in this Section 6 shall survive the sale of the
Transfer Restricted Securities pursuant to any Registration Statement and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any Indemnified Person.
<PAGE>
7. Rules 144 and 144A.
The Company shall use all reasonable efforts to file the
reports required to be filed by it under the Securities Act and the Exchange Act
in a timely manner and, if at any time it is not required to file such reports
but in the past had been required to or did file such reports, it will, upon the
request of any Holder, make available other information as required by, and so
long as necessary to permit sales of, its Transfer Restricted Securities
pursuant to Rule 144 and Rule 144A. Notwithstanding the foregoing, nothing in
this Section 7 shall be deemed to require the Company to register any of its
securities pursuant to the Exchange Act.
8. Underwritten Registrations.
If any of the Transfer Restricted Securities covered by any
Shelf Registration Statement are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be investment bankers of recognized national
standing selected by the Holders of a majority in aggregate principal amount of
such Transfer Restricted Securities included in such offering, subject to the
consent of the Company (which will not be unreasonably withheld or delayed).
No person may participate in any underwritten registration
hereunder unless such person (i) agrees to sell such person's Transfer
Restricted Securities on the basis reasonably provided in any underwriting
arrangements approved by the persons enticed hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
9. Miscellaneous.
(a) Remedies. In the event of a breach by the Company, or by a Holder, of any of
their obligations under this Agreement, each Holder or the Company,
respectively, in addition to being entitled to exercise all rights granted by
law, including recovery of damages, will be entitled to specific performance of
its rights under this Agreement. The Company and each Holder agree that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by it of any of the provisions of this Agreement and hereby further agree
that, in the event of any action for specific performance in respect of such
breach, they shall waive the defense that a remedy at law would be adequate.
<PAGE>
(b) No Inconsistent Agreements. Following the date hereof, the Company shall not
enter into any agreement with respect to its securities that is inconsistent
with the rights granted to the Holders in this Agreement or otherwise conflicts
with the provisions hereof. The Company is not currently a party to any
agreement granting any registration rights with respect to any of its securities
to any person which conflicts with the Company's obligations hereunder or gives
any other party the right to include any securities in any Registration
Statement filed pursuant hereto, except for such rights and conflicts as shall
have been irrevocably waived at the Closing Date. Without limiting the
generality of the foregoing, without the written consent of the Holders of a
majority in aggregate principal amount of the Transfer Restricted Securities,
following the date hereof, the Company shall not grant to any person the right
to request it to register any of its securities under the Securities Act unless
the rights so granted are subject in all respects to the prior rights of the
Holders of Transfer Restricted Securities set forth herein, and are not
otherwise in conflict or inconsistent with the provisions of this Agreement. (c)
No Adverse Action Affecting the Transfer Restricted Securities. The Company will
not take any action with respect to the Transfer Restricted Securities which
would adversely affect the ability of any of the Holders to include such
Transfer Restricted Securities in a registration undertaken pursuant to this
Agreement. (d) No Piggyback on Registrations. The Company shall not grant to any
of its security holders (other than the Holders of Transfer Restricted
Securities in such capacity) the right to include any of its securities in any
Shelf Registration Statement other than Transfer Restricted Securities. (e)
Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof, may not be given,
without the written consent of the Holders of a majority in aggregate principal
amount of the Transfer Restricted Securities. Notwithstanding the foregoing, a
waiver or consent to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of Holders of Transfer Restricted
Securities whose securities are being sold pursuant to a Registration Statement
and that does not directly or indirectly affect the rights of other Holders of
Transfer Restricted Securities may be given by Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities being sold by
such Holders pursuant to such Registration Statement; provided, however, that
the provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the immediately preceding sentence.
(f) Notices. All notices and other communications provided for herein shall be
made in writing by hand-delivery, next-day air courier, certified first-class
mail, return receipt requested or telecopy: (i) if to a Holder, to the address
of such Holder as it appears in the Note or Common Stock register of the
Company, as applicable; and
(ii) if to the Company, to:
Waste Systems International, Inc.
Lexington Office Park
420 Bedford Street
Lexington, MA 02173
Tel: (781) 862 3000
Fax: (781) 862 2929
Attn: Chief Financial Officer
with a copy to:
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109-2881
(617) 570-1000
Attn: Thomas P. Storer, P.C.
(iii) if to the Special Counsel, to:
Brown, Rudnick, Freed & Gesmer
One Financial Center
Boston, MA 02111
(617) 856-8200
Attn: Lawrence M. Levy, Esquire
or such other Special Counsel at such other address and telecopy number as a
majority in aggregate principal amount of Transfer Restricted Securities shall
have given notice to the Company as contemplated by Section (b) hereof.
<PAGE>
Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given, when delivered by hand,
if personally delivered; one Business Day after being timely delivered to a
next-day air courier, five Business Days after being deposited in the mail,
postage prepaid, if mailed; and when receipt is acknowledged by the recipient's
telecopier machine, if telecopied.
(g) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and
shall inure to the benefit of each existing and future Holder of Transfer
Restricted Securities. The Company may not assign its rights or obligations
hereunder without the prior written consent of each and every Holder, other than
by operation of law pursuant to a merger or consolidation to which the Company
is a party. In the event the Notes become convertible into common stock of
another person pursuant to the terms of the Notes, the Company shall cause such
person to assume the Company's obligations hereunder.
(h) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same Agreement.
(i) Governing Law; Submission to Jurisdiction.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF
ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW
YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW
YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS.
THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO
UNDER APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(j) Severability. The remedies provided herein are cumulative and not exclusive
of any remedies provided by law. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employee an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
<PAGE>
(k) Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof. All references
made in this Agreement to "Section" and "paragraph" refer to such Section or
paragraph of this Agreement, unless expressly stated otherwise. (l) Attorneys'
Fees. In any action or proceeding brought to enforce any provision of this
Agreement, or where any provision hereof is validly asserted as a defense, the
prevailing party, as determined by the court, shall be entitled to recover its
reasonable attorneys' fees in addition to any other available remedy.
IN WITNESS WHEREOF, the parties have caused this Registration
Rights Agreement to be duly executed as of the date first written above.
WASTE SYSTEMS INTERNATIONAL, INC.
By:
Name:
Title:
By:
Name:
Title:
FIRST ALBANY CORPORATION
By:
Authorized Signator
<PAGE>
Exhibit 5.1
September 28, 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-________) (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 7,205,022 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
September 28, 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
September 28, 1998
