UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _)*
Eastern Environmental Services, Inc.
(Name of Issuer)
Common Stock, $.01 par value
(Title Class of Securities)
276369 10 5
(CUSIP Number)
David Alan Miller, Esq.
Graubard Mollen Horowitz Pomeranz & Shapiro
600 Third Avenue, New York, New York 10016-2097
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
August 24, 1995
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box o.
Check the following box if a fee is being paid with the statement o. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.).
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however,
see the Notes).
Page 1 of 6 pages
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SCHEDULE 13D
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CUSIP No. 276369 10 5 Page 2 of 6 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Bette Nagelberg
###-##-####
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)o
(b)o
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF - See Item 3
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) o
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
250,000
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
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8 SHARED VOTING POWER
0
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9 SOLE DISPOSITIVE POWER
250,000
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10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
250,000 shares (See Item 5(a))
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.13%
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14 TYPE OF REPORTING PERSON*
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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Item 1. Security and Issuer.
The class of equity securities to which this statement relates
is the common stock, $.01 par value, of Eastern Environmental Services, Inc.
(the "Issuer"), a Delaware corporation, whose principal executive offices are
located at Rte. 309 North, Box 366, Drums, Pennsylvania 18222 (the "Common
Stock").
The percentage of beneficial ownership reflected in this
Statement is based upon 3,954,004 shares of Common Stock outstanding on August
31, 1995, which number has been provided to the Reporting Person by the Issuer.
Item 2. Identity and Background.
(a) Name: This statement is filed on behalf of Bette Nagelberg
("Nagelberg").
(b) Residence Address: Nagelberg has a residence address of 789
Ontario Court, Franklin Lakes, New Jersey 07417.
(c) Principal Business: Nagelberg is a homemaker.
(d) During the last five years, Nagelberg has not been
convicted in any criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Nagelberg has not been a party
to any civil proceeding of a judicial or administrative body of competent
jurisdiction resulting in any judgment, decree or final order against him
enjoining him from engaging in future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
(f) Nagelberg is a citizen of the United States.
Item 3. Source and Amount of Funds or other Consideration.
Nagelberg used personal funds to purchase the securities,
described below in Item 5(c).
Item 4. Purpose of Transactions.
Nagelberg has acquired the securities specified in Item 5(c)
of this Schedule 13D in order to obtain individual equity positions in the
Issuer for investment purposes. Nagelberg may acquire or dispose of additional
shares of the Issuer, but does not presently intend to do so, although this
intention may change depending upon market conditions. Nagelberg has no present
plans which relate to or would result in: an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
issuer or any of its subsidiaries; a sale or transfer of a material amount of
assets of the Issuer or any of its subsidiaries; any change in the
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present board of directors or management of the Issuer, including any plans or
proposals to change the number or term of directors or to fill any existing
vacancies on the board; any material change in the present capitalization or
dividend policy of the Issuer; any other material change in the Issuer's
business or corporate structure; changes in the Issuer's charter, by-laws or
instruments corresponding thereto or other actions which may impede the
acquisition of control of the Issuer by any person; causing a class of
securities of the Issuer to be delisted from a national securities exchange or
to cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association; causing a class of equity securities
of the Issuer becoming eligible for termination of registration pursuant to
Section 12(g)(4) of the Securities and Exchange Act of 1934; or any action
similar to the above.
Item 5. Interest in Securities of the Issuer.
(a) Nagelberg directly owns 125,000 shares of Common Stock and
125,000 Common Stock Purchase Warrants ("Warrants"). Each Warrant entitles the
holder thereof to purchase one share of Common Stock at an exercise price of
$1.50, at any time through and including August 24, 1998.
(b) Nagelberg has sole voting and dispositive powers over
the 250,000 shares of Common Stock described in Item 5(a).
(c) On August 24, 1995, the Issuer issued an aggregate of
400,000 shares of Common Stock and 400,000 Warrants in connection with a private
offering, of which Nagelberg purchased 125,000 shares of Common Stock and
125,000 Warrants for a purchase price of $125,000. Accordingly, Nagelberg
beneficially owns 250,000 or 6.13% of the shares of the Issuer's Common Stock
outstanding, which exceeds the five (5%) percent reporting threshold, thereby
requiring Nagelberg to file this Schedule 13D.
Item 6. Contracts, Agreements, Understandings or
Relationships with Respect to Securities of Issuer.
Pursuant to the terms of the Subscription Agreement, on or
before February 24, 1996, the Issuer is required to file a continuous or "shelf"
registration statement under Rule 415 of the Securities Act of 1933, as amended
("Securities Act"), on Form S-3 to register the resale of the shares of Common
Stock and the Common Stock underlying the Warrants owned by Nagelberg. Nagelberg
also has the right to "piggy back" upon any registration statement filed by the
Issuer through October 24, 1998 (other than a registration statement filed in
connection with a transaction contemplated by Rule 145(a) promulgated under the
Securities Act or pursuant to Form S-8) the shares of Common Stock and the
Common Stock underlying the Warrants purchased by Nagelberg in the private
offering.
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Item 7. Materials to be Filed as Exhibits.
Exhibit 4.1: Subscription Agreement, dated August 24, 1995,
between the Issuer and Nagelberg.
Exhibit 4.2: Warrant to purchase 125,000 shares of Common Stock
of the Issuer.
The balance of this page has been left blank intentionally.
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SIGNATURE
After reasonable inquiry and to the best of his knowledge and
belief, it is certified that the information set forth in this statement is
true, complete and correct.
Dated: September 5, 1995
/s/ Bette Nagelberg
Bette Nagelberg
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EASTERN ENVIRONMENTAL SERVICES, INC.
THE SHARES OFFERED AND SOLD PURSUANT TO THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR THE SECURITIES LAWS
OF ANY STATES, AND THERE ARE RESTRICTIONS ON THE TRANSFERABILITY OF THE SHARES
AS DESCRIBED HEREIN.
SUBSCRIPTION AGREEMENT
1. AGREEMENT TO PURCHASE
1.1. Subject to and in accordance with the terms of this Agreement, the
undersigned purchaser (the "Purchaser"), intending to be legally bound hereby,
hereby subscribes for and agrees to purchase from EASTERN ENVIRONMENTAL
SERVICES, INC. (the "Company") One Hundred Twenty Five Thousand (125,000) shares
(the "Shares") of Common Stock, $.01 par value per share, of the Company
("Common Stock"), and a warrant to purchase One Hundred Twenty Five Thousand
(125,000) shares of Common Stock (the "Warrant") as described in Section 1.3
below.
1.2. The total purchase price for the Shares to be purchased hereby is
One Hundred Twenty Four Thousand Eight Hundred Seventy Five Dollars ($124,875)
and the total purchase price for the Warrants is One Hundred Twenty Five Dollars
($125). The Purchaser is delivering contemporaneously with this Agreement a
check or wire transfer payable to the Company in the amount of the purchase
price for the Shares and the Warrants.
1.3. The Warrant shall be evidenced by that certain Warrant
Certificate of the Company, no. , which is being executed by
the Company and delivered to the Purchaser contemporaneously
herewith. The exercise price of the Warrant is One Dollar fifty
cents ($1.50) per share.
1.4. The Purchaser acknowledges and agrees that this subscription for
the Shares is irrevocable and the Purchaser may not cancel, terminate or revoke
this Agreement or any of the agreements made by him herein, regardless of any
adverse change in the properties, business, financial condition or prospectus of
the Company or its subsidiaries.
2. REPRESENTATIONS AND WARRANTIES
2.1. Representations and Warranties of Purchaser. By
executing this Subscription Agreement, the Purchaser hereby:
2.1.1. Represents and warrants that he maintains its
domicile at the address set forth below;
2.1.2. Acknowledges that each Purchaser has received a
copy of the Company's Annual Report on Form 10-K for the fiscal
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year ended June 30, 1994, the Company's Quarterly Reports on Form 10-Q for the
quarters ended September 30, 1994, December 31, 1994 and March 31, 1995, and the
Company's proxy statement for the annual meeting of stockholders held on
December 15, 1994.
2.1.3. Represents and warrants that the Shares are being
acquired for the Purchaser's own account without a view to public distribution
or resale and that the Purchaser has no contract, undertaking, agreement or
arrangement to sell or otherwise transfer or dispose of any Shares or any
portion thereof to any other person;
2.1.4. Understands that the Shares have not been registered
under the Securities Act or the securities laws of any state, and, as a result
thereof, the Shares are "restricted securities" as defined in Rule 144 under the
Securities Act and are subject to substantial restrictions on transfer;
2.1.5. Agrees that he will not sell or otherwise transfer or
dispose of any Shares or any portion thereof unless the Shares are registered
under the Securities Act and any applicable state securities laws or the
Purchaser obtains an opinion of counsel which is satisfactory to the Company
that the Shares may be sold in reliance on an exemption from such registration
requirements, and that the Shares and certificates evidencing the same will bear
a legend reflecting such restrictions;
2.1.6. Understands that (i) except as expressly set forth
herein, the Company has no obligation or intention to register the Shares for
resale under any federal or state securities laws and (ii) the Purchaser
therefore may be precluded from selling or otherwise transferring or disposing
of any Shares or any portion thereof for an indefinite period of time or at any
particular time;
2.1.7. Represents and warrants that in determining to purchase
the Shares, he has relied solely upon its independent investigation, including
the advice of its legal counsel and accountants or other financial advisers or
purchaser representatives and has, during the course of discussions concerning
the purchase of the Shares, been offered the opportunity to ask such questions
and inspect such documents concerning the Company and its business and affairs
as he has requested so as to more fully understand the nature of the investment
and to verify the accuracy of the information supplied;
2.1.8. ACKNOWLEDGES THAT THE PURCHASE OF THE SHARES INVOLVES A
HIGH DEGREE OF RISK, and represents and warrants that he can bear the economic
risk of the purchase of the Shares, including the total loss of his investment;
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2.1.9. Represents and warrants that (i) he has adequate means
of providing for his current needs and financial contingencies, (ii) he has no
need for liquidity in this investment, (iii) he has no debts or other
obligations, and cannot reasonably foresee any other circumstances, that are
likely in the future to require he to dispose of the Shares, (iv) all his
investments in and commitments to nonliquid investments are, and after his
purchase of the Shares will be, reasonable in relation to the Purchaser's net
worth and current needs, and (v) if a corporation, partnership or trust, it was
not formed for the specific purpose of making an investment in the Shares;
2.1.10. Understands that no federal or state agency has
approved or disapproved the Shares, passed upon or endorsed the merits of the
offering of the Shares hereunder, or made any finding or determination as to the
fairness of the Shares for investment; and
2.1.11. Understands that the Shares are being offered and sold
in reliance on specific exemptions from the registration requirements of federal
and state securities laws and that the Company is relying upon the truth and
accuracy of the representations, warranties, agreements, acknowledgments and
understandings set forth herein in order to determine the applicability of such
exemption and the suitability of the Purchaser to acquire the Shares;
2.1.12. IF THE PURCHASER IS A RESIDENT OF THE COMMONWEALTH OF
PENNSYLVANIA, THE PURCHASER UNDERSTANDS THAT PURSUANT TO SECTION 207(M) OF THE
PENNSYLVANIA SECURITIES ACT OF 1972, THE PURCHASER MAY ELECT, WITHIN TWO
BUSINESS DAYS FROM THE DATE OF RECEIPT BY THE COMPANY OF THIS SUBSCRIPTION
AGREEMENT SIGNED BY THE PURCHASER, TO WITHDRAW SUCH SUBSCRIPTION AND RECEIVE A
FULL REFUND OF ALL MONIES PAID. SUCH WITHDRAWAL WILL BE WITHOUT FURTHER
LIABILITY TO ANY PERSON. TO ACCOMPLISH THIS WITHDRAWAL, THE PURCHASER NEED ONLY
SEND A LETTER OR TELEGRAM TO THE COMPANY AT THE ADDRESS SET FORTH BELOW,
INDICATING HIS INTENTION TO WITHDRAW. SUCH LETTER OR TELEGRAM SHOULD BE
POSTMARKED OR DELIVERED TO WESTERN UNION PRIOR TO THE END OF THE AFOREMENTIONED
SECOND BUSINESS DAY. IT IS PRUDENT TO SEND ANY NOTICE OF WITHDRAWAL BY TELEGRAM
OR BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED. SHOULD A REQUEST TO WITHDRAW BE
MADE ORALLY, THE INVESTOR SHOULD ASK FOR A WRITTEN CONFIRMATION THAT THE REQUEST
WAS RECEIVED.
2.1.13. If the Purchaser is a resident of the Commonwealth of
Pennsylvania, the Purchaser agrees not to sell any of the Shares within twelve
months after the date of purchase, unless such Shares are covered by an
effective registration under the Pennsylvania Shares Act or unless the
prohibition against resale is waived pursuant to the provisions of Section
204.011 of Title 64 of the Pennsylvania Code of
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Regulations. The foregoing restriction is in addition to, and
not in lieu of, other restrictions on transfer;
2.1.14. The Purchaser is an accredited investor, as defined in
Rule 501(a) of Regulation D adopted under the Securities Act and as described on
Exhibit A attached hereto (an "Accredited Investor"), and, in the case of an
individual Purchaser, is at least 21 years of age; and
2.1.15. The Purchaser acknowledges that the Company will pay
GKN Securities Corp. a finder's fee upon the completion of the sale of the
Shares and Warrants pursuant to this Subscription Agreement. The aggregate
amount of the finder's fee payable in connection with the Subscription
Agreements between the Company, on the one hand, and Ronald I. Heller, David S.
Nagelberg, Donald Saunders and William DeArmen, on the other hand, is $10,000
plus warrants to purchase 12,500 shares of Common Stock at a per share exercise
price of $1.50.
2.2. Representations and Warranties of the Company. By
executing this Subscription Agreement, the Company hereby
represents and warrants that:
2.2.1. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. The
Company has all requisite legal power and authority to own or lease and operate
its properties and assets and to carry on its business as now conducted.
2.2.2. The execution and delivery of this Agreement and the
Warrant by the Company and the performance of the obligations of the Company
contemplated hereby and thereby have been duly and validly authorized by all
necessary corporate action. The Company has the right, power and authority to
enter into and perform this Agreement and the Warrant. This Agreement and the
Warrant constitute the valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, except to the
extent that its enforceability may be subject to limitations imposed by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding at law or in equity) and to the effect of applicable bankruptcy,
reorganization, insolvency, moratorium and similar laws of general application
relating to or affecting creditors' rights, including, without limitation, the
effect of statutory or other laws regarding fraudulent conveyances and
preferential transfers.
2.2.3. Upon issuance in accordance with the terms of this
Agreement and the Warrant, respectively, the Shares and the shares of Common
Stock purchasable upon exercise of the Warrant will be duly and validly issued
and will be fully paid and non-assessable, and the holders thereof will not be
subject to
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personal liability by reason of being such holders. The Shares and the shares of
Common Stock purchasable upon exercise of the Warrant are not subject to the
preemptive rights of any holders of any security of the Company or similar
contractual rights granted by the Company.
2.2.4. The execution and delivery of this Agreement and the
Warrant by the Company and the performance of the obligations of the Company
contemplated hereby and thereby do not and will not, with or without the giving
of notice or the lapse of time or both, (i) result in a breach of, or conflict
with any of the terms and provisions of, or constitute a default under, or
result in the creation, modification, termination or imposition of any lien,
charge or encumbrance upon any property or assets of the Company pursuant to the
terms of, any material indenture, mortgage, deed of trust, loan or credit
agreement, or any other material agreement or instrument evidencing an
obligation for borrowed money, or any other material agreement or instrument to
which the Company is a party or by which the Company is bound or to which any of
the material properties or assets of the Company is subject: (ii) result in any
violation of the provisions of the Certificate of Incorporation or the By-laws
of the Company; (iii) violate any existing applicable law, rule, regulation,
judgment, order or decree of any governmental agency or court, domestic or
foreign, having jurisdiction over the Company or any of its properties or
business; or (iv) have a material adverse effect on any material permit,
license, certificate, registration, approval, consent, license or franchise
issued to or held by the Company.
3. INDEMNIFICATION
The Purchaser acknowledges that he understands the meaning of the
representations, warranties, agreements, acknowledgments and understandings (the
"Representations") made by him in this Agreement and hereby agrees to indemnify
and hold harmless the Company and all persons deemed to be in control of the
Company from and against any and all losses, costs, expenses, damages and
liabilities (including, without limitation, court costs and attorneys' fees)
arising out of or due to a breach by the Purchaser of any of the
Representations. All of the representations, warranties, agreements,
acknowledgments and understandings of the Purchaser and the Company set forth in
Section 2 hereof shall survive the delivery of this Agreement and the purchase
by the Purchaser of the Shares and the Warrant.
4. REGISTRATION
4.1. Agreement to Register.
4.1.1. General. Within six months after the
Company's acceptance of this Subscription Agreement, the Company
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shall prepare and file with the Commission a continuous or "shelf" registration
statement under Rule 415 under the Securities Act on Form S-3 (the "Registration
Statement") to register the resale of the Registrable Securities by the
Purchaser, and the Company will use its best efforts to keep effective the
Registration Statement for a period of not less than three years and 60 days,
after which time the Company may, at its option, deregister all of the Shares
which have not been sold under the Registration Statement.
4.1.2. Permitted Delay of Registration. The Company may delay
any registration or qualification of Registrable Securities required pursuant to
this Section 4.1 for a period not exceeding 60 days provided the Company shall
in good faith determine, as evidenced by resolution of its Board of Directors,
that any such registration would adversely impact any active negotiations or
planning for a proposed or pending, material, public or private financing,
merger, stock or asset acquisition or sale of all or substantially all of the
Company's assets.
4.2. Incidental Registration. The Company agrees that at any time and
from time to time that the Company proposes to file a registration statement
(other than pursuant to subsection 4.1 above) under the Securities Act (the
"Registration Statement") to register any of its Common Stock under the
Securities Act on Form S-1 or any other form of registration statement then
available for the registration under the Securities Act of securities of the
Company and which is appropriate for the inclusion therein of the Registrable
Securities, as herein contemplated, it will give written notice to all holders
of Registrable Securities (or warrants to purchase Registrable Securities) of
its intention to do so, and upon the written request of any such holder to
include his or her Registrable Securities in such registration, given within 15
days after the mailing of any such notice by the Company (a "Holder Request"),
the Company will cause all Registrable Securities held by any such requesting
holder to be included in the Registration Statement, and the Company shall use
its best efforts to maintain the effectiveness of such Registration Statement
for a period of at least nine months; provided, however, that the obligation to
give such notice and to use such best efforts shall not apply to any proposal of
the Company to register any of its securities under the Securities Act:
(a) on Form S-8 (or any successor form),
(b) in connection with any stock option, stock
purchase or other benefit plan,
(c) for the purpose of offering such securities
to another business entity or the shareholders of such
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entity in connection with the acquisition of assets or
shares of capital stock, respectively, of such entity, or
(d) more than three years and 60 days after the
date of this Agreement.
Nothing in this subsection 4.2 shall be deemed to require the Company to proceed
with any registration of its securities after giving the notice herein provided.
4.3. Required Reduction of Offered Shares. The Company and/or any
underwriter may, in their sole discretion, round the number of securities to be
registered or qualified in accordance with Section 4.2 to the nearest 100
shares. In addition, the Company may reduce or eliminate the number of shares of
Registrable Securities to be registered pursuant to Section 4.2 if, at the time
of such request for registration by any holder of Registrable Securities (i) the
Company shall propose to file for registration within 120 days other securities
to be offered by the Company under the Securities Act and (ii) the investment
banker engaged by the Company in connection with an underwritten public offering
of such securities proposed for registration under the Securities Act determines
that registration of such Registrable Securities would interfere with or be
detrimental to such offering, including the timely consummation thereof, and
such investment banker shall give written notice (the "Banker Determination
Notice") of such determination to such requesting holder or holders, setting
forth in reasonable detail the reasons for such determination. In such event the
Company, upon written notice to the holders of such Registrable Securities,
shall have the right to limit such Registrable Securities to be registered, if
any, to the largest number which would not, in the opinion of such investment
banker, result in such interference or detriment or, if any number would result
in such interference or detriment, to exclude from such registration all
Registrable Securities. Such limitation shall be applied to each such requesting
holder and all other security holders who are included in the registration
statement pro rata in respect of the number of shares subject to such request or
proposed for registration, as the case may be. No Registrable Securities
excluded from the registration by reason of the Banker Determination Notice
shall be included in such registration.
4.4. Expenses. The Company shall pay all fees and expenses incurred by
it in connection with any registration effected pursuant to this Section 4.
Notwithstanding the foregoing, the Company shall not be required to pay the
underwriters' fees, discounts or commissions relating to Shares, the fees and
disbursements of counsel to the underwriters, if any, the fees and disbursements
of counsel to the Purchaser, accounting fees incurred in connection with any
comfort letters and fees and expenses associated with qualifying the
compensation of the
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underwriters, if any, pursuant to the rules and regulations of the National
Association of Securities Dealers, Inc.
4.5. Information. The Purchaser shall furnish in writing to
the Company such information regarding itself and the
distribution proposed by the Purchaser as the Company may
reasonably request or as shall be legally required in connection
with any registration referred to in this Section 4.
4.6. Holdback Obligations.
4.6.1. Applicable securities laws require that the prospectus
included in the Registration Statement (the "Prospectus") contains information
relating to material developments in the Company's business, including, among
other things, acquisitions or dispositions of significant subsidiaries. In the
event such developments occur during the period that the Registration Statement
is effective, the Registration Statement may be required to be amended or the
Prospectus may be required to be supplemented, in accordance with the Securities
Act and the rules promulgated thereunder. Accordingly, the Purchaser and the
Company agree to the following provisions:
(A) Prior to making sales of Shares under the
Prospectus, the Purchaser may inquire by written notice to the Company as to
whether or not, to the Company's knowledge, any developments have occurred which
would require that the Registration Statement be amended or that the Prospectus
be supplemented. Promptly upon receipt of such request, the Company shall
respond in writing to such inquiry. the Company may (but shall be under no
obligation to) notify the Purchaser on its own initiative, in writing, that the
Company is aware of developments which require the Registration Statement to be
amended or the Prospectus to be supplemented. In either case, if the Company
notifies the Purchaser that such an amendment or supplement is required, then
except as otherwise set forth in paragraph (C) of this subsection 4.6.1, the
Company shall, as promptly as reasonably practicable, prepare and file such
amendment or supplement with the Commission.
(B) In the event the Company determines that an
amendment to the Registration Statement is required, the Purchaser shall refrain
from offering or selling any Shares pursuant to the Prospectus from the date of
the Company's notification to the Purchaser that such amendment is required
until such amendment is declared effective by the Commission. In the event the
Company determines that a supplement to the Prospectus is required, the
Purchaser shall refrain from offering or selling any Shares pursuant to the
Prospectus from the date of the Company's notification to the Purchaser that
such a supplement is required until five days prior to the date such supplement
is filed with the Commission. In the case of either
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an amendment to the Registration Statement or a supplement to the Prospectus,
the Purchaser shall not offer or sell any Shares under the Prospectus except in
conjunction with a Prospectus (i) in the form filed as a part of such amendment
or (ii) accompanied by such supplement, as the case may be.
(C) If the Company determines that the filing of
any amendment or supplement would require disclosure of any information which
would, in the good faith determination of the Company, adversely impact any
active negotiations or planning for a proposed or pending, material, public or
private financing, merger, stock or asset acquisition or sale of all or
substantially all of the Company's assets, then the Company may defer the filing
of such amendment or supplement until the Company determines in good faith that
no material adverse impact would result, but in no event longer than 60 days. In
such event, the Company shall notify the Purchaser that although an amendment or
supplement is required to be filed, the Company is deferring the filing of the
required amendment or supplement pursuant to this paragraph, and the Purchaser
shall thereafter refrain from making any further offers or sales of Shares
pursuant to the Prospectus in accordance with paragraph (B) of this subsection
4.6.1.
4.6.2. The Purchaser agrees that at any time and from time to
time during the Effective Period that the Company files a registration statement
with the Commission relating to a primary offering by the Company of equity or
equity-related securities (other than any registration statement filed by the
Company (A) pursuant to Rule 415 under the Securities Act, (B) on Form S-8 (or
any successor form), or (C) in connection with any stock option, stock purchase
or other benefit plan or any dividend reinvestment plan) (a "Company
Registration"), the Purchaser will not offer, sell, contract to sell or
otherwise dispose of any shares of Common Stock beneficially owned by the
Purchaser until the earlier of (i) the withdrawal of such Company Registration
or (ii) 90 days after the effective date of such Company Registration; and the
Purchaser agrees to enter into such further documents and holdback letters as
may reasonably be requested by the Company or any underwriter in connection with
such Company Registration in order to reflect the holdback obligations set forth
in this Section.
4.7. Definitions. For purposes of this Agreement, the term
"Registrable Securities" shall mean the Shares being offered and
sold to the Purchaser pursuant hereto, together with the shares
of Common Stock purchasable pursuant to the Warrant, and any
securities issued or issuable with respect to any such shares (a)
by way of stock dividend or stock split or (b) in connection with
a combination of shares, recapitalization, merger, consolidation
or other reorganization. As to any Registrable Securities, such
securities shall cease to be Registrable Securities when (i) a
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<PAGE>
registration statement with respect to the sale of such securities shall have
become effective under the Securities Act and either such securities shall have
been disposed of in accordance with such registration statement, or (ii) all
such securities held by one holder are legally able to be sold in a single sale
under Rule 144 promulgated under the Securities Act.
4.8. Obligations of Holders Other than the Purchaser. As a
condition to including any Registrable Securities in a registration
pursuant to this Section 4, each holder of Registrable Securities shall be
required to comply, and to sign such agreements and documents reasonably
requested by the Company in order to reflect each such holder's agreement
comply, with all obligations of the Purchaser pursuant to this Section 3 in
respect of the Registrable Securities held by each such holder.
5. REGISTRATION INDEMNIFICATION
5.1. Indemnification by the Company. With respect to the
registration or qualification to be effected pursuant to this
Agreement:
5.1.1. The Company shall indemnify the Purchaser and each
person or entity who controls (within the meaning of the Securities Act) the
Purchaser (a "Purchaser Indemnitee"), from and against all claims, losses,
damages and liabilities (or actions in respect thereof), including reasonable
attorneys' fees, arising out of or based on:
(A) any untrue statement of a material fact
contained in the registration statement, in any preliminary or final prospectus
included therein, or in any amendment thereof or supplement thereto, incident to
such registration or qualification; or
(B) any omission to state in the registration
statement, in any preliminary or final prospectus included therein, or in any
amendment thereof or supplement thereto, incident to such registration or
qualification, a material fact required to be stated therein or necessary to
make the statements therein not misleading;
and will reimburse each such Purchaser Indemnitee for all reasonable legal and
other out-of-pocket expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action;
provided, however, the foregoing indemnity and reimbursement obligations shall
not be applicable to the extent that any such claim, loss, damage or liability
arises out of or is based on any untrue statement or omission or violation made
in reliance upon and in conformity with written information furnished to the
Company by the Purchaser (and/or, if an underwritten offering, by any
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<PAGE>
underwriter) expressly for use in such registration statement (or the prospectus
included therein), amendment or supplement; and provided, further, the foregoing
indemnity and reimbursement obligations shall not be applicable to the extent
that any such claim, loss, damage or liability (1) arises out of an offer or
sale by any Purchaser Indemnitee where such Purchaser Indemnitee did not comply
with the provisions of Section 4.6.1 hereof, or (2) arises out of or is based on
any untrue statement or omission made in:
(C) a preliminary prospectus, which untrue
statement or omission is corrected in the final prospectus and such final
prospectus is made available to the Purchaser in accordance with the
requirements of Rule 424 under the Securities Act; or
(D) any prospectus, which untrue statement or
omission is corrected in a prospectus supplement or amended prospectus and such
prospectus supplement or amended prospectus is made available to the Purchaser
prior to the sale of Shares which gave rise to such claim, loss, damage or
liability.
5.1.2. The Purchaser shall indemnify the Company, its
directors and officers, each person or entity who controls (within the meaning
of the Securities Act) the Company (a "Company Indemnitee") from and against all
claims, losses, damages and liabilities (or actions in respect thereof) arising
out of or based on:
(A) any untrue statement of a material fact
contained in the registration statement, in any preliminary or final prospectus
included therein, or in any amendment thereof or supplement thereto, incident to
such registration or qualification; or
(B) any omission to state in the registration
statement, in any preliminary or final prospectus included therein, or in any
amendment thereof or supplement thereto, incident to such registration or
qualification, a material fact required to be stated therein or necessary to
make the statements therein not misleading;
and will reimburse each such Company Indemnitee for any legal and other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, expense, liability or action, but in each case only to the
extent that such untrue statement or omission or violation is made in such
registration statement (or the prospectus included therein), or any amendment or
supplement thereto in reliance upon and in conformity with written information
furnished to the Company by the Purchaser (and/or, if an underwritten offering,
by any underwriter) specifically for use in such registration statement
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<PAGE>
(or the prospectus included therein), amendment or supplement, or if such claim,
loss, damage, expense, liability or action arise out of use of a prospectus
after such seller has been notified in writing by the Company that such
prospectus no longer complies with the provisions of Section 10 of the
Securities Act.
5.2. Each party indemnified under the provisions of this Section 5,
upon receipt of written notice of any claim or the service of a summons or other
initial legal process upon it or him in any action instituted against it, in
respect of which indemnity may be sought on account of any indemnity agreement
contained in Section 5 shall promptly give written notice of such claim or the
commencement of such action to the party or parties from whom indemnity shall be
sought hereunder. Such indemnifying party shall be entitled at its own expense
to participate in the defense of such claim or action or, if it or he shall
elect, to assume (in conjunction with any other indemnifying parties) such
defense, in which event such defense shall be conducted by counsel chosen by
such indemnifying party or parties, which counsel shall be satisfactory to the
indemnified party or parties against whom such claim is asserted or who shall be
the defendants in such action, and such indemnified party or parties shall bear
the fees and expenses of any additional counsel retained by it, him or them.
However, (i) if the indemnifying party or parties shall elect not to assume the
defense of such claim or action or (ii) if the indemnified party or parties
reasonably determine that there may be a conflict between the positions of the
indemnifying party or parties and of the indemnified party or parties in
defending such claim or action or that there may be legal defenses available to
such indemnified party or parties different from or in addition to those
available to the indemnifying party, then counsel for the indemnified party
shall be entitled to conduct the defense; in either such event the indemnifying
party or parties shall be liable for any legal or other expenses incurred by the
indemnified party or parties in connection with the defense.
6. CONFIDENTIALITY
Anything in this Subscription Agreement to the contrary
notwithstanding, the Company shall not be obligated to furnish any proprietary
or technical information to the Purchaser. The Purchaser agrees to hold
confidential all information which has been or shall in the future be furnished
to him by the Company under or pursuant to this Agreement, except for
information which is in the public domain.
7. MISCELLANEOUS PROVISIONS
7.1. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.
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7.2. This Agreement sets forth the entire understanding and agreement
between the parties hereto with respect to the subject matter hereof, and
supersedes any and all prior and contemporaneous agreements, inducements,
covenants, conditions, representations and warranties, oral or written,
expressed or implied, except as contained herein. This Agreement may be modified
only by a written document signed by each of the parties hereto.
7.3. In the event that any provision of this Agreement shall be deemed
to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
7.4. This Agreement shall be governed, construed and enforced in
accordance with the internal laws of the Commonwealth of Pennsylvania except to
the extent of the applicability of this to the securities or "blue sky" laws of
the jurisdiction in which the Offering has been made to the Purchaser.
7.5. Purchaser's obligation to purchase the Shares and the
Warrant hereunder shall be conditioned upon his receipt of an
opinion of counsel to the Company satisfactory to the Purchaser.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement, intending to be legally bound, this day of August, 1995.
PURCHASER:
------------------------------- ------------------------------
(please print)
By:____________________________ By:___________________________
(signature)
Title:_________________________ Title:________________________
(if applicable)
Address:_______________________ Address:______________________
------------------------------- -----------------------------
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<PAGE>
Nature of Purchaser:
____ Corporation _____ Individual
____ Partnership _____ Joint tenants with right
____ Trust of survivorship
____ Other ___________________________________________________
Taxpayer I.D. No.:____________________
(E.I.N. or Soc.Sec. No.)
Accepted:
EASTERN ENVIRONMENTAL SERVICES, INC.
By:__________________________
Title:_______________________
Date:
Route 309 North
R.R. #4, Box 4452
Drums, PA 18222
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Schedule A
Accredited Investor
A Purchaser which meets any one of the following definitions
will constitute an accredited investor as defined in Rule 501(a) of Regulation D
adopted under the Securities Act:
1. Any director or executive officer of the
Company;
2. A natural person whose individual net worth,
or joint net worth with that person's spouse, at the
time of his purchase exceeds $1,000,000;
3. A natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with that
person's spouse in excess of $300,000 in each of those years and has a
reasonable expectation of reaching the same income level in the current
year;
4. 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 its
individual or fiduciary capacity; any broker dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934; any insurance
company as defined in Section 2(13) of the Securities Act; any
investment company registered under the Investment Company Act of 1940
or a business development company as defined in Section 2(a)(48) of
that act; any 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; any 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, if such plan has total assets in excess of $5,000,000; any
employee benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, if the investment decision is made by a
plan fiduciary, as defined in Section 3(21) of such act, which is
either a bank, savings and loan association, insurance company, or
registered investment adviser, or if the employee benefit plan has
total assets in excess of $5,000,000 or, if a self-directed plan, with
investment decisions made solely by persons that are accredited
investors;
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5. A private business development company as
defined in Section 202(a)(22) of the Investment
Advisers Act of 1940;
6. An organization described in Section 501(c)(3) of the
Internal Revenue Code, corporation, Massachusetts or similar business
trust or partnership, not formed for the specific purpose of acquiring
the securities offered, with total assets in excess of $5,000,000;
7. A trust with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the securities offered,
whose purchase is directed by a person who has such knowledge and
experience in financial and business matters that he or it is capable
of evaluating the merits and risks of an investment in the Company; and
8. Any entity in which all of the equity owners
are accredited investors.
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NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF
1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS, AND THIS WARRANT CANNOT BE
EXERCISED, SOLD OR TRANSFERRED, AND THE SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE OF THIS WARRANT CANNOT BE SOLD OR TRANSFERRED, UNLESS AND UNTIL THEY
ARE SO REGISTERED OR UNLESS AN EXEMPTION IS THEN AVAILABLE.
Warrant to Subscribe
Warrant Certificate No. for 125,000 Shares
EASTERN ENVIRONMENTAL SERVICES, INC.
Warrant
To Subscribe for and Purchase
Common Stock of
EASTERN ENVIRONMENTAL SERVICES, INC.
THIS CERTIFIES that, for value received, BETTE NAGELBERG or
its registered assigns ("Holder"), is entitled to subscribe for and purchase
from EASTERN ENVIRONMENTAL SERVICES, INC., a Delaware corporation ("Company"),
at an exercise price per share of One Dollar fifty cents ($1.50) (initially and
as adjusted, if at all, pursuant to the terms and conditions of this Warrant,
the "Exercise Price"), One Hundred Twenty Five Thousand (125,000) fully paid and
nonassessable shares of Company's common stock, par value $.01 per share (the
"Common Stock"). This Warrant may be exercised, in whole or in part, by Holder
at any time prior to and including 5:00 p.m. Eastern time on the third (3rd)
anniversary of the date hereof.
This Warrant is subject to the following provisions, terms and
conditions:
1. Exercise; Payment. The rights represented by this
Warrant may be exercised by Holder, in whole or in part, by the
surrender of this Warrant at the principal office of Company
properly endorsed and accompanied by payment to Company of the
Exercise Price for that number of shares of Common Stock sought to
be purchased (the "Exercised Shares"), in the manner provided
below. Company agrees that (a) shares purchased upon exercise of
<PAGE>
this Warrant shall be and are deemed to be issued to Holder as the record owner
of such shares as of the close of business on the date on which this Warrant
shall have been surrendered and payment made for such shares as provided herein,
and (b) certificates for the shares of stock so purchased shall be delivered to
Holder as promptly as reasonably practicable following any exercise of this
Warrant, and unless this Warrant shall have been exercised in full, or shall
have expired, a new Warrant representing the number of shares with respect to
which this Warrant shall not yet have been exercised, shall also be delivered to
Holder.
Holder may pay the Exercise Price for any Exercised Shares in
one or a combination of the following methods:
(a) By delivering cash, check, money order or wire
transfer of funds to the Company in the amount of the Exercise
Price of the Exercised Shares; or
(b) By surrendering to the Company shares of Common Stock
having a Fair Market Value (as measured on the date of exercise of the Exercised
Shares) equal to the Exercise Price of the Exercised Shares; or
(c) By instructing the Company to reduce the number of Warrant
Shares eligible to be purchased pursuant to this Warrant by that number (rounded
up, if a fractional number, to the nearest whole number) of Warrant Shares
(herein referred to as the "Cancelled Warrant Shares") having a Net Value (as
defined below) equal to the Exercise Price of the Exercised Shares. For purposes
hereof, the term "Net Value" shall mean the excess of the Fair Market Value (as
measured on the date of exercise of the Exercised Shares) over the Exercise
Price. In the event the Net Value of the Cancelled Warrant Shares exceeds the
Exercise Price of the Exercised Shares by reason of the Net Value of a
fractional share, the Company shall pay the Holder such excess amount in cash.
2. Shares to be Fully Paid; Reservation. Company covenants and
agrees that all shares which may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance and payment therefor in
accordance with Section 1 above, be fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issue thereof; and without
limiting the generality of the foregoing, Company covenants and agrees that it
will from time to time take all such action as may be required to assure that
the par value per share of the Common Stock is at all times equal to or less
than the then effective Exercise Price per share of Common Stock issuable
pursuant to this Warrant. Company further covenants and agrees that when the
rights represented by this Warrant may be exercised, Company will at all times
thereafter have authorized, and reserved for the purpose of issue or transfer
upon exercise of the subscription rights evidenced by this Warrant, a sufficient
number of shares of its Common Stock to provide for the exercise of the rights
represented by this Warrant.
3. Protection Against Dilution.
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<PAGE>
(a) In the event at any time or from time to time,
all holders of Common Stock (or any other shares of stock or other securities at
that time receivable upon exercise of this Warrant) shall have received, other
or additional or less stock or other securities or property (other than cash)
without payment therefor (whether through a dividend in stock or any class of
stock of Company or any other corporation, or through stock split, spinoff,
split-off, reclassification, combination of shares or otherwise) (a
"Distribution"), then, and in each such case, Holder upon the exercise of this
Warrant and payment of the Exercise Price provided above, shall be entitled to
receive, in addition to the shares called for under this Warrant, the shares or
other securities or property to which Holder would have been entitled in the
Distribution if Holder had exercised this Warrant immediately prior thereto. In
case of the partial exercise of this Warrant under such circumstances, the
balance of the number of shares of stock or other securities which would have
been receivable upon the full exercise of this Warrant, and the Exercise Price
payable therefor computed as provided above, shall be proportionately adjusted.
(b) In case of any reorganization of Company, or
any other corporation the stock or securities of which are at the time
deliverable on the exercise of this Warrant, or in case Company or such other
corporation shall consolidate with or merge into another corporation, or convey
all or substantially all of its assets to another corporation, or liquidate,
Holder, upon the exercise hereof and upon the payment of the Exercise Price
provided above, shall be entitled to receive, in lieu of the shares called for
under this Warrant, the stock or other securities or property to which Holder
would have been entitled upon the consummation of such reorganization,
consolidation, merger, conveyance or liquidation if Holder had purchased the
shares called for hereby immediately prior thereto; and in such case, the
provisions of this Warrant shall be applicable to the shares of stock or other
securities or property thereafter deliverable upon the exercise of this Warrant.
In the case of the partial exercise of this Warrant under such circumstances,
the balance of the number of shares of stock or other securities or property
which would have been receivable upon the full exercise of this Warrant, and the
Exercise Price payable therefor, shall be proportionately adjusted.
4. Registration Rights. Holder shall be entitled to
registration rights with respect to the shares purchasable pursuant to this
Warrant on the terms more fully set forth in the Subscription Agreement between
the Company and the initial Holder of this Warrant pursuant to which such
initial Holder purchased this Warrant from the Company.
5. No Rights as Shareholder. Until the valid exercise
of this Warrant, the holder hereof shall not be entitled to any
voting right or other rights as a shareholder of Company with
respect to this Warrant.
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<PAGE>
6. Transfer of Warrants. Subject to Section 8 hereof, this
Warrant and all rights hereunder are transferable, in whole or in part, without
charge to the Holder, at the office or agency of Company referred to in Section
1 by the Holder in person or by duly authorized attorney, upon surrender of this
Warrant properly endorsed. Each taker and holder of this Warrant, by taking or
holding the same, consents and agrees that this Warrant, when endorsed in blank,
shall be deemed negotiable, and that the holder hereof, when this Warrant shall
have been so endorsed, may be treated by Company and all other persons dealing
with this Warrant as the absolute owner hereof for any purpose and as the person
entitled to exercise the rights represented by this Warrant, or to the transfer
hereof on the books of Company, any notice to the contrary notwithstanding; but
until such transfer on such books, Company may treat the registered holder
hereof as the owner for all purposes.
7. Fractional Interests. Company shall not be required to
issue fractional shares of Common Stock upon the exercise of this Warrant. If
any fraction of a share of Common Stock would, except for the provisions of this
Section 7, be issuable upon the exercise of this Warrant (or specified portion
thereof), Company shall pay an amount in cash equal to the Fair Market Value (as
defined below) of such fraction of a Common Share on the business day prior to
the date of such exercise. As used in this Agreement, the "Fair Market Value" of
the Common Stock shall be the closing price of the Common Stock on the date of
determination on the principal stock market or quotation system on which the
Common Stock is then traded; provided, however, if the Common Stock is not, as
of the date of determination of the Fair Market Value, traded on a recognized
public trading market or quoted on a recognized quotation system, then the Fair
Market Value shall be determined by Company on the basis of such valuation as it
considers appropriate.
8. Compliance With Securities Laws. By acquiring this
Warrant from Company on the date hereof, the Holder hereby agrees,
acknowledges, covenants, represents and warrants as follows:
(a) This Warrant and the shares of Common Stock
issuable upon exercise hereof have not been registered under the Securities Act
of 1933, as amended (the "Securities Act"), or qualified or registered under any
state securities laws which may be applicable. Holder understands that this
Warrant and such shares of Common Stock have been and will be issued and sold
hereunder in transactions exempt from the registration or qualification
requirements of the Securities Act and applicable state securities laws and
Holder acknowledges that reliance on and the availability of said exemptions is
predicated in part on the accuracy of Holder's representations and warranties
herein.
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(b) Holder represents and warrants that it is
acquiring this Warrant for his own account, for purposes of investment, and not
with a view to, or for sale in connection with, any distribution thereof within
the meaning of the Securities Act and the rules and regulations promulgated
thereunder. Holder represents, warrants and agrees that it will not sell,
exercise, transfer or otherwise dispose of this Warrant (or any interest
therein) or any of the Common Stock purchasable upon exercise hereof, except
pursuant to (i) an effective registration statement under the Securities Act and
applicable state securities laws or (ii) an opinion of counsel, satisfactory to
Company, that an exemption from registration under the Securities Act and such
laws is available. Holder further acknowledges and agrees that Company is not
required legally or contractually, so to register or qualify the Warrant or such
Common Stock or to take any action to make such an exemption available, except
as set forth in the Subscription Agreement of event date herewith between the
Company and Ronald I. Heller. Holder understands that Company will be relying
upon the truth and accuracy of the representations and warranties contained in
this Section 8 in issuing this Warrant and such Common Stock without first
registering the issuance thereof under the Securities Act or qualifying or
registering the issuance thereof under any state securities laws that may be
applicable.
(c) Holder acknowledges that (i) there is not now,
and there will not be in the future, any public market for the Warrant, (ii)
although there currently is a public trading market for the Common Stock, there
can be no assurance that any such market will be sustained, and (iii) there can
be no assurance that Holder will be able to liquidate his investment in Company.
Holder represents and warrants that it is familiar with and understands the
terms and conditions of Rule 144 promulgated under the Securities Act.
(d) Holder represents and warrants to Company that
(i) it has such knowledge and experience in financial and business matters as is
necessary to enable it to evaluate the merits and risks of any investments in
Company and is not utilizing any other person to be a purchaser representative
in connection with evaluation of such merits and risks; and (ii) it has no need
for liquidity in an investment in Company and is able to bear the risk of that
investment for an indefinite period and to afford a complete loss thereof.
(e) Holder represents and warrants that it has had
access to, and has been furnished with, all of the information it has requested
from Company and has had an opportunity to review the books and records of
Company and to discuss with management and members of the board of directors of
Company the business and financial affairs of Company.
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(f) Holder agrees that at the time of each exercise
of this Warrant, unless the issuance of shares of Common Stock issuable
thereupon is pursuant to an effective registration statement under the
Securities Act, Holder will provide Company with a letter embodying the
representations and warranties set forth in subsections (b) through (e), in form
and substance satisfactory to Company, and agrees that the certificate(s)
representing any shares issued to it upon any exercise of this Warrant may bear
such restrictive legend as Company may deem necessary to reflect the restricted
status of such shares under the Securities Act unless Company shall have
received from Holder an opinion of counsel to Holder, reasonably satisfactory in
form and substance to Company, that such restrictive legend is not required. If
such legend is placed on such certificate(s), before consenting to the removal
of such legend and the transfer of such shares, unless the request to remove
such legend is made in connection with a sale or transfer of the shares
represented by such certificate in a transaction registered under Section 5 of
the Securities Act, Company may insist upon the delivery to it of an opinion
from counsel to Holder, reasonably satisfactory in form and substance to
Company, that the contemplated transfer does not constitute a violation of the
Securities Act.
9. Notice. (a) Any notice, request or other communication
provided for under this Warrant shall be given in writing, delivered by hand, by
overnight United States Mail, return receipt requested, postage prepaid, or
through a reputable courier service (such as Federal Express) and shall be
addressed to Company or to the Holder at the address shown below, unless notice
of a change in address is furnished in accordance with this paragraph:
If to Company:
Eastern Environmental Services, Inc.
RR #4, Box 4452
Drums, PA 18222
Attn: Chief Financial Officer
If to Holder:
Bette Nagelberg
789 Ontario Court
Franklin Lakes, NJ 07417
(b) The Company shall be required to the give
notice described in this Section 9 upon one or more of the following events: (i)
if the Company shall take a record of the holders of its shares of Common Stock
for the purpose of entitling them to receive a dividend or distribution payable
otherwise than in cash, or a cash dividend or distribution payable otherwise
than out of retained earnings, as indicated by the accounting treatment
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<PAGE>
of such dividend or distribution on the books of the Company, or (ii) the
Company shall offer to all the holders of its Common Stock any
additional shares of capital stock of the Company or securities convertible into
or exchangeable for shares of capital stock of the Company, or any option, right
or warrant to subscribe therefor, or (iii) a dissolution, liquidation or winding
up of the Company (other than in connection with a consolidation or merger) or a
sale of all or substantially all of its property, assets and business shall be
proposed,
(c) The Company shall, promptly after an event
requiring a change in the Exercise Price pursuant to Section 3 hereof, send
notice to the Holders of such event and change ("Price Notice"). The Price
Notice shall describe the event causing the change and the method of calculating
same and shall be certified as being true and accurate by the Company's
President and Chief Financial Officer.
10. Descriptive Headings and Governing Law. The descriptive
headings of the several paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant is being
delivered and is intended to be performed in the Commonwealth of Pennsylvania
and shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the law of such state.
11. Mutilated or Missing Warrant Certificates. In case
this Warrant certificate shall be mutilated, lost, stolen or destroyed, the
Company shall issue and deliver in exchange and substitution for and upon
cancellation of the mutilated certificate, or in lieu of and substitution for
the certificate lost, stolen or destroyed, a new certificate of like tenor and
representing an equivalent right or interest; but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction of
such certificate and indemnity or bond, if requested, also reasonably
satisfactory to the Company. An applicant for such substitute certificates shall
also comply with such other reasonable regulations and pay such other reasonable
charges as the Company may prescribe.
12. Successors. All the covenants and provisions hereof
by or for the benefit of the Company or the Holder shall bind and
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inure to the benefit of their respective successors and assigns hereunder,
except as otherwise provided herein.
IN WITNESS WHEREOF, Eastern Environmental Services, Inc. has
caused this Warrant to be signed by its duly authorized officers under its
corporate seal, this 25th day of August, 1995.
EASTERN ENVIRONMENTAL SERVICES, INC.
By: ________________________________
William C. Skuba
Title: Chairman, Chief Executive
Officer and President
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ELECTION TO PURCHASE
The undersigned Holder hereby irrevocably elects to
exercise the within Warrant to purchase (_________)* Shares of Common Stock
issuable upon exercise thereof to and requests that certificates for such Shares
be issued in its/her/its name and delivered to him/her/it at the following
address: ______________________________________________________________________.
______________
Date:_______________
_____________
________________________________________________
Signature(s)**
___________
*If the Warrant is to be exercised or transferred in its entirety, insert
the word "All" before "Shares"; otherwise insert the number of shares then
purchasable on the exercise thereof as to which transferred or exercised. If
such Warrants shall not be transferred or exercised to purchase all shares
purchasable upon exercise thereof, that a new Warrant to purchase the balance of
such shares be issued in the name of, and delivered to, the Holder at the
address stated below.
**Signature(s) must conform exactly to the name(s) of the Holder as set
forth on the first page of this Warrant.
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<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers the
within Warrant to the extent of (_______)* Shares purchasable upon
exercise thereof to ______________________________________________
, whose address is ____________________________________________________
and hereby irrevocably constitute and appoint his/her/its Attorney
to transfer said Warrant on the book of the Company, with full power of
substitution.
Date:___________________
______________________________________
Signature(s)**
*If the Warrant is to be exercised or transferred in its entirety, insert
the word "All" before "Shares"; otherwise insert the number of shares then
purchasable on the exercise thereof as to which transferred or
exercised. If such Warrants shall not be transferred or exercised to purchase
all shares purchasable upon exercise thereof, that a new Warrant to purchase
the balance of such shares be issued in the name of, and delivered to,
the Holder at the address stated below.
**Signature(s) must conform exactly to the name(s) of the Holder as set forth
on the first page of this Warrant.
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<PAGE>
