<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
FORM 8-K
Current Report
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) June 21, 1996
EASTERN ENVIRONMENTAL SERVICES, INC.
------------------------------------
(Exact name of issuer as specified in charter)
DELAWARE 0-16102 59-2840783
(State or Other Jurisdiction Commission (I.R.S. Employer
of Incorporation or file number Identification
Organization) Number)
1000 Crawford Place, Mt. Laurel, New Jersey 08054
(Address of principal executive offices)
(717) 788-6075
(Registrant's telephone number, including area code)
<PAGE>
ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
--------------------------------
On June 21, 1996, William C. Skuba, sold an aggregate of 500,000
shares (the "Shares") of the Common Stock of Eastern Environmental Services,
Inc. (the "Company") at a price of $2.00 per share to a group consisting of
George O. Moorehead, Louis D. Paolino, Jr., Environmental Opportunities Fund,
L.P., a Delaware limited partnership (the "Fund"), and Environmental
Opportunities Fund (Cayman), L.P., a Cayman Islands exempted limited partnership
(the "Cayman Fund")(Mr. Moorehead, Mr. Paolino, the Fund and the Cayman Fund
being hereinafter sometimes collectively referred to as the "Purchasers")
pursuant to a Stock Purchase Agreement dated as of May 8, 1996 by and among Mr.
Skuba and the Purchasers (the "Stock Purchase Agreement"). The Purchasers have
advised the Company that they used their personal funds, and the Fund and the
Cayman Fund used their working capital, to pay for the Shares, and that no
borrowed funds were used for such purchases.
Pursuant to the Stock Purchase Agreement, Mr. Skuba also converted all
of his Class A Common Stock of the Company which carries four votes per share
into Common Stock which carries one vote per share. Mr Skuba also granted to the
Purchasers an irrevocable proxy over his remaining 1,111,101 million shares of
Common Stock for a period to expire on the earlier of June 20, 1997 or the date
upon which Mr. Skuba disposes of such remaining shares.
The consummation of the Stock Purchase Agreement has resulted in a
change of control of the Company, with the Purchasers becoming significant
owners of the Company's Common Stock. As required by the Stock Purchase
Agreement, Mr. Skuba resigned as the Company's Chairman and Chief Executive
Officer and, along with all of the other members of the Company's Board of
Directors, resigned from the Board of Directors of the Company. Mr. Paolino, Mr.
Moorehead and Kenneth Chuan-kai-Leung were elected as members of the Company's
Board of Directors. Mr. Paolino was appointed as the Company's new Chairman and
Chief Executive Officer.
In connection with the consummation of the Stock Purchase Agreement,
the Company entered into a series of agreements with Mr. Skuba regarding his
relationship with the Company following his resignation as an officer, director
and employee of the Company. Among such agreements, the Company and Mr. Skuba
entered into a severance agreement ("1996 Severance Agreement") which provides
for Mr. Skuba to receive certain health insurance benefits from the Company (at
its cost for one year and at Mr. Skuba's cost thereafter). Additionally, the
Company sold to a company controlled by Mr. Skuba: (i) the outstanding stock of
a corporation which owns certain real property located in Drums, Pennsylvania,
which currently serves as the Company's corporate headquarters ("Drums Real
Property"), (ii) certain real and personal property located in Jasper County,
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South Carolina, and (iii) certain vehicles owned by the Company. The Company
also sold to Mr. Skuba certain potential business opportunities which the
Company has decided that it has no interest in pursuing. The Company entered
into two leases with a company controlled by Mr. Skuba under which the Company
agreed to lease back a portion of the Drums Real Property currently used in the
Company's operations.
The 1996 Severance Agreement further provides that until the earlier
of one year from the Closing Date or a change of control of the Company, Mr.
Skuba will not compete with the Company or its subsidiaries (i) in the business
of landfill operation or municipal solid waste collection within a 50-mile
radius of the Company's landfills operated in West Virginia, South Carolina,
Kentucky and Illinois, or (ii) in the business of asbestos hauling within a
90-mile radius of the Drums Real Property. Finally, the 1996 Severance Agreement
included a mutual release of all claims each of the Company and Mr. Skuba may
have against the other and, for a six-year period, the Company's agreement to
indemnify Mr. Skuba and maintain director and officer liability insurance
coverage for Mr. Skuba.
The Company also retained Mr. Skuba as a consultant for a period of
six months with the Company having an option to retain Mr. Skuba for an
additional six months pursuant to a consulting agreement (the "Consulting
Agreement"). Under the Consulting Agreement, Mr. Skuba will serve as a general
advisor and consultant to the Company to assist the Company on such matters
related to the transition of control of the Company and negotiating acquisitions
for the Company as the Company and Mr. Skuba may mutually agree. In
consideration for performing such services during the first six months, the
Company will provide no compensation to Mr. Skuba other than the reimbursement
of his reasonable expenses and secretarial support.
Additionally, the Company entered into a registration rights agreement
with Mr. Skuba ("Registration Rights Agreement") providing for the registration
of the remainder of Mr. Skuba's shares of Common Stock which are not being sold
pursuant to the Stock Purchase Agreement and which are not yet registered under
the Securities Act of 1933 (the "Securities Act"). Pursuant to the Registration
Rights Agreement, the Company also agreed to register Mr. Skuba's unregistered
Common Stock under the Securities Act in the event that the Company proposes to
register any of its Common Stock under the Securities Act.
SECURITY OWNERSHIP OF THE PURCHASERS AND DESIGNATED DIRECTORS
The following table sets forth certain information regarding beneficial
ownership of the Company's capital stock by each of the Purchasers and the
Designated Directors at June 21,1996. Unless otherwise indicated, the
shareholders
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listed possess sole voting power and investment power with respect to the shares
listed.
<TABLE>
<CAPTION>
=================================================================================
Common Stock
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- ---------------------------------------------------------------------------------
Amount and Nature
Name and Address of of Beneficial Percent of Class
Beneficial Owner Ownership Outstanding
- ---------------- ------------------ ----------------
- ---------------------------------------------------------------------------------
<S> <C> <C>
George O. Moorehead 2,258,435 (a) 38.8%
5339 East Lafayette Blvd.
Phoenix, Arizona 85018
- ---------------------------------------------------------------------------------
Louis D. Paolino, Jr. 2,268,435 (b) 39.0%
1000 Crawford Ave.
Mt. Laurel, NJ 08051
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Kenneth Chuan-kai-Leung * *
3100 Texas Commerce Tower
Houston, Texas 77002
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Environmental Opportunities Fund, L.P. 2,258,435 (c) 38.8%
- ---------------------------------------------------------------------------------
Environmental Opportunities Fund 1,147,334 (d) 19.7%
(Cayman), L.P.
=================================================================================
</TABLE>
___________________
*Represents less than 1% of the outstanding shares.
(a) Includes 853,584 shares held of record by the other Purchasers, 45,000
shares which the purchasers have the right to purchase under non-
contingent contracts, and 1,111,101 shares held of record by Mr. Skuba
with respect to which the Purchasers hold a proxy.
(b) Includes 10,000 shares currently held by Wenonah Holdings, Inc., a
Pennsylvania corporation of which Mr. Paolino is a director. Also
includes 486,253 shares held of record by the other Purchasers,
45,000 shares which the purchasers have the right to purchase under
non-contingent contracts, and 1,111,101 shares held of record by Mr.
Skuba with respect to which the Purchasers hold a proxy.
(c) Includes 891,032 shares held of record by the other Purchasers,
45,000 shares which the purchasers have the right to purchase under
non-contingent contracts, and 1,111,101 shares held of record by Mr.
Skuba with respect to which the Purchasers hold a proxy.
(d) Includes 1,076,133 shares held of record by the other Purchasers, and
45,000 shares which the purchasers have the right to purchase under
non-contingent contracts.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA
FINANCIAL INFORMATION AND EXHIBITS
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(c) Exhibits
10.1 Severance Agreement dated as of June 20, 1996 between Eastern
Environmental Services, Inc. and William C. Skuba
10.2 Consulting Agreement dated as of June 20, 1996 between Eastern
Environmental Services, Inc. and William C. Skuba
10.3 Registration Rights Agreement dated as of June 20, 1996 between
Eastern Environmental Services, Inc. and William C. Skuba
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EASTERN ENVIRONMENTAL SERVICES, INC.
Date: July 3, 1996 By: /s/ Louis D. Paolino, Jr.
------------------------------
Louis D. Paolino, Jr.
President
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<PAGE>
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
- ------- -----------
10.1 Severance Agreement dated as of June 20, 1996 between Eastern Environmental
Services, Inc. and William C. Skuba
10.2 Consulting Agreement dated as of June 20, 1996 between Eastern
Environmental Services, Inc. and William C. Skuba
10.3 Registration Rights Agreement dated as of June 20, 1996 between Eastern
Environmental Services, Inc. and William C. Skuba
<PAGE>
SEVERANCE AGREEMENT
-------------------
SEVERANCE AGREEMENT dated as of June 20, 1996 between EASTERN ENVIRONMENTAL
SERVICES, INC., a Delaware corporation the "Company") and WILLIAM C. SKUBA, an
individual ("Executive").
W I T N E S S E T H:
-------------------
WHEREAS, Executive is currently a member of the Board of Directors of the
Company as well as an officer and employee of the Company; and
WHEREAS, in accordance with that certain stock purchase agreement ("Stock
Purchase Agreement") dated May 8, 1996 by and among Executive, George O.
Moorehead ("Moorehead"), Louis D. Paolino, Jr. ("Paolino"), Environmental
Opportunities Fund, L.P. (the "Fund") and Environmental Opportunities Fund
(Cayman), L.P. (the "Cayman Fund") (Moorehead, Paolino, the Fund and the Cayman
Fund are sometimes hereinafter referred to as the "Purchasers"), Executive and
the Company have agreed that it is in their mutual best interests for Executive
to resign his positions as a director, officer and employee of the Company; and
WHEREAS, pursuant to the Stock Purchase Agreement, the Company and
Executive have entered into that certain Consulting Agreement dated as of the
date hereof ("Consulting Agreement"), and Executive, Moorehead, Paolino and the
Fund have entered into that certain Put Option Agreement dated as of the date
hereof ("Put Option Agreement"); and
WHEREAS, each of Executive and the Company also desire to settle and
release the other party from matters arising out of any aspect of the
Executive's employment with the Company and/or out of his separation from that
employment;
NOW, THEREFORE, in consideration of the mutual agreements herein contained
and intending to be legally bound hereby, the parties hereto agree as follows:
1. Prior Agreements. All agreements and understandings between Executive
----------------
and the Company, whether oral or written, which were in effect at any time prior
to the execution and delivery of this Severance Agreement with the exception of
that certain Indemnity Agreement dated April 18, 1995 between Executive and the
Company (the "Indemnity Agreement"), which agreement shall continue in effect in
accordance with its terms (all such agreements and understandings other than the
Indemnity Agreement being herein referred to as the "Prior Agreements"), are
hereby terminated and of no further force and effect. Neither Executive nor the
Company shall have any further rights
<PAGE>
or obligations under the Prior Agreements, except to the extent otherwise set
forth pursuant to Section 6(c) hereof.
2. Separation from Employment. Executive and the Company acknowledge
--------------------------
and agree that, effective the date hereof, Executive shall not render any
further services to the Company in the capacity of director, officer or employee
of the Company, and that, as of that date, has effectively resigned from any and
all positions that Executive heretofore held with the Company and its
subsidiaries, including, without limitation, positions as an officer, director,
trustee and/or administrator. In addition, Executive and the Company acknowledge
and agree that, except as set forth herein or in the Consulting Agreement, that
the Company shall not have any obligation, contractual or otherwise, to rehire,
reemploy or recall Executive in the future and/or to pay or to make available to
Executive any additional compensation or benefits after that date except as
required by law or as specifically provided herein.
3. Covenant Not to Compete.
-----------------------
(a) For a period of commencing on the date hereof and expiring upon
the earlier of a Change of Control (as defined below) in the Company or the
first anniversary of the date hereof, Executive shall not (whether directly or
through any firm, corporation, partnership, association or other entity of which
Executive is a stockholder, director, officer, consultant, employee, partner,
joint venturer, investor, principal, agent, proprietor or employee) compete with
the Company or its subsidiaries (i) in the business of landfill operation or
municipal solid waste collection within a 50 mile radius of the of any of the
following four landfills operated by the Company on the date hereof: West
Virginia, South Carolina, Kentucky and Illinois, or (ii) in the business of
asbestos hauling within a 90 mile radius of the Drums Real Property (as defined
herein). Notwithstanding the foregoing, the Company expressly agrees that
Executive shall not be restricted from engaging in any business opportunity
which Consultant may be entitled to pursue in accordance with this Severance
Agreement.
(b) In the event this Section 3 should ever be adjudicated to
exceed the time, geographic, product or other limitations permitted by
applicable law or in any jurisdiction, then such provisions shall be deemed
amended in such jurisdiction to the maximum time, geographic, product or other
limitations permitted by applicable law.
(c) Executive expressly acknowledges that damages alone will be an
inadequate remedy for any breach or violation of any of the provisions of this
Severance Agreement and that the Company, in addition to all other remedies
available at law or hereunder, shall be entitled to injunctive relief, including
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specific performance, with respect to any such breach or violation, in any court
of competent jurisdiction.
(d) In the event that Executive shall be in violation of any the
covenant contained in this Section 3, then the period referred to in paragraph
(a) above shall be extended for a period of time equal to the period of time
between the time during which such breach shall occur; and, in the event that
the Company should be required to seek relief from such breach in any court,
board of arbitration or other tribunal, then such three-year period shall be
extended for the period of time required for the pendency of such proceedings,
including all appeals.
(e) For purposes of this Section 3, a "Change of Control" shall
mean the occurrence of any of the following events:
(i) the acquisition in one or more transactions by any
"Person" (as the term person is used for purposes of Sections 13(d) or 14(d) of
the Securities Exchange Act of 1934, as amended (the "1934 Act")) of "Beneficial
Ownership" (as the term beneficial ownership is used for purposes of Rule 13d-3
promulgated under the 1934 Act) of fifty percent (50%) or more of the combined
voting power of the Company's then outstanding voting securities (the "Voting
Securities"), provided that for purposes of this Section 3, the Voting
Securities acquired directly from the Company by any Person shall be excluded
from the determination of such Person's Beneficial Ownership of Voting
Securities (but such Voting Securities shall be included in the calculation of
the total number of Voting Securities then outstanding); or
(ii) Approval by shareholders of the Company of: (A) a merger,
reorganization or consolidation involving the Company if the shareholders of the
Company immediately before such merger, reorganization or consolidation do not
or will not own directly or indirectly immediately following such merger,
reorganization or consolidation, more than fifty percent (50%) of the combined
voting power of the outstanding voting securities of the corporation resulting
from or surviving such merger, reorganization or consolidation in substantially
the same proportion as their ownership of the Voting Securities immediately
before such merger, reorganization or consolidation, or (B) (1) a complete
liquidation or dissolution of the Company or (2) an agreement for the sale or
other disposition of all or substantially all of the assets of the Company; or
(iii) Acceptance by shareholders of the Company of shares in a
share exchange if the shareholders of the Company immediately before such share
exchange do not or will not own directly or indirectly immediately following
such share exchange more than fifty percent (50%) of the combined voting
3
<PAGE>
power of the outstanding voting securities of the corporation resulting from or
surviving such share exchange in substantially the same proportion as the
ownership of the Voting Securities outstanding immediately before such share
exchange.
(iv) Notwithstanding the foregoing, a Change of Control shall
not be deemed to occur solely because fifty percent (50%) or more of the then
outstanding Voting Securities is acquired by any or all of Louis D. Paolino,
Jr., George Moorehead, Environmental Opportunities Fund, L.P. and Environmental
Opportunities Fund (Cayman), L.P.
4. Consideration. In consideration for the Covenant Not to Compete set
-------------
forth in Section 3 hereunder, for the General Release described in Section 6 and
for all other agreements made by Executive contained in this Severance
Agreement, the Company shall provide Executive with the following benefits and
compensation:
(a) Basic Group Insurance.
---------------------
(i) It is the intention of the parties hereto that Executive's
status as an active participant under the Company's basic group medical, life
insurance and long term disability programs will continue, insofar as permitted
by the contracts with the Company's group insurance providers and by applicable
law through the first anniversary of the date hereof. In addition, the Company
agrees to continue to pay all premiums payable under the individual long term
disability policy owned by the Company covering Executive through the first
anniversary of the date hereof, whereupon such all of the Company's right, title
and interest in and to such policy will be assigned and conveyed to Executive at
no cost to Executive.
(ii) In the event that the Company should determine that the
continued inclusion of Executive as an active participant in its basic group
insurance plans is not permitted by its providers, the Company shall so advise
Executive by written notice. Furthermore, in such event, as part of the
severance package made available to Executive hereunder, the Company agrees to
bear the cost of continuing Executive's group medical benefits under COBRA
through the first anniversary of the date hereof, provided that Executive elects
COBRA coverage and that he satisfies the statutory eligibility criteria.
(iii) Upon expiration of such period, Executive shall thereafter
have the right to continue at his own cost Executive's group medical benefits
under COBRA provided that Executive satisfies the statutory eligibility
criteria.
(b) Registration Rights. Immediately upon execution of this
-------------------
Severance Agreement, the Company and Executive
4
<PAGE>
shall enter into a Registration Rights Agreement in the form attached hereto as
Exhibit A, providing for the grant by the Company to Executive of certain
- ---------
registration rights relating to unregistered stock of the Company owned by the
Executive.
(c) Transfer of Telephone Lines. Immediately upon execution of this
---------------------------
Severance Agreement, the Company shall assign and transfer to Executive all of
its right, title and interest in and to the following four (4) telephone lines:
(i) 717-788-7020, (ii) 717-788-7022, (iii) 717-788-7023 and (iv) 717-788-7024
(the "Telephone Lines"). The Company shall execute and deliver to Executive such
assignments and other good and sufficient instruments of transfer and
assignment, satisfactory in form and substance to Executive and his counsel as
shall be effective to assign and transfer the Telephone Lines to Executive. The
Company further agrees to pay any applicable telephone company charges necessary
to effectuate the assignment and transfer.
5. Additional Agreements.
---------------------
(a) Sale of WRN Properties, Inc. As soon as practicable following
---------------------------
the date hereof (but in no event later than two weeks after the date hereof),
the Company will sell, transfer, grant and convey to WCS Properties, Inc. ("WCS
Properties"), an entity controlled by the Executive, and WCS Properties will
purchase from Eastern Real Property, Inc., a subsidiary of the Company, all of
the outstanding shares of capital stock of WRN Properties, Inc. ("WRN
Properties"), a corporation which owns certain real property (the "Drums Real
Property") described on Exhibit B-1 attached hereto which currently serves as
-----------
the Company's corporate headquarters, free and clear of any and all liens,
assessments, claims, charges, defects of title, security interests, pledges,
taxes, encumbrances, and restrictions of any kind whatsoever ("Liens") created
by the Company after the date of this Severance Agreement. Executive represents
and warrants that WRN Properties owns no assets other than the Drums Real
Property. The Drums Real Property is subject to a currently existing note dated
November 18, 1994 which note is secured by a mortgage on the Drums Real
Property, the note and the mortgage having an outstanding principal amount of
approximately $246,450 (collectively, the "Mortgage"). Executive hereby agrees
to pay and indemnify the Company against all amounts due and payable under the
Mortgage including, without limitation, interest, principal and amounts due upon
a default. If the mortgagee under the Mortgage does not: (i) consent to the
transfer of the stock of WRN Properties to WCS Properties with the Drums Real
Property remaining subject to the Mortgage and (ii) release the Company from all
obligations under the Mortgage, then Executive agrees to cause the outstanding
balance of the Mortgage to be paid and discharged upon the transfer of stock to
WCS Properties. The purchase price to be paid by WCS Properties for the stock of
WRN Properties will be
5
<PAGE>
$104,550 (which exceeds the current appraised fair market value of the Drums
Real Property as determined by two independent appraisers minus the current
Mortgage balance). The Company shall also sell, transfer, grant and convey to
WCS Properties by execution and delivery of a bill of sale all of the equipment
and other personal property located at the Drums Real Property and listed on
Exhibit B-2 attached hereto (the "Drums Personal Property"), in exchange for the
- -----------
payment by the WCS Properties to the Company of $9,800. The purchase price for
the stock of WRN Properties and the Drums Personal Property shall be paid by WCS
Properties through the offset of the excess of the purchase price against the
amount owed by the Company to Executive pursuant to the 1993 Severance Agreement
(as defined in Section 6(c) hereof). The Company agrees to pay all costs and
expenses of each of the parties hereto incurred in connection with the transfer
of the WRN Properties stock including, without limitation, all title insurance
costs, transfer taxes and other closing costs.
(b) Sale of AWRS Real Property. As soon as practicable following the
--------------------------
date hereof (but in no event later than two weeks after the date hereof), the
Company will sell, transfer, grant and convey to WCS Properties in fee simple by
delivery of a special warranty deed to WCS Properties, and WCS Properties will
purchase from the Company, all of the Company's right, title and interest in and
to certain real property (the "AWRS Real Property") described on Exhibit C
---------
attached hereto, together with all rights, privileges, easements and
appurtenances thereto, free and clear of all Liens created by the Company after
the date of this Severance Agreement. The Company shall also sell, transfer,
grant and convey to WCS Properties by execution and delivery of a bill of sale
the telephone system located at the AWRS Real Property (the "AWRS Personal
Property"). The AWRS Real Property is located in Jasper County, South Carolina
and has been marketed for sale unsuccessfully for an extended period of time.
Accordingly, the purchase price to be paid by WCS Properties for the AWRS Real
Property and the AWRS Personal Property will be $122,000, which the Company and
Executive agree represents the fair market value of the property. The purchase
price for the AWRS Real Property and the AWRS Personal Property shall be paid by
Executive through an offset against the amounts owed by the Company to Executive
pursuant to the 1993 Severance Agreement. The Company shall execute and deliver
such agreements of sale, special warranty deeds, bills of sale, endorsements,
assignments and other good and sufficient instruments of transfer and
assignment, satisfactory in form and substance to Executive and his counsel, as
shall be effective to convey and transfer the AWRS Real Property and AWRS
Personal Property to WCS Properties and to vest in WCS Properties full and
complete right, title and interest in and to the AWRS Real Property and AWRS
Personal Property. The Company agrees to pay all costs and expenses of each of
the parties hereto incurred in connection with the transfer of AWRS Real
Property and AWRS Personal Property
6
<PAGE>
including, without limitation, title insurance costs, transfer taxes and other
closing costs. At the time of the sale of the AWRS Real Property to WCS
Properties, the lease currently in existence relating to a portion of the AWRS
Real Property will be assigned by the Company or its subsidiary to WCS
Properties.
(c) Lease to NHD. Immediately upon execution of this Severance
------------
Agreement, NHD, Inc., a subsidiary of the Company ("NHD"), and WRN Properties
shall enter into a lease in the form of a standard Form 50 lease, as modified in
order to conform to the terms of this paragraph (the "NHD Lease"), which
provides for NHD to lease from WRN Properties that portion of the Drums Real
Property currently used in the operation of NHD's business, as indicated in the
cross-hatched area of the plan of the Drums Real Property attached hereto as
Exhibit D. NHD's obligations under the NHD Lease will be guaranteed by the
- ---------
Company. The NHD Lease will have a term of two years and will require NHD to pay
rent equal to $414 per month. The NHD Lease will require WRN Properties to pay
all expenses associated with the occupancy and maintenance of the leased
premises, including, without limitation, all insurance, utilities and taxes
except for any extraordinary increases in such items. Upon execution of the NHD
Lease, NHD will be required to pay a security deposit to WRN Properties equal to
one month's rent.
(d) Lease to the Company. Immediately upon the execution of this
--------------------
Severance Agreement, the Company and WRN Properties shall enter into a lease in
the form of a standard Form 50 lease, as modified in order to conform to the
terms of this paragraph (the "Company Lease"), which provides for the Company to
lease from WRN Properties that portion of the Drums Real Property currently used
in the operation of the Company's business, as indicated in the cross-hatched
area of the plan of the Drums Real Property attached hereto as Exhibit E. The
---------
Company Lease will be month to month and will require the Company to pay rent
equal to $1686 per month, which the parties believe is below the fair market
value rent for such property. The Company Lease will require WRN Properties to
pay all expenses associated with the occupancy and maintenance of the leased
premises, including, without limitation, all insurance, utilities and taxes
except for any extraordinary increases in such items. Upon execution of the
Company Lease, the Company will be required to pay a security deposit to WRN
Properties equal to one month's rent.
(e) Sale of Vehicles. Immediately upon execution of this Severance
----------------
Agreement, the Company shall sell, transfer and deliver to Executive or his
designee all of the Company's rights, title and interest in and to a 1988 Jeep
Cherokee, VIN 1JCMT7892JT089413, a 1988 Chevy pick-up truck, VIN
1GCDC14H7JZ126190, and a 1988 Jeep Commanche, VIN 1JTML6318JT182710 (the
"Vehicles"), free and clear of any Liens created by the Company after the date
of this Agreement, for an
7
<PAGE>
aggregate purchase price for all three Vehicles equal to Nine Thousand Seven
Hundred Dollars ($9,700), which shall be payable by Executive through an offset
against the amounts owed by the Company to Executive pursuant to the 1993
Severance Agreement. In order to transfer and deliver the Vehicles, the Company
shall execute and deliver to Executive such certificates of title and other good
and sufficient instruments of transfer and assignment satisfactory in form and
substance to Executive and his counsel as shall be effective to effectuate the
orderly registration, titling and transfer of the Vehicles to Executive and to
vest in Executive complete right, title and interest in and to the Vehicles.
Executive (or his designee which purchases the Vehicles) will pay any applicable
sales tax.
(f) Sale of Potential Business Opportunities. Immediately upon
----------------------------------------
execution of this Severance Agreement, the Company shall sell, assign and
transfer to LH Properties, Inc. ("LH"), an entity controlled by Executive, all
of its right, title and interest in and to the following potential landfill
business opportunities: F&S Sand (FL) and Brown Brothers (OH) (collectively, the
"Business Opportunities"). In consideration therefor, at the closing, LH will
pay to the Company an amount equal to the amount which the Company has invested
in such Business Opportunities as of the date hereof. Such payment shall be made
by LH as an offset against the amount owed by the Company to Executive pursuant
to the 1993 Severance Agreement. Executive hereby represents and warrants to the
Company that each of the Business Opportunities involves an Undeveloped Site (as
defined in Section 5(h) hereof). Based on such representation and warranty, the
Company acknowledges that it has no interest in pursuing the Business
Opportunities any further. The Company agrees to allow Michael Fioravante and
Gregory Krzemien to consult with LH, Executive and its or his affiliates on
matters related to the Business Opportunities or any Third Party Landfill Files
(as defined below). The parties acknowledge that from time to time, Executive
and the Company will be discussing additional potential business opportunities
for the Company, some of which will not be of interest to the company. The
Company agrees to grant Executive free access to the Company's employees
(including Michael Fioravante and Gregory Krzemien) to discuss and evaluate such
future business opportunities, including those identified in the Third Party
Landfill Files.
(g) Storage of Company Records. Following the date of this Severance
--------------------------
Agreement, the Company shall be permitted to continue to store certain of its
business records at the Drums Real Property which are currently located thereat
in areas of the premises other than those being leased to NHD or the Company
under Sections 5(c) and 5(d) hereunder ("Record Storage"), at no cost to the
Company, subject to the following terms and conditions: (i) the Record Storage
shall be terminable at will by either party upon ten (10) days prior written
notice; and (ii)
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<PAGE>
the Company agrees to indemnify, exculpate and hold harmless Executive for and
against any Liabilities which result from or arise out of the Record Storage.
The Executive shall provide the Company with access to such records at such
times during normal business hours as shall be reasonably requested by the
Company. Prior to the removal of any such records, the Company shall provide
Executive (at the Company's expense) with a legible copy (or duplicate, in the
case of records consisting of X-rays) of all records reasonably requested by
Executive. Executive shall be permitted to have access to such records in
accordance with Section 9 hereof.
(h) Third Party Landfill Files. The Company is in possession of
--------------------------
information and data concerning numerous landfill sites or potential landfill
sites ("Third Party Landfill Files"), the vast majority of which will never be
pursued by the Company as potential targets of acquisition. This information and
data was collected in large part through the work of Executive. The Company
agrees that with respect to any such landfill site or potential landfill site
which either: (i) has no current permit or expansion permit relating to at least
250,000 cubic yards of remaining airspace for the acceptance of waste; or (ii)
is not currently accepting waste at a level of more than 100 tons of waste per
day (an "Undeveloped Site"), the Company will permit Executive to have access to
and to retain copies of all information and data held by the Company relating to
such Undeveloped Site, and the Company hereby consents to Executive pursuing the
business opportunity of attempting to acquire an interest in and/or develop any
Undeveloped Site.
(i) Cooperation in Defending Legal Actions. Executive agrees that he
--------------------------------------
will cooperate with and assist the Company, as is reasonably requested by the
Company, in its defense of any action or proceeding against the Company, its
directors, officers, employees or affiliates arising out of or in any way
related to any transactions, events or other matters which occurred during the
period of his employment with the Company, to the extent that such cooperation
and assistance will not impair Executive's legal rights or remedies or increase
the likelihood that Executive will incur any Liabilities as a result thereof.
This Agreement shall not preclude Executive from testifying in such an action or
proceeding. In the event that Executive does cooperate with and assist the
Company in its defense of such an action or proceeding, the Company agrees to
reimburse Executive for all reasonable expenses incurred by Executive in
providing such assistance including, without limitation, the cost of all airline
travel in the event that action or proceeding is held in a court or any other
location which is at a distance from Executive's residence taking more than one
hundred (100) minutes driving time one way.
9
<PAGE>
(j) Forwarding of Mail. The Company and Executive acknowledge that a
------------------
large part of Executive's personal mail is currently sent to him at the
Company's current headquarters in the Drums Real Property. Accordingly, the
Company and Executive agree that the transition of the Company's business mail
and other deliveries will be handled as set forth in this paragraph. Promptly
following the date hereof, the Company will notify all parties with whom or with
which the Company does business of the address of the Company's new
headquarters. The Company agrees that it will not instruct or request the U.S.
Post Office to forward all mail addressed to the Company at the Drums Real
Property to the address of the Company's new headquarters. All mail and other
deliveries received at the Drums Real Property and relating to official Company
business will be forwarded upon receipt by Executive to such address as the
Company shall designate from time to time, at the Company's expense. All mail
and other deliveries received by the Company and relating to Executive's
personal matters or business matters unrelated to the Company will be forwarded
upon receipt by the Company to such address as Executive shall designate from
time to time, at the Company's expense.
6. Release of Claims.
-----------------
(a) In consideration for the foregoing, except as set forth in
Section 6(c) hereof, Executive (for himself and all dependents, heirs,
executors, administrators, legal representatives, assigns, and/or any others who
have or may have a claim by or through him) hereby IRREVOCABLY RELEASES AND
FOREVER DISCHARGES the Company from any and all suits, causes of action, claims,
demands, charges, debts, dues, losses, bills, covenants, contracts, promises,
agreements, variances, trespasses, expenses, complaints, obligations or actions
of any kind ("Liabilities"), whether in law or equity, direct or indirect, known
or unknown, mature or not matured, which Executive ever had, now has, or
hereinafter can or may have against the Company, from the beginning of time to
the date of this Severance Agreement, including but not limited to any and all
such claims relating to or in any way arising out of any aspect of Executive's
employment relationship and/or his separation from employment with the Company.
This general release specifically includes, but is not limited to, any and all
claims for:
(i) wrongful discharge;
(ii) breach of contract (whether express or implied);
(iii) breach of any alleged covenant of good faith and
fair dealing;
10
<PAGE>
(iv) violation of any federal, state or local statute,
ordinance, executive order, or common law doctrine
prohibiting discrimination in employment in any form
(including but not limited to claims for harassment
and/or other discrimination on the basis of age, race,
color, religion, sex, national origin and/or mental or
physical disability);
(v) tortious conduct of any kind (including but not
limited to claims for misrepresentation, fraud,
defamation, interference with contract or with
prospective economic advantage, assault, battery,
intentional infliction of emotional distress and/or
negligence); and
(vi) additional compensation, benefits or damages of
any kind arising in connection with Executive's
employment relationship and/or separation from
employment with the Company.
(b) In consideration for the foregoing, except as set forth in
Section 6(c) hereof, the Company in turn hereby IRREVOCABLY RELEASES AND FOREVER
DISCHARGES Executive from any and all Liabilities, whether in law or equity,
direct or indirect, known or unknown, matured or not matured, which the Company
ever had, now has, or hereinafter can or may have against Executive from the
beginning of time to the date of this Severance Agreement, including but not
limited to any and all such claims relating to or in any way arising out of any
aspect of Executive's employment relationship and/or his separation from
employment. This general release includes, but is not limited to, any and all
Liabilities arising out of or allegedly arising out of any act or omission of
Executive in his capacity as a member of the Board of Directors or an officer of
the Company; provided, however, that this Severance Agreement is not intended to
cover, apply to and/or discharge any claims arising in connection with (i) any
criminal conduct on the part of the Executive contrary to the interests of the
Company or its subsidiaries.
(c) Executive and the Company specifically acknowledge and hereby
agree that the provisions of this general release extend to all of the
aforementioned actions, whether presently matured or not matured, known or
unknown, suspected or unsuspected by Executive and by the Company, and further
agree that this constitutes an essential, material term of this Severance
Agreement. Notwithstanding the foregoing, Executive
11
<PAGE>
and the Company expressly agree that the releases set forth in this Section 6
shall not apply to any and all suits, causes of action, claims, demands,
charges, complaints, covenants, promises, obligations or any actions of any sort
whatsoever, whether in law or equity, directly or indirectly, relating to or in
any away arising out of any aspect of this Severance Agreement, the Registration
Rights Agreement, the Consulting Agreement and the Indemnity Agreement (the
"Excluded Agreements") and any other agreements and instruments related to the
transactions or matters contemplated by the Excluded Agreements, and the payment
provisions of that certain Severance Agreement dated August 20, 1993, as amended
effective February 29, 1996 between Executive and the Company (the "1993
Severance Agreement"). Executive and the Company further agree that the releases
set forth in this Section 6 shall not apply to any obligations of the Company to
pay Executive or third parties on Executive's behalf any accrued and unpaid
salary, fringe benefits or reimbursable expenses, which the Company shall pay in
the ordinary course. The Company acknowledges and agrees that any balance owed
to Executive under the 1993 Severance Agreement after offset of all amount
payable by Executive to the Company under this Severance Agreement shall be a
credit in favor of Executive, which may only be used by Executive to pay any
amounts owed by Executive to the Company in the future for the acquisition of
business opportunities other than Undeveloped Sites, if the Company agrees to
sell such business opportunities. Executive has no right to receive any of the
balance owed under the 1993 Severance Agreement in cash or any property other
than business opportunities sold to Executive by the Company. Executive and the
Company agree that the remaining balance under the 1993 Severance Agreement is
$6,373, which amount may only be used as a credit as set forth above. The
Company further acknowledges and agrees that for purposes of the 1993 Severance
Agreement, a Control Change within the meaning of Section 4 thereof shall be
deemed to have occurred on the date hereof by virtue of the consummation of the
Stock Purchase Agreement, and such Control Change shall be deemed to have
occurred prior to the resignation of Executive pursuant to this Severance
Agreement. The Executive shall not be entitled to any further payments under the
1993 Severance Agreement by virtue of any future Control Changes. In the event
that the sale of the stock of WRN Properties is not completed within two weeks
after the date hereof because the Company fails to convey such stock as set
forth in Section 5(a) hereof, the amount required to be paid by WCS Properties
for such real and personal property through an offset against the amount owed by
the Company to Executive pursuant to the 1993 Severance Agreement will be paid
to Executive in cash on the first business day following the expiration of such
two week period; in such event, such portion of the purchase price shall be
payable in cash upon completion of such sales rather than through an offset.
12
<PAGE>
7. No Admission. This Severance Agreement shall not in any way be
------------
construed as an admission by either Executive or the Company that either has
acted wrongfully with respect to the other party or that any action taken by
Executive or the Company with respect to the other at any time prior to the
execution of this Severance Agreement has been unwarranted, unjustified,
discriminatory, or otherwise unlawful. Rather, it is understood and agreed that
this Severance Agreement constitutes a good faith settlement of any and all
claims between the parties, and, except as set forth in Section 6(c) hereof,
Executive and the Company hereby specifically disclaim any liability to or
wrongful acts against the other party on the part of itself, its directors,
officers, employees, agents and/or other representatives including legal counsel
of any kind.
8. Indemnification and Insurance.
-----------------------------
(a) Subject to applicable law, for a period of six (6) years after
the date hereof, the Company will: (i) indemnify Executive and his heirs and
representatives to the extent provided in the Company's Certificate of
Incorporation in effect on the date of this Severance Agreement and will not
amend, reduce or limit rights of indemnity afforded to them or the ability of
the Company to indemnify them, not hinder, delay or make more difficult the
exercise of such rights of indemnity and (ii) maintain director and officer
liability insurance coverage providing Executive with coverage (1) at least as
favorable as the policies in effect immediately prior to the date hereof
covering the Company's directors and officers or (2) as favorable as is
available at a cost to the Company of up to 125% of the premiums currently being
paid by the Company. The Company also agrees to maintain Executive as a named
insured on the Company's general liability policy, subject to the reimbursement
by Executive to the Company of any additional premium required by the insurance
company in order to maintain Executive as such an additional insured.
(b) If any claim is (or claims are) made against Executive and his
heirs and representatives, including legal counsel, arising from Executive's
services as a director, officer and employee of the Company, within six years
from the date hereof, the provisions of this Section 8 respecting the Company's
Certificate of Incorporation shall continue in effect until the final
disposition of all such claims.
(c) Company agrees to provide written notice to Executive immediately
upon learning of any claim or threatened claim against Executive by any third
party relating to or arising out of the business of the Company or Executive's
prior service as a director, officer or controlling shareholder of the Company.
The Company further agrees to provide to Executive any complaints
13
<PAGE>
and other relevant documentation related to such claims immediately upon receipt
of such documentation.
9. Access to Information. Following the execution and delivery of
---------------------
this Severance Agreement, the Company shall give to Executive, his counsel,
accountants and other consultants and representatives, full access during normal
business hours to the financial, accounting, tax and operational books and
records of the Company in existence on the date hereof. Executive shall hold in
strict confidence all confidential information obtained from the Company for at
least one year after receipt of such information.
10. Entire Agreement and Modifications. This Severance Agreement
----------------------------------
constitutes the entire understanding between the Company and Executive and
supersedes all other agreements, whether written or oral, with respect to the
transactions contemplated by this Severance Agreement. This Severance Agreement
may not be amended or modified except pursuant to a writing signed by each of
the parties hereto.
11. Waiver. Any waiver by either party of any breach of any term or
------
condition in this Severance Agreement shall not operate as a waiver of any other
breach of such term or condition or of any other term or condition, nor shall
any failure to enforce any provision hereof operate as a waiver of such
provision or of any other provision hereof or constitute or be deemed a waiver
or release of any other rights, in law or in equity.
12. Governing Law. All issues concerning this Severance Agreement
-------------
be governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania, without giving effect to any choice of law or conflict of law
provision or rule (whether of the Commonwealth of Pennsylvania or any other
jurisdiction) that would cause the application of the law of any jurisdiction
other than the Commonwealth of Pennsylvania. The parties hereto agree that any
action to enforce this Severance Agreement may be properly brought in any court
within Luzerne County, Pennsylvania or in the United States District Court for
the Eastern District of Pennsylvania, and the parties hereto agree that the
courts of Luzerne County, Pennsylvania and the United States District Court for
the Eastern District of Pennsylvania shall have jurisdiction with respect to the
subject matter hereof and the person of the parties hereto.
13. Severability. Whenever possible, each provision of this
------------
Severance Agreement will be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Severance Agreement is
held to be invalid, illegal or unenforceable in any respect under any applicable
law or rule in any jurisdiction, such invalidity, illegality or
14
<PAGE>
unenforceability will not affect any other provision or the effectiveness or
validity of any provision in any other jurisdiction, and this Severance
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision had never been contained
herein.
14. Further Assurances. From time to time after the execution of this
------------------
Severance Agreement, each of the parties hereto hereby agrees to use all
reasonable efforts to take, or cause to be taken, all action and to do, or cause
to be done, all things necessary, proper and advisable under applicable laws,
rules and regulations to consummate and make effective the transactions
contemplated by this Severance Agreement, including using its best efforts to
obtain all necessary waivers, consents and approvals. In case at any time after
the execution of this Severance Agreement further action is necessary or
desirable to carry out the purposes of this Severance Agreement, the proper
officers and directors of each of the parties shall take all such necessary
action.
15. Successors and Assigns. This Severance Agreement shall be
----------------------
binding upon and inure to the benefit of the parties hereto and their respective
heirs, personal representatives, executors, administrators, successors and
assigns. This Severance Agreement may not be assigned by either party (by
operation of law or otherwise) without the express written consent of the other
party.
16. Notices. All notices and other communications which are required
-------
or may be given under this Severance Agreement shall be in writing and shall be
deemed to have been given if delivered personally or sent by registered or
certified mail, return receipt requested, postage prepaid:
To Company:
Eastern Environmental Services, Inc.
1000 Crawford Place
Mt. Laurel, NJ 08054
Attn: Louis D. Paolino, Jr.
To Executive:
William C. Skuba
RR #4, Box 4452
Drums, PA 18222
or to such other place as either party shall have specified by notice in writing
to the other.
15
<PAGE>
IN WITNESS WHEREOF, the undersigned parties have executed this Agreement
and Release as of the day and year written below.
ATTEST: EASTERN ENVIRONMENTAL SERVICES,
INC.
______________________ By: /s/ Louis D. Paolino, Jr.
--------------------------------
Title: Louis D. Paolino, Jr., Chief
Executive Officer
WITNESS: EXECUTIVE
______________________ /s/ William C. Skuba
------------------------------------
WILLIAM C. SKUBA
16
<PAGE>
CONSULTING AGREEMENT
--------------------
CONSULTING AGREEMENT, dated June 20, 1996 between EASTERN ENVIRONMENTAL
SERVICES, INC., a Delaware corporation (the "Company"), and WILLIAM C. SKUBA, an
individual ("Consultant").
W I T N E S S E T H:
-------------------
WHEREAS, Consultant is currently a member of the Board of Directors of the
Company as well as an officer and employee of the Company; and
WHEREAS, in accordance with that certain Stock Purchase Agreement ("Stock
Purchase Agreement") dated May 8, 1996 by and among Consultant, George O.
Moorehead, Louis D. Paolino, Jr., Environmental Opportunities Fund, L.P. and
Environmental Opportunities Fund (Cayman), L.P., Consultant and the Company have
agreed that it is in the best mutual interests for Consultant to resign his
positions as a member of the Board of Directors of the Company and as an officer
and employee of the Company;
WHEREAS, in connection with such resignation, the Company and Consultant
have entered into that certain Severance Agreement dated as of the date hereof
("Severance Agreement"); and
WHEREAS, the Company desires to assure itself of the continuing benefit of
Consultant's services and experience for a period of time and has offered to
engage Consultant to render consultative and advisory services to it; and
WHEREAS, Consultant desires to accept such engagement, upon the terms and
conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual agreements herein contained,
and intending to be legally bound hereby, the parties hereto agree as follows:
1. Term of Agreement. Subject to the terms and conditions hereof, the
-----------------
term of this Consulting Agreement shall be for a period of six (6) months
commencing on the date hereof and terminating at the close of business on the
six-month anniversary of the date hereof, as the same may be extended as
provided below (the "Engagement Period"). Upon the default of any material term
of this Consulting Agreement, the nondefaulting party shall have the right to
terminate this Consulting Agreement if such default is not cured by the
defaulting party within thirty (30) days after delivery of a written notice by
the nondefaulting party that describes such default in reasonable detail. The
Company shall have the option of extending the Engagement Period for an
<PAGE>
additional six (6) months upon such terms and for such compensation as shall be
mutually agreed upon by the Company and Consultant, provided that: (a) the
Company exercises such option by providing written notice of such exercise to
Consultant at least thirty (30) days prior to the expiration of the initial six-
month period and (b) the Company shall not be in default of any material term of
the Consulting Agreement.
2. Services to be Rendered. The Company hereby retains Consultant as a
-----------------------
general advisor and consultant to the Company for the sole and exclusive purpose
of advising and consulting the Company on matters related to the transition of
control of the Company following the execution of the Stock Purchase Agreement
("Services"). In addition, the Services shall include the negotiation of
acquisitions for the Company on such prospective acquisitions as Consultant and
the Company shall mutually agree from time to time during the Engagement Period.
In performing the Services, Consultant shall report to the President of the
Company. In addition to rendering Services, the Company agrees that Consultant
shall be permitted but shall not be required to perform the following additional
services for the Company: (a) supervision and direction of the dissolution of
inactive subsidiaries of the Company; (b) completion of all corporate records
relating to corporate actions of the Company and its subsidiaries prior to the
commencement of the Engagement Period; and (c) advising of all matters related
to the Company's insurance coverage, risk management and other matters related
to the liability or potential liability of the Company and/or its officers and
directors for operations of the Company for the period preceding the Engagement
Period ("Additional Services"). Consultant shall not be required to perform
Services and Additional Services for more than twenty (20) hours per week during
Engagement Period.
3. Location for Services and Additional Services to be Rendered.
------------------------------------------------------------
Consultant may render Services and Additional Services from any location of his
choosing, provided, however, that the Company may require Consultant to render
Services at the Company's corporate offices under the following conditions: (a)
if the Company's corporate offices are located at a distance from Consultant's
residence taking less than one hundred (100) minutes driving time one way, the
Company may require Consultant to provide Services at such corporate offices up
to one day per week; (b) if the Company's corporate offices are located at a
distance from Consultant's residence taking more than one hundred (100) minutes
driving time one way, (i) the Company may require Consultant to provide Services
at such corporate offices up to one day per month and (ii) Consultant may take
as transportation to the Company's corporate offices a scheduled airline to such
corporate offices at the Company's expense; and (c) the failure of the Company
to require Consultant to work at such corporate offices during a particular week
or month, as applicable, will not require Consultant to work at such corporate
offices more
2
<PAGE>
than one day per week or month, as applicable, in future weeks or months.
4. Status as Independent Contractor. It is expressly understood and
--------------------------------
agreed that Consultant is an independent contractor and is not an agent nor an
employee of the Company.
5. Secretarial Assistance. The Company agrees to pay directly all costs
----------------------
and expenses associated with the provision of secretarial assistance for
Consultant during the Engagement Period in an amount not to exceed: (a) Three
Hundred and Seventy-Five Hundred Dollars ($375.00) per week plus (b) all
withholding and other employment related taxes associated with the provision of
such secretarial assistance, plus (c) the cost of medical-related fringe
benefits at a level consistent with such benefits provided by the Company to
other executive-level secretaries from time to time, plus (d) the reasonable
cost of office supplies required in connection with the efficient operation of
Consultant's office in connection with the performance of the Services and the
Additional Services.
6. Car Allowance. During the Engagement Period, the Company agrees to
-------------
pay Executive a monthly car allowance of Four Hundred Dollars ($400).
7. Expenses. During the Engagement Period, the Company shall (a) pay all
--------
expenses for basic telephone service for four (4) telephone lines and charges
for all long distance telephone calls incurred (from such four lines or
otherwise) in connection with the performance of Services and Additional
Services; and (b) reimburse Consultant for all other reasonable expenses
incurred by Consultant in the performance of Services and Additional Services
hereunder within 10 days after the presentation to Company of an itemized
account of and, where applicable, receipts for such expenses.
8. Legal Assistance. In connection with the performance of any Services
----------------
by Consultant involving the negotiation of acquisitions for the Company, the
Company agrees that Consultant may engage, at the Company's expense, Laurel E.
Lockett as legal counsel on behalf of the Company; provided that Consultant
obtains the prior written consent of the President of the Company to such
engagement, which consent shall not be unreasonably withheld. If the Company
does not so consent with respect to a particular acquisition, then at
Consultant's option, Consultant shall not be required to provide Services in
connection with such acquisition. In addition, in the event that Consultant
desires to engage outside counsel other than Lockett in connection with the
performance of Services or Additional Services, he may do so, at the Company's
expense; provided that Consultant obtains the prior written consent of the
President of the Company to such engagement, which consent shall not be
unreasonably withheld.
3
<PAGE>
9. Indemnification. The Company agrees to (a) indemnify, defend and hold
---------------
harmless Consultant from and against any losses, claims, costs, damages or
liabilities arising out of, based upon or resulting from any services performed
by Consultant pursuant to this Consulting Agreement, and (b) pay (or, at
Consultant's request, reimburse Consultant for) any and all fees, costs and
expenses of any kind related thereto (including, without limitation, any and all
out-of-pocket fees, costs and expenses of any kind incurred by Consultant and
its counsel in investigating, preparing for, defending against or providing
evidence, producing documents or taking other action with respect to any
threatened or asserted claim); unless such losses, claims, costs, damages or
liabilities are due to the gross negligence or intentional wrongdoing of
Consultant, in which event Consultant shall promptly repay all amounts expended
by the Company pursuant to this Section 9 on Consultant's behalf in connection
with the same matter.
10. Confidentiality. Consultant agrees to regard and preserve as
---------------
confidential all proprietary information pertaining to the Company's business
that may be obtained by Consultant in the course of his engagement with the
Company. Consultant will not, without written authority from the Company to do
so or as required by court order, use for his benefit or purposes, directly or
indirectly, nor disclose to others, either during the Engagement Period
hereunder or thereafter, except as required by the conditions of his engagement
hereunder, any of the Company's proprietary information connected with the
business or developments of the Company. In the event that Consultant or any of
his representatives becomes legally compelled to disclose any of the proprietary
information, Consultant will provide the Company with prompt written notice so
that the Company may seek a protective order or other appropriate remedy. The
obligations of Consultant pursuant to this Section 10 will survive the
termination or expiration of the Engagement Period for one year.
11. Notices. All notices and other communications which are required or
-------
may be given under this Consulting Agreement shall be in writing and shall be
deemed to have been given if delivered personally or sent by registered or
certified mail, return receipt requested, postage prepaid:
To the Company:
Eastern Environmental Services, Inc.
1000 Crawford Place
Mt. Laurel, NJ 08054
Attn: Louis D. Paolino, Jr., President
with a copy to:
Robert M. Kramer, Esquire
Robert M. Kramer & Associates
4
<PAGE>
1150 First Avenue
Suite 900
King of Prussia, PA 19406
To Consultant:
William C. Skuba
RR #4, Box 4452
Drums, PA 18222
or to such other place as either party shall have specified by notice in writing
to the other.
12. Governmental Regulation. Nothing contained in this Consulting
-----------------------
Agreement shall be construed so as to require the commission of any act contrary
to law and wherever there is any conflict between any provision of this
Consulting Agreement and any statute, law, ordinance, order or regulation, the
latter shall prevail, but in such event any such provision of this Consulting
Agreement shall be curtailed and limited only to the extent necessary to bring
it within the legal requirements.
13. Assignment. This Consulting Agreement may not be assigned by either
----------
party without the express written consent of the other party, except that the
Company may assign its rights under this Agreement to the purchaser of
substantially all of the Company's assets or pursuant to a merger of the
Company.
14. Severability. Whenever possible, each provision of this Consulting
------------
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Consulting Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability will
not affect any other provision or the effectiveness or validity of any provision
in any other jurisdiction, and this Consulting Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein.
15. Governing Law. All issues concerning this Consulting Agreement will
-------------
be governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania, without giving effect to any choice of law or conflict of law
provision or rule (whether of the Commonwealth of Pennsylvania or any other
jurisdiction) that would cause the application of the law of any jurisdiction
other than the Commonwealth of Pennsylvania. The parties hereto agree that any
action to enforce this Consulting Agreement may be properly brought in any court
within the Commonwealth of Pennsylvania or in the United States District Court
for the Eastern District of Pennsylvania, and the parties hereto agree that the
courts of the Commonwealth of Pennsylvania
5
<PAGE>
and the United States District Court for the Eastern District of Pennsylvania
shall have jurisdiction with respect to the subject matter hereof and the person
of the parties hereto.
16. Entire Agreement. This Consulting Agreement sets forth the entire
----------------
understanding of the parties in respect to the subject matter contained therein
and supersedes all prior agreements and understandings relating to the subject
mater and may only be amended by a written agreement signed by the parties
hereto.
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Consulting
Agreement as of the date first above written.
ATTEST: EASTERN ENVIRONMENTAL
SERVICES, INC.
_______________________ By: /s/ Louis D. Paolino, Jr.
--------------------------------
Title: Louis D. Paolino, Jr., Chief
Executive Officer
WITNESS: CONSULTANT
_______________________ /s/ William C. Skuba
------------------------------------
WILLIAM C. SKUBA
7
<PAGE>
REGISTRATION RIGHTS AGREEMENT
-----------------------------
REGISTRATION RIGHTS AGREEMENT, dated June 20, 1996 between EASTERN
ENVIRONMENTAL SERVICES, INC., a Delaware corporation (the "Company") and WILLIAM
C. SKUBA, an individual ("Skuba").
W I T N E S S E T H:
-------------------
WHEREAS, Skuba is currently a member of the Board of Directors of the
Company as well as an officer and employee of the Company;
WHEREAS, in accordance with that certain Stock Purchase Agreement
dated May 8, 1996 by and among Skuba and certain certain other parties, Skuba
and the Company have agreed that it is in their mutual best interests for Skuba
to resign his positions as director, officer and employee of the Company;
WHEREAS, in connection with such resignation, Skuba and the Company
have entered into that certain Consulting Agreement dates as of the date hereof
("Consulting Agreement") and that certain Severance Agreement dated as of the
date hereof ("Severance Agreement") and Skuba and certain other parties have
entered into that certain Put Option Agreement dated as of the date hereof ("Put
Option Agreement");
WHEREAS, as a material inducement for Skuba to enter into the
Severance Agreement, and as a material term thereof, the Company has agreed to
enter into this Registration Rights Agreement, upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and intending to be legally bound hereby, the parties hereto agree as
follows:
1. Certain Defined Terms. For purposes of this Registration Rights
---------------------
Agreement, the following terms shall have the following respective meanings:
(a) Applicable Law: The Securities Act, the Exchange Act (to the
--------------
extent applicable to offers or sales of securities) and any applicable state
securities law and the rules and regulations thereunder.
(b) Common Stock: Stock of the Company of the class or classes
------------
having general voting power under ordinary circumstances to elect at least a
majority of the Board of Directors of the Company (irrespective of whether or
not at the time stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).
<PAGE>
(c) Demand Registration: Any registration, qualification,
-------------------
notification or exemption of Registrable Securities effectuated by the Company
pursuant to Section 2(a) hereof.
(d) Exchange Act: The Securities Exchange Act of 1934, as now or
------------
hereafter amended, and the rules and regulations thereunder which shall be in
effect at the time.
(e) Holder: Any holder of Registrable Securities.
------
(f) Nasdaq: The Nasdaq Stock Market.
------
(g) Registrable Securities: (i) All shares of Common Stock owned by
----------------------
Skuba on the date hereof which, as of the date of determination, are not covered
by an effective registration statement under the Securities Act, and (ii) 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
particular Registrable Securities, once issued such securities shall cease to be
Registrable Securities when (a) a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such registration
statement, (b) they shall have been distributed to the public pursuant to Rule
144 (or any successor provision) under the Securities Act, (c) they shall have
been otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent disposition of them shall not require registration or qualification
of them under the Securities Act or any similar state law then in force, or (d)
they shall have ceased to be outstanding.
(h) Securities Act: The Securities Act of 1933, as now or hereafter
--------------
amended, and the rules and regulations thereunder which shall be in effect at
the time.
(i) SEC: The United States Securities and Exchange Commission.
---
(j) Piggy-Back Registration: Any registration, qualification,
-----------------------
notification or exemption of Registrable Securities effectuated by the Company
pursuant to Section 2(b) hereof.
2
<PAGE>
2. Registration Rights.
-------------------
(a) Demand Registration and Notice. As soon as reasonably
------------------------------
practicable following the date hereof, but in no event later than 90 days
following the date hereof, the Company shall prepare and file with the
Commission a continuous or "shelf" registration statement under Rule 415 under
the Securities Act on Form S-3 to register the resale or other disposition of
the Registrable Securities by all Holders under the Securities Act, to the
extent reasonably necessary to permit such resale or other disposition by such
Holders, promptly upon the effectiveness of such registration ("Demand
Registration") in the manner set forth in Sections 3 and 4 hereof. The Company
shall actively pursue the processing of such registration statement through the
Commission's Division of Corporation Finance, and the Company shall use its best
efforts to have the registration statement declared effective by the Company as
soon as practicable. The Holders shall be required to advise the Company of
their intended methods of disposition of the Registrable Securities to be
included in such registration statement. The Company will maintain the
effectiveness of such registration statement and, if necessary, amend the
registration statement and supplement the prospectus included therein for a
period of no less than four (4) years from the effective date of such
registration statement, or such sooner time as counsel for the Company shall
render his written unqualified legal opinion that each Holder of Registrable
Securities registered in such registration statement is legally permitted to
sell all such Registrable Securities held by such Holder without volume
restrictions under Rule 144 promulgated under the Securities Act; provided,
--------
however, that the Company shall not be obligated to effect the filing of a
- -------
registration statement pursuant to this Section 2(a) if the Company's Board of
Directors shall determine in good faith that such filing will interfere with a
pending or contemplated financing, merger, sale of assets, acquisition of a
significant subsidiary (as defined under Regulation S-X), recapitalization or
other similar corporate action of the Company. In the event the Company's
obligations are abated pursuant to the foregoing proviso, and if any of the
-------
Holders on whose behalf the Demand Registration would be filed and who were
unable to have all of the Registrable Securities included in the Company's
registration statement pursuant to the Demand Registration then want such
registration statement to be filed, the Company shall file such registration
statement as promptly as practicable following the date on which the
transactions referred to in clause above shall have been completed or abandoned.
If Skuba intends to distribute his Registrable Securities covered by
the Demand Registration by means of an underwriting, he shall so advise the
Company, the right of any Holder to participate in the Demand Registration shall
be
3
<PAGE>
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent requested (unless otherwise mutually agreed by Skuba), to the extent
provided herein.
(b) Piggy-Back Registration and Notice. The Company agrees that at
----------------------------------
any time and from time to time that the Company proposes to register any of its
Common Stock under the Securities Act (other than pursuant to a Demand
Registration) 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 outstanding Registrable Securities of its intention to do so, and upon the
written request of any such Holder, given within fifteen (15) days after receipt
of any such notice from the Company, the Company will in each instance cause all
Registrable Securities held by each such requesting Holder (or such lesser
amount as shall be requested by such Holder) to be registered under the
Securities Act and registered, qualified or exempted under any Applicable Law,
and the Company shall cause to be filed any and all notifications to any
governmental authority under any federal or state securities law to be sent and
any and all listings with any securities exchange or Nasdaq to be obtained, all
to the extent reasonably necessary to permit the sale or other disposition
thereof by such Holders, promptly upon the effectiveness of such registrations,
qualifications and/or filings ("Piggy Back Registration") in the manner set
forth in Sections 3 and 4 hereof. The Company shall maintain the effectiveness
of any registration statement filed in connection with any Piggy Back
Registration and, if necessary, amend the registration statement and supplement
the prospectus for a period of no less than four (4) years from the effective
date of such registration statement, or such sooner time as counsel for the
Company shall render his written unqualified legal opinion that each Holder of
Registrable Securities registered in such registration statement is legally
permitted to sell all such Registrable Securities held by such Holder without
volume restrictions under Rule 144 promulgated under the Securities Act;
provided, however, that if, at any time after giving written notice of its
intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason either not to register or to delay registration
of such securities, the Company may, at its election, give written notice of
such determination to each holder of Registrable Securities and, thereupon, (i)
in the case of a determination not to register any securities, shall be relieved
of its obligation to register Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses in
connection therewith), and in such case the Company shall not register any
securities without
4
<PAGE>
again complying with the provisions of this Section 2(b), and (ii) in the case
of a determination to delay registering, shall be permitted to delay registering
any Registrable Securities, for the same period as the delay in registering such
other securities.
(c) Expenses. The Company will pay all expenses (including without
--------
limitation registration fees, qualification fees, Company legal expenses,
printing expenses and the costs of special audits or "cold comfort" letters, but
not including underwriting discounts and commissions or fees of counsel or any
consultants to the Holders of Registrable Securities being registered, which
shall be borne by such Holders) in connection with any registrations,
qualifications, notifications or exemptions pursuant to Sections 2(a) or 2(b)
above. In the case of a Demand Registration pursuant to Section 2(a) hereof,
the Company will also pay the reasonable fees (up to $5,000) and disbursements
of one special counsel representing all of the Holders for whom Registrable
Securities are included in such registration.
(d) 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 2(b) of this Agreement to the
nearest 100 shares. In addition, the Company may reduce or eliminate the number
of shares of Registrable Securities to be registered or qualified in accordance
with Section 2(b) if, at the time of the request for registration by any holder
of Registrable Securities (i) the Company shall propose to file for registration
within 30 days other securities to be offered by the Company under the
Securities Act and (ii) the lead 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 together with other selling shareholders' securities
proposed for registration (if any) would interfere with or be detrimental to
such offering, including the timely consummation thereof, and such investment
banker shall give prompt 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 and
any other selling shareholders whose securities are proposed for registration,
shall have the right to limit such Registrable Securities and selling
shareholders' 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 and other selling
shareholders' securities. Such limitation shall be applied to each such
requesting holder and selling shareholder
5
<PAGE>
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 or any other
securities excluded from the registration by reason of the Banker Determination
Notice shall be included in such registration.
(e) Indemnification. In connection with any registration,
---------------
qualification, notification, or exemption of Registrable Securities under
Sections 2(a) or 2(b) hereof, the Company hereby agrees to indemnify the Holders
of such Registrable Securities, and each underwriter thereof, including each
person, if any, who controls such Holder within the meaning of Section 15 of the
Securities Act, against all losses, claims, damages and liabilities caused by
any untrue, or alleged untrue, statement of a material fact contained in any
registration statement or prospectus or notification or offering circular (and
as amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or 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 not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any untrue statement
or alleged untrue statement or omission based upon information furnished in
writing to the Company by such Holder or, as the case may be, any such
underwriter expressly for use therein, and the Company, the underwriter for the
Company and each person who controls the Company within the meaning of Section
15 of the Securities Act shall be indemnified by each Holder of such Registrable
Securities for all such losses, claims, damages and liabilities caused by any
untrue, or alleged untrue, statement or any omission or alleged omission, based
upon information furnished in writing to the Company by such Holder for any such
use.
3. Registration Procedures and Covenants. In the case of the Demand
-------------------------------------
Registration or any Piggy-Back Registration, the Company shall, by written
notice to each Holder of Registrable Securities included in such Demand
Registration or Piggy-Back Registration, keep such Holder advised as to the
initiation, progress and effective date of such Demand Registration or Piggy-
Back Registration, and, at the expense of the Company, the Company will:
(a) before filing a registration statement or prospectus or any
amendments or supplements thereto, furnish to the Holders of Registrable
Securities covered by such registration statement and the underwriter or
underwriters, if any, copies of all such documents proposed to be filed,
including without limitation documents incorporated by reference in the
prospectus and, if requested by such Holders of Registrable Securities, the
exhibits incorporated by reference, and such Holders shall have the opportunity
to object to any information
6
<PAGE>
pertaining solely to such Holders that is contained therein and the Company will
make the corrections reasonably requested by an underwriter or such Holders with
respect to such information prior to filing any registration statement or
amendment thereto or any prospectus or any supplement thereto;
(b) Skuba recognizes that the occurrence of certain corporate
developments, including significant acquisitions, may result in the failure of
the registration statement in which Registrable Securities are registered to
contain all information required in accordance with Applicable Law until an
amendment or supplement is filed and made available to the Holders of all such
Registrable Securities. Skuba recognizes that in such event, sales under the
registration statement will be suspended until the Company files the amendments
or supplements required by the next sentence. The Company agrees, as promptly
as reasonably practicable, to prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the period required pursuant to the terms hereof and comply with the provisions
of the Securities Act with respect to the disposition of all Registrable
Securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the Holder thereof set
forth in such registration statement;
(c) furnish to each Holder of Registrable Securities covered by such
registration statement such number of copies of such registration statement,
each amendment and supplement thereto, the prospectus included in such
registration statement (including without limitation each preliminary
prospectus) and such other documents as such Holder may reasonably request in
order to facilitate the disposition of the Registrable Securities owned by such
Holder;
(d) unless the Registrable Securities are exempt from the blue sky
laws of any jurisdiction, including by reason of being designated for trading in
the Nasdaq National Market, the Company agrees to use its best efforts to
register or qualify such Registrable Securities under such other securities or
blue sky laws of such jurisdictions as any Holder of Registrable Securities
reasonably requests and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holder to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
Holder (provided that the Company will not be required to: (i) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(d) hereof; (ii) subject itself to
taxation in any such jurisdiction; or (iii) consent to general service of
process in any such jurisdiction);
7
<PAGE>
(e) cause to be filed any and all notifications to any governmental
authority under any federal or state securities law to be sent and any and all
listings with any securities exchange or Nasdaq to be obtained, as may be
reasonably necessary or advisable to enable Holders to consummate the
disposition of their Registrable Securities pursuant to the registration;
(f) notify each Holder of such Registrable Securities at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act of the occurrence of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and promptly prepare a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not contain an untrue statement of
a material fact or omit to state any fact necessary to make the statements
therein not misleading;
(g) in the case of an underwritten offering, cause to be delivered to
the Holders of such Registrable Securities and the underwriters, if any,
opinions of counsel to the Company in customary form, covering such matters as
are customarily covered by opinions for an underwritten public offering as the
underwriters may request and addressed to the underwriters and the Holders;
(h) make available for inspection by any Holder of such Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other agent retained by
any Holder or underwriter, relevant financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such Holder, underwriter, attorney,
accountant or agent in connection with such registration statement;
(i) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
(j) cause to be delivered, immediately prior to the effectiveness of
the registration statement (and, in the case of an underwritten offering, at the
time of delivery of any Registrable Securities sold pursuant thereto), letters
from the Company's independent certified public accountants addressed to each
selling Holder and each underwriter, if any, stating that such accountants are
independent public accountants within the meaning of the Securities Act and the
applicable published rules and regulations thereunder, and otherwise in
customary form and
8
<PAGE>
covering such financial and accounting matters as are customarily covered by
letters of the independent certified public accountants delivered in connection
with primary or secondary underwritten public offerings, as the case may be;
(k) make generally available to the Holders of such Registrable
Securities a consolidated earnings statement (which need not be audited) for the
twelve (12) months beginning after the effective date of a registration
statement as soon as reasonably practicable after the end of such period, which
earnings statement shall satisfy Section 11(a) of the Securities Act and Rule
158 thereunder; and
(l) promptly notify each Holder of such Registrable Securities and
the underwriter or underwriters, if any: (i) when the registration statement,
any pre-effective amendment, the prospectus or any prospectus supplement or
post-effective amendment to the registration statement has been filed and, with
respect to the registration statement or any post-effective amendment, when the
same has become effective; (ii) of any written request by the SEC for amendments
or supplements to the registration statement or prospectus; (iii) of the
notification to the Company by the SEC of its initiation of any proceeding with
respect to the issuance by the SEC of, or the issuance by the SEC of, any stop
order suspending the effectiveness of the registration statement; and (iv) of
the receipt by the Company of any notification with respect to the suspension of
the qualification of any Registrable Securities for sale under the Applicable
Law.
5. Underwritten Offering.
---------------------
(a) In the case of an underwriting of the Demand Registration or any
Piggy-Back Registration under this Registration Rights Agreement, the Company
shall (together will all Holders and, if applicable, other stockholders of the
Company proposing to distribute their securities through such underwriting)
enter into an underwriting agreement in customary form with the representative
of the underwriter or underwriters selected for such underwriting by the Holders
of more than fifty percent (50%) of the Registrable Securities being
registered. The Holders of Registrable Securities may, at their option, require
that any or all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such Holders of
Registrable Securities and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of such Holders of Registrable Securities. No
Holder of Registrable Securities shall be required to make any representations
or warranties to or agreements with the Company or the underwriters other than
9
<PAGE>
representations, warranties or agreements regarding such Holder's power and
authority to enter into and perform such Holder's obligations under the
underwriting agreement, such Holder's ownership of the Registrable Securities
and such Holder's intended method of distribution and any other representation
required by Applicable Law.
5. Rule 144 Reporting and Sales. With a view to making available to each
----------------------------
Holder of Registrable Securities the benefits of certain regulations of the SEC
which may permit the sale of the Registrable Securities to the public without
registration, the Company agrees that, so long as a Holder owns any Registrable
Securities, the Company shall: (a) make and keep available public information,
as those terms are contemplated by Rule 144; (b) timely file with the SEC all
reports and other documents required to be filed under the Securities Act and
the Exchange Act; (c) comply with all rules and regulations of the SEC
applicable in connection with the use of Rule 144; and (d) take such other
actions and furnish such Holder with such other information as such Holder may
reasonably request in order to avail such Holder of any rule or regulation of
the SEC allowing such Holder to sell any Registrable Securities without
registration. The Company also agrees to furnish to each Holder promptly upon
request a written statement by the Company as to its compliance for a period of
at least ninety (90) days prior to the date of the certificate with the
reporting requirements of the Securities Act and the Exchange Act and a copy of
the most recent annual or quarterly report of the Company.
6. Nominees for Beneficial Owners. In the event that any Registrable
------------------------------
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election, be treated as the Holder of such
Registrable Securities for purposes of any request or other action by any Holder
or Holders of Registrable Securities pursuant to this Registration Rights
Agreement or any determination of any number or percentage of shares of
Registrable Securities contemplated by this Agreement.
7. Successors, Assigns and Transferees. 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. In addition, and
whether or not any express assignment shall have been made, the provisions of
this Registration Rights Agreement which are for the benefit of the parties
hereto other than the Company shall also be for the benefit of and enforceable
by any subsequent Holder of any Registrable Securities, subject to the
provisions and obligations hereof.
8. Entire Agreement and Modifications. This Registration Rights
----------------------------------
Agreement constitutes the entire understanding between the parties and
supersedes all other agreements, whether written or
10
<PAGE>
oral, with respect to the transactions contemplated by this Registration Rights
Agreement. This Registration Rights Agreement may not be amended or modified by
either party unless such amendment or modification is memorialized in a writing
signed by each of the parties hereto. Any such amendment or modification of this
Registration Rights Agreement shall be binding upon and inure to the benefit of
all Holders of Registrable Securities.
9. Waiver. Any waiver by either party of any breach of any term or
------
condition in this Registration Rights Agreement shall not operate as a waiver of
any other breach of such term or condition or of any other term or condition,
nor shall any failure to enforce any provision hereof operate as a waiver of
such provision or of any other provision hereof or constitute or be deemed a
waiver or release of any other rights, in law or in equity.
10. Governing Law. All issues concerning this Registration Rights
-------------
Agreement will be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania, without giving effect to any choice of law or
conflict of law provision or rule (whether of the Commonwealth of Pennsylvania
or any other jurisdiction) that would cause the application of the law of any
parties hereto agree that any action to enforce this Registration Rights
Agreement may be properly brought in any court within the Commonwealth of
Pennsylvania or in the United States District Court for the Eastern District of
Pennsylvania, and the parties hereto agree that the courts of the Commonwealth
of Pennsylvania and the United States District Court for the Eastern District of
Pennsylvania shall have jurisdiction with respect to the subject matter hereof
and the person of the parties hereto.
11. Severability. Whenever possible, each provision of this Registration
------------
Rights Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Registration Rights Agreement
is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or the effectiveness or
validity of any provision in any other jurisdiction, and this Registration
Rights Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision had never been contained
herein.
12. Further Assurances. From time to time after the execution of this
------------------
Registration Rights Agreement, each of the parties hereto hereby agrees to use
all reasonable efforts to take, or cause to be taken, all action and to do, or
cause to be done, all things necessary, proper and advisable under applicable
laws, rules and regulations to consummate and make effective the
11
<PAGE>
transactions contemplated by this Registration Rights Agreement, including using
its best efforts to obtain all necessary waivers, consents and approvals. In
case at any time after the execution of this Registration Rights Agreement
further action is necessary or desirable to carry out the purposes of this
Registration Rights Agreement, the proper officers and directors of each of the
parties shall take all such necessary action.
13. Notices. All notices and other communications which are required or
-------
may be given under this Registration Rights Agreement shall be in writing and
shall be deemed to have been given if delivered personally or sent by registered
or certified mail, return receipt requested, postage prepaid:
To Company:
Eastern Environmental Services, Inc.
1000 Crawford Place
Mt. Laurel, NJ 08054
Attn: Louis D. Paolino, President
with a copy to:
Robert M. Kramer, Esquire
Robert M. Kramer & Associates
1150 First Avenue
Suite 900
King of Prussia, PA 19406
To Skuba:
William C. Skuba
RR #4, Box 4452
Drums, PA 18222
or to such other place as either party shall have specified by notice in writing
to the other.
12
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement or caused this Registration Rights Agreement to be executed on its
behalf as of the date first written above.
ATTEST: EASTERN ENVIRONMENTAL SERVICES, INC.
______________________ By: /s/ Louis D. Paolino, Jr.
--------------------------------
Title: Louis D. Paolino, Jr., Chief
Executive Officer
WITNESS: WILLIAM C. SKUBA
______________________ /s/ William C. Skuba
------------------------------------
13
