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As Filed with the Securities and Exchange Commission on February 14, 1996
Registration No. 333-00283
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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EASTERN ENVIRONMENTAL SERVICES, INC.
(Exact Name of Registrant as Specified in Charter)
DELAWARE 59-2840783
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Identification
Organization) Number)
R.R. #4, Box 4452
Drums, Pennsylvania 18222
(717) 788-6075
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
William C. Skuba, Chairman of the Board,
President and Chief Executive Officer
R.R. #4, Box 4452
Drums, Pennsylvania 18222
(717) 788-6075
(Name and address, including zip code, and telephone number,
including area code, of agent for service)
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Approximate date of commencement of proposed sale to public: As soon as
practicable after the effectiveness of this Registration Statement.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
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If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration number of the earlier effective registration statement for the same
offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.[_]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+ REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+ SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY+
+ OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+ BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+ THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+ SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+ UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF+
+ ANY SUCH STATE. +
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED FEBRUARY 14, 1996
PROSPECTUS
EASTERN ENVIRONMENTAL SERVICES, INC.
This Prospectus relates to the resale by the Selling Shareholders
of a total of 2,762,204 shares of Common Stock, $.01 par value per share
(the "Common Stock") of Eastern Environmental Services, Inc. (the
"Company"), including:
(1) 1,198,000 shares of Common Stock held by Selling
Shareholders. See "Selling Shareholders."
(2) 785,601 additional shares of Common Stock which may be
issued by the Company to one of the Selling Shareholders upon conversion of
shares of Class A Common Stock. The issuance of the shares of Common Stock
upon conversion of the Class A Common Stock is not covered by this
Prospectus, but rather only the resale of such shares. See "Selling
Shareholders."
(3) 778,603 additional shares of Common Stock which may be issued
by the Company to Selling Shareholders upon the exercise of outstanding
warrants (the "Warrants") to purchase shares of Common Stock at per share
exercise prices ranging from $.87 to $3.56. The issuance of the shares of
Common Stock upon exercise of the Warrants is not covered by this
Prospectus, but rather only the resale of such shares. See "Selling
Shareholders."
There is no assurance that any of the Warrants will be exercised
and, therefore, there are no assurances that the Company will receive any
proceeds hereunder. The Company will not receive any proceeds from the
conversion of any Class A Common Stock or from the sale of shares of Common
Stock by Selling Shareholders. See "Selling Shareholders."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
PROSPECTIVE PURCHASERS SHOULD CONSIDER THE RISKS SET FORTH UNDER
"RISK FACTORS" COMMENCING ON PAGE 2.
The shares offered by the Selling Shareholders hereby will be
sold at market prices on The Nasdaq Stock Market ("Nasdaq") or in private
sales at prevailing market prices or negotiated prices. Selling
Shareholders may pay commissions or other compensation to broker-dealers in
connection with such sales, which may be in excess of customary commissions
charged for Nasdaq transactions. See "Selling Shareholders."
The Common Stock is traded on Nasdaq under the symbol EESI. On
February 9, 1996, the closing sales price of the Common Stock, as reported
by Nasdaq, was $1.75.
The date of this Prospectus is February __, 1996
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RISK FACTORS
In analyzing this offering, prospective purchasers should carefully
consider the following risks and other information contained in this Prospectus.
Need for Additional Capital
The Company has experienced liquidity problems due to its lack of
significant revenues. The Company is currently operating only the South
Carolina landfill at full capacity. It is also operating the West Virginia
landfill and its special waste hauling operation, although at only partial
capacity. Aside from these operations, the Company has only recently received a
permit from the State of Illinois to develop a landfill and the expansion area
at the Company's Kentucky landfill remains in the permit development stage.
This lack of revenues and the development stage situation in Kentucky and
Illinois, among other factors, have led to operating losses with a continued
need to invest in additional transportation equipment, landfill permitting and
development costs, disposal space cell construction, and closure costs. The
Company has currently addressed such issues, in the absence of long-term bank
financing arrangements, primarily by private placements of its equity
securities, with net proceeds of $300,000 from sales of common stock in the
fiscal year ended June 30, 1995, and $875,000 in the first quarter of fiscal
1996.
The Company's operations to date have required substantial amounts of
working capital and the Company expects to expend substantial funds to support
the expansion of its disposal and transportation operations. The Company
expects capital expenditures of approximately $1,500,000 in fiscal 1996, of
which approximately 85% was expended by December 31, 1995, to construct
additional disposal space at the Company's West Virginia landfill, further the
permits at the Kentucky site, and acquire necessary landfill and transportation
equipment. In addition, the Company will require approximately $1,500,000 of
additional capital reserves, which are not currently available to the Company,
to construct the initial disposal space at the Illinois landfill. Significant
additional capital reserves would be required to construct initial disposal
space at the Company's Kentucky landfill, should it receive a permit during
fiscal 1996. The Company currently does not have such necessary capital
reserves and will, therefore, be required to raise additional funds to meet its
working capital requirements through bank financing or additional equity or debt
placements, which may include the sale of an equity interest in individual
landfill sites. Although the Company is currently engaged in discussions with
potential lenders and other investors regarding such additional financing, no
assurance can be given that additional financing will be available or, if
available, that it will be available on acceptable terms. Further, there can be
no assurance that additional financing will not be required to fund the
Company's operations beyond fiscal 1996. If the Company is unable to obtain
additional financing, it may be required to forego the development of the
Illinois landfill and, if the permit is received, the Kentucky landfill, to sell
one or more of the Company's landfills, or to curtail or cease its operations.
History of Operating Losses
The Company has experienced annual net losses from fiscal 1992 through
fiscal 1995. In recent years, the Company has incurred increases in expenses
associated with meeting federal, state and local regulatory requirements
affecting its business. There can be no assurance that the Company will realize
revenues and gross profits sufficient to achieve or sustain profitability on a
quarterly or annual basis in the future. In the event it fails to do so, the
Company's operations could be adversely affected and investors in the Common
Stock could face the loss of part or all of their investment.
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Permits and Licenses
The Company's landfills operate under permits which must be renewed
periodically, and the Company must also obtain permits to expand its operating
area and to expand the types or sources of wastes for disposal at its landfills.
Obtaining permits for expansion is expensive and time consuming and is typically
subject to state and local government approval, the availability of which cannot
be predicted. There can be no assurance that renewals and expansion permits
will be obtained. The inability of the Company to obtain renewals of existing
permits or to obtain expansion permits as needed for any of its landfill sites
would have a material adverse effect on the Company's business and financial
condition.
The Company has permits which allow it to conduct its current landfill
operations in West Virginia and South Carolina until October 1998 and November
1998, respectively, at which time they must be renewed. In July 1995, the
Company was forced to cease operations in its existing Kentucky disposal area
because of its failure to meet newly required standards. Although the Company
expects to receive an expansion permit from the State of Kentucky for a 43-acre
expansion area at the Kentucky landfill, there can be no assurance that the
permit will be obtained. Failure to obtain the permit from Kentucky would have
a material adverse effect on the Company's financial condition. As the Company
continues to pursue a final state permit for the expansion area at the Kentucky
site, it implemented a program on July 1, 1995 to transfer and dispose of waste
to an alternate, non-affiliated landfill. The suspension of waste disposal at
the landfill and the operation of a transfer station generates a higher
operating loss at the site than existed prior to the suspension of waste
disposal.
Regulation
General. The solid waste industry is subject to extensive federal,
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state, and local environmental regulations that affect the siting, design,
construction, operation, closure and post-closure care of the Company's
landfills, the availability of waste for disposal and other matters. These
regulations are continually evolving, and the Company may from time to time be
required to make significant capital and operating expenditures in response to
these changes. Additionally, although the Company believes it is in material
compliance with current regulatory requirements, the Company could incur
liability for violations of federal, state and local environmental regulations.
The Company also may be subject to actions brought by individuals or community
groups in connection with the permitting, licensing or expansion of its
operations, alleged violations of such permits and licenses or other matters.
If any of the occurrences described above were to happen, the Company's
operating results and the value of a Common Stock Purchaser's investment could
be adversely affected.
State Regulation. The Company will incur material costs in connection
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with the state regulatory requirements governing closure and post-closure
monitoring and maintenance of the current operating areas and future expansion
areas of its landfill sites. The costs of closing current permitted operating
areas at the Company's West Virginia landfill, if all acreage is used, and the
recently closed area of the Kentucky landfill, is estimated to be approximately
$4,643,000 and at the Company's South Carolina landfill approximately $465,000
(under draft South Carolina regulations expected to become effective in fiscal
1996, described below). Closure costs for the Kentucky expansion area are
expected to be approximately $3,300,000. Post-closure care and monitoring
obligations at both the West Virginia and Kentucky sites could add additional
expenditures of $27,000 to $120,000 per year per site over the 30-year period
following closure. Closure and post-closure care costs for the Company's
Illinois landfill are expected to be similar to those for the West Virginia and
Kentucky landfills. All of these amounts are only estimates based on current
and proposed regulatory
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requirements. There can be no assurance that significant additional closure and
post-closure requirements will not be mandated which could have a material
adverse impact on the Company's financial condition and, correspondingly, on a
Common Stock purchaser's investment.
The construction of the expansion area at the West Virginia landfill,
planned construction of the expansion area at the Kentucky landfill and initial
disposal area at the Illinois landfill will all require the installation of
liners, additional groundwater monitoring wells, leachate collection and
treatment systems, methane gas monitoring and venting systems and other
environmental protection measures. The capital costs for installation of these
regulatory compliance measures and preparation of the expansion areas are
substantial. The state and federal regulatory requirements affecting the
planned expansions have changed frequently in the past, and additional changes
could occur in the future which may have an adverse effect on the Company's
preparation of the expansion areas and, as a result, on the Company's financial
results and on a Common Stock purchaser's investment.
In 1993, the South Carolina Department of Health and Environmental
Control proposed new regulations governing industrial waste landfills, which
include the Company's South Carolina facility. If passed in the proposed form,
these regulations would impose additional operating, reporting and record-
keeping requirements on the Company's South Carolina landfill as well as
significant new closure, post-closure and design requirements. These
regulations, however, are only in draft form, and final regulations may have
additional or substantially different requirements which may materially
adversely affect the Company's operations.
The rates that the Company may charge at its West Virginia landfill
for the disposal of municipal solid waste are regulated by the West Virginia
Public Service Commission. As a result, the Company may be prevented from
raising its rates or maintaining its current rates in the future. Such an
occurrence could adversely affect the Company's operating results.
Additionally, adoption of rate regulation of waste disposal in Kentucky,
Illinois or South Carolina, or in other states in which the Company may own
landfills in the future, could also adversely affect the Company's operating
results.
Certain states (including South Carolina) have enacted (and others may
enact) legislation limiting the source of waste that may be disposed of in such
states or imposing a tax on the collection or disposal of out-of-state waste.
Such legislation in the states where the Company conducts operations could have
a material adverse effect on the Company's opportunities for additional revenues
and waste streams.
Federal Regulation. The Resource Conservation and Recovery Act
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("RCRA") comprehensively regulates the transportation and disposal of solid and
hazardous waste. Pursuant to RCRA, the Company could be compelled to abate any
imminent and substantial endangerment to public health or welfare or the
environment caused by the past or present handling of solid or hazardous waste
at any of its facilities. Although the Company attempts to accept only non-
hazardous waste and maintains hazardous waste exclusion plans at its landfills,
it is difficult for the Company to screen fully and effectively for certain
types of non-regulated hazardous waste. There can be no assurance, therefore,
that household hazardous waste will not be present at Company landfills or that
the Company will not be forced to initiate a significant and costly abatement
project which would materially adversely affect the Company's financial
condition.
RCRA regulations set forth criteria for solid waste disposal
practices. Failure to satisfy these criteria constitutes open dumping which is
prohibited by RCRA and most state laws. According to these regulations, if the
disposal activity has certain specified effects on such environmental resources
as floodplains, endangered species, surface water, groundwater and air, the
disposal activity may constitute illegal open dumping. The Company conducts
monitoring at all of its
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landfill sites and believes that its landfills do not exceed any current open
dumping standards; however, there can be no assurance that future monitoring
will not reveal conditions that may call for remediation. Such remediation, if
required, could cause a material adverse effect on the Company's operations.
The Federal Clean Water Act established rules regulating the discharge
of pollutants from a variety of sources, including landfills, into streams or
other surface waters. Whenever pollutants from the Company's landfills may be
discharged into surface waters through a point source (e.g. a drainage channel,
ditch, pipe or similar conveyance), this act requires the Company to apply for
and obtain discharge permits, conduct periodic sampling and monitoring and,
under certain circumstances, reduce the quantity of pollutants in those
discharges via treatment or management practices. This act may regulate the
discharge of materials as varied as the constituents of storm water runoff or
landfill leachate released to surface water channels. In most states,
implementation of this program is delegated by the federal government to the
state.
The Clean Air Act provides for federal, state and local regulation of
emissions of air pollutants into the atmosphere and has been construed by the
EPA to apply to the operation of landfills. In addition to other requirements,
when the Company's landfills accept asbestos-containing waste, they also are
governed by federal EPA regulations promulgated pursuant to the Clean Air Act
which require that there be no visible emissions to the outside air from the
disposal site or that the asbestos-containing materials be covered daily (or if
the site is continuously operated, at least once every 24 hours). Further,
unless a natural barrier adequately deters access by the general public, warning
signs and fencing must be installed or the asbestos waste must be covered daily.
In an effort to track asbestos waste, federal regulations require active
asbestos waste disposal sites to record the location of all asbestos waste and
retain waste shipment records for at least two years. In addition to federal
regulation, many states and localities have programs for approving and licensing
asbestos disposal sites.
The Company's continued compliance with the Federal Clean Water and
Clean Air Acts may impose significant expense upon the Company which may
adversely affect its results of operations and financial condition.
Competition
The solid waste industry is highly competitive and the Company
believes that industry consolidation will increase competitive pressures. The
Company's landfills compete with municipalities, numerous small local firms,
regional firms and large national waste management companies. Although a large
portion of the waste transported by the Company's waste hauling operations is
disposed of at Company's landfills, the Company's landfills receive the majority
of their revenues from non-affiliated waste generators and haulers. Competition
among landfills is based primarily upon proximity of the landfill to the waste
generator, price, service, condition of the landfill and permit approvals for
particular wastes. Many of the Company's competitors have greater capital
resources and experience than the Company and municipalities generally have
financial advantages such as tax revenues and tax exempt financing which induce
public ownership of landfills in certain states. Increased competition among
regional and national landfill companies and local municipalities may adversely
affect the Company's profit margins in the future.
The Company's waste hauling and collection operations compete with
small transporters and large volume waste hauling firms located in the
northeastern, mid-Atlantic and southeastern states. Competition among waste
haulers is based primarily upon price and the quality and timeliness of service.
Many of the Company's competitors have greater capital resources and
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experience than the Company and increased competition among regional and
national waste haulers may adversely affect profit margins in the future.
Potential Environmental Liability
The Company may be subject to significant response costs and
liabilities under federal, state, and local environmental laws, particularly as
a result of the contamination or threat of contamination of groundwater, surface
water or the soil at its landfills, including damage resulting from conditions
existing prior to the acquisition of the landfills by the Company, as well as
for environmental contamination caused by waste transported by the Company for
disposal at other facilities. For example, the federal Superfund law imposes
strict, joint and several liability on the present or former owners or operators
of facilities which release or threaten to release hazardous substances into the
environment regardless of when the hazardous substance was first detected in the
environment. Similar liability is imposed upon the generators and transporters
of waste that contains hazardous substances. All such persons may be liable for
waste site investigation, waste site cleanup costs and natural resource damages,
regardless of whether they exercised due care and complied with all relevant
laws and regulations. Such costs can be substantial. Furthermore, the
liability is founded upon the existence of even very small amounts of the more
than 700 "hazardous substances" listed by the EPA and is not limited to the
disposal of "hazardous wastes."
Asbestos is a listed hazardous substance hauled and disposed of by the
Company. The Company also hauls other hazardous substances and hazardous wastes
to non-Company owned facilities. There can be no assurance that hazardous wastes
or hazardous substances other than asbestos are not present in the Company's
landfills or that the Company will not face claims resulting in environmental
liability with respect to its landfill and waste hauling operations.
Lack of Cash Dividends on Common Stock
The Company has not paid cash dividends on its Common Stock since its
inception. It is anticipated that, in the foreseeable future, no cash dividends
will be paid on the Common Stock and any cash otherwise available for such
dividends will be reinvested in the Company's business. Payment of dividends is
also restricted by the Company's loan agreements with its primary lenders.
Limited Availability of Favorable Acquisitions
In conjunction with the expansion of its current facilities, the
Company plans to expand its operations through the acquisition of additional
landfills, waste hauling operations and other waste-related businesses. The
success of the Company is largely dependent on its ability to complete such
acquisitions at reasonable prices, obtain and comply with applicable
governmental permits and approvals and then expand and integrate newly acquired
operations with the Company's existing operations. Landfills have become
increasingly scarce and valuable, and intense competition for existing landfill
sites could result in prices for acquisitions that may be difficult to justify
or that may be beyond the Company's financial resources. Many of the Company's
competitors for such acquisitions have substantially greater financial resources
than the Company. Accordingly, there can be no assurance as to the number or
timing of the Company's acquisitions or as to the availability of financing
necessary to complete an acquisition. Should the Company be unable to make
acquisitions, the Company's expansion plans and the Company's operating results
could be adversely impacted.
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Insurance and Bonding Requirements
Although the Company maintains general liability insurance for all its
operations, the Company does not maintain environmental impairment liability
insurance for its landfills. If the Company were to incur substantial liability
for environmental damage, its business and financial condition would be
materially adversely affected.
The Company is required to post a form of financial assurance at its
West Virginia and Kentucky landfills to ensure proper closure and post-closure
monitoring and maintenance. Similar bonding requirements will also be imposed
upon the Illinois landfill and the expansion area of the Company's Kentucky
landfill. Additionally, some of the Company's hauling and collection contracts
require performance and payout bonds to guarantee project completion and certain
states may require collateral bonds to secure compliance with hazardous waste
hauling requirements. The Company's ability to meet these bonding requirements
is contingent upon the Company's performance record and creditworthiness.
The inability to maintain the Company's insurance program and bonding
capacity or a sizable increase in rates would have a material adverse impact on
the Company's business and may preclude it from obtaining or retaining landfill
operating permits. The Company also is subject to the risk of potential claims
in excess of policy limits, claims relating to projects performed during periods
not covered by insurance, or claims made after the expiration of the policy
coverage period. Asbestos-related illnesses, such as asbestosis, lung cancer,
mesothelioma and other cancers, may not become apparent until many years after
exposure. From May 15, 1985 through April 28, 1988, the Company carried claims
made general liability coverage when quality occurrence insurance was difficult
to obtain. Because of the long-term nature of asbestos-related illnesses, any
claims presented on the basis of exposure during that period of time may not be
covered by insurance. If the Company were to incur significant liability for
asbestos-related illnesses which were not covered by insurance, its financial
condition could be materially adversely affected.
Dependence on Key Personnel
The Company's overall operations are dependent upon the services of
its executive officers, including William C. Skuba, its Chairman of the Board,
Chief Executive Officer and President. The loss of Mr. Skuba's or other
executive officers' services could have a material adverse effect on the
Company.
Management Control of the Company; Delaware Anti-Takeover Statute
As of the date of this Prospectus, William C. Skuba, the Company's
Chairman of the Board, Chief Executive Officer and President, owns 1,591,201
shares of the Company's Class A Common Stock, which is entitled to four votes
per share and 20,000 shares of the Company's Common Stock, which is entitled to
one vote per share. As of the date of this Prospectus, Mr. Skuba's stock
ownership, together with 15,000 other shares which Mr. Skuba has the right to
vote, represents approximately 61.2% of the combined voting power of all classes
of outstanding capital stock. As a result, he is in a position to control the
policies and elect all of the directors of the Company. In Addition, Section 203
of the Delaware General Corporation Law prohibits certain
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persons from engaging in business combinations with the Company. This section
may be considered to have an anti-takeover effect and may delay, defer or
prevent a takeover attempt that a stockholder may consider in its best interest.
This section may also adversely affect prevailing market prices for the Common
Stock.
Waste Reduction Programs
The Company's landfills and related waste collection operations may be
affected by the trend toward state and local laws requiring the development of
waste reduction and recycling programs. For example, many states (including
West Virginia, Kentucky, South Carolina and Illinois, where the Company's
existing and proposed landfills are located) have enacted laws that require
counties to adopt comprehensive plans to reduce the volume of solid waste
deposited in landfills through waste planning, composting, recycling or other
programs. Some states, including South Carolina, West Virginia, Kentucky and
Illinois have adopted legislation that prohibits the disposal of yard waste,
tires and other items in landfills. The development of such programs could
reduce the volume of landfill waste and thereby have a material adverse effect
on the Company.
THE COMPANY
Eastern Environmental Services, Inc. (the "Company") is an integrated
waste services company specializing in the transportation and disposal of non-
hazardous residential, commercial, industrial and special waste in the eastern
United States. The Company currently owns and operates three landfills located
in West Virginia, Kentucky and South Carolina and has entered into a management
agreement to manage a municipal solid waste landfill in Illinois. The Company's
special waste hauling operation serves the eastern United States and is a source
of waste (primarily asbestos) for the Company's landfills. The Company also
provides roll off container services from its West Virginia and South Carolina
landfills. The Company currently has five active operating subsidiaries.
The Company discontinued and sold substantially all of the operating
assets of its asbestos abatement and laboratory services subsidiaries during the
fiscal year ended June 30, 1994. As a result of increasing competition and
price compression in both of these markets, management decided to exit these
businesses and focus on expanding the Company's waste disposal and
transportation capabilities.
The Company was formed as a Delaware corporation in April 1987 to
continue the asbestos abatement operations of the William C. Skuba Company, Inc.
The Company began asbestos waste hauling in 1988 and acquired its West Virginia
landfill in August 1989. The Company's Kentucky landfill was acquired in July
1990 and its South Carolina landfill in November 1990. The Company also has
recently entered into a management agreement to develop an Illinois landfill.
The Company's strategy is to expand its waste disposal capabilities by further
developing its existing landfills and hauling operations and secondarily by
acquiring and developing additional landfills, waste hauling operations and
other waste-related businesses.
The address of the Company's principal executive offices is R.R. #4,
Box 4452, Drums, Pennsylvania 18222 and its telephone number is (717) 788-6075.
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RECENT DEVELOPMENTS
The Company has recently acquired a permit from the Illinois
Environmental Protection Agency approving the development of a new municipal and
non-hazardous special waste landfill in Illinois. The permit allows development
of a 42-acre site consisting of approximately 5,700,000 cubic yards of airspace.
The Company has the right to operate the landfill under a management agreement
(the "Agreement") with the owner of the real estate on which the landfill is
located. The Agreement allows the Company to develop and operate the landfill in
return for the payment to the owner of a royalty based upon the landfill's
revenues. The Agreement also provides that waste from a local collection
business and transfer station will be disposed of exclusively at the landfill,
once and if it becomes operational. Additionally, the Company has the option, at
any time within the next 40 years, to purchase the land from the owner for
consideration consisting of a nominal cash payment and the continuation of the
royalty payments. See "Risk Factors -- Need for Additional Capital."
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form S-3 with the
Securities and Exchange Commission (the "Commission") relating to the shares of
Common Stock offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement, certain portions of which
have been omitted pursuant to the rules and regulations of the Commission.
Reference is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the Company and the
securities offered hereby.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and, in accordance
therewith, files reports and other information with the Commission. Proxy
statements concerning the Company, reports and other information filed by the
Company can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the Commission's regional offices in New York (7 World Trade Center,
Suite 1300, New York, New York 10048) and Chicago (Citicorp Center, 500 W.
Madison St., Suite 1400, Chicago, Illinois 60661-2511). Copies of such material
can be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates.
The Company will furnish, without charge, to any person to whom a copy
of this Prospectus is delivered, upon such person's written or oral request, a
copy of any and all of the documents that have been incorporated by reference in
the Registration Statement and herein (not including exhibits to such documents,
unless such exhibits are specifically incorporated by reference into such
documents). Any such request should be directed to the Chief Financial Officer,
Eastern Environmental Services, Inc., R.R. #4, Box 4452, Box 366, Drums,
Pennsylvania 18222, phone number: (717) 788-6075.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated in this Prospectus by reference:
(a) The Company's Annual Report on Form 10-K for the year ended June
30, 1995.
(b) The Company's Quarterly Report on Form 10-Q for the quarters
ended September 30, 1995 and December 31, 1995.
(c) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A filed with the Commission,
including any amendments or reports filed for the purpose of
updating such description.
(d) In addition, all documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act prior to the termination of the offering shall be deemed to
be incorporated by reference herein from their respective dates
of filing.
Any statements contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is incorporated or deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
-9-
<PAGE>
SELLING SHAREHOLDERS
The following table sets forth the names of the Selling Shareholders
and certain information regarding the beneficial ownership of the Company's
Common Stock by the Selling Shareholders as of December 31, 1995, and as
adjusted to reflect the sale of the shares offered by this Prospectus:
<TABLE>
<CAPTION>
Beneficial Ownership
After Offering
--------------------------
Number of
Shares Percent of
Beneficially Number of Class (if
Owned Prior to Shares Number of greater
Name Offering Offered Shares than 1%)
---- -------------- --------- --------- ----------
<S> <C> <C> <C> <C>
Steven Brody 50,000(1) 50,000(1) -- --
Jack Casagrande 250,000 250,000 -- --
Jose Castaneda 1,250(2) 1,250(2) -- --
Dr. Steven Celani 5,000(3) 5,000(3) -- --
Gerald Cohn 10,000(4) 10,000(4) -- --
William M. DeArman 150,000(5) 150,000(5) -- --
Joseph M. DeBias 25,000(6) 25,000(6) -- --
Fred M. Ferreira 197,500(7) 187,500(7) 10,000 --
GKN Securities Corp. 12,500(8) 12,500(8) -- --
Ronald I. Heller 250,000(9) 250,000(9) -- --
LBC Capital Resources 65,853(10) 65,853(10) -- --
Larry Martin 187,500(7) 187,500(7) -- --
John Meister 5,000(3) 5,000(3) -- --
Bette Nagelberg 250,000(11) 250,000(11) -- --
Robert J. Powell 21,000(12) 21,000(12) -- --
Don A. Sanders 150,000(5) 150,000(5) -- --
Randall W. Skuba &
Catherine A. Skuba 25,000 25,000 -- --
William C. Skuba 1,626,201(13) 805,601(14) 820,600(15) 17% (15)
Stephen C. Stamos, Jr. 21,000(12) 21,000(12) -- --
Timothy W. Sweeney 37,000(12) 37,000(12) -- --
Ralph Velocci 250,000 250,000 -- --
Larry Walko 3,000 3,000 -- --
- ---------------------
</TABLE>
-10-
<PAGE>
(1) Consists of shares of Common Stock which are issuable upon exercise of a
warrant to purchase such shares at an exercise price of $1.22 per share
which expires on November 1, 1999. Mr. Brody provided consulting services
for the Company from October, 1994 through November, 1995, for which he
received $44,000 in consulting fees.
(2) Consists of shares of Common Stock which are issuable upon exercise of a
warrant to purchase shares with an exercise price of $2.00 per share which
expires on July 8, 1997.
(3) Consists of shares of Common Stock which are issuable upon exercise of a
warrant to purchase shares with an exercise price of $3.562 per share which
expires on September 5, 1996.
(4) Consists of shares of Common Stock which are issuable upon exercise of a
warrant to purchase shares with an exercise price of $1.50 per share which
expires on January 10, 1997.
(5) Includes 75,000 shares of Common Stock which are issuable upon exercise of
a warrant to purchase such shares at an exercise price of $1.50 per share
which expires on August 25, 1998. Messrs. DeArman and Sanders are
principals of Sanders Morris Mundy Inc., a firm which provides investment
banking services for the Company.
(6) Consists of shares of Common Stock which are issuable upon exercise of a
warrant to purchase shares with an exercise price of $.875 per share which
expires on August 20, 1998.
(7) Includes 62,500 shares of Common Stock which are issuable upon exercise of
a warrant to purchase such shares at an exercise price of $1,50 per share
which expires on August 7, 1998.
(8) Consists of shares of Common Stock which are issuable upon exercise of a
warrant to purchase such shares at an exercise price of $1.50 per share
which expires on August 25, 1998. GKN Securities received a fee of $10,000
from the Company in connection with a private placement by the Company in
August 1995.
(9) Includes 125,000 shares of Common Stock which are issuable upon exercise of
a warrant to purchase such shares at an exercise price of $1.50 per share
which expires on August 25, 1998. All of the shares and the warrant are
held in Mr. Heller's individual retirement account with Delaware Charter
Guarantee & Trust.
(10) Consists of shares of Common Stock which are issuable upon exercise of a
warrant to purchase shares with an exercise price of $1.531 per share which
expires on June 28, 2000.
(11) Includes 125,000 shares of Common Stock which are issuable upon exercise of
a warrant to purchase such shares at an exercise price of $1.50 per share
which expires on August 25, 1998.
(12) Consists of shares of Common Stock which are issuable upon exercise of
warrants to purchase shares with exercise prices ranging from $.875 to
$1.50 which expire on dates from September 5, 1996 through July 28, 2000.
Messrs. Sweeney, Stamos and Powell all serve as directors of the Company.
(13) Includes 1,591,201 shares of Common Stock which are issuable upon
conversion of Class A Common Stock and 15,000 shares of Common Stock owned
by Mr. Skuba's mother and
-11-
<PAGE>
which Mr. Skuba has the right to vote. Mr. Skuba is the Company's Chairman
of the Board, Chief Executive Officer and President.
(14) Includes 785,601 shares of Common Stock which are issuable upon conversion
of Class A Common Stock.
(15) Includes 805,600 shares of Common Stock which are issuable upon conversion
of Class A Common Stock and 15,000 shares of Common Stock owned by Mr.
Skuba's mother and which Mr. Skuba has the right to vote. Upon completion
of this Offering, these shares will represent 39.9% of the combined voting
power of all classes of outstanding capital stock, as the Class A Common
Stock is entitled to four votes per share.
-12-
<PAGE>
PLAN OF DISTRIBUTION
The Selling Shareholders or their pledgees, donees, transferees or other
successors in interest, may sell all, a portion or none of the securities
offered by them hereby from time to time. Any such sales may be in one or more
transactions on Nasdaq at prices prevailing at the times of such sales or in
private sales of the securities at prices related to the prevailing market
prices or at negotiated prices. The sales may involve (a) a block transaction
in which the broker or dealer so engaged will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction, (b) a purchase by a broker or dealer as principal
and resale by such broker or dealer for its account pursuant to this Prospectus,
or (c) ordinary brokerage transactions in which the broker solicits purchasers.
Broker-dealers may receive compensation in the form of underwriting discounts,
concessions or commissions (which compensation may be in excess of customary
commissions). The Selling Shareholders and any broker-dealers that participate
in the distribution of the shares may be deemed to be underwriters and any
commissions received by them and any profit on the resale positioned by them
might be deemed to be underwriting discounts and commissions under the
Securities Act of 1933.
There can be no assurance that the Selling Shareholders will sell any
or all of their shares of Common Stock offered hereby. The Company will receive
no proceeds from any sales of Common Stock hereunder by the Selling
Shareholders.
The Registration Statement of which this Prospectus is a part has been
filed with the Commission by the Company in accordance with certain subscription
agreements between the Company and certain of the Selling Shareholders, pursuant
to which the Company has agreed to pay the filing fees, costs and expenses
associated with such Registration Statement. The Company has also agreed to
indemnify such Selling Shareholders for certain civil liabilities in connection
with such Registration Statement and the securities offered hereby, including
liabilities under the Securities Act of 1933.
The Selling Shareholders have advised the Company that they or their
pledgees, donees, transferees or other successors in interest may sell all or a
portion of the securities covered by this Prospectus pursuant to Rule 144.
LEGAL MATTERS
The validity of the Common Stock offered hereby has been passed upon
for the Company by Pepper, Hamilton & Scheetz, 3000 Two Logan Square,
Philadelphia, PA 19103.
EXPERTS
The consolidated financial statements and schedule of Eastern
Environmental Services, Inc. included in Eastern Environmental Services, Inc.'s
Annual Report (Form 10-K) for the year ended June 30, 1995, have been audited by
Ernst & Young, LLP, independent auditors, as set forth in their reports thereon
included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
reports given upon the authority of such firm as experts in accounting and
auditing.
-13-
<PAGE>
================================================================================
No dealer, salesman or other person has been authorized to give any information
or to make any representations other than those contained in this Prospectus in
connection with the offer made hereby, and, if given or made, such information
or representations must not be relied upon as having been authorized by the
Company. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, the securities offered hereby to any person in
any state or other jurisdiction in which such offer or solicitation is unlawful.
The delivery of this Prospectus at any time does not imply that information
contained herein is correct as of any time subsequent to its date.
-------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Risk Factors............................................................... 2
The Company................................................................ 8
Recent Developments........................................................ 9
Available Information...................................................... 9
Incorporation of Certain Documents by Reference............................ 9
Selling Shareholders....................................................... 10
Plan of Distribution....................................................... 13
Legal Matters.............................................................. 13
Experts.................................................................... 13
</TABLE>
================================================================================
EASTERN
ENVIRONMENTAL
SERVICES, INC.
----------------
PROSPECTUS
----------------
February __, 1996
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
<TABLE>
<S> <C>
SEC registration fee........... $ 1,309.67 *
Accounting fees and expenses... $ 3,000.00 **
Legal fees and expenses........ $ 15,000.00 **
Miscellaneous.................. $ 690.33 **
Total........................ $ 20,000.00 **
</TABLE>
- ------------
* Actual
** Estimated for the 12-month period commencing January, 1996.
Item 15. Indemnification of Directors and Officers
Section 145 of the General Corporation Law of the State of Delaware
(the "DGCL") provides, in general, that a corporation incorporated under the
laws of the State of Delaware, such as the Company, may indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding (other than an action by or in the right
of the corporation) by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding if such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe such person's conduct was
unlawful. In the case of an action by or in the right of the corporation, a
Delaware corporation may indemnify any such person against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
with the defense or settlement of such action or suit if such person acted in
good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the corporation, except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent that the court determines such person is fairly and reasonably entitled
to indemnity for such expenses.
Article Tenth, Paragraph (a) of the Company's Certificate of
Incorporation, as amended, provides that each person who was or is made a party
to or is involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a "proceeding"), by reason of the
fact that he or she, or a person of whom he or she is the legal representative,
is or was a director or officer of the Company or is or was serving at the
request of the Company as a director, officer, employee or agent of another
company or of a partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, whether or not the basis of such
proceeding is alleged action in an official capacity as a director, officer,
employee or agent, shall be indemnified and held harmless by the Company to the
fullest extent authorized by the DGCL, as the
II-1
<PAGE>
same exists or may hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the Company to provide broader
indemnification rights than said law permitted the Company to provide prior to
such amendment), against all expense, liability and loss (including attorneys'
fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to
be paid in settlement) reasonably incurred or suffered by such person in
connection therewith. Such indemnification continues as to a person who has
ceased to be a director, officer, employee or agent and inures to the benefit of
his or her heirs, executors and administrators; provided, however, that except
as provided in Paragraph (b) of the Article Tenth (described below), the Company
shall indemnify any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if such proceeding
(or part thereof) was authorized by the board of directors of the Company.
Article Tenth Paragraph (a) further provides that such right to indemnification
shall be a contract right and shall include the right to be paid by the Company
the expenses incurred in defending any such proceeding in advance of its final
disposition; provided, however, that, if the DGCL requires, the payment of such
expenses incurred by a director or officer (in his or her capacity as a director
or officer and not in any other capacity in which service was or is rendered by
such person while a director or officer, including, without limitation, service
to an employee benefit plan) in advance of the final disposition of a proceeding
shall be made only upon delivery to the Company of an undertaking, by or on
behalf of such director or officer, to repay all amounts so advanced if it shall
ultimately be determined that such director or officer is not entitled to be
indemnified under the Certificate of Incorporation or otherwise. The Company
may, by action of its Board of Directors, provide indemnification to employees
and agents of the Company with the same scope and effect as the foregoing
indemnification of directors and officers. The foregoing right to
indemnification and advancement of expenses is not exclusive.
Article Tenth, Paragraph (b) of the Company's Certificate of
Incorporation provides further that if a claim described under Paragraph (a) of
Article Tenth is not paid in full by the Company within thirty days after a
written claim has been received by the Company, the claimant may at any time
thereafter bring suit against the Company to recover the unpaid amount of the
claim and, if successful in whole or in part, the claimant shall be entitled to
be paid also the expense of prosecuting such claim. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition where
the required undertaking, if any is required, has been tendered to the Company)
that the claimant has not met the standards of conduct which make it permissible
under the DGCL for the Company to indemnify the claimant for the amount claimed,
but the burden of providing such defense shall be on the Company. Neither the
failure of the Company (including its Board of Directors, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he or she has met the applicable standard of conduct
set forth in the DGCL, nor an actual determination by the Company (including its
Board of Directors, independent legal counsel, or its stockholders) that the
claimant has not met such applicable standard or conduct, shall be a defense to
the action or create a presumption that the claimant has not met the applicable
standard of conduct.
Certain of the Selling Shareholders included in this Registration
Statement have, pursuant to the terms of the subscription agreements and/or the
warrants by which they have acquired or may acquire the shares which they are
offering hereby, agreed to indemnify the Company's officers and directors for
certain civil liabilities, including liabilities under the Securities Act of
1933, arising from untrue statements in this Registration Statement or material
omissions from the same as a result of information supplied to the Company by
such Selling Shareholders.
The directors and officers of the Company and its subsidiaries are
covered by policies of insurance under which they are insured, within limits and
subject to certain limitations, against certain expenses in connection with the
defense of actions, suits or proceedings, and certain liabilities
II-2
<PAGE>
which might be imposed as a result of such actions, suits or proceedings, in
which they are parties by reason of being or having been directors or officers;
the Company is similarly insured, with respect to certain payments it might be
required to make to its directors or officers under the applicable statutes and
its charter provisions.
Reference is made to Item 17 of this Registration Statement for
additional information regarding indemnification of directors and officers.
Item 16. Exhibits
5 Opinion of Pepper, Hamilton & Scheetz.
23.1 Consent of Ernst & Young LLP (included on page II-5).
23.2 Consent of Pepper, Hamilton & Scheetz (included in Exhibit 5).
*24 Power of Attorney.
______________________
* Previously filed.
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the Company pursuant to the provisions discussed in Item
15 of this Registration Statement, or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person with the securities being registered,
the Company will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The undersigned registrant hereby undertakes: (1) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this registration statement: (i) to include any prospectus required by Section
10(a)(3) of the Act; (ii) to reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement (notwithstanding the foregoing, any increase or decrease
in volume of Securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high and of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement); and (iii) to
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement; provided, however, that clauses
-------- -------
(i) and (ii) above do not apply if the information required to be included in a
post-effective amendment by those clauses is contained in periodic reports filed
by the Company pursuant
II-3
<PAGE>
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement; (2) that, for the
purpose of determining any liability under the Act, each such post-effective
amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof; and (3) to remove
from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-4
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the
incorporation by reference therein of our reports dated September 26, 1995, in
Amendment No. 1 to the Registration Statement (Form S-3 No. 333-00283) and
related Prospectus of Eastern Environmental Services, Inc. for the registration
of 2,762,204 shares of its Common Stock.
ERNST & YOUNG LLP
Reading, Pennsylvania
February 8, 1996
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Company certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Drums, Pennsylvania, on February 14, 1996.
EASTERN ENVIRONMENTAL
SERVICES, INC.
By: /s/ WILLIAM C. SKUBA
------------------------------------
William C. Skuba, Chairman
of the Board, President and
Chief Executive Officer
(the principal executive officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on February 14,
1996 in the capacities indicated.
/s/ WILLIAM C. SKUBA
-----------------------------------------------
William C. Skuba, Chairman of
the Board, President, Chief
Executive Officer and Director
(the principal executive officer)
/s/ GREGORY M. KRZEMIEN
-----------------------------------------------
Gregory M. Krzemien, Chief Financial
Officer and Treasurer (the principal
financial officer)
II-6
<PAGE>
/s/ MICHAEL P. NAMETH
-----------------------------------------------
Michael P. Nameth, Chief Accounting
Officer (the principal accounting officer)
*
-----------------------------------------------
Michael A. Fioravante, Director of
Engineering, Executive Vice President
and Director
*
-----------------------------------------------
Timothy W. Sweeney, Director
*
-----------------------------------------------
Robert J. Powell, Director
*
-----------------------------------------------
Stephen C. Stamos, Jr., Director
* BY: /s/ WILLIAM C. SKUBA
----------------------------------
William C. Skuba, Attorney-in-fact
II-7
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
5 Opinion of Pepper, Hamilton & Scheetz.
23.1 Consent of Ernst & Young LLP (included on page II-5).
23.2 Consent of Pepper, Hamilton & Scheetz (included in
Exhibit 5).
<PAGE>
February 14, 1996
Eastern Environmental Services, Inc.
R.R. #4, Box 4452
Drums, PA 18222
Gentlemen:
We have acted as special counsel to Eastern Environmental Services,
Inc. a Delaware corporation (the "Company"), in connection with the preparation
and filing with the Securities and Exchange Commission (the "Commission") of a
registration statement (the "Registration Statement") of the Company on Form S-3
under the Securities Act of 1933, as amended (the "Act"). The Registration
Statement registers the proposed offer and sale by certain shareholders
of the Company (the "Selling Shareholders") of the following shares (the
"Shares") of the Company's Common Stock, par value $.01 per share (the "Common
Stock"):
1. 1,198,000 outstanding shares of Common Stock (the "Outstanding
Shares").
2. 785,601 shares of Common Stock (the "Conversion Shares") which
are issuable upon the conversion of an equal number of
outstanding shares of the Company's Class A Common Stock.
3. 778,603 shares of Common Stock (the "Warrant Shares") which are
issuable upon the exercise of outstanding warrants (the
"Warrants") of the Company.
In connection with our representation of the Company, we have examined
the Registration Statement, including the exhibits thereto, the originals or
copies, certified or otherwise identified to our satisfaction, of the
Certificate of Incorporation and the By-Laws of the Company, as amended to date,
resolutions of the Company's Board of Directors and such other documents and
corporate records relating to the Company and the proposed offer and sale of the
Shares as we have deemed appropriate. In the foregoing examination, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals and the authenticity of all documents submitted to
us as copies of originals. The opinion expressed herein is based exclusively on
the applicable provisions of the Delaware General Corporation Law as in effect
on the date hereof.
<PAGE>
Eastern Environmental Services, Inc.
R.R. #4, Box 4452
Drums, PA 18222
On the basis of the foregoing, we are of the opinion that:
1. The Outstanding Shares have been validly issued and are fully
paid and nonassessable.
2. The Conversion Shares, when issued upon conversion of the Class A
Common Stock in accordance with the terms thereof, as in effect
on the date hereof, will be validly issued, fully paid and
nonassessable.
3. The Warrant Shares, when issued and paid for upon exercise of the
Warrants in accordance with the terms thereof, as in effect
on the date hereof, will be validly issued, fully paid and
nonassessable.
We hereby consent to the reference to our firm under the caption
"Legal Matters" in the Registration Statement and to the filing of this opinion
as an exhibit to the Registration Statement. Such consent does not constitute a
consent under Section 7 of the Act, since we have not certified any part of such
Registration Statement and do not otherwise come within the categories of
persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission promulgated thereunder.
Very truly yours,
PEPPER, HAMILTON & SCHEETZ
By: /s/ Robert A. Friedel
-----------------------------
A Partner
