<PAGE>
As filed with the Securities and Exchange Commission on July 29, 1997
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_______________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________
EASTERN ENVIRONMENTAL SERVICES, INC.
(Exact Name of Registrant as Specified in Its Charter)
_______________
DELAWARE 59-2840783
(State of Incorporation) (I.R.S. Employer Identification Number)
1000 CRAWFORD PLACE, SUITE 101 LOUIS D. PAOLINO, JR.
MT. LAUREL, NEW JERSEY 08054 CHAIRMAN AND CHIEF EXECUTIVE OFFICER
(609) 235-6009 1000 CRAWFORD PLACE, SUITE 101
MT. LAUREL, NEW JERSEY 08054
(609) 235-6009
(Address, Including Zip Code, (Name, Address, Including Zip Code,
and Telephone Number, Including Area Code, and Telephone Number, Including
of Registrant's Principal Executive Offices) Area Code, of Agent for Service)
_______________________
COPY TO:
H. JOHN MICHEL, JR., ESQUIRE
DRINKER BIDDLE & REATH LLP
1345 CHESTNUT STREET
PHILADELPHIA, PENNSYLVANIA 19107-3496
(215) 988-2700
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as determined by
market conditions and other factors.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Amount Proposed Maximum Proposed Maximum Amount of
Title of Shares to be Offering Price Aggregate Registration
to be Registered Registered Per Share (1) Offering Price(1) Fee
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 199,232 $17.84 $3,554,299 $1,078
================================================================================================
</TABLE>
(1) Calculated pursuant to Rule 457(c).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE>
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 JULY 29, 1997
PROSPECTUS
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199,232 SHARES
EASTERN ENVIRONMENTAL SERVICES, INC.
COMMON STOCK
This Prospectus relates to 199,232 shares (the "Shares") of Common Stock, par
value $.01 per share (the "Common Stock"), of Eastern Environmental Services,
Inc. (the "Company") currently outstanding. The Shares are being offered for
sale pursuant to this Prospectus (the "Offering"), from time to time, by or for
the account of the stockholder named herein (the "Selling Stockholder"). See
"Selling Stockholder." The Company will not receive any of the proceeds of this
Offering. See "Use of Proceeds."
The Selling Stockholder, either directly, through agents designated or to be
designated from time to time by him, or through underwriters or dealers, may
sell the Shares from time to time on terms to be determined by the Selling
Stockholder at the time of sale. The Selling Stockholder may also seek, to the
extent permitted by applicable laws, to sell the Shares in transactions under
Rule 144 of the Securities Act of 1933, as amended (the "Securities Act").
All expenses of the Offering, other than commissions or discounts of broker-
dealers, will be borne by the Company. It is estimated that such expenses to be
borne by the Company will approximate $15,000.
The Selling Stockholder and any broker-dealers, agents, underwriters or
dealers that participate with the Selling Stockholder in the distribution of the
Shares may be deemed to be "underwriters" within the meaning of the Securities
Act, and any commissions received by them and any profit on the resale of the
Shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.
The Common Stock is currently traded on the Nasdaq National Market under the
symbol "EESI." The closing sale price of the Common Stock on the Nasdaq
National Market on July 28, 1997 was $17.875 per share.
----------------------
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON
PAGE 4 OF THIS PROSPECTUS FOR INFORMATION THAT SHOULD BE CONSIDERED BY
PROSPECTIVE PURCHASERS.
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
____________________
The date of this Prospectus is July , 1997
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may 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 at Seven World
Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material
also 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 Commission
maintains a web site at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding registrants, like the
Company, that file electronically with the Commission. The Company's Common
Stock is quoted on the Nasdaq National Market, and reports and other information
concerning the Company may be inspected at the National Association of
Securities Dealers, Inc. at 1735 K Street, N.W., Washington, D.C. 20006-1500.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with any amendments thereto, the "Registration Statement") under
the Securities Act with respect to the securities offered hereby. As permitted
by the rules and regulations of the Commission, this Prospectus does not contain
all of the information set forth in the Registration Statement and exhibits
thereto. Statements contained in this Prospectus or in any document incorporated
by reference in this Prospectus as to the contents of any contract or other
document referred to herein or therein are not necessarily complete, and in each
instance where such contract or document has been filed as an exhibit to the
Registration Statement, or other document incorporated by reference, reference
is made to the copy of such contract or other document, each such statement
being qualified in all respects by such reference.
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<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been previously filed by the Company with the
Commission and are hereby incorporated by reference in this Prospectus as of
their respective dates:
(i) the Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1996 (filed September 27, 1996) (as amended on Form 10-K/A filed
October 28, 1996);
(ii) the Company's Current Reports on Form 8-K dated June 21, 1996,
July 2, 1996 (as amended on Forms 8-K/A filed September 16, 1996, May 13,
1997, June 6, 1997, and July 10, 1997), September 27, 1996 (as amended on
Forms 8-K/A filed December 9, 1996, June 6, 1997, and July 10, 1997),
December 10, 1996 (as amended on Forms 8-K/A filed February 11, 1997, June
6, 1997, and July 10, 1997), January 31, 1997 (as amended on Form 8-K/A
filed April 15, 1997 and July 10, 1997), March 31, 1997 (as amended on Form
8-K/A filed May 15, 1997 and July 10, 1997), May 8, 1997, and May 12, 1997
(as amended on Forms 8-K/A filed July 11, 1997 and July 25, 1997);
(iii) the Company's Quarterly Reports on Form 10-Q for the quarters
ended September 30, 1996 (filed November 13, 1996), December 31, 1996
(filed February 14, 1997), and March 31, 1997 (filed May 15, 1997, as
amended on Form 10-Q/A filed May 16, 1997); and
(iv) the description of the Common Stock contained in the Registration
Statement on Form 8-A (File No. 0-16102), including all amendments and
reports filed for the purpose of updating such description prior to the
termination of the Offering.
Additionally, all documents and reports filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of this Prospectus and prior to termination of the
Offering shall be deemed to be incorporated by reference in this Prospectus and
to be a part hereof from the date of filing of such documents or reports. Any
statement or information 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 subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement or information so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon written or oral request, a copy of any or all
of the documents that have been incorporated by reference in this Prospectus,
other than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into the documents that this Prospectus incorporates.
Requests for such copies should be directed to: Investor Relations, Eastern
Environmental Services, Inc., 1000 Crawford Place, Mt. Laurel, New Jersey 08054,
(609) 235-6009.
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<PAGE>
RISK FACTORS
An investment in the shares of Common Stock being offered by this
Prospectus involves a high degree of risk. In addition, this Prospectus contains
forward-looking statements that involve risks and uncertainties. Discussions
containing such forward-looking statements may be found under "Risk Factors," as
well as in this Prospectus generally. The Company's actual results could differ
materially from those anticipated in these forward-looking statements as a
result of certain factors, including those set forth in the following risk
factors and elsewhere in this Prospectus. Accordingly, prospective investors
should consider carefully the following risk factors, in addition to the other
information concerning the Company and its business contained in this Prospectus
and in those documents incorporated by reference in this Prospectus, before
purchasing the shares of Common Stock offered hereby.
HISTORY OF LOSSES; WORKING CAPITAL DEFICITS; CONTINUING CHARGES
The Company has recorded net losses to common stockholders of approximately
$55,000, $4.4 million (including $2.8 million in unusual items principally
related to the Company's June 1996 change of control), and $205,000 (including
$4.2 million of merger costs and related tax provisions incurred as a result of
acquisitions) during the fiscal years ended June 30, 1995 and 1996 and during
the nine months ended March 31, 1997, respectively, and had working capital
deficits at June 30, 1996 and March 31, 1997 of approximately $1.9 million and
$700,000, respectively. In connection with the financing of its acquisitions and
business growth, the Company has incurred, and anticipates that it will continue
to incur, significant debt and interest charges under its revolving credit
facility. In addition, the Company will continue to recognize a significant
amount of goodwill amortization charges in connection with its acquisitions of
collection and transportation businesses and transfer stations that are
accounted for under the "purchase" method of accounting. Such goodwill is
amortized over a period of 40 years depending on the business acquired,
resulting in an annual non-cash charge to earnings during that period. As the
Company continues to pursue its acquisition program, its financial position and
results of operations may fluctuate significantly from period to period.
LIMITED OPERATING HISTORY IN REGARD TO SIGNIFICANT ASSETS
In June 1996, control of the Company was acquired by a group of investors, and
the Company appointed a new Board of Directors, hired a new management team, and
implemented an aggressive acquisition program. Since July 1996, the Company has
acquired 18 solid waste management businesses. Of these acquisitions, the nine
completed by March 31, 1997 collectively contributed approximately $47.3 million
or 90.3% of the Company's revenues for the nine months ended March 31, 1997 and
approximately $69.8 million or 78.1% of the Company's assets at March 31, 1997.
Because of the Company's relatively limited operating history with respect to
these businesses, no assurances can be given that the Company will be able to
replicate or improve upon their historical financial performance.
ABILITY TO MANAGE GROWTH
The Company's strategy of growing primarily through acquisitions has placed,
and is expected to continue to place, significant burdens on the Company's
management and on its operational and other resources. The Company will need to
attract, train, motivate, retain, and supervise its senior managers, technical
professionals and other employees. Any failure to expand its management
information system capabilities, to implement and improve its operational and
financial systems and controls or to recruit appropriate additional personnel in
an efficient manner and at a pace consistent with the Company's business growth
could have a material adverse effect on the Company's business and results of
operations.
DEPENDENCE ON ACQUISITIONS FOR GROWTH
The rate of future growth and profitability of the Company is largely
dependent on its ability to identify and acquire additional solid waste
collection, transportation, and disposal businesses. This
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<PAGE>
strategy involves risks inherent in assessing the values, strengths, weaknesses,
risks, and profitability of acquisition candidates, including adverse short-term
effects on the Company's reported operating results, diversion of management's
attention, dependence on retaining, hiring and training key personnel, and risks
associated with unanticipated problems or latent liabilities. There can be no
assurance that acquisition opportunities will be available, that the Company
will have access to the capital required to finance potential acquisitions, that
the Company will continue to acquire businesses or that any business acquired by
the Company will be integrated successfully into the Company's operations or
prove profitable.
AVAILABILITY OF ACQUISITION TARGETS
Increased competition for acquisition candidates may result in fewer
acquisition opportunities being made available to the Company as well as less
advantageous acquisition terms which may increase acquisition costs to levels
that are beyond the Company's financial capability or that may have an adverse
effect on the Company's business and results of operations. Accordingly, no
assurance can be given as to the number or timing of the Company's acquisitions
or as to the availability of financing necessary to complete an acquisition. The
Company also believes that a significant factor in its ability to consummate
acquisitions following the Offering will be the attractiveness of the Common
Stock as an investment to potential acquisition candidates. Such attractiveness
may, in large part, be dependent upon the market price and capital appreciation
prospects of the Common Stock compared to the equity securities of the Company's
competitors. Many of the Company's competitors for acquisitions are larger, more
established companies with significantly greater capital resources than the
Company and whose equity securities may be more attractive than the Common
Stock. To the extent the Common Stock is less attractive to acquisition
candidates, the Company's acquisition program may be adversely affected.
ABILITY TO INTEGRATE ACQUIRED BUSINESSES AND ACHIEVE OPERATING EFFICIENCIES
The Company is in the process of combining the businesses and assets that it
has acquired since July 1996 into an integrated operating structure. This
process may require, among other things, changes in the operating methods and
strategies of these separate businesses. The future growth and profitability of
the Company will be substantially dependent upon its ability to operate recently
acquired companies, as well as additional businesses that may be acquired in the
future, and integrate them in the Company's operations. The Company's strategy
is to achieve economies of scale and operating efficiencies through increases in
its size resulting from acquisitions. There can be no assurance that the
Company's efforts to integrate acquired operations will be effective or that
expected efficiencies and economies of scale will be realized. The failure to
achieve any of these results could have a material adverse effect on the
Company's business and results of operations.
POTENTIAL LIABILITIES ASSOCIATED WITH ACQUISITIONS
The businesses acquired by the Company may have liabilities that the Company
does not discover or may be unable to discover during its pre-acquisition
investigations, including liabilities arising from environmental contamination
or non-compliance by prior owners with environmental laws or regulatory
requirements, and for which the Company, as a successor owner or operator, may
be responsible. Certain environmental liabilities, even if expressly not assumed
by the Company, may nonetheless be imposed on the Company under certain legal
theories of successor liability, including particularly under Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA" or "Superfund"). The businesses acquired by the Company handled and
stored petroleum, motor oil, and other hazardous substances at their facilities.
In the past, there may have been releases of these hazardous substances into the
soil or groundwater. The Company may be required under federal, state, or local
law to investigate and remediate this contamination. Any indemnities or
warranties, due to their limited scope, amount, duration, the financial
limitations of the indemnitor or warrantor, or other reasons, may not fully
cover such liabilities.
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<PAGE>
NEED FOR ADDITIONAL CAPITAL; POTENTIAL DILUTION
The Company's acquisition program required a steady increase in capital, which
is expected to continue in the future as the Company pursues its strategy. The
Company has used with respect to completed acquisitions and intends to use with
respect to future acquisitions a combination of Common Stock, cash, and the
assumption of debt as consideration. In the event the Company issues Common
Stock to make future acquisitions, purchasers of Common Stock in the Offering
may experience dilution in the net tangible book value per share of Common
Stock. To the extent the Company is unable to use Common Stock to make future
acquisitions, its ability to grow may be adversely affected. The Company's
capital requirements also include working capital needs to maintain daily
operations and significant capital expenditures for cell construction and
expansion of its landfills, closure and post-closure care costs associated with
its landfills, equipment purchases, and debt repayment obligations and/or
financial assurance obligations. To the extent that cash available under the
Company's credit facility and internally generated cash are not sufficient to
meet the Company's capital needs, the Company will be required to raise
additional funds through significant additional equity and/or debt financing. No
assurance can be given that additional funding will be available on terms
favorable to the Company.
DEPENDENCE ON KEY PERSONNEL
In June 1996, the Company appointed a new Board of Directors and hired a new
management team. The Company's operations are substantially dependent upon the
services of its executive officers, particularly Louis D. Paolino, Jr., the
Chairman of the Board, Chief Executive Officer, and President of the Company,
and Terry W. Patrick, the Chief Operating Officer and an Executive Vice
President of the Company. The loss of the services of Mr. Paolino, Mr. Patrick
or one or more of the other executive officers of the Company could have a
material adverse effect on the Company's business and results of operations. All
of the Company's executive officers have entered into employment agreements with
the Company, most of which contain noncompetition agreements. The Company does
not maintain key-man life insurance policies on its executive officers.
DEPENDENCE ON THIRD PARTY LANDFILLS
A substantial portion of the solid waste collected by the Company is delivered
to third party landfills under informal arrangements or without long-term
contracts. If these third parties increase their disposal fees and the Company
is unable to pass along such increase to its customers, or if these third
parties discontinue their arrangements with the Company and the Company is
unable to locate alternative disposal sites, the Company's business and results
of operations would be materially adversely affected.
EXTENSIVE PERMITTING AND LICENSING REQUIREMENTS
The Company is required to obtain and maintain in effect various federal,
state, and local permits and licenses in connection with its solid waste
collection and transportation operations. The Company is also required to obtain
and maintain in effect various facility permits and other governmental
approvals, including those related to zoning, environmental, and land use, in
order to develop and operate a landfill, a transfer station, or a waste hauling
operation, and is required to obtain additional permits and approvals to expand
its existing landfill operations. These permits and approvals are difficult,
time consuming, and costly to obtain, may be subject to community opposition,
opposition by various local elected officials or citizens, regulatory delays and
other uncertainties, and may be dependent upon the Company's facilities being
included in state or local solid waste management plans and the Company's
entering into satisfactory host agreements with local communities. In addition,
operating permits may be subject to modification, renewal, or revocation by the
issuing agencies after issuance, which may increase the Company's obligations
and reopen opportunities for opposition relating to the permits. Moreover, from
time to time, regulatory agencies may impose moratoria on, or otherwise delay,
the review or granting of these permits or approvals or such agencies may modify
the procedures or increase the stringency of the standards applicable to the
review or granting of such permits or approvals.
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<PAGE>
There can be no assurance that the Company will be successful in obtaining and
maintaining in effect the permits and approvals required for the successful
operation and growth of its business, including permits and approvals required
for the development of additional disposal capacity needed to replace existing
capacity that becomes exhausted. The failure of the Company to obtain or
maintain in effect a permit or approval significant to its business would have a
material adverse effect on the Company's business and results of operations.
POTENTIAL PENNSYLVANIA LANDFILL RESTRICTIONS
The Company's Pennsylvania landfill operation, acquired by the Company in
December 1996, has been in existence since 1972. From 1972 to 1988, the 110-acre
area of the landfill which received waste or was authorized by state permits to
receive waste had either received all necessary local zoning approvals or was
not required by local ordinance to receive a zoning permit or other approval to
operate. In 1988, the Company received a state expansion permit for a 32-acre
lined expansion area increasing the size of the permitted disposal area to 142
acres as well as a conditional use zoning approval from the local township. In
1990, the township, however, adopted a new zoning ordinance which limited the
height of municipal waste landfills to 35 feet above the original land contour.
The landfill, as permitted in 1988 and as currently designed and permitted,
exceeds 35 feet in certain areas. The Company has maintained that the current
permitted area is an existing nonconforming use and is not subject to the 35
foot height limitation imposed by the 1990 ordinance. However, if the township
seeks to impose this limitation, and is successful, the existing permitted
capacity of the Company's Pennsylvania landfill would be materially affected.
KENTUCKY LANDFILL OBLIGATIONS
The Company ceased operations at its Kentucky landfill on June 30, 1995
because the existing permitted disposal area did not meet current state law
design requirements. From June 30, 1995 to June 30, 1996, the Company operated a
transfer station at the landfill site and disposed of waste at an alternate
location. The Company simultaneously pursued a final state permit for an
expansion area designed to meet the new state standards. The suspension of
landfill operations and the diversion of waste to an alternate location had an
adverse effect on the Company's operating results and the Company discontinued
its transfer station operation on July 1, 1996. The Company received a final
permit to construct its expansion area on October 14, 1996. The planned
development of the expansion area is currently expected to begin in the fall of
1997. The initial capital costs required to meet the new state requirements are
anticipated to be approximately $3.3 million. The final permit issued for the
Kentucky landfill expansion area incorporated the requirements contained in an
October 8, 1996 Agreed Order which settled an administrative appeal filed by the
Somerset Pulaski County Concerned Citizens Group. Prior to actual construction
of the expansion area, the Company is required to complete an additional
hydrogeologic investigation to confirm the adequacy of the groundwater
monitoring program approved in the final permit. Any negative results of this
investigation could have a material adverse effect on the permitted disposal
capacity at the Kentucky landfill expansion area and cause a delay in reopening
the landfill.
The final permit issued for the Kentucky landfill expansion area also requires
closure of the original disposal area, which ceased operations on June 30, 1995,
by August 15, 1997. The Company will commence but does not expect to complete
closure of this area by that date. Failure to complete closure activities by
such date would result in a violation of the final permit and could result in
the assessment of penalties and/or a forfeiture of the existing $1.3 million
payment bond posted by the Company to assure a proper closure of this area.
GOVERNMENT REGULATION
The Company is subject to extensive and evolving federal, state, and local
environmental laws and regulations that have become increasingly stringent in
recent years as a result of greater public interest
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<PAGE>
in protecting the environment. These laws and regulations affect the Company's
business in many ways and will continue to impose substantial costs on the
Company.
The design, operation, and closure of landfills is extensively regulated.
These regulations include, among others, the regulations establishing minimum
federal requirements adopted by the United States Environmental Protection
Agency (the "EPA") in October 1991 under Subtitle D (the "Subtitle D
Regulations") of the Resource Conservation and Recovery Act of 1976 ("RCRA").
The Subtitle D Regulations, which generally became effective in October 1993,
include location restrictions, facility design standards, operating criteria,
closure and post-closure requirements, financial assurance requirements,
groundwater monitoring requirements, groundwater remediation standards, and
corrective action requirements. In addition, the Subtitle D Regulations require
that new landfill units meet more stringent liner design criteria (typically,
composite soil and synthetic liners or two or more synthetic liners) designed to
keep leachate out of groundwater and have extensive collection systems to
collect leachate for treatment prior to disposal. Groundwater monitoring wells
must also be installed at virtually all landfills to monitor groundwater quality
and, indirectly, the effectiveness of the leachate collection system operation.
Most states have adopted extensive landfill regulations that have been updated
or replaced with new regulations consistent with, or more stringent than, the
Subtitle D Regulations. Failure to comply with these regulations could require
the Company to undertake investigatory or remedial activities, to curtail or
modify operations, or to close a landfill temporarily or permanently. Future
changes in federal or state regulations may require the Company to modify,
supplement, or replace equipment or facilities at costs that may be substantial.
The failure of regulatory agencies to enforce these regulations vigorously or
consistently may give an advantage to competitors of the Company whose
facilities do not comply with the Subtitle D Regulations or its state
counterparts. The Company's ultimate financial obligations related to any
failure to comply with these regulations could have a material adverse effect on
the Company's business and results of operations.
The Company is also regulated under the Federal Water Pollution Control Act of
1972 (the "Clean Water Act"), and the Clean Air Act, as amended in 1990 (the
"Clean Air Act"). The Clean Water Act regulates the discharge of pollutants from
a variety of sources, including landfills, into streams or other surface waters.
The Clean Air Act, including the 1990 amendments, provides for federal, state,
and local regulation of emissions of air pollutants into the atmosphere,
including emissions resulting from landfill operations. The EPA recently
promulgated new standards regulating air emissions of certain regulated
pollutants from municipal solid waste landfills. These standards, combined with
the new permitting programs established under the 1990 Clean Air Act amendments,
likely will subject four of the Company's landfills to new permitting
requirements and may require the installation of gas recovery systems. In
addition to these requirements, the Company's landfills are subject to Clean Air
Act regulations regulating the handling and disposal of asbestos-containing
materials. The Company's continued compliance with these existing and future
regulations may impose a significant expense upon the Company which could have a
material adverse effect on the Company's business and results of operations.
In addition, most states and municipalities in which the Company operates or
may operate have adopted laws or requirements which limit or ban certain
categories of waste or mandate the disposal or recycling of local refuse. These
recycling laws and requirements have the effect of reducing landfill disposal
tonnage. Additionally, certain permits and approvals, as well as state and local
regulations, may seek to limit a landfill to accepting waste that originates
from specified geographic areas or seek to restrict the importation of out-of-
state waste. Generally, such legislative or regulatory restrictions have not
withstood judicial challenges. However, from time to time, federal legislation
is proposed which would allow individual states to prohibit the disposal of out-
of-state waste or to limit the amount that could be imported for disposal. This
legislation would also authorize in certain instances local governmental units
to mandate the flow of waste to certain designated facilities. Although, to
date, no such federal legislation has been enacted, if such federal legislation
should be enacted in the future, states in which the Company operates landfills
could act to limit or prohibit the importation of out-of-state waste or require
the Company's collection operations to utilize certain designated sites. Such
federal or state
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actions could have an adverse effect on the Company's landfills that receive a
significant portion of waste originating from other states and on the Company's
collection operations.
REGULATION BY NEW YORK CITY TRADE WASTE COMMISSION
In 1996, the New York City Council enacted Local Law 42 ("Local Law 42") in
order to control the corrupting influence of organized crime on the waste
hauling industry. Local Law 42 created the Trade Waste Commission (the "TWC")
and established rules for licensing and regulating the operations of the
commercial and industrial waste industry in New York City. The law prohibits the
collection, disposal, or transfer of commercial and industrial waste without a
license issued by the TWC and requires TWC approval of all acquisitions or other
business combinations proposed by all licensees. Each acquisition, sale, or
merger transaction generally must be submitted for review by the TWC 30 days
before the transaction takes effect, although the amount of time required for
review depends on the complexity of the transaction and the need to investigate
the background of the principals involved. In considering applications for
licenses, which are now only temporary licenses, the TWC closely examines the
backgrounds of the applicant and the applicant's principals for any history of
criminal and other unlawful activity or involvement with members of organized
crime. The license issued to the Company by the TWC for the Company's New York
City collection operations is only a temporary license that is subject to
revocation by the TWC and there is no assurance that the Company will be issued
a permanent license. The TWC also sets maximum rates for the industry and
establishes operational requirements. In May 1997, the TWC lowered the maximum
collection rates that may be charged by licensed companies. The Company's New
York City collection operations are subject to Local Law 42, which could
preclude or materially impact the Company's operations in this region, the time
and cost of completing future acquisitions in this region, and the rates which
may be charged for collection services.
POSSIBLE LEGAL ACTION
Companies in the solid waste management business, including the Company, are
frequently subject in the normal course of business to judicial and
administrative proceedings involving federal, state, or local agencies or
citizen groups. These governmental agencies may seek to impose fines or
penalties on the Company or to revoke or deny renewal of the Company's operating
permits or licenses for violations or alleged violations of environmental laws
or regulations or require that the Company make expenditures to remediate
potential environmental problems relating to waste disposed of or stored by the
Company or its predecessors, or resulting from its or its predecessors'
transportation and collection operations. Any adverse outcome in these
proceedings could have an adverse effect on the Company's business and results
of operations and may subject the Company to adverse publicity. The Company may
also be subject to actions brought by local governments, individuals, or
community groups in connection with the permitting or licensing of its
operations, any alleged violation of such permits or licenses, or other matters.
POTENTIAL ENVIRONMENTAL LIABILITY
GENERAL. The Company is subject to liability for any environmental damage
that its solid waste facilities may cause to neighboring landowners,
particularly as a result of the contamination of drinking water sources or soil,
including damage resulting from the conditions existing prior to the acquisition
of such facilities by the Company. The Company also may be subject to liability
from any off-site environmental contamination caused by pollutants or hazardous
substances whose transportation, treatment, or disposal was arranged by the
Company or its predecessors. Any substantial liability for environmental damage
incurred by the Company could have a material adverse effect on the Company's
business and results of operations.
CERCLA imposes strict, joint, and several liability on the present owners and
operators of facilities from which a release of hazardous substances into the
environment has occurred, as well as any party that owned or operated the
facility at the time of disposal of the hazardous substances regardless of when
the hazardous substance was first detected. Similar liability is imposed upon
the generators of waste that
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contains hazardous substances and hazardous substance transporters that select
the treatment, storage, or disposal site. All such persons, who are referred to
as potentially responsible parties ("PRPs"), generally are jointly and severally
liable for the expense of investigation, cleanup, and natural resource damages
relating to environmental contamination, regardless of whether they exercised
due care and complied with all relevant laws and regulations. These costs can be
substantial. Liability can be based 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," as statutorily defined. It is
likely that hazardous substances have in the past come to be located in
landfills which the Company has been associated as an owner or operator or as a
result of its solid waste collection operations. Moreover, the Company's solid
waste collection operations may have transported hazardous substances in the
past and may do so on occasion in the future.
The National Emission Standards for Hazardous Air Pollutants ("NESHAPs")
regulate the collection, packaging, transportation, and disposal of asbestos-
containing material. NESHAPs regulate visible emissions of asbestos fibers to
outside air and require emissions controls and appropriate work practices.
Asbestos is listed as a hazardous substance under CERCLA. A few states have
classified asbestos as hazardous waste and require appropriate handling and
disposal practices. The Company transports and disposes of asbestos-containing
materials. There can be no assurance that the Company will not face claims
resulting from environmental liabilities relating to these and other materials
in its solid waste management operations.
PENNSYLVANIA LANDFILL. Prior to 1990, the Company's Pennsylvania landfill
disposed of municipal solid waste in an unlined disposal area. This unlined area
was operated by the former owner and has caused localized ground water
contamination. As a condition to a recent permit modification, the Company has
agreed to remove all waste from unlined areas to remove the source of
contamination and relocate the waste to a Subtitle D approved disposal area at
the landfill. For the period of trash relocation, the Company will operate a
groundwater removal and treatment system which has received a permit for the
associated surface water discharge. Relocation of trash began in April 1997, is
coordinated with new pad construction, and is scheduled to be completed in
fiscal year 2008. At March 31, 1997, the Company had accrued $4.5 million for
such relocation and removal costs. An additional condition of the permit
modification requires groundwater monitoring of five private water supply wells
off-site. Low levels of volatile organic compounds have been detected in two of
these private water supply wells. The Company does not believe that this off-
site contamination is related to the Company's on-site groundwater
contamination. Nevertheless, the Company voluntarily has supplied one private
residence with a carbon treatment unit on its water supply; the other private
residence is on bottled water. The Company has not established a specific
financial reserve for potential costs relating to this remediation or any
additional potential liabilities associated with this contamination. The Company
currently believes that ultimate resolution of these matters should not have a
material adverse effect on the Company's business or results of operations.
However, there can be no assurance that the Company's ultimate financial
obligations related to these matters will not have a material adverse effect on
the Company's business and results of operations.
KENTUCKY LANDFILL. The permit issued October 14, 1996 (reissued February 26,
1997) for the Company's Kentucky landfill approved corrective action measures to
abate a ground water discharge containing vinyl chloride at an off-site spring.
The corrective action requires the installation of three vertical gas wells.
This corrective action has been completed by the Company and the Company is
monitoring the spring on a quarterly basis. On December 30, 1994, the Company
received a notice of intent to sue from a neighbor of the Kentucky landfill for
an alleged unauthorized discharge of hazardous substances resulting in damage to
the neighboring property. No lawsuit has been initiated. The Company believes
any lawsuit by this neighboring landowner would lack merit and vigorously would
defend such a lawsuit. The Company currently believes that ultimate resolution
of these matters should not have a material adverse effect on the Company's
business or results of operations. However, there can be no assurance that the
Company's ultimate financial obligations related to these matters will not have
a material adverse effect on the Company's business and results of operations.
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ILLINOIS LANDFILL. The Company has received all required permits to
construct the new Illinois landfill, but intends to delay such construction
until a closure permit for an adjacent unlined landfill is issued. The Company
currently anticipates commencement of construction of the new landfill in the
fall of 1997 and commencement of operations in the spring of 1998 upon issuance
of an operating permit. The Company estimates that the cost of construction of
the initial landfill area will be $1.7 million.
Although the Company is not the owner or operator of the adjacent unlined
landfill and therefore disclaims financial responsibility for its closure and
any other potential liability associated therewith, the Company has contracted
with the owner to facilitate and partially fund closure. As part of the
Company's Landfill Management Agreement to operate the new Illinois landfill,
the Company agreed to contribute up to a maximum of $365,000 towards closure of
the adjacent unlined landfill. In addition, the Company has entered into an
agreement with a surety providing financial assurance for the closure and post-
closure care requirements for the adjacent unlined landfill pursuant to which
the Company agreed to indemnify the surety in the amount of $646,000 in the
event the owner of the adjacent landfill defaults on its closure and/or post-
closure care obligations. The Company believes that the ultimate resolution of
this matter should not have a material adverse effect on its business and
results of operations. However, there can be no assurance that the Company's
ultimate financial obligations related to these matters, including a significant
delay in commencement of operations of the new landfill area, will not have a
material adverse effect on the Company's business and results of operations.
WEST VIRGINIA LANDFILL. The Company has been advised by the State regulatory
agency that the Company's West Virginia landfill is in violation of regulatory
requirements and its permit relating to stabilization of a slope area and
closure of a portion of the landfill. The State regulatory agency has not issued
a formal notice of violation. The Company submitted a schedule for a phased
closure on July 1, 1997, and advised the State regulatory agency that it will
commence closure activities by August 15, 1997, and submit a slope stabilization
plan by October 1, 1997. The costs associated with these activities are
estimated to be $348,000. Although the State could assess penalties and/or cause
a forfeiture of the Company's closure bond, the Company believes that such
activities are unlikely. The Company believes that the ultimate resolution of
this matter will not have a material adverse effect on the Company's business or
results of operations. However, there can be no assurance that the Company's
ultimate financial obligations related to this matter will not have a material
adverse effect on the Company's business and results of operations.
SUPERFUND LIABILITY. One of the Company's solid waste collection
subsidiaries, is a defendant, along with approximately 350 other defendants, in
a private cost recovery action under various state statutory and common law
theories for allegedly sending waste to a landfill now undergoing a remedial
clean-up. The suit seeks reimbursement of an unspecified amount for soil and
groundwater remediation. The case is in the early stages of discovery and
neither the total potential remediation costs nor the Company's allocable share
of liability has been quantified. Based on information available to the Company,
the subsidiary did not contribute a significant proportion of the waste to the
site and any waste that was transported by the subsidiary to the site appears to
have been construction and demolition waste and municipal solid waste. To date,
one of the Company's insurance carriers has agreed to provide defense up to the
policy limits of $70,000, which the Company expects will be sufficient to cover
its liability, and four other carriers are expected to be placed on notice.
Given the limited quantities of waste potentially transported to the landfill,
the nature of the waste sent to the site, the availability of insurance
coverage, and other potential defenses, the resolution of the action should not
have a material adverse effect on the Company's business and results of
operations. No assurance can be given, however, that the Company's ultimate
financial obligations related to this matter will not have a material adverse
effect on the Company's business and results of operations.
The same subsidiary is also a party to a Superfund litigation, which has been
settled by substantially all of the defendants. The Company is being defended in
this action by one of its insurance carriers, which did not accept a $13,000
settlement offer. Because the settlement offer was not accepted, the Company
could be subject to claims for any deficiency between the amount contributed by
all settling
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parties and the actual costs of remediating the site. While the Company has no
reason to believe that any such claims will be asserted and no meaningful basis
to estimate the amount of such claims, no assurances can be given that they
would not be brought or that the amount claimed would not be substantial. Were
any such claim to be asserted, the Company would expect to vigorously assert all
available defenses and believes that its liability, if any, would either be
covered by insurance or, under applicable law, the responsibility of the carrier
because of its failure to accept settlement. However, no assurances can be given
that insurance proceeds would cover the entire amount of the claim or that the
Company would prevail in any action against the carrier. Accordingly, there can
be no assurance that the Company's ultimate financial obligations related to
this matter will not have a material adverse effect on the Company's business
and results of operations.
POTENTIAL INADEQUACY OF ACCRUALS FOR CLOSURE AND POST-CLOSURE COSTS
The Company has material financial obligations relating to closure and post-
closure costs of the landfills it operates. While the precise amounts of these
future obligations cannot be determined, at March 31, 1997 the Company estimated
the total costs (on a current dollar as opposed to a discounted present value
basis) to be approximately $13.6 million for final closure of its landfills, of
which $3.2 million has been accrued as of March 31, 1997. The Company makes an
accrual for these costs based on consumed airspace in relation to Management's
estimate of total available airspace of the landfills. Post-closure monitoring
costs pursuant to applicable regulations (generally for a term of 30 to 40 years
after final closure) are estimated at $7.5 million. At March 31, 1997, the
Company had accrued $1.5 million for such projected post-closure costs. The
Company will provide additional accruals based on engineering estimates of
consumption of permitted landfill airspace over the useful lives of its
landfills. There can be no assurance that the Company's ultimate financial
obligations for actual closing or post-closing costs will not exceed the amount
then accrued and reserved or amounts otherwise receivable pursuant to insurance
policies or trust funds. Such a circumstance could have a material adverse
effect on the Company's business and results of operations.
ABILITY TO MEET BONDING REQUIREMENTS
The Company is required to post a form of financial assurance at its landfills
to ensure proper closure and post-closure monitoring and maintenance.
Additionally, some of the Company's collection and transportation contracts
require performance and payment bonds to guarantee project completion and
certain states may require collateral bonds to secure compliance with hazardous
waste transportation requirements. The Company's ability to meet these bonding
requirements is contingent upon the Company's performance record and
creditworthiness. Any inability by the Company to maintain bonding capacity or a
sizable increase in payment could have a material adverse impact on the
Company's business and results of operations.
LIMITS ON INSURANCE COVERAGE
The Company carries insurance covering its assets and operations, including
pollution liability coverage. Specifically, each of the Company's landfills has
pollution liability coverage of $5.0 million per occurrence or $5.0 million in
the aggregate subject to a $500,000 deductible per occurrence. Nevertheless,
there can be no assurance that the Company's insurance will provide sufficient
coverage in the event an environmental claim was made against the Company or
that the Company will be able to maintain in place such insurance at reasonable
costs. An uninsured or underinsured claim against the Company of sufficient
magnitude could have a material adverse effect on the Company's business and
results of operations. The Company also is subject to the risk of claims by
employees and others made after the expiration of the policy coverage period,
including asbestos-related illnesses (such as asbestosis, lung cancer,
mesothelioma, and other cancers), which 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. Any claims presented on the basis of
exposure during that period may not be covered
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by insurance and any liability resulting therefrom could, consequently, have an
adverse effect on the Company's business and results of operations.
WASTE REDUCTION PROGRAMS
Alternatives to landfill disposal, such as recycling, incineration, and
composting, are increasingly being used. There also has been an increasing trend
at the state and local levels to mandate recycling and waste reduction at the
source and to prohibit the disposal of certain types of wastes at landfills.
Many states (including states in which the Company operates) 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 Florida, Illinois, Kentucky,
Pennsylvania, South Carolina, and West Virginia) have adopted legislation that
prohibits the disposal of yard waste, tires, and other items in landfills. These
developments could result in a reduction in the volume of waste destined for
landfills in certain areas, which may affect the Company's ability to operate
its landfills at their full capacity and/or affect the prices that can be
charged for landfill disposal services. Such effects could have a material
adverse effect on the Company's business and results of operations.
COMPETITION
The solid waste management industry is highly competitive and the Company
believes that industry consolidation will increase competitive pressures even
further. The Company competes with several large national waste management
companies, including Waste Management, Inc. (formerly WMX Technologies, Inc.),
Browning-Ferris Industries, Inc., U.S.A. Waste Services, Inc., United Waste
Systems, Inc., and Allied Waste Industries, Inc. A number of these competitors
have significantly greater financial, technical, marketing, and other resources
than the Company. The Company also competes with numerous well-established
smaller, local, or regional firms, some of which have accumulated substantial
goodwill. In addition, municipalities that operate their own waste collection
and disposal facilities often enjoy the benefits of tax-exempt financing and may
control the disposal of waste collected within their jurisdictions. Increased
competition from these companies or municipalities could have a material adverse
effect on the Company's business and results of operations.
At July 9, 1997, the Company provided residential collection services under 56
municipal contracts with terms ranging between one to five years. As is
customary in the waste management industry, such contracts come up for
competitive bidding periodically and there is no assurance that the Company will
be the successful bidder and will be able to retain such contracts. If the
Company is unable to replace any contract lost through the competitive bidding
process with a comparable contract within a reasonable time period or to use any
surplus equipment in other service areas, the Company's business and results of
operations could be adversely affected.
SEASONALITY; ECONOMIC CONDITIONS
The Company's revenues tend to be somewhat lower in the winter months. This is
primarily attributable to the fact that (i) the volume of waste relating to
construction and demolition activities tends to increase in the spring and
summer months and (ii) the volume of industrial and residential waste in the
regions in which the Company operates tends to decrease during the winter
months. In addition, particularly harsh weather conditions may affect the
Company's operations by interfering with collection, transportation, and
disposal operations, delaying the development of landfill capacity, and/or
reducing the volume of waste generated by the Company's customers which could
have a material adverse effect on the Company's business and results of
operations.
The Company's business is affected by general economic conditions, both
nationally and in the geographic regions in which the Company's operations are
currently located. There can be no assurance that a national or local economic
downturn will not result in a reduction in the volume of waste being
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collected, transported, and disposed of by the Company and/or the prices that
the Company can charge for its services.
ANTI-TAKEOVER PROVISIONS; SEVERANCE AGREEMENTS
The Company's Certificate of Incorporation authorizes the Board of Directors
to issue up to 10,000,000 shares of Class A Common Stock, of which 8,319,799
shares are available for issuance as of the date of this Prospectus. Holders of
Class A Common Stock are entitled to four votes for each share held on all
matters submitted to a vote of the stockholders. The issuance of Class A Common
Stock could have the effect of delaying or preventing a change in control of the
Company without further action by the stockholders. As of the date of this
Prospectus, no shares of Class A Common Stock were outstanding, and the Company
has no present plans to issue any shares of Class A Common Stock in the future.
See "Description of Capital Stock--Common Stock and Class A Common Stock." In
the future, the Company may adopt other charter provisions, such as authorizing
the Board of Directors to issue undesignated preferred stock, that also may have
an anti-takeover effect.
In addition, certain of the Company's executive officers that have entered
into employment agreements with the Company will be entitled to receive certain
bonuses in cash or Common Stock upon a change in control of the Company in such
amounts that, in the aggregate, could have an adverse effect on the Company's
liquidity and capital resources. Accordingly, such provisions could discourage
or prevent bids to takeover the Company and decrease values that would otherwise
be obtained by stockholders for their Common Stock.
The Company is subject to the anti-takeover provisions of Section 203 of the
Delaware General Corporation Law, which prohibits the Company from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
The application of Section 203 also could have the effect of delaying or
preventing a change in control of the Company without further action by the
stockholders.
CONTROL BY MANAGEMENT
At July 9, 1997, executive officers and directors of the Company as a group
beneficially owned 5,948,233 shares or approximately 27.7% of the outstanding
Common Stock. As a result, these existing stockholders, if acting together,
will be able to influence significantly the election of individuals to the Board
of Directors and the outcome of other matters submitted for stockholder
consideration.
VOLATILITY OF STOCK PRICE
The market price of the Common Stock has been and is likely to continue to be
highly volatile. Factors such as fluctuations in the Company's quarterly
revenues and operating results, the Company's on-going acquisition program,
governmental regulations, market conditions for waste management stocks in
general, and economic conditions generally may have a significant impact on the
market price of the Common Stock. In addition, as the Company pursues its
acquisition program, it may agree to issue shares of Common Stock that will
generally become available for resale which may have an impact on the market
price of the Common Stock.
SHARES ELIGIBLE FOR FUTURE SALE; SUBSEQUENT REGISTRATIONS
Sales in the public market of substantial amounts of Common Stock (including
the Shares offered hereby) could have an adverse effect on the market price of
the Common Stock and may make it more difficult for the Company to sell its
equity securities in the future at times and prices that it deems appropriate.
At July 9, 1997, the Company had outstanding 16,206,224 shares of Common Stock.
Of these shares, approximately 6,134,084 shares of Common Stock will generally
be tradeable without
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restriction or limitation under the Securities Act, except for any shares owned
by "affiliates" of the Company, which will be subject to the resale limitations
under Rule 144 of the Securities Act. The remaining approximately 10,072,140
outstanding shares of Common Stock held by existing stockholders are "restricted
securities" and may not be sold in a public distribution except in compliance
with the registration requirements of the Securities Act or pursuant to an
exemption therefrom, including that provided by Rule 144. Of these restricted
securities, 6,016,422 shares will be saleable in the public market 180 days
following the date of this Prospectus subject to compliance with Rule 144. At
July 9, 1997, there were outstanding options and warrants to purchase a total of
3,368,155 shares of Common Stock and an additional 359,264 shares reserved for
issuance pursuant to future option grants under the Company's stock option
plans. In addition, in connection with certain of the Company's acquisitions,
the Company has held back a certain portion of the purchase price that was
payable in Common Stock to generally secure the sellers' indemnification
obligations to the Company under the acquisition agreements. Such Common Stock
will be issued to the sellers upon the occurrence of certain events and/or the
satisfaction of certain liabilities by the sellers. At July 9, 1997, a total of
481,059 shares of unissued Common Stock were subject to such hold backs.
In addition, certain stockholders of the Company that hold restricted
securities have registration rights for an aggregate of up to 7,601,748 shares
of Common Stock and an additional 788,464 shares of Common Stock issuable upon
exercise of warrants. The Company has agreed to pay substantially all expenses
incident to such registration, other than underwriting discounts and
commissions.
The Company intends to register under the Securities Act 4.5 million shares of
Common Stock in connection with an underwritten public offering in July 1997.
The Company intends to register 2 million shares of Common Stock under the
Securities Act not earlier than 30 days after the date of the final prospectus
for the public offering of 4.5 million shares of Common Stock referenced in the
paragraph above for its use in connection with future acquisitions. These shares
generally will be freely tradable after their issuance by persons not affiliated
with the Company; however, resales of these shares during the 180-day period
following the date of the related shelf registration statement would require the
prior written consent of Smith Barney Inc.
LACK OF CASH DIVIDENDS ON COMMON STOCK
The Company does not expect to pay any cash dividends on the Common
Stock in the foreseeable future. Any cash otherwise available for such dividends
will be reinvested in the Company's business. In addition, the Company's credit
facility agreement prohibits the payment of cash dividends without prior bank
approval.
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THE COMPANY
Eastern Environmental Services, Inc. is a non-hazardous solid waste
management company specializing in the collection, transportation, and disposal
of residential, industrial, commercial, and special waste, principally in the
eastern United States. In June 1996, control of the Company was acquired by a
group of investors who repositioned the Company for the purpose of implementing
an aggressive acquisition program in the solid waste industry. The Company
appointed a new Board of Directors, hired a new management team with an average
of 17 years of experience in the waste management industry, raised a total of
approximately $10.0 million through two private placements of Common Stock, and
established a credit facility principally for acquisitions.
The Company believes that significant opportunities exist to acquire solid
waste collection, transportation, and disposal businesses in the eastern United
States and to develop within its existing markets. As part of its acquisition
program, the Company reviews acquisition opportunities on an ongoing basis and
is currently in various stages of negotiating the acquisition of additional
solid waste management businesses. There can be no assurance that any of such
acquisition negotiations will result in the actual acquisition of additional
solid waste management businesses.
The Company's principal executive offices are located at 1000 Crawford
Place, Suite 101, Mt. Laurel, New Jersey 08054, and its telephone number is
(609) 235-6009.
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SELLING STOCKHOLDER
The following table lists the name of the person whose Shares are covered
by this Prospectus (the "Selling Stockholder") and the number of Shares
beneficially owned by him at the commencement of the Offering, the number of
Shares being offered for sale and the number of Shares and percentage interest
of the Company to be beneficially owned after the Offering.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
NUMBER OF SHARES SHARES OWNED
OWNED AT NUMBER OF AFTER OFFERING
COMMENCEMENT SHARES BEING --------------
SELLING STOCKHOLDER OF OFFERING OFFERED NUMBER PERCENT
- --------------------- ---------------- ------------ -------------- -------
</TABLE>
Robert A. Kinsley (1) 199,232 199,232 0 *
_______________________________
* Less than 1%
(1) The shares offered hereby were acquired by the Selling Stockholder in
connection with an acquisition by the Company.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time to purchasers directly by the
Selling Stockholder, or, alternatively, the Selling Stockholder may from time to
time offer the Shares through dealers or agents, who may receive compensation in
the form of underwriting discounts, concessions or commissions from the Selling
Stockholder and/or the purchasers of the Shares for whom they may act as agent.
Any discounts, commissions or concessions received by any such dealers or agents
and any profits on the sale of Shares by them may be deemed to be underwriting
discounts and commissions under the Securities Act.
The Shares may be sold from time to time in one or more transactions at a
fixed offering price, which may be changed, at varying prices determined at the
time of sale, or at negotiated prices. Such prices will be determined by the
Selling Stockholder or by agreement between the Selling Stockholder and/or
dealers. The Shares are listed on the Nasdaq National Market and may also be
sold in transactions on the Nasdaq National Market. In addition, the Shares may
be sold, to the extent permitted, from time to time in transactions effected in
accordance with the provisions of Rule 144 under the Securities Act.
In connection with the offer and sale of the Shares, various state
securities laws and regulations require that any such offer and sale should be
made only through the use of a broker-dealer registered as such in any state
where the Selling Stockholder engages such broker-dealer and in any state where
such broker-dealer intends to offer and sell the Shares.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of the Shares may not bid for or purchase the Shares
until after such person has completed his or her participation in such
distribution, including the period of five business days prior to the
commencement of such distribution. In addition to and without limiting the
foregoing, the Selling Stockholder and any other person participating in such
distribution will be subject to other applicable provisions of the Exchange Act
and the rules and regulations thereunder, including without limitation
Regulation M, which provisions may affect the timing of purchases and sales of
any of the Shares by the Selling Stockholder and any such other person. All of
the foregoing may affect the marketability of the Shares and the ability of any
person or entity to engage in market making activities with respect to the
Shares.
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LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for the
Company by Drinker Biddle & Reath LLP, Philadelphia, Pennsylvania, counsel for
the Company.
EXPERTS
The consolidated financial statements of the Company at March 31, 1997,
June 30, 1996 and June 30, 1995, and for the nine months ended March 31, 1997
and for each of the three years in the period ended June 30, 1996, appearing in
the Registration Statement on Form S-3 (Reg. No. 333-27245) were audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated by reference herein, which, as to each of the
three years in the period ended June 30, 1996, is based in part on the reports
of Bardall, Weintraub P.C. and Paternostro, Callahan & DeFreitas, LLP,
independent auditors. The financial statements referred to above are
incorporated by reference herein in reliance upon such reports given upon the
authority of such firms as experts in accounting and auditing.
The combined financial statements of Allied Environmental Services, Inc.
and affiliates as of June 30, 1996 and 1995 and for the years then ended
appearing in the Company's Current Report on Form 8-K dated July 2, 1996, as
amended by its Forms 8-K/A filed September 16, 1996, May 13, 1997, June 6, 1997,
and July 10, 1997, have been audited by BDO Seidman LLP, independent auditors,
as set forth in their report thereon included therein and incorporated by
reference herein. Such financial statements are incorporated by reference herein
in reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
The combined financial statements of Allied Environmental Services, Inc.,
Allied Environmental Services, West, Inc., Allied Mid-Atlantic, Inc., and Allied
Waste Management, Inc. as of June 30, 1994 and for the year then ended appearing
in the Company's Current Report on Form 8-K dated July 2, 1996, as amended by
its Form 8-K/A filed September 16, 1996, May 13, 1997, June 6, 1997, and July
10, 1997, have been audited by B.J. Klinger & Co., P.C., independent auditors,
as set forth in their report thereon included therein and incorporated by
reference herein. Such financial statements are incorporated by reference herein
in reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
The combined financial statements of Super Kwik, Inc. and Waste Maintenance
Services, Inc. appearing in the Company's Current Report on Form 8-K dated
September 27, 1996, as amended by its Forms 8-K/A filed December 9, 1996, June
6, 1997, and July 10, 1997, have been audited by Bardall, Weintraub P.C.,
independent auditors, as set forth in their report thereon included therein and
incorporated by reference herein. Such financial statements are incorporated by
reference herein in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.
The financial statements of R&A Bender, Inc. and R&A Property, Ltd.
appearing in the Company's Current Report on Form 8-K dated December 10, 1996,
as amended by its Forms 8-K/A filed February 11, 1997, June 6, 1997, and July
10, 1997, have been audited by Boyer & Ritter, CPAs, independent auditors, as
set forth in their reports thereon included therein and incorporated by
reference
-18-
<PAGE>
herein. Such financial statements are incorporated by reference herein in
reliance upon such reports given upon the authority of such firm as experts in
accounting and auditing.
The combined financial statements of Donno Company, Inc. and affiliates
appearing in the Company's Current Report on Form 8-K dated January 31, 1997, as
amended by its Form 8-K/A filed April 15, 1997 and July 10, 1997, have been
audited by Paternostro, Callahan & DeFreitas, LLP, independent auditors, as set
forth in their report thereon included therein and incorporated by reference
herein. Such financial statements are incorporated by reference herein in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
The financial statements of Apex Waste Services, Inc. appearing in the
Company's Current Report on Form 8-K dated March 31, 1997, as amended by its
Form 8-K/A filed May 15, 1997 and July 10, 1997, have been audited by Daniel P.
Irwin & Associates, P.C., independent auditors, as set forth in their report
thereon included therein and incorporated by reference herein. Such financial
statements are incorporated by reference herein in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
The combined financial statements of Waste Services, Inc. and affiliates as
of December 31, 1996 and for the year then ended appearing in the Company's
Current Report on Form 8-K dated May 12, 1997, as amended by its Form 8-K/A
filed July 11, 1997 and July 25, 1997, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated by reference herein. Such financial statements are incorporated by
reference herein in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.
_______________________
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY,
THE SELLING STOCKHOLDER OR ANY OTHER PERSON. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES
OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH AN OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH
DATE.
-19-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses payable by the
Registrant in connection with this Registration Statement.
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission Registration Fee.. $ 1,078
Legal Fees and Expenses.............................. 10,000
Miscellaneous Expenses............................... 3,922
Total................................................ $15,000
=======
</TABLE>
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 vest 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 upon application that, despite the adjudication
of liability but in view of all circumstances of the case, such person is fairly
and reasonable entitled to indemnity for such expenses.
Article Tenth, Paragraph (a) of the Certificate of Incorporation of the
Company provides that each person who was or is made a party or is threatened to
be 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, or in any other capacity while serving 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 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
II-1
<PAGE>
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 or in any
other capacity while serving as 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 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 (30) 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 to 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.
As permitted by Article Eleventh of the Certificate of Incorporation and
Section 145(g) of the DGCL, 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 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. The Company has also entered
into indemnification agreements with certain of its directors and officers.
II-2
<PAGE>
The Company is also indemnified against certain liabilities, including
liabilities under the Securities Exchange Act of 1934, or will contribute
payments that the certain underwriters may be required to make in respect
thereof, in an underwriting agreement executed in connection with the public
offering of 4.5 million shares of Common Stock of the Company under a
Registration Statement on Form S-3 (File No. 333-27245) filed by the Company.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<CAPTION>
(A) EXHIBITS:
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
5 Opinion of Drinker Biddle & Reath LLP
23.1 Consent of Ernst & Young LLP
23.2 Consent of B.J. Klinger & Co., P.C.
23.3 Consent of BDO Seidman, LLP
23.4 Consent of Bardall, Weintraub P.C.
23.5 Consent of Boyer & Ritter
23.6 Consent of Paternostro, Callahan & DeFreitas, LLP
23.7 Consent of Daniel P. Irwin and Associates P.C.
23.8 Consent of Drinker Biddle & Reath LLP (included in
Exhibit 5)
24 Powers of Attorney -- Included on signature page.
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(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, represents
a fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in the 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.
II-3
<PAGE>
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3, and the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, 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.
(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 undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the 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 registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3, and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Mt. Laurel, New Jersey on July 29, 1997.
EASTERN ENVIRONMENTAL SERVICES,INC.
By: /s/Louis D. Paolino, Jr.
-------------------------------
Louis D. Paolino, Jr.
Chairman of the Board and Chief
Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby constitute
and appoint Louis D. Paolino, Jr. and Gregory M. Krzemien, or either of them
acting alone, his true and lawful attorney-in-fact and agent, with full power of
substitution and revocation for him and in his name, place and stead, in any and
all capacities, to sign this Registration Statement on Form S-3 of Eastern
Environmental Services, Inc. (and any Registration Statement filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended), relating to the offer
and sale of shares of its Common Stock and any and all amendments (including
post-effective amendments) to the Registration Statement and to file the same
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or his or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons, in the
capacities indicated, on July 29, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/Louis D. Paolino, Jr. Chairman of the July 29, 1997
- -------------------------- Board and Chief
Louis D. Paolino, Jr. Executive Officer
(Principal
Executive Officer)
/s/Gregory M. Krzemien Chief Financial July 29, 1997
- -------------------------- Officer and
Gregory M. Krzemien Treasurer
(Principal Financial
and Accounting
Officer)
/s/George O. Moorehead Director July 29, 1997
- --------------------------
George O. Moorehead
/s/Kenneth C. Leung Director July 29, 1997
- --------------------------
Kenneth C. Leung
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
5 Opinion of Drinker Biddle & Reath LLP
23.1 Consent of Ernst & Young LLP
23.2 Consent of B.J. Klinger & Co., P.C.
23.3 Consent of BDO Seidman, LLP
23.4 Consent of Bardall, Weintraub P.C.
23.5 Consent of Boyer & Ritter
23.6 Consent of Paternostro, Callahan & DeFreitas, LLP
23.7 Consent of Daniel P. Irwin and Associates P.C.
23.8 Consent of Drinker Biddle & Reath LLP (included in
Exhibit 5)
</TABLE>
<PAGE>
Exhibit 5
---------
DRINKER BIDDLE & REATH LLP
1345 Chestnut Street
Philadelphia, PA 19107-3496
Phone: (215) 988-2700
July 29, 1997
Eastern Environmental Services, Inc.
1000 Crawford Place
Mt. Laurel, New Jersey 08054
Re: Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
We have acted as counsel to Eastern Environmental Services, Inc., a
Delaware corporation (the "Company"), in connection with the preparation and
filing with the Securities and Exchange Commission of a Registration Statement
on Form S-3 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), relating to the public offering of 199,232
shares of the Company's common stock, par value $.01 per share (the "Shares").
In this connection, we have examined the originals or copies, certified or
otherwise identified to our satisfaction, of the Certificate of Incorporation
and the By-laws of the Company, resolutions of the Company's Board of Directors,
and such other documents and corporate records relating to the Company and the
issuance and sale of the Shares as we have deemed appropriate. This opinion is
based exclusively on the General Corporation Law of the State of Delaware.
In all cases, we have assumed the legal capacity of each natural person
signing any of the documents and corporate records relating to the Company, the
genuineness of signatures, the authenticity of documents submitted to us as
originals, the conformity to authentic original documents of documents submitted
to us as copies and the accuracy and completeness of all corporate records and
other information made available to us by the Company.
On the basis of the foregoing, we are of the opinion that the Shares have
been validly issued and are fully paid and non-assessable by the Company.
We hereby consent to the reference to our firm under the caption "Legal
Matters" in the prospectus included in the Registration Statement and to the
filing of this opinion as an exhibit to the Registration Statement. In giving
this consent, we do not admit that we come within the categories of persons
whose consent is required under Section 7 of the Securities Act.
Very truly yours,
DRINKER BIDDLE & REATH LLP
<PAGE>
Exhibit 23.1
------------
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
We consent to the reference to our firm under the caption "Experts" and to the
incorporation by reference of our reports dated May 13, 1997 with respect to the
consolidated financial statements of Eastern Environmental Services, Inc.
included in Amendment No. 3 to the Registration Statement (Form S-3 No.
333-27245) and related Prospectus of Eastern Environmental Services, Inc. for
the registration of 4,500,000 shares of its common stock, and June 19, 1997,
with respect to the combined financial statements of Waste Services, Inc. and
Affiliates, included in Eastern Environmental Services, Inc.'s Current Report on
Form 8-K dated May 12, 1997 (as amended July 11, 1997 and July 25, 1997 on Form
8-K/A), in this Registration Statement and related Prospectus of Eastern
Environmental Services, Inc. for the registration of 199,232 shares of its
common stock.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
July 29, 1997
<PAGE>
Exhibit 23.2
------------
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
We consent to the reference to our firm under the caption "Experts" and to
the incorporation by reference in this Registration Statement on Form S-3 and
related Prospectus of Eastern Environmental Services, Inc. of our report dated
August 19, 1996, with respect to the combined financial statements of Allied
Environmental Services, Inc., Allied Environmental Services West, Inc., Allied
Mid-Atlantic, Inc. and Allied Waste Management, Inc. included in Eastern
Environmental Services, Inc.'s and affiliates included in Eastern Environmental
Services, Inc.'s Current Report on Form 8-K dated July 2, 1996 (as amended on
Forms 8-K/A dated September 16, 1996, May 13, 1997, June 6, 1997, and July 10,
1997), filed with the Securities and Exchange Commission.
/s/ B.J. Klinger & Co., P.C.
B.J. Klinger & Co., P.C.
Great Neck, N.Y.
July 29, 1997
<PAGE>
Exhibit 23.3
------------
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
Allied Environmental Services, Inc. and Affiliates
Merrick, New York
We hereby consent to the incorporation by reference in this Registration
Statement and related Prospectus of Eastern Environmental Services, Inc. of our
reports relating to the combined financial statements of Allied Environmental
Services, Inc. and affiliates dated October 12, 1995 (except for Notes 1 and 7
which are June 25, 1996) for the five month period ended November 30, 1994 and
seven month period ended June 30, 1995 and November 12, 1996 for the year ended
June 30, 1996, included in Eastern Environmental Services, Inc.'s Form 8-K dated
July 2, 1996 (as amended on Forms 8-K/A dated September 16, 1996, May 13, 1997,
June 6, 1997 and July 10, 1997).
We also consent to the reference to us under the caption "Experts" in the
Prospectus constituting a part of this Registration Statement on Form S-3.
/s/ BDO Seidman, LLP
BDO SEIDMAN, LLP
Philadelphia, Pennsylvania
July 29, 1997
<PAGE>
Exhibit 23.4
------------
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
We consent to the reference to our firm under the caption "Experts" and to
the incorporation by reference in this Registration Statement on Form S-3 and
related Prospectus of Eastern Environmental Services, Inc., of our report dated
September 30, 1996, with respect to the combined comparative financial
statements of Super Kwik, Inc. and Waste Maintenance Services, Inc. included in
Eastern Environmental Services, Inc.'s Current Report on Form 8-K dated
September 27, 1996 (as amended on Forms 8-K/A filed December 9, 1996, June 6,
1997 and July 10, 1997), filed with the Securities and Exchange Commission.
/s/ Bardall, Weintraub P.C.
BARDALL, WEINTRAUB P.C.
Turnersville, New Jersey
July 29, 1997
<PAGE>
Exhibit 23.5
------------
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
We consent to the reference to our firm under the caption "Experts" and to
the incorporation by reference in this Registration Statement on Form S-3 and
related Prospectus of Eastern Environmental Services, Inc., of our reports dated
December 27, 1996, with respect to the audited financial statements of R & A
Bender, Inc., and R & A Bender Property, Ltd., included in Eastern Environmental
Services, Inc.'s Current Report on Form 8-K dated December 10, 1996 (as amended
on Forms 8-K/A filed February 11, 1997, June 6, 1997, and July 10, 1997), filed
with the Securities and Exchange Commission.
/s/ Boyer & Ritter
Chambersburg, Pennsylvania
July 29, 1997
<PAGE>
Exhibit 23.6
------------
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
We consent to the reference to our firm under the caption "Experts" and to
the incorporation by reference in this Registration Statement on Form S-3 and
related Prospectus of Eastern Environmental Services, Inc., of our report dated
March 3, 1997, with respect to the combined financial statements of Donno
Company, Inc. and affiliates included in Eastern Environmental Services, Inc.'s
Current Report on Form 8-K dated January 31, 1997 (as amended on Form 8-K/A
filed April 15, 1997 and July 10, 1997), both filed with the Securities and
Exchange Commission.
/s/ Paternostro, Callahan & DeFreitas, LLP
Paternostro, Callahan & DeFreitas, LLP
Mineola, New York
July 29, 1997
<PAGE>
Exhibit 23.7
------------
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
We consent to the reference to our firm under the caption "Experts" and to
the incorporation by reference in this Registration Statement on Form S-3 and
related Prospectus of Eastern Environmental Services, Inc., of our report dated
April 22, 1997, with respect to the financial statements of Apex Waste Services,
Inc. included in Eastern Environmental Services, Inc.'s Current Report on Form
8-K dated March 31, 1997 (as amended on Form 8-K/A filed May 15, 1997 and July
10, 1997), filed with the Securities and Exchange Commission.
/s/ Daniel P. Irwin and Associates P.C.
Daniel P. Irwin and Associates P.C.
Strafford-Wayne, Pennsylvania
July 29, 1997
