<PAGE>
As filed with the Securities and Exchange Commission on February 27, 1998
Registration No. 333-37845
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_______________
AMENDMENT NO.1 TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________
EASTERN ENVIRONMENTAL SERVICES, INC.
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Delaware 4953 59-2840783
(State of Incorporation) (Primary Standard Industrial (I.R.S. Employer Identification Number)
1000 Crawford Place, Suite 400 Classification Code Number) Louis D. Paolino, Jr.
Mt. Laurel, New Jersey 08054 Chairman and Chief Executive Officer
(609) 235-6009 1000 Crawford Place, Suite 400
Mt. Laurel, New Jersey 08054
(609) 235-6009
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
(Address, Including Zip Code, and Telephone Number (Name, Address, Including Zip Code, and Telephone
Including Area Code, of Registrant's Principal Executive Offices) Number, Including Area Code, of Agent for Service)
</TABLE>
_______________________
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.
If any of the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement number for the same offering. [_] ______
If this form is a post-effective amendment filed pursuant to Rule 462(d)
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. [_] ______
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 FEBRUARY 27, 1998
PROSPECTUS
- ----------
5,000,000 SHARES
EASTERN ENVIRONMENTAL SERVICES, INC.
COMMON STOCK
This Prospectus relates to an aggregate of 5,000,000 shares (the "Shares") of
common stock, par value $.01 per share ("Common Stock"), of Eastern
Environmental Services, Inc., a Delaware corporation (the "Company"), which may
be issued from time to time in the future by the Company on the completion of
acquisitions of assets, businesses or securities, or on the payment of dividends
on or conversion of shares of preferred stock or the conversion of or payment of
interest on convertible debt securities issued in connection with such
acquisitions (the "Offering").
It is expected that the terms of acquisitions involving the issuance of the
Shares of Common Stock covered by this Prospectus will be determined by direct
negotiations with the owners or controlling persons of the assets, businesses or
securities to be acquired, and that the Shares of Common Stock issued will be
valued at prices reasonably related to the market price of the Common Stock
either at the time an agreement is entered into concerning the terms of the
acquisition or at or about the time the Shares are delivered. No underwriting
discounts or commissions will be paid, although finder's fees may be paid in
connection with certain acquisitions. Any person receiving such fees may be
deemed to be an "underwriter" within the meaning of the Securities Act of 1933,
as amended (the "Securities Act"), and any such fee may be deemed to be
underwriting commissions or discounts under the Securities Act.
This Prospectus, as amended or supplemented if appropriate, has also been
prepared for use, and with the Company's permission may be used, by the persons
who have received or will receive shares issued in Company acquisitions,
including Shares sold hereunder and who wish to offer and sell such Shares, upon
terms then obtainable, in transactions in which they may be deemed underwriters
within the meaning of the Securities Act. Any profits realized on such sales by
such persons may be regarded as underwriting compensation under the Securities
Act. See "Outstanding Securities Covered by this Prospectus."
At the close of business on January 31, 1998, the Company had 23,308,249
shares of Common Stock outstanding. Those shares are listed for trading on The
NASDAQ National Market ("Nasdaq"). Application will be made to list the Shares
of Common Stock covered by this Prospectus on Nasdaq. The Common Stock is traded
on Nasdaq under the symbol "EESI." On February 26, 1998 the last reported sale
price for the Common Stock as reported by Nasdaq was $23 15/16 per share.
____________
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS SET FORTH UNDER
THE CAPTION "RISK FACTORS" BEGINNING ON PAGE 5 OF THIS PROSPECTUS.
____________
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 __________, 1998.
<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, 1997 (as amended on Form 10-K/A filed October 28, 1997),
excluding the financial statements and notes thereto, selected consolidated
financial data, and the information contained under Management's Discussion
and Analysis of Financial Condition and Results of Operations which have
been superseded by the financial statements and notes thereto and the
information contained under Management's Discussion and Analysis of
Financial Condition and Results of Operations included in the Company's
Form 8-K dated February 27, 1998.
(ii) the Company's Quarterly Reports on Form 10-Q for the quarters
ended September 30, 1997 (filed November 13, 1997) and December 31, 1997
(filed February 17, 1998);(the financial statements and notes thereto
contained in the Reports on Form 10-Q for the quarter ended September 30,
1997 are deemed to be outdated as they are not on a basis consistent with
the consolidated financial statements and notes thereto included in the
Company's Form 8-K filed February 27, 1998 as they do not reflect:
(a) pooling of interests accounting for an acquisition that
occurred subsequent to September 30, 1997; and
(b) earnings per share information calculated in accordance
with the recently issued pronouncement FASB 128, Earnings
--------
Per Share.
---------
(iii) the Company's Current Reports on Form 8-K/A dated July 10, 1997
(amending the Company's Form 8-K dated July 2, 1996), July 10, 1997
(amending the Company's Form 8-K dated September 27, 1996), July 10, 1997
(amending the Company's Form 8-K dated December 10, 1996), July 10, 1997
(amending the Company's Form 8-K dated January 31, 1997), July 10, 1997
(amending the Company's Form 8-K dated March 31, 1997), July 11, 1997 and
July 25, 1997 (amending the Company's Form 8-K dated May 12, 1997), the
Company's Current Report on Form 8-K dated August 15, 1997 (as amended on
Form 8-K/A filed October 10, 1997), the Company's Current Report on Form 8-
K dated August 20, 1997 (as amended on Form 8-K/A on November 3, 1997), the
Company's Current Report on Form 8-K dated October 17, 1997, the Company's
Current Report on Form 8-K dated October 27, 1997, the Company's
Current Report on Form 8-K dated December 1, 1997 (as amended on Form 8-K/A
dated February 13, 1998), the Company's Current Report on Form 8-K
dated December 1, 1997 (as amended on Form 8-K/A dated February 17, 1998),
the Company's Current Report on Form 8-K dated February 12, 1998, and the
Company's Current Report on Form 8-K dated February 27, 1998; 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.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. 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. IN ORDER TO ENSURE TIMELY DELIVERY
OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE FIVE BUSINESS DAYS PRIOR TO THE
DATE ON WHICH THE FINAL INVESTMENT DECISION IS MADE.
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 Nasdaq, and reports, proxy statements 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-4 (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.
-2-
<PAGE>
OUTSTANDING SECURITIES COVERED BY THIS PROSPECTUS
This Prospectus, as appropriately amended or supplemented, may, with the
prior consent of the Company, be used from time to time by persons who have
received Shares covered by this Prospectus in acquisitions of businesses or
properties or interests therein by the Company, or their transferees, and who
wish to offer and sell such Shares (such persons are herein referred to as the
"Registered Stockholders" or a "Registered Stockholder") in transactions in
which they and any broker dealer through whom such Shares are sold may be deemed
to be underwriters within the meaning of the Securities Act, as more fully
described herein. The Company may consent to the use of this Prospectus for a
limited period of time by the Registered Stockholders, subject to limitations
and conditions that may be varied by agreement between the Company and the
Registered Stockholders. Resales of such Shares may be made on Nasdaq, in the
over-the-counter market, in private transactions, or pursuant to underwriting
agreements. See "Manner of Offering by Registered Stockholders."
The Company will receive none of the proceeds from any such sales. Any
commissions paid or concessions allowed to any broker-dealer, and, if any
broker-dealer purchases such Shares as principal, any profits received on the
resale of such Shares, may be deemed to be underwriting discounts and
commissions under the Securities Act.
Printing, certain legal, filing and other similar expenses of the Offering
will be paid by the Company. Registered Stockholders will bear all other
expenses of the Offering, including brokerage fees and any underwriting
discounts or commissions.
There currently are no arrangements or understandings, formal or informal,
pertaining to the distribution of any of the Shares by Registered Stockholders.
See "Manner of Offering by Registered Stockholders."
-3-
<PAGE>
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 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 400, Mt. Laurel, New Jersey 08054, and its telephone number is
(609) 235-6009.
-4-
<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 and the
Company's reports under the Securities Exchange Act of 1934, as amended,
incorporated herein by reference (the "Incorporated Documents") contain 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 and the Incorporated Documents 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 and the Incorporated
Documents. 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 the Incorporated
Documents, before purchasing the shares of Common Stock offered hereby.
HISTORY OF LOSSES; WORKING CAPITAL DEFICITS; CONTINUING CHARGES
For the years ended June 30, 1997 and 1995, the Company reported net income
of $2.5 million (including $4.2 million of merger costs and related tax
provisions incurred as a result of acquisitions) and $1.3 million, respectively.
Although the Company reported net income during such fiscal years, the Company
has reported net losses in prior years, including a net loss to common
stockholders of approximately $3.5 million (including $2.8 million in unusual
items principally related to the Company's June 1996 change of control) during
the fiscal year ended June 30, 1996. Additionally, the Company had working
capital deficits of $2.0 million and $1.8 million at June 30, 1997 and 1996,
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
The Company's acquisition of solid waste collection, transportation and
disposal businesses during fiscal 1997 contributed approximately $73 million or
76% of the Company's revenues for the fiscal year ended June 30, 1997 and
approximately $136 million or 82% of the Company's assets at June 30, 1997.
Because of the Company's relatively limited operating history with respect to
these recently acquired 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.
-5-
<PAGE>
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 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 recently acquired 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 the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended. 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, if any. 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.
-6-
<PAGE>
NEED FOR ADDITIONAL CAPITAL; POTENTIAL DILUTION
The Company's acquisition program has 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, the Company's stockholders may experience
dilution in the net tangible book value per share of Common Stock and a regular
infusion of additional Common Stock into the capital markets. 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 generated cash is not sufficient to meet the
Company's capital needs, the Company will be required to raise additional funds
through bank borrowings (such as its existing credit facility) and significant
additional equity and/or debt financings. 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.
The loss of the services of Mr. Paolino 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. 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 the 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,
-7-
<PAGE>
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.
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
One of the Company's Pennsylvania landfill operations, 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. However, in 1990, the township 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 the height limit 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. If the township seeks to impose this limitation, and is successful,
the existing permitted capacity of the landfill would be materially reduced.
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. On July 1, 1997, the Company
recommenced operation of its transfer station to fulfill the obligations of the
disposal franchise until the Company's expansion area is completed. The Company
received a final permit to construct its expansion area on October 14, 1996
(reissued February 26, 1997). 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 has commenced closure of the area. The Company
has received a notice of violation and an $80,000 fine for not completing
closure by the required date. The violation 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.
-8-
<PAGE>
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 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.
The Subtitle D Regulations also require, where threshold test levels are
present, that methane gas generated at landfills be controlled in a manner that
protects human health and the environment. Each state is required to revise its
landfill regulations to meet these requirements or such requirements will be
automatically imposed upon it by the EPA. Each state is also required to adopt
and implement a permit program or other appropriate system to ensure that
landfills within the state comply with Subtitle D Regulation criteria. 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.
If runoff or collected leachate from the Company's landfills or transfer
stations is discharged into surface waters, the Clean Water Act would require
the Company to apply for and obtain a discharge permit, conduct sampling and
monitoring and, under certain circumstances, reduce the quantity of pollutants
in such discharge. Also, virtually all landfills are required to comply with
federal storm water regulations issued in November 1990, which are designed to
prevent contaminated landfill storm water runoff from flowing into 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 many of the Company's landfills to new permitting
requirements and may require the installation of gas recovery systems. The EPA
has recently promulgated new standards regulating air emissions of certain
regulated pollutants (methane and non-methane organic compounds) from municipal
solid waste landfills. Landfills located in areas with air pollution problems
may be subject to even more extensive air pollution controls and emissions
limitations. The EPA and the states in which the Company operated also have
adopted regulations under Title V of the Clean Air Act requiring permits for
certain disposal facilities. 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.
The Occupational Safety and Health Act of 1970, as amended ("OSHA"),
authorizes the Occupational Safety and Health Administration to promulgate
occupational safety and health standards. Various of those promulgated
standards, including standards for notices of hazards, safety in excavation and
the handling of asbestos, may apply to certain of the Company's operations. OSHA
regulations set forth requirements for the training of employees handling, or
who may be exposed in the work place to, concentrations of asbestos-containing
materials that exceed specified action levels. The OSHA regulations also set
standards for employee protection, including medical surveillance, the use of
respirators, protective clothing and decontamination units, during asbestos
demolition, removal, or encapsulation as well as its storage, transportation,
and disposal. In addition, OSHA specifies a maximum permissable exposure level
for airborne asbestos in the workplace. The Company has no direct involvement in
asbestos removal or abatement projects. However, asbestos-containing waste
materials are accepted at certain of the Company's landfills that are authorized
to accept such materials, and some of the Company's collection businesses
receive asbestos-containing waste materials which have already been packaged and
labeled. These packages are loaded onto the Company's vehicles by employees of
the asbestos abatement contractors for transportation to and disposal at the
Company's authorized landfills. Accordingly, OSHA regulations designed to
minimize employees' exposure to airborne asbestos fibers and provide employees
with proper training and protection generally apply to the Company's operations
in the transportation, handling, and disposal of the asbestos waste.
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
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to mandate the flow of waste to certain designated facilities or impose other
flow control restrictions. 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 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. Further, restrictions on out-of-state waste could result
in higher disposal costs for the Company's collection operations. If the Company
were unable to pass such higher costs through to its customers, the Company's
business and results of operations could be adversely affected.
Each state in which the Company currently operates, or may operate in the
future, also has laws and regulations governing the generation, storage,
treatment, handling, transportation, and disposal of solid waste, water and air
pollution and, in most cases, the siting, design, operation, maintenance,
closure and post-closure maintenance of landfills and other solid waste
management facilities. Many states also have programs that require investigation
and clean up of sites containing hazardous materials in a manner comparable to
or more stringent than CERCLA. These statutes impose requirements for
investigation and cleanup of contaminated sites and liability for costs and
damages associated with such sites. Some of the state laws provide for the
imposition of liens on property owned by responsible parties. Many
municipalities also have ordinances, local laws, and regulations affecting the
Company's operations. These include zoning and health measures that limit solid
waste management activities to specified sites or activities.
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 September 1997, one of the
Company's subsidiaries received a license from the TWC which enables it to
conduct New York City collections operations. The license, as all TWC licenses,
has a term of two years. The TWC also sets maximum rates for the industry and
establishes operational requirements. 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.
PUBLIC UTILITY REGULATION
The rates that the Company may charge at its West Virginia landfill for the
disposal of municipal solid waste are regulated by the West Virginia Public
Service Commisssion. Rate regulation in West Virginia, and the adoption of rate
regulation in other states in which the Company owns landfills, could have an
adverse effect on the Company's business and results of operations.
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
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the hazardous substance was first detected. Similar liability is imposed upon
the generators of waste that 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 with 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, one of the Company's Pennsylvania
landfills disposed of municipal solid waste in an unlined disposal area. This
unlined area was operated by the former owner and has caused localized
groundwater 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 June 30, 1997, the Company had accrued approximately $4.0
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 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. 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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SUPERFUND LIABILITY. One of the Company's solid waste collection
subsidiaries is 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 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
assert vigorously 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.
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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 December 31, 1997 the Company
estimated the total costs to be approximately $19.3 million for final closure of
its landfills, of which $4.1 million has been accrued as of December 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 $11.1 million. At
December 31, 1997, the Company had accrued $3.5 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 is 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
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exposure during that period may not be covered 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 most states in which the Company
operates) 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. 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., 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.
The Company provides residential collection services under 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 collected,
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transported, and disposed of by the Company and/or the prices that the Company
can charge for its services.
ANTI-TAKEOVER PROVISIONS; CHANGE IN CONTROL PROVISIONS
The Board of Directors and the stockholders of the Company have approved a
charter amendment to provide for an undesignated class of preferred stock. No
shares of preferred stock are outstanding as of the date of this Prospectus. It
is not possible to state the precise effect of preferred stock upon the rights
of the holders of the Company's Common Stock until the Board of Directors
determines the respective preferences, limitations and relative rights of the
holders of one or more series or classes of the Preferred Stock. However, such
effect might include: (i) reduction of the amount otherwise available for
payment payment of dividends on Common Stock, to the extent dividends are
payable on any issued shares of preferred stock, and restrictions on dividends
on Common Stock if dividends on the preferred stock are in arrears; (ii)
dilution of the voting power of the Common Stock to the extent that the
preferred stock had voting rights; and (iii) the holders of Common Stock not
being entitled to share in the Company's assets upon liquidation until
satisfaction of any liquidation preference granted to the preferred stock.
The preferred stock may be viewed as having the effect of discouraging an
unsolicited attempt by another person or entity to acquire control of the
Company and may therefore have an anti-takeover effect. Issuances of authorized
preferred shares can be implemented, and have been implemented by some companies
in recent years, with voting or conversion privileges intended to make
acquisition of the Company more difficult or costly. Such an issuance could
discourage or limit the stockholders' participation in certain types of
transactions that might be proposed (such as a tender offer), whether or not
such transactions were favored by the majority of the stockholders, and could
enhance the ability of officers and directors to retain their positions.
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
Executive officers and directors of the Company as a group beneficially own a
significant amount 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. As the Company pursues its acquisition
program, it may agree to issue shares of Common Stock included in this
Prospectus or otherwise that will generally become available for resale which
may have an impact on the market price of the Common Stock.
ADDITIONAL RISKS
In addition to the Risk Factors set forth above, prospective investors in the
Common Stock should review the Company's Incorporated Documents, which may
contain, in certain instances and from time to time, additional and supplemental
information relating to the risks set forth above and/or additional risks to be
considered by investors in the Common Stock, including, without limitations,
information relating to losses experienced by the Company in particular
historical periods, working capital deficits of the Company at particular dates,
information relating to pending and recently completed acquisitions,
descriptions of new or changed federal or state regulations applicable to the
Company, data relating to remediation and other actions taken by the Company,
and estimates at various times of the Company's potential liabilities for
compliance with environmental laws or in connection with pending litigation,
including estimates of closure and post-closure costs.
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 current credit
facility agreement prohibits the payment of cash dividends without prior bank
approval.
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ACQUISITION TERMS
This Prospectus covers Shares of Common Stock that may be issued from time
to time in the future by the Company on the completion of acquisitions of
assets, businesses or securities, or on the payment of dividends on or
conversion of shares of preferred stock or the conversion of or payment of
interest on convertible debt securities issued in connection with such
acquisitions.
It is expected that the terms of acquisitions involving the issuance of the
shares of Common Stock covered by this Prospectus will be determined by direct
negotiations with the owners or controlling persons of the assets, businesses or
securities to be acquired, and that the Shares issued will be valued at prices
reasonably related to the market price of the Common Stock either at the time an
agreement is entered into concerning the terms of the acquisition or at or about
the time the Shares are delivered. No underwriting discounts or commissions will
be paid, although finder's fees may be paid in connection with certain
acquisitions. Any person receiving such fees may be deemed to be an underwriter
within the meaning of the Securities Act, and any such fee may be deemed to be
underwriting commissions or discounts under the Securities Act.
This Prospectus, as amended or supplemented if appropriate, has also been
prepared for use, with the Company's permission, by the persons who have
received or will receive shares issued in Company acquisitions, including Shares
sold hereunder, and who wish to offer and sell such Shares, upon terms then
obtainable, in transactions in which they may be deemed underwriters within the
meaning of the Securities Act. Any profits realized on such sales by such
persons may be regarded as underwriting compensation under the Securities Act.
USE OF PROCEEDS
This Prospectus relates to Shares of Common Stock of the Company that may
be offered and issued by the Company from time to time in connection with the
acquisition of other businesses and properties and interests therein, and upon
exercise or conversion of warrants, options, convertible notes, or other similar
instruments issued by the Company from time to time in connection with any such
acquisition. Other than the business or properties acquired, there usually will
be no proceeds to the Company from these offerings. However, in situations where
the Company issues warrants or options to purchase Common Stock in connection
with an acquisition, any proceeds received by the Company upon the exercise of
such warrants or options will be used for general corporate purposes. When this
Prospectus is used by a Registered Stockholder in a public reoffering or resale
of Common Stock acquired pursuant to this Prospectus, the Company will not
receive any proceeds from such sale by the Registered Stockholder.
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MANNER OF OFFERING BY REGISTERED STOCKHOLDERS
This Prospectus, as appropriately amended or supplemented, may, with the
consent of the Company, be used from time to time by a Registered Stockholder,
or its transferees, to offer and sell the Shares in transactions in which the
Registered Stockholder and any broker-dealer through whom any of the Shares are
sold may be deemed to be underwriters within the meaning of the Securities Act.
The Company will receive none of the proceeds from any such sales. There
presently are no arrangements or understandings, formal or informal, pertaining
to the distribution of the Shares.
The Company anticipates that resales of the Shares by a Registered
Stockholder may be effected from time to time on the open market in ordinary
brokerage transactions on Nasdaq, or such other security exchange on which the
Common Stock may be listed, in the over-the-counter market, or in private
transactions (which may involve crosses and block transactions). The Shares will
be offered for sale at market prices prevailing at the time of sale or at
negotiated prices and on terms to be determined when the agreement to sell is
made or at the time of sale, as the case may be. The Shares may be offered
directly, through agents designated from time to time, or through brokers or
dealers. A member firm of Nasdaq may be engaged to act as the Registered
Stockholder's agent in the sale of the Shares by the Registered Stockholder
and/or may acquire Shares as principal. Broker-dealers participating in such
transactions as agents may receive commissions from the Registered Stockholder
(and, if they act as agent for the purchaser of such Shares, from such
purchaser), such commissions computed in appropriate cases in accordance with
the applicable rules of Nasdaq, which commissions may be at negotiated rates
where permissible.
Participating broker-dealers may agree with the Registered Stockholder to
sell a specified number of Shares at a stipulated price per share and, to the
extent such broker-dealer is unable to do so acting as agent for the Registered
Stockholder to purchase as principal any unsold Shares at the price required to
fulfill the broker-dealers commitment to the Registered Stockholder. In addition
or alternatively, Shares may be sold by the Registered Stockholder, and/or by or
through other broker-dealers in special offerings, exchange distributions, or
secondary distributions pursuant to and in compliance with the governing rules
of Nasdaq, and in connection therewith commissions in excess of the customary
commission prescribed by the rules of Nasdaq may be paid to participating
broker-dealers, or, in the case of certain secondary distributions, a discount
or concession from the offering price may be allowed to participating brokers-
dealers in excess of such customary commission. Broker-dealers who acquire
Shares as principal may thereafter resell such Shares from time to time in
transactions (which may involve crosses and block transactions and which may
involve sales to and through other broker-dealers, including transactions of the
nature described in the preceding two sentences) on Nasdaq or such other
securities exchange on which the Common Stock may be listed, in negotiated
transactions, or otherwise, at market prices prevailing at the time of sale or
at negotiated prices, and in connection with such resales may pay to or receive
commissions from the purchasers of such Shares.
The Registered Stockholder and any brokers, dealers, agents, member firm or
others that participate with the Registered Stockholder in the distribution of
the Shares may be deemed to be "underwriters" within the meaning of the
Securities Act, and any commissions or fees received by such persons and any
profit on the resale of the Shares purchased by such person may be deemed to be
underwriting commissions or discounts under the Securities Act.
In order to comply with certain states securities laws, if applicable, the
Common Stock will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In addition, in certain states the Common Stock may
not be sold unless the Common Stock has been registered or qualified for sale in
such state or an exemption from registration or qualification is available and
is complied with.
-17-
<PAGE>
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 as of June 30, 1997
and 1996 and for each of the three years in the period ended June 30, 1997
appearing in the Company's Current Report on Form 8-K dated February 27, 1998,
which are incorporated by reference herein, have been 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 two 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.
Such financial statements 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 and for the period ended June 30, 1996 and 1995 and at 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 Form 8-K/A dated July 10, 1997, which are
incorporated by reference herein, 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 and for the period ended June 30, 1994 and at 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 dated July 10, 1997, which are
incorporated by reference herein, 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 Form 8-K/A dated July 10, 1997, which are
incorporated by reference herein, have been audited by Bardall, Weintraub P.C.,
independent auditors, as set forth
-18-
<PAGE>
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 Form 8-K/A dated July 10, 1997, which are incorporated by
reference herein, have been audited by Boyer & Ritter, CPAs, independent
auditors, as set forth in their reports thereon included therein and
incorporated by reference 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 dated July 10, 1997, which are incorporated by
reference herein, 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 dated July 10, 1997, which are incorporated by reference herein, 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 at
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 Forms 8-K/A dated July
11, 1997 and July 25, 1997, which are incorporated by reference herein, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
The financial statements of Pappy, Inc. as of October 31, 1996 and 1995 and
for the years then ended appearing in the Company's Current Report on Form 8-K
dated August 15, 1997, as amended by its Form 8-K/A filed October 10, 1997,
which are incorporated by reference herein, 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.
The financial statements of Soil Remediation of Philadelphia, Inc. and USA
waste of Fairless Hills, Inc appearing in the Company's Current Report on Form
8-K dated August 20, 1997, as amended by its Form 8-K/A dated November 3, 1997,
which are incorporated by reference herein, have been audited by Daniel P. Irwin
& Associates, B.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 consolidated financial statements of Pine Grove, Inc. appearing in the
Company's Current Report on Form 8-K dated December 1, 1997 as amended by its
Form 8-K/A dated February 17, 1998, which are incorporated by reference herein,
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon included therein and incorporated herein by reference.
Such financial statements are incorporated herein by reference in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.
_______________________
-19-
<PAGE>
================================================================================
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 STOCKHOLDERS 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.
---------------------
TABLE OF CONTENTS
Page
----
Available Information................................................... 2
Incorporation of Certain Documents by Reference......................... 2
Outstanding Securities Covered by This Prospectus....................... 3
The Company............................................................. 4
Risk Factors............................................................ 5
Acquisition Terms....................................................... 16
Use of Proceeds......................................................... 16
Manner of Offering by Registered Stockholders........................... 17
Legal Matters........................................................... 18
Experts................................................................. 18
5,000,000 Shares
Common Stock
EASTERN ENVIRONMENTAL SERVICES, INC.
---------------------
PROSPECTUS
__________, 1998
---------------------
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware (the
"DGCL") provides, in general, that a corporation incorporated under the laws of
the State of Delaware, such as the Company, may indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending, or
completed action, suit, or proceeding (other than an action by or in the right
of the corporation) by reason of the fact that such person is or was a director,
officer, employee, or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee, or agent of another
enterprise, against expenses (including attorneys' fees), judgments, fines, and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit, or proceeding if such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe such person's conduct was
unlawful. In the case of an action by or in the right of the corporation, a
Delaware corporation may indemnify any such person against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
with the defense or settlement of such action or suit if such person acted in
good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the corporation, except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent that the court determines 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
II-1
<PAGE>
indemnification rights than said law permitted the Company to provide prior to
such amendment), against all expense, liability, and loss (including attorneys'
fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to
be paid in settlement) reasonably incurred or suffered by such person in
connection therewith. Such indemnification continues as to a person who has
ceased to be a director, officer, employee, or agent 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 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 Tenth 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, pursuant to an underwriting agreement executed in connection with the
public offering of 5,175,000 shares of Common Stock of the Company under a
Registration Statement on Form S-3 (File No. 333-27245) filed by the Company.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(A) EXHIBITS:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
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>
- ------------
ITEM 22. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act 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, represent
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
II-3
<PAGE>
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.
(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;
(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.
(b) 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 Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes as follows: prior to any
public offering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(d) The undersigned registrant undertakes that every prospectus (i) that is
filed pursuant to the immediately preceding paragraph or (ii) that purports to
meet the requirements of Section 10(a)(3) of the Securities Act of 1933 and is
used in connection with the offering of securities subject to Rule 415, will be
filed as part of an amendment to the registration statement and will not be used
until such amendment is effective, and that, for purposes 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.
(e) 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>
(f) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(g) The undersigned registrant hereby undertakes to supply by means of a post-
effective amendment all information concerning a transaction, and the company
being acquired involved therein, that was not the subject of and included in the
registration statement when it became effective.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4, 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 February 27, 1998.
EASTERN ENVIRONMENTAL SERVICES, INC.
By: /s/Louis D. Paolino, Jr.
-------------------------------
Louis D. Paolino, Jr.
Chairman of the Board and Chief Executive
Officer
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 February 27, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- -----
<S> <C> <C>
/s/Louis D. Paolino, Jr. Chairman of the February 27, 1998
- -------------------------- Board and Chief
Louis D. Paolino, Jr. Executive Officer
(Principal
Executive Officer)
/s/Gregory M. Krzemien Chief Financial February 27, 1998
- -------------------------- Officer and
Gregory M. Krzemien Treasurer
(Principal Financial
and Accounting
Officer)
George O. Moorehead* Director February 27, 1998
- --------------------------
George O. Moorehead
Kenneth C. Leung* Director February 27, 1998
- --------------------------
Kenneth C. Leung
</TABLE>
* Gregory M. Krzemien, pursuant to a Power of Attorney executed by each of the
directors and officers noted above and included in the signature page of the
initial filing of this Registration Statement, by signing his name hereto, does
hereby sign and execute this Amendment No. 1 to Registration Statement on behalf
of the persons noted above, in the capacities indicated, and does hereby sign
and execute this Amendment No. 1 to Registration Statement on his own behalf, in
the capacity indicated.
/s/ Gregory M. Krzemien
----------------------------
Gregory M. Krzemien
II-6
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
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>
- ----------------
II-7
<PAGE>
Exhibit 5
[Letterhead of Drinker Biddle & Reath LLP]
February 27, 1998
Eastern Environmental Services, Inc.
1000 Crawford Place
Mt. Laurel, New Jersey 08054
Re: Eastern Environmental Services, Inc.
Registration Statement on Form S-4
Registration No. 333-37845
-----------------------------------------
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-4 (Registration No. 333-37845), as amended (the "Registration
Statement"), under the Securities Act of 1933, as amended (the "Securities
Act"), registering an aggregate of 5,000,000 shares of the Company's Common
Stock, par value $.01 per share (the "Shares").
In that capacity, 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 as amended through the effective date of the
Registration Statement, 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 examined by us, 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
proposed to be issued by the Company pursuant to the Registration Statement will
be, when so issued in accordance with due authorization by the board of
directors of the Company and in
<PAGE>
Eastern Environmental Services, Inc.
February 27, 1998
Page 2
accordance with the terms of the applicable transaction documents, legally
issued, fully paid, and non-assessable by the Company under the laws of the
State of Delaware.
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,
/s/ DRINKER BIDDLE & REATH LLP
DRINKER BIDDLE & REATH LLP
<PAGE>
Exhibit 23.1
------------
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in this
Amendment No. 1 to Registration Statement (Form S-4 No. 333-37845) and related
Prospectus of Eastern Environmental Services, Inc. for the registration of its
common stock and to the incorporation by reference therein of our reports dated:
(i) June 19, 1997 with respect to the combined financial
statements of Waste Services, Inc. and Affiliates,
included in the Company'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);
(ii) September 12, 1997 with respect to the financial
statements of Pappy, Inc. included in the Company's
Current Report on Form 8-K dated August 15, 1997 (as
amended October 10, 1997 on Form 8-K/A);
(iii) December 12, 1997 with respect to the consolidated
financial statements of Pine Grove, Inc. included in the
Company's Current Report on Form 8-K dated December 1,
1997 (as amended February 17, 1998 on Form 8-K/A); and
(iv) February 27, 1998 with respect to the consolidated
financial statements of Eastern Environmental Services,
Inc. included in its Current Report on Form 8-K dated
February 27, 1998;
all filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
February 27, 1998
<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 Amendment No. 1 to Registration Statement
on Form S-4 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 Current Report on Form 8-K dated July
2, 1996 (as amended on Form 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.
February 25, 1998
<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 Amendment No. 1 to
Registration Statement on Form S-4 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 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 Form
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-4.
/s/ BDO Seidman, LLP
--------------------
BDO SEIDMAN, LLP
Philadelphia, Pennsylvania
February 25, 1998
<PAGE>
Exhibit 23.4
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CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the
incorporation by reference in this Amendment No. 1 to Registration Statement on
Form S-4 and related Prospectus of Eastern Environmental Services, Inc., of our
reports 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 Form 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
February 25, 1998
<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 Amendment No. 1 to Registration Statement on
Form S-4 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
February 25, 1998
<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 Amendment No. 1 to Registration Statement on
Form S-4 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/A dated July 10, 1997 (amending the Company's
Form 8-K dated January 31, 1997), both filed with the Securities and Exchange
Commission.
/s/ Paternostro, Callahan & Defreitas, LLP
------------------------------------------
PATERNOSTRO, CALLAHAN & DEFREITAS, LLP
Mineola, New York
February 25, 1998
<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 Amendment No. 1 to Registration Statement on
Form S-4 and related Prospectus of Eastern Environmental Services, Inc., of our
reports dated April 30, 1997, with respect to the financial statements of Apex
Waste Services, Inc. and Waste Management of Pennsylvania, Inc., Northeast
Pennsylvania Division, 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) and August 29, 1997 with respect to the
financial statements of Soil Remediation of Philadelphia, Inc. and USA Waste of
Fairless Hills, Inc., included in Eastern Environmental Services, Inc.'s Current
Report on Form 8-K dated August 20, 1997 (as amended on Form 8-K/A filed
November 3, 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
February 25, 1998
