REGISTRATION RIGHTS AGREEMENT
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REGISTRATION RIGHTS AGREEMENT, dated September 27, 1996, between Eastern
Environmental Services, Inc., a Delaware corporation (the "Company") and Xxxxxxx
Xxxxxx, ("Stockholder").
W I T N E S S E T H:
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WHEREAS, in accordance with that certain Agreement of Merger dated July 24,
1996, by and among the Company, Stockholder and certain other parties, including
the Constituent Corporations to the merger, Stockholder has received 1,279,781
shares of Company Common Stock;
WHEREAS, as a material inducement for Stockholder to enter into the
Agreement of Merger, and as a material term thereof, the Company has agreed to
enter into this Registration Rights Agreement, upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
and intending to be legally bound hereby, the parties agree as follows:
1. Certain Defined Terms. For purposes of this Registration Rights
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Agreement, the following terms shall have the following respective meanings:
(a) Applicable Law: The Securities Act, the Exchange Act (to the
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extent applicable to offers or sales of securities) and any applicable state
securities law and the rules and regulations thereunder.
(b) Common Stock: Stock of the Company of the class or classes having
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general voting power under ordinary circumstances to elect at least a majority
of the Board of
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Directors of the Company (irrespective of whether or not at the time stock of
any other class or classes shall have or might have voting power by reason of
the happening of any contingency).
(c) Demand Registration: Any registration, qualification,
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notification or exemption of Registrable Securities effectuated by the Company
pursuant to Section 2(a) hereof.
(d) Exchange Act: The Securities Exchange Act of 1934, as now or
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hereafter amended, and the rules and regulations thereunder which shall be in
effect at the time.
(e) Holder: Any holder of Registrable Securities.
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(f) Nasdaq: The Nasdaq Stock Market.
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(g) Registrable Securities: (i) All shares of Common Stock owned by
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Stockholder on the date hereof which, as of the date of determination, are not
covered by an effective registration statement under the Securities Act,
(ii) all shares of Common Stock owned by Stockholder pursuant to the exercise of
a Warrant for 246,168 share of Common Stock issued to Stockholder even date
hereof and (iii) any securities issued or issuable with respect to any such
shares (A) by way of stock dividend or stock split or (B) in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular Registrable Securities, once issued such
securities shall cease to be Registrable Securities when (a) a registration
statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, (b) they shall have been
distributed to the public pursuant to Rule 144 (or any successor provision)
under the Securities Act, (c) they shall have been otherwise transferred, new
certificates for them not bearing a legend restricting further transfer shall
have been delivered by the Company and subsequent disposition of them shall not
require registration or qualification
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of them under the Securities Act or any similar state law then in force, or (d)
they shall have ceased to be outstanding.
(h) Securities Act: The Securities Act of 1933, as now or hereafter
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amended, and the rules and regulations thereunder which shall be in effect at
the time.
(i) SEC: The United States Securities and Exchange Commission.
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2. Registration Rights.
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(a) Demand Registration and Notice: As soon as reasonably practicable
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following the latter of (i) 90 days after the date of closing of the Agreement
of Merger or (ii) the receipt by Company of audited financial statements of the
Constituent Corporations, the Company shall prepare and file with the Commission
a continuous or "shelf" registration statement under Rule 415 under the
Securities Act on Form S-3 to register the resale or other disposition of the
Registrable Securities by all Holders under the Securities Act to the extent
reasonably necessary to permit such resale or other disposition by such Holders,
promptly upon the effectiveness of such registration ("Demand Registration") in
the manner set forth in Sections 3 and 4 hereof. The Company shall actively
pursue the processing of such registration statement through the Commission's
Division of Corporation Finance, and the Company shall use its best efforts to
have the registration statement declared effective by the Company as soon as
practicable. The Holders shall be required to advise the Company of their
intended methods of disposition of the Registrable Securities to be included in
such registration statement. The Company will maintain the effectiveness of
such registration statement and, if necessary, amend the registration statement
and supplement the prospectus included therein for a period of no less than four
(4) years from the effective date of such registration statement, or such sooner
time as counsel for the Company shall
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render his written unqualified legal opinion that each Holder of Registrable
Securities registered in such registration statement is legally permitted to
sell all such Registrable Securities held by such Holder without volume
restrictions under Rule 144 promulgated under the Securities Act.
If Stockholder intends to distribute his Registrable Securities covered by
the Demand Registration by means of any underwriting, he shall so advise the
Company. The right of any Holder to participate in the Demand Registration
shall be conditioned upon such Holder's participation in such underwriting and
the inclusion of such Holder's Registrable Securities in the underwriting to the
extent requested (unless otherwise mutually agreed by the parties hereto), to
the extent provided herein.
(b) Expenses. The Company will pay all expenses (including without
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limitation registration fees, qualification fees, Company legal expenses,
printing expenses and the costs of special audits or "cold comfort" letters, but
not including underwriting discounts and commissions or fees of counsel or any
consultants to the Holders of Registrable Securities being registered, which
shall be borne by such Holders) in connection with any registrations,
qualifications, notifications or exemptions pursuant to Section 2(a) above. In
the case of a Demand Registration pursuant to Section 2(a) hereof, the Company
will also pay the reasonable fees (up to $5,000) and disbursements of one
special counsel representing all of the Holders for whom Registrable Securities
are included in such registration.
(c) Indemnification. In connection with any registration,
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qualification, notification, or exemption of Registrable Securities under
Section 2(a) hereof, the Company hereby agrees to indemnify the Holders of such
Registrable Securities, and each underwriter thereof, including each person, if
any, who controls such Holder within the meaning of Section 15 of the
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Securities Act, against all losses, claims, damages and liabilities caused by
any untrue, or alleged untrue, statement of a material fact contained in any
registration statement or prospectus or notification or offering circular (and
as amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus or caused by any omission, or
alleged omission, to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any untrue statement
or alleged untrue statement or omission based upon information furnished in
writing to the Company by such Holder or, as the case may be, any such
underwriter expressly for use therein, and the Company, the underwriter for the
Company and each person who controls the Company within the meaning of Section
15 of the Securities Act shall be indemnified by each Holder of such Registrable
Securities for all such losses, claims, damages and liabilities caused by any
untrue, or alleged untrue, statement or any omission or alleged omission, based
upon information furnished in writing to the Company by such Holder for any such
use.
3. Registration Procedures and Covenants. In the case of the Demand
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Registration, the Company shall, by written notice to each Holder of Registrable
Securities included in such Demand Registration, keep such Holder advised as to
the initiation, progress and effective date of such Demand Registration, and, at
the expense of the Company, the Company will:
(a) before filing a registration statement or prospectus or any
amendments or supplements thereto, furnish to the Holders of Registrable
Securities covered by such registration statement and the underwriter or
underwriters, if any, copies of all such documents proposed to be filed,
including without limitation documents incorporated by reference in the
prospectus and,
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if requested by such Holders of Registrable Securities, the exhibits
incorporated by reference, and such Holders shall have the opportunity to object
to any information pertaining solely to such Holders that is contained therein
and the Company will make the corrections reasonable requested by an underwriter
or such Holders with respect to such information prior to filing any
registration statement or amendment thereto or any prospectus or any supplement
thereto;
(b) Stockholder recognizes that the occurrence of certain corporate
developments, including significant acquisitions, may result in the failure of
the registration statement in which Registrable Securities are registered to
contain all information required in accordance with Applicable Law until an
amendment or supplement is filed and made available to the Holders of all such
Registrable Securities. Stockholder recognizes that in such event, sales under
the registration statement will be suspended until the Company files the
amendments or supplements required by the next sentence. The Company agrees, as
promptly as reasonably practicable, to prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective for the period required pursuant to the terms hereof and
comply with the provisions of the Securities Act with respect to the disposition
of all Registrable Securities covered by such registration statement during such
period in accordance with the intended methods of disposition by the Holder
thereof set forth in such registration statement;
(c) furnish to each Holder of Registrable Securities covered by such
registration statement such number of copies of such registration statement,
each amendment and supplement thereto, the prospectus included in such
registration statement (including without limitation each preliminary
prospectus) and such other documents as such Holder may reasonably request in
order
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to facilitate the disposition of the Registrable Securities owned by such
Holder;
(d) unless the Registrable Securities are exempt from the blue sky
laws of any jurisdiction, including by reason of being designated for trading in
the Nasdaq National Market, the Company agrees to use its best efforts to
register or qualify such Registrable Securities under such other securities or
blue sky laws of such jurisdictions as any Holder of Registrable Securities
reasonably requests and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holder to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
Holder (provided that the Company will not be required to: (1) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(d) thereof; (ii) subject itself to taxation in
any such jurisdiction, or (iii) consent to general service of process in any
such jurisdiction);
(e) cause to be filed any and all notifications to any governmental
authority under any federal or state securities law to be sent and any and all
listings with any securities exchange or Nasdaq to be obtained, as may be
reasonably necessary or advisable to enable Holders to consummate the
disposition of their Registrable Securities pursuant to the registration;
(f) notify each Holder of such Registrable Securities at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act of he occurrence of any event as a result of which the prospectus
included in such registration statement contains an untrue statement of a
material fact or omits any fact necessary to make the statements therein not
misleading, and promptly prepare a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus shall not contain an untrue statement of a material fact or omit
to state any fact necessary to make
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the statements therein not misleading;
(g) in the case of an underwritten offering, cause to be delivered to
the Holders of such Registrable Securities and the underwriters, if any,
opinions of counsel to the Company in customary form, covering such matters as
are customarily covered by opinions for an underwritten public offering as the
underwriters may request and addressed to the underwriters and the Holders;
(h) make available for inspection by any Holder of such Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other agent retained by
any Holder or underwriter, relevant financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such Holder, underwriter, attorney,
accountant or agent in connection with such registration statement;
(i) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
(j) cause to be delivered, immediately prior to the effectiveness of
the registration statement (and, in the case of an underwritten offering, at the
time of delivery of any Registrable Securities sold pursuant thereto), letters
from the Company's independent certified public accountants addressed to each
selling Holder and each underwriter, if any, stating that such accountants are
independent public accountants within the meaning of the Securities Act and the
applicable published rules and regulations thereunder, and otherwise in
customary form and covering such financial and accounting matters as are
customarily covered by letters of the independent certified public accountants
delivered in connection with primary or secondary
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underwritten public offerings, as the case may be;
(k) make generally available to the Holders of such Registrable
Securities a consolidated earnings statement (which need not be audited) for the
twelve (12) months beginning after the effective date of a registration
statement as soon as reasonably practicable after the end of such period, which
earnings statement shall satisfy Section 11(a) of the Securities Act and Rule
158 thereunder; and
(l) promptly notify each Holder of such Registrable Securities and
the underwriter or underwriters, if any: (i) when the registration statement,
any pre-effective amendment, the prospectus or any prospectus supplement or
post-effective amendment to the registration statement has been filed and, with
respect to the registration statement or any post-effective amendment, when the
same has become effective; (ii) of any written request by the SEC for amendments
or supplements to the registration statement or prospectus; (iii) of the
notification to the Company by the SEC of its initiation of any proceeding with
respect to the issuance by the SEC of, or the issuance by the SEC of, any stop
order suspending the effectiveness of the registration statement; and (iv) of
the receipt by the Company of any notification with respect to the suspension of
the qualification of any Registrable Securities for sale under the Applicable
Law.
5. Nominees for Beneficial Owners. In the event that any Registrable
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Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election, be treated as the Holder of such
Registrable Securities for purposes of any request or other action by any Holder
or Holders of registrable Securities pursuant to this Registration Rights
Agreement or any determination of any number or percentage of shares of
Registrable Securities contemplated by this Agreement.
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6. Successors, Assigns and Transferees. This Agreement shall be binding
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upon and shall inure to the benefit of the parties hereto and their respective
heirs, personal representatives, successors and assigns. In addition, and
whether or not any express assignment shall have been made, the provisions of
this Registration Rights Agreement which are for the benefit of the parties
hereto other than the Company shall also be for the benefit of and enforceable
by any subsequent Holder of any Registrable Securities, subject to the
provisions and obligations hereof.
7. Entire Agreement and Modifications. This Registration Rights
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Agreement constitutes the entire understanding between the parties and
supersedes all other agreements, whether written or oral, with respect to the
transactions contemplated by this Registration Rights Agreement. This
Registration Rights Agreement may not be amended or modified by either party
unless such amendment or modification is memorialized in a writing signed by
each of the parties hereto. Any such amendment or modification of this
Registration Rights Agreement shall be binding upon and inure to the benefit of
all Holders of Registrable Securities.
8. Waiver. Any waiver by either party of any breach of any term or
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condition in this Registration Rights Agreement shall not operate as a waiver of
any other breach of such term or condition or of any other term or condition,
nor shall any failure to enforce any provision hereof operate as a waiver of
such provision or of any other provision hereof or constitute or be deemed a
waiver or release of any other rights, in law or in equity.
9. Governing Law. All issues concerning this Registration Rights
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Agreement will be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania, without giving effect to any choice of law or
conflict of law provision or rule (whether of the Commonwealth of Pennsylvania
or any other jurisdiction) that would cause the law of any other
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jurisdiction to be applied to this Registration Rights Agreement. The parties
hereto agree that any action to enforce this Registration Rights Agreement may
be properly brought in any court within the Commonwealth of Pennsylvania or in
the United States District court for the Eastern District of Pennsylvania, and
the parties hereto agree that the courts of the Commonwealth of Pennsylvania and
the United States District Court for the Eastern District of Pennsylvania shall
have jurisdiction with respect to the subject matter hereof and the person of
the parties hereto.
10. Severability. Whenever possible, each provision of this Registration
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Rights Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Registration Rights Agreement
is held to be invalid, illegal or unenforceable in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or the effectiveness or validity of any provision in any other jurisdiction, and
this Registration Rights Agreement will be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
11. Further Assurances. From time to time after the execution of this
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Registration Rights Agreement, each of the parties hereto hereby agrees to use
all reasonable efforts to take, or cause to be taken, all action and to do, or
cause to be done, all things necessary, proper and advisable under applicable
laws, rules and regulations to consummate and make effective the transactions
contemplated by this Registration Rights Agreement, including using its best
efforts to obtain all necessary waivers, consents and approvals. In case at any
time after the execution of this Registration Rights Agreement further action is
necessary or desirable to carry out the purposes of this Registration Rights
Agreement, the proper officers and directors of each of the parties shall take
all such necessary action.
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12. Notices. All notices and other communications which are required or
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may be given under this Registration Rights Agreement shall be in writing and
shall be deemed to have been given if delivered personally or sent by registered
or certified mail, return receipt requested, postage prepaid:
To Company: Eastern Environmental Services, Inc.
0000 Xxxxxxxx Xxxxx
Xx. Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, President
with a copy to: Xxxxxx X. Xxxxxx, Esq.
Xxxxxx X. Xxxxxx & Associates
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxx xx Xxxxxxx, XX 00000
To Stockholder: Xxxxxxx Xxxxxx
000 Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
or to such other place as either party shall have specified by notice in writing
to the other.
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement or
caused this Registration Rights Agreement to be executed on its behalf as of the
date first written above.
EASTERN ENVIRONMENTAL
SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxxx, Xx.
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Xxxxx X. Xxxxxxx, Xx., President
STOCKHOLDER XXXXXXX XXXXXX
/s/ Xxxxxxx Xxxxxx
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