Common use of Earnout Covenants Clause in Contracts

Earnout Covenants. The Purchaser agrees to comply with the following covenants commencing with the Closing Date and ending upon the earlier of (i) April 1, 2003, and (ii) satisfaction of all amounts due and owing under the Earnout Agreement. (a) The Purchaser shall not directly, or indirectly through any of its Subsidiaries, own or operate a Rail Transportation Business east of the Mississippi River other than the Company and an Acquired Business. For purposes of this Agreement, an "Acquired Business" is a business or company, or group of related businesses or companies, acquired in a single transaction and designated as an "Acquired Business" by the Purchaser. The Purchaser shall be entitled to designate only one Acquired Business and such Acquired Business shall not own in the aggregate more than 100 railcars. For purposes of this Section, "Rail Transportation Business" shall mean the business of transporting biosolids, incinerator ash and/or soils by intermodal rail for landfilling or for land application or beneficial reuse. The Purchaser shall allow the Company the option to provide Rail Transportation Business services to Synagro and its Subsidiaries (other than any Acquired Business) with respect to transportation originating east of the Mississippi River on the same terms as proposed to be provided by a third party, unless otherwise precluded by contract, Governmental Authority or lack of Company capacity. The Acquired Business shall be entitled to replace railcars no longer in use with similar railcars but shall be precluded from increasing the aggregate number of railcars owned by the Acquired Business by more than 10% of the number owned at the time Purchaser acquires the Acquired Business. An Acquired Business shall be able to bid on new contracts utilizing its railcars to replace lost contracts, provided that those contracts are for services consistent with the business of such Acquired Business. There shall be no restrictions on the Acquired Business with respect to any business not utilizing its railcars.