Modified Total Funded Debt to EBITDAR Ratio. Maintain a modified total Funded Indebtedness to EBITDAR ratio of (i) less than 2.00 to 1.00 as of the end of each fiscal quarter based on the preceding trailing twelve month (12) period for the periods ending March 30, 2005, June 30, 2005, September 30,2005,December 31, 2005, and March 31, 2006 and (iii) less than 1.75 to 1.00 as at the end of all other fiscal quarters based on the preceding trailing twelve (12) month periods. Modified total Funded Indebtedness is defined as Funded Indebtedness less Short Term Line Financing secured by marketable securities. For purposes of this subsection 5.04(c), (i) EBITDAR is defined as (i) earnings before (a) interest,(b) taxes (including, but not limited to, the provision for taxes related to discontinued operations), (c) depreciation, (d) amortization, (e) Lease Expense and (f) charges incurred in connection with Lease and Leasehold abandonment, (ii) less investment gains (losses) , (iii) plus realized gains, (iv) less realized losses (iv) plus (a) $7,292,000 for the period ending June 30, 2005, (b) $2,766,000 for the period ending September 30, 2005, (c) $1,500,000.00 for the period ending December 31, 2005 and (d) $1,500,000 for the period ending March 31, 2006. For purposes of calculating realized gains or losses on the Borrower’s investments, realized gains and losses are defined as gross proceeds from the sale of the investment less the Borrower’s cash basis in the investment. Amortization is defined as (a) the amount of any expense(s) required to be recognized by the Borrower, in accordance with GAAP for any period and reflected in the Borrower’s financial statement for such period, for (1) the Borrower’s Intangible Assets, (2) the Borrower’s issuance of (A) any restricted stock , (B) notes, (C) warrants and/or (D) stock to match 401K contribution obligations, (3) cost incurred in the issuance of any options, (b) less charges taken by the Borrower against income for a given period for discontinued operation of the Borrower. .
Modified Total Funded Debt to EBITDAR Ratio. Maintain a modified total Funded Indebtedness to EBITDAR ratio of less than 1.75 to 1.00 as at the end of each fiscal quarter based on preceding trailing twelve (12) month period. Modified total Funded Indebtedness is defined as Funded Indebtedness less Short Term Line Financing secured by marketable securities. Notwithstanding anything to the contrary contained herein, the Borrower’s failure to meet any of the above Financial Covenants shall constitute an Event of Default only if the Borrower fails to cause the covenant violated to be brought into compliance within forty-five (45) days of the date written notice of the Borrower’s failure to meet a Financial Covenant is given to the Borrower by the Bank. The Borrower’s compliance with the Financial Covenants over a trailing twelve month period that includes any reporting period ending before or including the Closing Date (each a “PreClosing Date Reporting Period”), shall be computed utilizing (i) the results of DesCap’s operations for each PreClosing Date Reporting Period as reflected in the financial information covering such period prepared for, by or on behalf of DesCap that most closely approximates the financial information referenced in subsections 5.03(b) and 5.03(c), as applicable as adjusted to add back the actual compensation expenses paid to the individuals set forth in the definition of “Employment Contracts” for the period in question less the amount required to be paid to these individuals under the terms of the Employment Contracts for a period of equal length, and (ii) the results of Borrower’s operations for each PreClosing Date Reporting Period as reflect in the financial information referenced in subsections 5.03(b) and 5.03(c), as applicable.
