TO THE EXTENT HELD BY THE SHAREHOLDER
PLEDGORS), WHETHER NOW OWNED OR HEREAFTER ACQUIRED, OR ANY INCOME OR PROFITS
THEREFROM, OR FILE OR PERMIT THE FILING OF, OR PERMIT TO REMAIN IN EFFECT, ANY
FINANCING STATEMENT, OR OTHER SIMILAR NOTICE OF ANY LIEN WITH RESPECT TO ANY
SUCH PROPERTY, ASSET, INCOME OR PROFITS UNDER THE UNIFORM COMMERCIAL CODE OF ANY
STATE OR UNDER ANY SIMILAR RECORDING OR NOTICE STATUTE, EXCEPT (SOLELY WITH
RESPECT TO THE BORROWER AND ITS SUBSIDIARIES):
(I)
ANY PERMITTED ENCUMBRANCES; PROVIDED, HOWEVER, THAT NO SUCH
PERMITTED ENCUMBRANCES SHALL RESULT IN A LIEN ON THE CAPITAL STOCK OF THE
BORROWER OR ITS SUBSIDIARIES; AND
(II)
LIENS IN FAVOR OF THE AGENT GRANTED PURSUANT TO THE COLLATERAL
DOCUMENTS TO SECURE THE OBLIGATIONS OR GRANTED IN FAVOR OF THE AGENT OR LENDER
PURSUANT TO THE TERMS OF THIS AGREEMENT.
B.
NO FURTHER NEGATIVE PLEDGES.
EXCEPT WITH RESPECT TO SPECIFIC
PROPERTY ENCUMBERED TO SECURE PAYMENT OF PARTICULAR INDEBTEDNESS PERMITTED BY
THIS AGREEMENT OR TO BE SOLD PURSUANT TO AN ASSET SALE OTHERWISE PERMITTED BY
THIS AGREEMENT, NEITHER THE BORROWER NOR ANY OF ITS SUBSIDIARIES SHALL ENTER
INTO ANY AGREEMENT (OTHER THAN THE LOAN DOCUMENTS) PROHIBITING THE CREATION OR
ASSUMPTION OF ANY LIEN UPON ANY OF ITS PROPERTIES OR ASSETS, WHETHER NOW OWNED
OR HEREAFTER ACQUIRED.
C.
NO RESTRICTIONS ON DISTRIBUTIONS, ETC.
EXCEPT AS OTHERWISE
PROVIDED IN THE LOAN DOCUMENTS AND THE CLUB TRANSFER AGREEMENT, THE BORROWER
WILL NOT, AND WILL NOT PERMIT ANY OF ITS SUBSIDIARIES TO, CREATE OR OTHERWISE
CAUSE OR SUFFER TO EXIST OR BECOME EFFECTIVE ANY CONSENSUAL ENCUMBRANCE,
LIMITATION OR RESTRICTION OF ANY KIND ON THE ABILITY OF ANY SUBSIDIARIES OF THE
BORROWER TO (I) PAY DIVIDENDS OR MAKE ANY OTHER DISTRIBUTIONS ON ANY OF SUCH
SUBSIDIARY'S CAPITAL STOCK OWNED BY THE BORROWER OR ANY OTHER SUBSIDIARIES OF
THE BORROWER, (II) REPAY OR PREPAY ANY INDEBTEDNESS OWED BY SUCH SUBSIDIARY TO
THE BORROWER OR ANY OTHER SUBSIDIARY OF THE BORROWER, (III) MAKE LOANS OR
ADVANCES TO THE BORROWER OR ANY OTHER SUBSIDIARY OF THE BORROWER, OR
(IV) TRANSFER ANY OF ITS PROPERTY OR ASSETS TO THE BORROWER OR ANY OTHER
SUBSIDIARY OF THE BORROWER.
85
6.3
Investments.
The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investments, except
(I)
THE BORROWER AND ITS SUBSIDIARIES MAY MAKE INVESTMENTS IN CASH
EQUIVALENTS;
(II)
THE BORROWER AND ITS SUBSIDIARIES MAY MAKE INVESTMENTS FOR
PURPOSES OF PURCHASING ADDITIONAL REAL PROPERTY COLLATERAL TO THE EXTENT
PERMITTED HEREUNDER, WHICH WILL BE PLEDGED AS COLLATERAL TO SECURE THE
BORROWER'S AND ITS SUBSIDIARIES' OBLIGATIONS HEREUNDER AS REQUIRED BY
SECTION 5.13 HEREOF;
(III)
THE BORROWER MAY MAKE INVESTMENTS IN ITS SUBSIDIARIES AND THE
BORROWER'S SUBSIDIARIES MAY MAKE INVESTMENTS IN THEIR SUBSIDIARIES;
[(IV)
THE BORROWER AND ITS SUBSIDIARIES MAY MAKE INVESTMENTS IN
ROYAL ISLAND - RH, LP, A DELAWARE LIMITED PARTNERSHIP, IN THE MAXIMUM AGGREGATE
AMOUNT OF $250,000 FOR PURPOSES OF FUNDING CAPITAL EXPENDITURES, TRANSACTION
COSTS AND OTHER WORKING CAPITAL NEEDS AT THE ROCK HOUSE FROM