Common use of Disposal of Property Clause in Contracts

Disposal of Property. The Borrower shall not sell, assign, lease, convey, lease, transfer or otherwise dispose of (whether in one transaction or a series of transactions) all or any substantial part of its properties, assets and rights (or sell or assign, with or without recourse, any receivables) to any Person except (a) sales of Inventory in the ordinary course of business, (b) sales of Equipment being replaced in the ordinary course of business with other Equipment with a fair market value and orderly liquidation value equal to or greater than the Equipment being replaced, (c) sales in the ordinary course of business of personal property that is obsolete, unmerchantable or otherwise unsalable, unusable or unnecessary to Borrower’s business, (d) sales, leases and assignments of personal property between one Borrower to another Borrower, and (e) the sale, conveyance or transfer (a “Permitted Disposition”) of any one or more of the Facilities provided that: (i) at the time of each such Permitted Disposition, no Default or Event of Default shall have occurred and be continuing or would result from such transaction (including, without limitation, any breach or violation of any financial ratio covenant set forth in Section 9.12 hereof); (ii) that such Permitted Disposition is an arm’s length transaction for the fair value of the Facility being sold or transferred; DM3\2429630.8 (iii) such Permitted Disposition shall be consummated in accordance with all applicable Law; and (iv) at least five (5) Business Days prior to the consummation of the Permitted Disposition, the Borrower whose Facility is being disposed of shall have delivered to the Administrative Agent an Officer’s Certificate certifying that such transactions comply with the foregoing provisions (which shall have attached thereto reasonable back-up data and calculations showing such compliance). Solely for purpose of this Section 9.6, in connection with the consummation of any one or more Permitted Dispositions complying in all respects with the foregoing requirements, Administrative Agent and Lender will fully release and discharge the applicable lien and security interest granted to Administrative Agent to secure the Loan (for the ratable benefit of the Lenders and the Administrative Agent) under this Agreement and the Financing Agreements on the specific Collateral of such applicable Borrower or Borrowers (the “Released Collateral”), and will fully release and discharge such Borrower or Borrowers (the “Released Borrowers”) from their obligations under this Agreement and any Financing Agreement, including the Term Loan Note (except for contingent indemnification obligations that survive by their terms herein, including, without limitation, pursuant to Sections 12.9 and 12.16), provided that and conditioned upon satisfaction of each of the foregoing, in the sole determination of the Administrative Agent: (i) The release documents are reasonably acceptable to Administrative Agent and customary for recording the release of liens and security interests in the applicable Collateral in the jurisdictions where the liens and security in the Released Collateral are filed or recorded. Released Borrowers shall be responsible for the cost and expense of preparing and recording the applicable release documents; (ii) All reasonably requested instruments, documents and agreements by the Administrative Agent and Lenders in connection with such Permitted Dispositions are duly executed and delivered by the Released Borrowers and, if applicable, any other Borrower (including amendments to this Agreement and the other Financing Agreements); and (iii) The Released Borrowers shall, substantially simultaneously with (and in any event not later than the first (1st) Business Day following the receipt of the net cash proceeds from the insurance or incurrence of the Permitted Disposition), apply and pay in immediately available funds without setoff or deduction of any kind an amount equal to the loan value apportioned to the Facility or Facilities being disposed of as set forth on Schedule 9.6 attached hereto (which Schedule shall identify the values given to the respective Facilities for purposes of achieving such loan to value). Notwithstanding the release and discharge of the Released Borrowers and the Released Collateral as provided in this Section 9.6, this Agreement, the other Financing Agreements and the Lien of the Administrative Agent on the Collateral (and any other Lien provided by the other Financing Agreements, including pursuant to the applicable Mortgages), shall remain and continue in full force and effect as to the Borrowers other than the Released Borrower and the Collateral DM3\2429630.8 (and other assets and property subject to the other Financing Agreements) other than the Released Collateral. No Prepayment Premium shall be required or due in respect of any prepayment on the Loan made by Borrower pursuant to a Permitted Disposition.

Disposal of Property. The Borrower shall not, and shall not permit any Subsidiary to, sell, assign, lease, convey, leaseassign, transfer or otherwise dispose of (whether in one transaction or a series of transactions) all or any substantial part of its propertiesProperty, assets and rights (or sell or assign, with or without recourse, any receivables) to any Person except for (ai) bona fide sales of Inventory to customers for fair value in the ordinary course of business, (bii) sales of Equipment being replaced in the ordinary course of business with other Equipment with a fair market value and orderly liquidation value equal to or greater than the Equipment being replaced, (c) sales in the ordinary course of business of personal property that which is obsolete, unmerchantable worn-out or otherwise unsalable, unusable or unnecessary not useable in the Borrower's business (up to Borrower’s business, Two Hundred Fifty Thousand Dollars (d$250,000) sales, leases and assignments of personal property between one Borrower to another Borrowerin sales proceeds in the aggregate in any Fiscal Year), and (eiii) assets to be sold pursuant to the sale, conveyance or transfer (a “Permitted Disposition”) of Retail Stores Sale Program as set forth on EXHIBIT 8.7. In the event any one or more Equipment of the Facilities provided that: Borrower or any Subsidiary (iother than Equipment included in the Retail Stores Sale Program) at the time is sold, transferred or otherwise disposed of each such Permitted Disposition, no Default or Event of Default shall have occurred and be continuing or would result from such transaction (including, without limitation, any breach or violation of any financial ratio covenant set forth in Section 9.12 hereof); as permitted by clause (ii) that of this SUBSECTION 8.7 or with the Required Lenders' consent, and (x) such Permitted Disposition sale, transfer or disposition is an arm’s length transaction for the fair value effected without replacement of the Facility being sold Equipment so sold, transferred or transferred; DM3\2429630.8 disposed of or such Equipment is replaced by Equipment leased by the Borrower, the Borrower shall promptly (iii) such Permitted Disposition shall be consummated but in accordance with all applicable Law; and any event within three (iv) at least five (53) Business Days prior of the receipt thereof) deliver all of the cash proceeds of any such sale, transfer or disposition to the consummation of Agent, which proceeds shall be applied to the Permitted DispositionTerm Loans (or, if the Term Loans have been paid in full, the Borrower whose Revolving Loans, and the Total Revolving Loan Facility shall be permanently reduced by such amount) without premium or penalty, except as provided in SUBSECTION 2.7(b), or (y) such sale, transfer or disposition is being disposed of shall have delivered to the Administrative Agent an Officer’s Certificate certifying that such transactions comply with the foregoing provisions (which shall have attached thereto reasonable back-up data and calculations showing such compliance). Solely for purpose of this Section 9.6, made in connection with the consummation purchase by the Borrower of any one replacement Equipment, the Borrower shall use the proceeds of such sale, transfer or more Permitted Dispositions complying disposition to finance the purchase by the Borrower of replacement Equipment and shall deliver to the Agent written evidence of the use of the proceeds for such purchase. Except as permitted by SUBSECTION 8.1, all replacement Equipment purchased by the Borrower shall be free and clear of all Liens, except for Liens in all respects with favor the foregoing requirementsAgent, Administrative Agent and Lender will fully release and discharge the applicable lien and security interest granted to Administrative Agent to secure the Loan (for the ratable benefit of the Lenders and the Administrative Agent) under this Agreement and the Financing Agreements on the specific Collateral of such applicable Borrower or Borrowers (the “Released Collateral”), and will fully release and discharge such Borrower or Borrowers (the “Released Borrowers”) from their obligations under this Agreement and any Financing Agreement, including the Term Loan Note (except for contingent indemnification obligations that survive by their terms herein, including, without limitation, pursuant to Sections 12.9 and 12.16), provided that and conditioned upon satisfaction of each of the foregoing, in the sole determination of the Administrative Agent: (i) The release documents are reasonably acceptable to Administrative Agent and customary for recording the release of liens and security interests in the applicable Collateral in the jurisdictions where the liens and security in the Released Collateral are filed or recorded. Released Borrowers shall be responsible for the cost and expense of preparing and recording the applicable release documents; (ii) All reasonably requested instruments, documents and agreements by the Administrative Agent and Lenders in connection with such Permitted Dispositions are duly executed and delivered by the Released Borrowers and, if applicable, any other Borrower (including amendments to this Agreement and the other Financing Agreements); and (iii) The Released Borrowers shall, substantially simultaneously with (and in any event not later than the first (1st) Business Day following the receipt of the net cash proceeds from the insurance or incurrence of the Permitted Disposition), apply and pay in immediately available funds without setoff or deduction of any kind an amount equal to the loan value apportioned to the Facility or Facilities being disposed of as set forth on Schedule 9.6 attached hereto (which Schedule shall identify the values given to the respective Facilities for purposes of achieving such loan to value). Notwithstanding the release and discharge of the Released Borrowers and the Released Collateral as provided in this Section 9.6, this Agreement, the other Financing Agreements and the Lien of the Administrative Agent on the Collateral (and any other Lien provided by the other Financing Agreements, including pursuant to the applicable Mortgages), shall remain and continue in full force and effect as to the Borrowers other than the Released Borrower and the Collateral DM3\2429630.8 (and other assets and property subject to the other Financing Agreements) other than the Released Collateral. No Prepayment Premium shall be required or due in respect of any prepayment on the Loan made by Borrower pursuant to a Permitted DispositionLenders.

Disposal of Property. The Borrower shall not sell, assign, lease, convey, lease, transfer or otherwise dispose of (whether in one transaction or a series of transactions) all or any substantial part of its properties, assets and rights (or sell or assign, with or without recourse, any receivables) to any Person except (a) sales of Inventory in the ordinary course of business, (b) sales of Equipment being replaced in the ordinary course of business with other Equipment with a fair market value and orderly liquidation value equal to or greater than the Equipment being replaced, (c) sales in the ordinary course of business of personal property that is obsolete, unmerchantable or otherwise unsalable, unusable or unnecessary to Borrower’s business, (d) sales, leases and assignments of personal property between one Borrower to another Borrower, and (e) the sale, conveyance or transfer (a “Permitted Disposition”) of any one or more of the Facilities provided that: (i) at the time of each such Permitted Disposition, no Default or Event of Default shall have occurred and be continuing or would result from such transaction (including, without limitation, any breach or violation of any financial ratio covenant set forth in Section 9.12 hereof); (ii) that such Permitted Disposition is an arm’s length transaction for the fair value of the Facility being sold or transferred; DM3\2429630.8; (iii) such Permitted Disposition shall be consummated in accordance with all applicable Law; and (iv) at least five (5) Business Days prior to the consummation of the Permitted Disposition, the Borrower whose Facility is being disposed of shall have delivered to the Administrative Agent an Officer’s Certificate certifying that such transactions comply with the foregoing provisions (which shall have attached thereto reasonable back-up data and calculations showing such compliance). Solely for purpose of this Section 9.6, 9.6 in connection with the consummation of any one or more Permitted Dispositions complying in all respects with the foregoing requirements, or as permitted pursuant to Section 6.8, Administrative Agent and Lender will fully release and discharge the applicable lien and security interest granted to Administrative Agent to secure the Loan (for the ratable benefit of the Lenders and the Administrative Agent) under this Agreement and the Financing Agreements on the specific Collateral of such applicable Borrower or Borrowers (the “Released Collateral”), and will fully release and discharge such Borrower or Borrowers (the “Released Borrowers”) from their obligations under this Agreement and any Financing Agreement, including the Term Loan Note (except for contingent indemnification obligations that survive by their terms herein, including, without limitation, pursuant to Sections - 79 - DM3\7000734.9 12.9 and 12.16), provided that and conditioned upon satisfaction of each of the foregoing, in the sole determination of the Administrative Agent: (i1) The release documents are reasonably acceptable to Administrative Agent and customary for recording the release of liens and security interests in the applicable Collateral in the jurisdictions where the liens and security in the Released Collateral are filed or recorded. Released Borrowers shall be responsible for the cost and expense of preparing and recording the applicable release documents; (ii2) All reasonably requested instruments, documents and agreements by the Administrative Agent and Lenders in connection with such Permitted Dispositions are duly executed and delivered by the Released Borrowers and, if applicable, any other Borrower (including amendments to this Agreement and the other Financing Agreements); and (iii3) The Released Borrowers shall, substantially simultaneously with (and in any event not later than the first (1st) Business Day following the receipt of the net cash proceeds from the insurance or incurrence of the Permitted Disposition), apply and pay in immediately available funds without setoff or deduction of any kind an amount equal to (A) the loan value apportioned to the Facility or Facilities being disposed of as set forth on Schedule 9.6 attached hereto (which Schedule shall identify the values given to the respective Facilities for purposes of achieving such loan to value)value based on the “Debt Allocation Percentage” column on such Schedule) to prepay the outstanding Term Loan amount in accordance with Section 2.10 and any other related then due and owing Liabilities, if such Permitted Disposition is with respect to any Facility listed on Schedule 9.6 hereof or (B) an amount equal to one hundred percent (100%) of such net cash proceeds of such Permitted Disposition to be applied to the outstanding Term Loans and any other related then due and owing Liabilities, if such Permitted Disposition is with respect to any Facility not listed on Schedule 9.6 and that was acquired by the Borrowers pursuant to a Permitted Acquisition. Notwithstanding the release and discharge of the Released Borrowers and the Released Collateral as provided in this Section 9.6, this Agreement, the other Financing Agreements and the Lien of the Administrative Agent on the Collateral (and any other Lien provided by the other Financing Agreements, including pursuant to the applicable Mortgages), shall remain and continue in full force and effect as to the Borrowers other than the Released Borrower and the Collateral DM3\2429630.8 (and other assets and property subject to the other Financing Agreements) other than the Released Collateral. No Prepayment Premium shall be required or due in respect of any prepayment on the Loan made by Borrower pursuant to a Permitted Disposition.

Disposal of Property. The Borrower shall not sell, assign, lease, convey, lease, transfer or otherwise dispose of (whether in one transaction or a series of transactions) all or any substantial part of its properties, assets and rights to any Person (or sell or assign, with or without recourse, any receivables) to any Person except (a) sales of Inventory in the ordinary course of business, (b) sales of Equipment being replaced in the ordinary course of business with other Equipment with a fair market value and orderly liquidation value equal to or greater than the Equipment being replaced, and (c) sales transfers of Inventory and Equipment located at a Facility made by Borrower to the owner or new operator of the Facility in connection with the ordinary course transfer of business operations upon the termination of personal property that is obsoletethe Commercial Lease for such Facility, unmerchantable or otherwise unsalable, unusable or unnecessary to Borrower’s business, and (d) salesthe conveyance, leases and assignments of personal property between one Borrower to another Borrower, and (e) the sale, conveyance transfer, assignment or transfer other disposition (a “Permitted Disposition”) of any one or more of the Real Property Assets listed on Schedule 9.6 (which shall be limited to that certain vacant Carolina Beach property and the five unencumbered Facilities that were once Capmark Facilities) provided that: (ia) at the time of each such Permitted Disposition, no Default or Event of Default shall have occurred and be continuing or would result from such transaction (including, without limitation, any breach or violation of any financial ratio covenant set forth in Section 9.12 hereof); (iib) that such Permitted Disposition is an arm’s length transaction for the fair value of the Facility Real Property Asset being sold sold, transferred or transferred; DM3\2429630.8otherwise disposed of; (iiic) such Permitted Disposition shall be consummated in accordance with all applicable Law; and (ivd) at least five (5) Business Days prior to the consummation of the Permitted Disposition, the Borrower whose Facility Real Property Asset is being disposed of shall have delivered to the Administrative Agent an Officer’s Certificate certifying that such transactions comply with the foregoing provisions (which shall have attached thereto reasonable back-up data and calculations showing such compliance). Solely for purpose purposes of this Section 9.6, to the extent the applicable Licenses constitute General Intangibles that are a part of the Collateral, Administrative Agent will (upon written request of Borrower and at Borrower’s cost) release any security interest granted hereunder in such Licenses required, necessary or used in connection with the consummation of any one or more Permitted Dispositions complying in all respects with Real Property Asset that is the foregoing requirements, Administrative Agent and Lender will fully release and discharge the applicable lien and security interest granted to Administrative Agent to secure the Loan (for the ratable benefit of the Lenders and the Administrative Agent) under this Agreement and the Financing Agreements on the specific Collateral subject of such applicable Borrower or Borrowers (the “Released Collateral”), and will fully release and discharge such Borrower or Borrowers (the “Released Borrowers”) from their obligations under this Agreement and any Financing Agreement, including the Term Loan Note (except for contingent indemnification obligations that survive by their terms herein, including, without limitation, pursuant to Sections 12.9 and 12.16), provided that and conditioned upon satisfaction of each of the foregoing, in the sole determination of the Administrative Agent: (i) The release documents are reasonably acceptable to Administrative Agent and customary for recording the release of liens and security interests in the applicable Collateral in the jurisdictions where the liens and security in the Released Collateral are filed or recorded. Released Borrowers shall be responsible for the cost and expense of preparing and recording the applicable release documents; (ii) All reasonably requested instruments, documents and agreements by the Administrative Agent and Lenders in connection with such Permitted Dispositions are duly executed and delivered by the Released Borrowers and, if applicable, any other Borrower (including amendments to this Agreement and the other Financing Agreements); and (iii) The Released Borrowers shall, substantially simultaneously with (and in any event not later than the first (1st) Business Day following the receipt of the net cash proceeds from the insurance or incurrence of the Permitted Disposition), apply and pay in immediately available funds without setoff or deduction of any kind an amount equal to the loan value apportioned to the Facility or Facilities being disposed of as set forth on Schedule 9.6 attached hereto (which Schedule shall identify the values given to the respective Facilities for purposes of achieving such loan to value). Notwithstanding the release and discharge of the Released Borrowers and the Released Collateral as provided in this Section 9.6, this Agreement, the other Financing Agreements and the Lien of the Administrative Agent on the Collateral (and any other Lien provided by the other Financing Agreements, including pursuant to the applicable Mortgages), shall remain and continue in full force and effect as to the Borrowers other than the Released Borrower and the Collateral DM3\2429630.8 (and other assets and property subject to the other Financing Agreements) other than the Released Collateral. No Prepayment Premium shall be required or due in respect of any prepayment on the Loan made by Borrower pursuant to a Permitted Disposition.

Disposal of Property. The Borrower shall not sell, assign, lease, convey, lease, transfer or otherwise dispose of (whether in one transaction or a series of transactions) all or any substantial part of its properties, assets and rights (or sell or assign, with or without recourse, any receivables) to any Person except (a) sales of Inventory in the ordinary course of business, (b) sales - 67 - DM3\3743049.7 of Equipment being replaced in the ordinary course of business with other Equipment with a fair market value and orderly liquidation value equal to or greater than the Equipment being replaced, (c) sales in the ordinary course of business of personal property that is obsolete, unmerchantable or otherwise unsalable, unusable or unnecessary to Borrower’s business, (d) sales, leases and assignments of personal property between one Borrower to another Borrower, and (e) the sale, conveyance or transfer (a “Permitted Disposition”) of any one or more of the Facilities provided that: (i) at the time of each such Permitted Disposition, no Default or Event of Default shall have occurred and be continuing or would result from such transaction (including, without limitation, any breach or violation of any financial ratio covenant set forth in Section 9.12 hereof); (ii) that such Permitted Disposition is an arm’s length transaction for the fair value of the Facility being sold or transferred; DM3\2429630.8; (iii) such Permitted Disposition shall be consummated in accordance with all applicable Law; and (iv) at least five (5) Business Days prior to the consummation of the Permitted Disposition, the Borrower whose Facility is being disposed of shall have delivered to the Administrative Agent an Officer’s Certificate certifying that such transactions comply with the foregoing provisions (which shall have attached thereto reasonable back-up data and calculations showing such compliance). Solely for purpose of this Section 9.6, 9.6 in connection with the consummation of any one or more Permitted Dispositions complying in all respects with the foregoing requirements, or as permitted pursuant to Section 6.8, Administrative Agent and Lender will fully release and discharge the applicable lien and security interest granted to Administrative Agent to secure the Loan (for the ratable benefit of the Lenders and the Administrative Agent) under this Agreement and the Financing Agreements on the specific Collateral of such applicable Borrower or Borrowers (the “Released Collateral”), and will fully release and discharge such Borrower or Borrowers (the “Released Borrowers”) from their obligations under this Agreement and any Financing Agreement, including the Term Loan Note and the Acquisition Loan Note (except for contingent indemnification obligations that survive by their terms herein, including, without limitation, pursuant to Sections 12.9 and 12.16), provided that and conditioned upon satisfaction of each of the foregoing, in the sole determination of the Administrative Agent: (i1) The release documents are reasonably acceptable to Administrative Agent and customary for recording the release of liens and security interests in the applicable Collateral in the jurisdictions where the liens and security in the Released Collateral are filed or recorded. Released Borrowers shall be responsible for the cost and expense of preparing and recording the applicable release documents; (ii2) All reasonably requested instruments, documents and agreements by the Administrative Agent and Lenders in connection with such Permitted Dispositions are duly executed - 68 - DM3\3743049.7 and delivered by the Released Borrowers and, if applicable, any other Borrower (including amendments to this Agreement and the other Financing Agreements); and (iii3) The Released Borrowers shall, substantially simultaneously with (and in any event not later than the first (1st) Business Day following the receipt of the net cash proceeds from the insurance or incurrence of the Permitted Disposition), apply and pay in immediately available funds without setoff or deduction of any kind an amount equal to (A) the loan value apportioned to the Facility or Facilities being disposed of as set forth on Schedule 9.6 attached hereto (which Schedule shall identify the values given to the respective Facilities for purposes of achieving such loan to value)value based on the “Debt Allocation Percentage” column on such Schedule) to prepay the outstanding Term Loan amount in accordance with Section 2.10 and any other related then due and owing Liabilities, if such Permitted Disposition is with respect to any Facility listed on Schedule 9.6 hereof or (B) an amount equal to one hundred percent (100%) of such net cash proceeds of such Permitted Disposition to be applied to the outstanding Acquisition Loans and any other related then due and owing Liabilities, if such Permitted Disposition is with respect to any Facility not listed on Schedule 9.6 and that was acquired by the Borrowers pursuant to a Permitted Acquisition. Notwithstanding the release and discharge of the Released Borrowers and the Released Collateral as provided in this Section 9.6, this Agreement, the other Financing Agreements and the Lien of the Administrative Agent on the Collateral (and any other Lien provided by the other Financing Agreements, including pursuant to the applicable Mortgages), shall remain and continue in full force and effect as to the Borrowers other than the Released Borrower and the Collateral DM3\2429630.8 (and other assets and property subject to the other Financing Agreements) other than the Released Collateral. No Prepayment Premium shall be required or due in respect of any prepayment on the Loan made by Borrower pursuant to a Permitted Disposition.

Disposal of Property. The Borrower shall not not, nor shall it permit any of its Subsidiaries to, sell, assign, lease, convey, leaseassign, transfer or otherwise dispose of (whether in one transaction or a series of transactions) all or any substantial part of its propertiesProperty, assets and rights (or sell or assign, with or without recourse, any receivables) to any Person except for (ai) bona fide sales of Inventory to customers for fair value in the ordinary course of business, (bii) the sale of the Borrower's Axcell product line for fair market value, (iii) sales of Equipment being replaced which is obsolete, worn-out or otherwise not useable in the ordinary course Borrower's business and (iv) other dispositions of business with other Equipment with any asset having a fair market value and orderly liquidation value equal to or greater of less than $200,000; provided that the aggregate amount of all such dispositions under this clause (iv) in any Fiscal Year shall not exceed $500,000. In the event any Equipment being replacedof the Borrower is sold, (c) sales in the ordinary course of business of personal property that is obsolete, unmerchantable transferred or otherwise unsalable, unusable or unnecessary to Borrower’s business, (d) sales, leases and assignments disposed of personal property between one Borrower to another Borroweras permitted by this subsection 8.7, and (ei) the such sale, conveyance transfer or transfer disposition is effected without replacement of the Equipment so sold, transferred or disposed of or such Equipment is replaced by Equipment leased by the Borrower, the Borrower shall promptly (a “Permitted Disposition”but in any event within three (3) Business Days of the receipt thereof) deliver all of the cash proceeds of any one such sale, transfer or more of disposition to the Facilities Agent, which proceeds shall be applied to the Revolving Loan Obligations; provided that: (i) at the time of each such Permitted Disposition, so long as no Default or Event of Default shall have occurred and be continuing continuing, if at the time of application of such proceeds LIBOR Loans are outstanding and such application would subject the Borrower to any obligation pursuant to subsection 2.20(c), the Agent shall (a) hold such proceeds in a cash collateral account and shall not apply such proceeds to the Revolving Loan Obligations until the end of the applicable Interest Period(s) for such LIBOR Loans, or would result from (b) immediately apply the proceeds to the Revolving Loan Obligations and waive the applicability of subsection 2.20(c) to such transaction (includingprepayment, without limitation, any breach or violation of any financial ratio covenant set forth in Section 9.12 hereof); (ii) that such Permitted Disposition sale, transfer or disposition is an arm’s length transaction for the fair value of the Facility being sold or transferred; DM3\2429630.8 (iii) such Permitted Disposition shall be consummated in accordance with all applicable Law; and (iv) at least five (5) Business Days prior to the consummation of the Permitted Disposition, the Borrower whose Facility is being disposed of shall have delivered to the Administrative Agent an Officer’s Certificate certifying that such transactions comply with the foregoing provisions (which shall have attached thereto reasonable back-up data and calculations showing such compliance). Solely for purpose of this Section 9.6, made in connection with the consummation purchase by the Borrower of any one replacement Equipment, the Borrower shall use the proceeds of such sale, transfer or more Permitted Dispositions complying in all respects with disposition to finance the foregoing requirements, Administrative purchase by the Borrower of replacement Equipment and shall deliver to the Agent and Lender will fully release and discharge the applicable lien and security interest granted to Administrative Agent to secure the Loan (for the ratable benefit written evidence of the Lenders use of the proceeds for such purchase. Except as permitted by subsection 8.1, all replacement Equipment purchased by the Borrower shall be free and the Administrative Agent) under this Agreement and the Financing Agreements on the specific Collateral clear of such applicable Borrower or Borrowers (the “Released Collateral”)all Liens, and will fully release and discharge such Borrower or Borrowers (the “Released Borrowers”) from their obligations under this Agreement and any Financing Agreement, including the Term Loan Note (except for contingent indemnification obligations that survive by their terms herein, including, without limitation, pursuant to Sections 12.9 and 12.16), provided that and conditioned upon satisfaction of each of the foregoing, in the sole determination of the Administrative Agent: (i) The release documents are reasonably acceptable to Administrative Agent and customary for recording the release of liens and security interests in the applicable Collateral in the jurisdictions where the liens and security in the Released Collateral are filed or recorded. Released Borrowers shall be responsible for the cost and expense of preparing and recording the applicable release documents; (ii) All reasonably requested instruments, documents and agreements by the Administrative Agent and Lenders in connection with such Permitted Dispositions are duly executed and delivered by the Released Borrowers and, if applicable, any other Borrower (including amendments to this Agreement and the other Financing Agreements); and (iii) The Released Borrowers shall, substantially simultaneously with (and in any event not later than the first (1st) Business Day following the receipt of the net cash proceeds from the insurance or incurrence of the Permitted Disposition), apply and pay in immediately available funds without setoff or deduction of any kind an amount equal to the loan value apportioned to the Facility or Facilities being disposed of as set forth on Schedule 9.6 attached hereto (which Schedule shall identify the values given to the respective Facilities for purposes of achieving such loan to value). Notwithstanding the release and discharge of the Released Borrowers and the Released Collateral as provided in this Section 9.6, this Agreement, the other Financing Agreements and the Lien of the Administrative Agent on the Collateral (and any other Lien provided by the other Financing Agreements, including pursuant to the applicable Mortgages), shall remain and continue in full force and effect as to the Borrowers other than the Released Borrower and the Collateral DM3\2429630.8 (and other assets and property subject to the other Financing Agreements) other than the Released Collateral. No Prepayment Premium shall be required or due in respect of any prepayment on the Loan made by Borrower pursuant to a Permitted DispositionLiens.

Disposal of Property. The Borrower shall not, and shall not permit Webco Tube to, sell, assign, lease, convey, lease, transfer or otherwise dispose of (whether in one transaction or a series any of transactions) all the Collateral or any substantial part of its other properties, assets and rights (or sell or assign, with or without recourse, any receivables) to any Person Person, except for (ai) sales of Inventory to customers in the ordinary course of business, (bii) sales rights of Borrower in and to the services of its employees to Webco Tube pursuant to the terms of the Service Agreement, and (iii) the sale of Equipment being replaced in the ordinary course of business with other Equipment with a fair market value and orderly liquidation value equal to or greater than the Equipment being replaced, (c) sales in the ordinary course of business of personal property that is obsolete, unmerchantable or otherwise unsalable, unusable or unnecessary to Borrower’s business, (d) sales, leases and assignments of personal property between one Borrower to another Borrower, and (e) the sale, conveyance or transfer (a “Permitted Disposition”) of at any one or more of the Facilities provided that: (i) at the time of each such Permitted Disposition, when no Default or Event of Default shall have has occurred and be continuing or would result from such transaction (including, is continuing; provided that Borrower and Webco Tube shall not sell Equipment with an aggregate value greater than $250,000 during any period of 12 consecutive months without limitation, any breach or violation of any financial ratio covenant set forth in Section 9.12 hereof); (ii) that such Permitted Disposition is an arm’s length transaction for the fair value consent of the Facility being sold or transferred; DM3\2429630.8 Required Lenders (iii) provided that no Lender shall unreasonably withhold its consent to such Permitted Disposition a sale). The term "value" as used in this Subsection 8.15 shall be consummated in accordance with all applicable Law; and (iv) at least five (5) Business Days prior mean, as to the consummation any item of the Permitted DispositionEquipment, the Borrower whose Facility is being disposed greater of shall have delivered to (a) the Administrative Agent an Officer’s Certificate certifying that proceeds received for such transactions comply with the foregoing provisions items of Equipment upon disposition (which shall have attached thereto net of taxes and reasonable back-up data and calculations showing such compliance). Solely for purpose of this Section 9.6, in connection with the consummation of any one or more Permitted Dispositions complying in all respects with the foregoing requirements, Administrative Agent and Lender will fully release and discharge the applicable lien and security interest granted to Administrative Agent to secure the Loan (for the ratable benefit of the Lenders and the Administrative Agent) under this Agreement and the Financing Agreements on the specific Collateral of such applicable expenses incurred by Borrower or Borrowers (the “Released Collateral”), and will fully release and discharge such Borrower or Borrowers (the “Released Borrowers”) from their obligations under this Agreement and any Financing Agreement, including the Term Loan Note (except for contingent indemnification obligations that survive by their terms herein, including, without limitation, pursuant to Sections 12.9 and 12.16), provided that and conditioned upon satisfaction of each of the foregoing, in the sole determination of the Administrative Agent: (i) The release documents are reasonably acceptable to Administrative Agent and customary for recording the release of liens and security interests in the applicable Collateral in the jurisdictions where the liens and security in the Released Collateral are filed or recorded. Released Borrowers shall be responsible for the cost and expense of preparing and recording the applicable release documents; (ii) All reasonably requested instruments, documents and agreements by the Administrative Agent and Lenders Webco Tube in connection with such Permitted Dispositions are duly executed and disposition) or (b)(i) if such item is listed on the equipment appraisal delivered by to Agent in February, 2004 (the Released Borrowers and, if applicable, any other Borrower (including amendments to this Agreement and the other Financing Agreements); and (iii) The Released Borrowers shall, substantially simultaneously with (and in any event not later than the first (1st) Business Day following the receipt of the net cash proceeds from the insurance or incurrence of the Permitted Disposition"Appraisal"), apply and pay in immediately available funds without setoff or deduction of any kind an amount equal to the loan value apportioned to the Facility or Facilities being disposed of as appraised "orderly liquidation value" set forth on Schedule 9.6 attached hereto for such item thereon (which Schedule shall identify the values given to the respective Facilities for purposes net of achieving such loan to value). Notwithstanding the release and discharge of the Released Borrowers and the Released Collateral as provided in this Section 9.6, this Agreement, the other Financing Agreements and the Lien of the Administrative Agent on the Collateral (and any other Lien provided by the other Financing Agreements, including pursuant to the applicable Mortgages), shall remain and continue in full force and effect as to the Borrowers other than the Released Borrower and the Collateral DM3\2429630.8 (and other assets and property subject to the other Financing Agreements) other than the Released Collateral. No Prepayment Premium shall be required or due taxes payable in respect of any prepayment such "orderly liquidation value" and reasonable expenses incurred by borrower or Webco Tube in connection with such disposition), or (ii) if such item is not listed on the Loan made by Appraisal, Borrower's or Webco Tube's net book value for such item. Agent does not authorize Borrower pursuant or any Subsidiary to a Permitted Dispositiontake any action in contravention to the foregoing.