WHICH SUCH LIEN IS ATTACHED; AND
(I)
LIENS EXISTING ON THE DATE HEREOF AND SET FORTH ON
SCHEDULE 5.25 HERETO (OTHER THAN LIENS PERMITTED BY SECTION 9.05(E)), AND
EXTENSIONS, RENEWALS AND REPLACEMENTS THEREOF, PROVIDED THAT SUCH EXTENSION,
RENEWAL OR REPLACEMENT LIEN SHALL BE LIMITED TO ALL OR A PART OF THE PROPERTY
WHICH SECURED THE LIEN SO EXTENDED, RENEWED OR REPLACED (PLUS IMPROVEMENTS ON
SUCH PROPERTY).
9.06
DISPOSITIONS OF ASSETS.
THE COMPANY WILL NOT, AND
WILL NOT PERMIT ANY OF THE OTHER GROUP MEMBERS TO, DIRECTLY OR INDIRECTLY,
CONVEY, SELL (PURSUANT TO A SALE/LEASEBACK OR OTHERWISE), LEASE, SUBLEASE,
TRANSFER OR OTHERWISE DISPOSE OF, OR GRANT ANY PERSON AN OPTION TO ACQUIRE, IN
ONE TRANSACTION OR A SERIES OF TRANSACTIONS, ANY OF ITS PROPERTY, BUSINESS OR
ASSETS, INCLUDING THE CAPITAL STOCK OF ANY SUBSIDIARY THAT IS A GROUP MEMBER,
WHETHER NOW OWNED OR HEREAFTER ACQUIRED, EXCEPT FOR (EACH, A "PERMITTED
DISPOSITION"):
(A)
BONA FIDE SALES OF INVENTORY TO CUSTOMERS FOR FAIR VALUE IN
THE ORDINARY COURSE OF BUSINESS;
(B)
THE SALE, LEASE, TRANSFER OR OTHER DISPOSITION OF OBSOLETE
MACHINERY, PARTS, EQUIPMENT AND OTHER ASSETS NO LONGER USED OR USEFUL IN THE
CONDUCT OF THE BUSINESS OF THE COMPANY OR ANY OTHER GROUP MEMBER, AS
APPROPRIATE, TO CUSTOMERS FOR FAIR VALUE IN THE ORDINARY COURSE OF BUSINESS SO
LONG AS THE NET PROCEEDS THEREFROM ARE USED TO REPAIR OR REPLACE OBSOLETE
PROPERTY OR TO PURCHASE OR OTHERWISE ACQUIRE NEW ASSETS OR PROPERTY;
(C)
ASSET DISPOSITIONS IF ALL OF THE FOLLOWING CONDITIONS ARE
MET:
(I)
THE MARKET VALUE OF ASSETS SOLD OR
OTHERWISE DISPOSED OF (BY THE COMPANY AND THE OTHER GROUP MEMBERS TAKEN AS A
WHOLE) IN ANY FISCAL YEAR DO NOT EXCEED $300,000;
(II)
THE NET PROCEEDS RECEIVED ARE AT LEAST
EQUAL TO THE FAIR MARKET VALUE OF SUCH ASSETS;
(III)
AT LEAST 75% OF THE CONSIDERATION RECEIVED
IS CASH;
(IV)
AFTER GIVING EFFECT TO THE SALE OR OTHER
DISPOSITION OF THE ASSETS INCLUDED WITHIN THE ASSET DISPOSITION AND THE
REPAYMENT OF INDEBTEDNESS WITH THE PROCEEDS THEREOF, THE COMPANY WOULD BE IN
COMPLIANCE ON A PRO FORMA BASIS WITH THE COVENANTS SET FORTH IN SECTION 9.08
HEREOF AND IS IN COMPLIANCE WITH ALL OTHER TERMS AND CONDITIONS OF THIS
AGREEMENT;
(V)
THE NET PROCEEDS RECEIVED ARE APPLIED TO
REPAY SENIOR INDEBTEDNESS OR PREPAY THE NOTE;
47
(VI)
NO EVENT OF DEFAULT THEN EXISTS OR SHALL
RESULT FROM SUCH SALE OR OTHER DISPOSITION; AND
(VII)
SUCH ASSET DISPOSITION DOES NOT INVOLVE THE SALE
OF SOME BUT NOT ALL OF THE CAPITAL STOCK OF A SUBSIDIARY GUARANTOR.
(D)
ISSUANCES OF CAPITAL STOCK (OTHER THAN BY WC HOLDINGS AND ITS
SUBSIDIARIES) UPON EXERCISE OF OPTIONS;
(E)
THE DISPOSITION OF PUMPKIN MASTERS HOLDINGS, INC., OR P.D.
HOLDINGS OR THEIR SUBSIDIARIES.; AND.
(F)
ISSUANCES BY PRIMROSE (BUT NOT ANY OTHER GROUP MEMBER) OF
OPTIONS TO ACQUIRE ITS COMMON STOCK, PROVIDED THAT PRIMROSE MAY MAKE NO SUCH
ISSUANCE IF, AS A RESULT, THE TOTAL AMOUNT OF OPTIONS, WARRANTS AND OTHER RIGHTS
TO ACQUIRE COMMON STOCK OF