Yes, you can sell your old armor for 20% of the original PHB price.
Also, please deduct 20 GP from party loot so Zora can get herself some leather armor and a short sword.
While shopping, Leth picks up a vial of teal liquid with very tiny toadstools floating in it. It may or may not work as a healing item, but it looks pretty and it was only 1 GP.
Grimzo leads the party out to the south canyon. Children caked in white run shrieking past you, as children do. At the end of this long canyon, you pass through a guarded gate like the one you came to this place through. Beyond the gate, a short rocky passage gives way to a long, wide tunnel of soft, damp earth.
"This is the easy leg," Grimzo says. "After you're past the seal, we part ways. The going will be a little rougher but if you just keep heading south, you'll be fine. Once you're under the wicked city the real fun begins. Where Hazard connects to the Ways is in the depths of the Zapanim family crypts." He punctuates this with a suggestive leer. "You all look like you can handle yourselves, though. Any questions?"