EXHIBIT 10.1
THIRD AMENDMENT TO FORBEARANCE AGREEMENT
This Third
Amendment to Forbearance Agreement (the
"Amendment") is
entered into as of this 4th day of May, 2009 by and among Ronson
Corporation, a
New Jersey corporation ("Parent"), Ronson Consumer Products
Corporation, a New
Jersey corporation ("RCPC"), Ronson
Aviation, Inc., a New Jersey corporation
("RAI") and Ronson Corporation of Canada Ltd., an Ontario
corporation ("Ronson
Canada") (RCPC and RAI are collectively and
individually referred to as the
"Domestic Borrower" or "Domestic Borrowers"; the
Domestic Borrower and Ronson
Canada are collectively and individually
referred to as the "Borrower" or
"Borrowers", and the Borrowers, together
with Parent are collectively and
individually referred to as the "Obligors") and
Wells Fargo Bank, National
Association ("Lender"), acting through its Wells Fargo Business
Credit operating
division.
RECITALS:
Borrowers
and Lender are parties to a certain Credit
and Security
Agreement dated as of May 30, 2008 (as
amended, modified, supplemented or
restated from time to time, the "Credit
Agreement"), relating to financing by
Lender to Borrowers.
Certain Events of
Default occurred under the Credit Agreement and, as a
result thereof, Lender and Borrowers
entered into that certain Forbearance
Agreement dated as of March 29, 2009 (as amended,
modified, supplemented or
restated from time to time, the "Forbearance Agreement";
capitalized terms used
but not specifically defined herein shall have the
meanings provided for such
terms in the Forbearance Agreement),
whereby Lender agreed to forbear from
exercising certain of its rights and
remedies available as a result of the
Existing Events of Default.
The
Forbearance Agreement expires pursuant to its terms not later
than
May 4, 2009.
Borrowers have requested
that Lender amend the definition
of
Termination Event to extend the
stated expiration date in the Forbearance
Agreement from May 4, 2009 to June 12, 2009 in order to
provide Borrowers with
additional time to explore a Liquidity
Transaction and to amend certain terms
and conditions of the Credit Agreement.
Lender has
considered Borrowers' request and, in an effort to
continue
working with Borrowers, hereby agrees to amend the Forbearance
Agreement and the
Credit Agreement on the terms and conditions set forth below.
NOW,
THEREFORE, for and in consideration of the
foregoing and other
good and valuable consideration, the receipt and sufficiency
of which is hereby
acknowledged, the parties agree as follows:
1. Amendment to
Credit Agreement. As of the date hereof, the definition
-----------------------------
of Maximum Line Amount set forth in Section
1.1 of the Credit Agreement is
amended and restated in its entirety to read as follows:
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"Maximum Line Amount" means $2,500,000, unless this amount
is
reduced
pursuant to Section 2.12, in which event it means such
lower
amount.
2. Amendment to
Forbearance Agreement. As of the date hereof,
Section
-----------------------------------
2(b) of the Forbearance Agreement shall be amended and
restated in its entirety
to read as follows:
(a) For purposes
of this Agreement, a "Termination Event" shall
mean
the earliest to occur of (i) June
12, 2009 and (ii) any one or more of the
following:
(A) the failure of the Obligors to
comply with the terms,
covenants,
agreements and conditions of this Agreement;
(B) any representation or warranty
made herein shall be
incorrect in any
material respect;
(C) the occurrence of any Event of Default under
the Credit
Agreement, other
than the Existing Events of Default;
(D) Obligors shall fail to employ a CRO (as
defined below)
throughout the
term of this Agreement;
(E) in the Lender's discretion, it determines that
Parent is
no longer actively
pursuing a Liquidity Transaction; and
(F) Any Person, other than Lender, shall exercise its
rights
and remedies
against the Obligors as a result of defaults or events of
defaults
arising under any agreement between Obligors and such
Person
due to
cross-defaults arising from the Existing Events of Default.
3. RCPC Raw
Materials Advance Rate. Obligors acknowledge and agree that
-------------------------------
based on a recent appraisal obtained
by Lender, Lender shall adjust
the
Inventory advance rate on Eligible Inventory of RCPC
constituting raw materials
to seventeen percent (17%) of cost, which
is equal to 85% of the Net Orderly
Liquidation Value of such Inventory.
4. Sums
Secured; Estoppel. The Obligors acknowledge and
reaffirm that
-----------------------
their obligations to Lender as set forth in and evidenced by
the Loan Documents
are due and owing without any
defenses, set-offs, recoupments, claims
or
counterclaims of any kind as of the
date hereof. To the extent that
any
defenses, set-offs, recoupments, claims or
counterclaims may exist as of the
date hereof, the Obligors waive and release Lender from the
same.
5. No Other
Changes. Except as explicitly amended by this
Amendment,
----------------
all of the terms and conditions of the
Forbearance Agreement shall remain in
full force and effect.
6.
References. All references in the Forbearance
Agreement to "this
----------
Agreement" shall be deemed to refer to the
Forbearance Agreement as amended
hereby.
7. No Waiver. The
execution of this Amendment shall not be deemed to be
---------
a waiver of any Default or Event of Default under the Credit
Agreement, a waiver
of any Termination Event under the Forbearance Agreement or
breach, default or
event of default under any Loan Documents or
other document held by Lender,
whether or not known to Lender and whether or not
existing on the date of this
Amendment.
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<PAGE>
8. Waiver and
Release of Claims and Defenses. The Obligors hereby waive
-----------------------------------------
and release all claims and demands of any nature
whatsoever that they now have
or may have against Lender, whether arising under the
Loan Documents or by any
acts or omissions of Lender, or any of its
directors, officers, employees,
affiliates, attorneys or agents, or
otherwise, and whether known or unknown,
existing as of the date of the execution of this
Amendment, and further waive
and release any and all defenses of any nature whatsoever to
the payment of the
Obligations or the performance of their obligations under Loan
Documents.
9.
Reaffirmation of Loan Documents. The Obligors
hereby agree with,
---------------------------------
reaffirm and acknowledge their representations and
warranties contained in the
Loan Documents. Furthermore, the Obligors represent
that their representations
and warranties contained in the Loan Documents continue
to be true and in full
force and effect. This agreement, reaffirmation and
acknowledgment is given to
Lender by the Obligors without defenses, claims or counterclaims of
any kind. To
the extent that any such defenses, claims or
counterclaims against Lender may
exist, the Obligors waive and release Lender from same.
10.
Ratification and Reaffirmation of Loan
Documents. The Obligors
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ratify and reaffirm all terms, covenants, conditions and agreements
contained in
the Loan Documents.
11. No
Preferential Treatment. No Obligor
has entered into this
---------------------------
Amendment to provide any preferential treatment to Lender or any
other creditor.
No Obligor intends to file for protection or seek relief under the
United States
Bankruptcy Code or any similar federal or state law providing
for the relief of
debtors.
12. Legal
Representation. Each of the parties hereto acknowledge
that
---------------------
they have been represented by independent legal counsel
in connection with the
execution of this Amendment, that
they are fully aware of the terms
and
conditions contained herein, and that they have
entered into and executed the
within Amendment as a voluntary action and
without coercion or duress of any
kind.
13. Partial
Invalidity; No Repudiation. If any of the
provisions of
-------------------------------------
this Amendment shall contravene or be
held invalid under the laws of any
jurisdiction, this Amendment shall be
construed as if not containing such
provisions and the rights, remedies, warranties, representations,
covenants, and
provisions hereof shall be
construed and enforced accordingly
in such
jurisdiction and shall not in any manner affect
such provision in any other
jurisdiction, or any other provisions of this Amendment in any
jurisdiction.
14. Binding
Effect. This Amendment is binding upon the parties hereto
---------------
and their respective heirs, administrators,
executors, officers, directors,
representatives and agents.
15.
Governing Law. This Amendment shall be governed by the laws of
the
-------------
State of New York.
16. WAIVER OF JURY
TRIAL. EACH OF THE PARTIES HERETO WAIVE THE RIGHT TO
--------------------
A TRIAL BY JURY, AS TO ANY ACTION
WHICH MAY ARISE AS A RESULT OF THE LOAN
DOCUMENTS, THIS AGREEMENT OR ANY DOCUMENT EXECUTED IN CONNECTION
HEREWITH.
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<PAGE>
17.
Counterparts. This Amendment and/or any documentation
contemplated
------------
or required in connection
herewith may be executed in any
number of
counterparts, each of which shall be deemed an original
and all of which shall
be considered one and the same document. Delivery of an
executed counterpart of
a signature page of this document by facsimile shall be effective
as delivery of
a manually executed counterpart of this document.
[Signature pages follow]
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<PAGE>
IN WITNESS
WHEREOF, the parties hereto, intending to be legally
bound
hereby, do hereby execute this Amendment the date and year first
above written.
RONSON CORPORATION
By: S/JOEL GETZLER
----------------------------------
Print Name: Joel Getzler
Print Title: Chief Restructuring Officer
RONSON CONSUMER PRODUCTS CORPORATION
By: S/JOEL GETZLER
----------------------------------
Print Name: Joel Getzler
Print Title: Chief Restructuring Officer
RONSON AVIATION, INC.
By: S/JOEL GETZLER
----------------------------------
Print Name: Joel Getzler
Print Title: Chief Restructuring Officer
RONSON CORPORATION OF CANADA LTD.
By: S/JOEL GETZLER
----------------------------------
Print Name: Joel Getzler
Print Title: Chief Restructuring Officer
WELLS FARGO BANK, NATIONAL ASSOCIATION
By: S/PETER GANNON, V.P.
----------------------------------
Peter Gannon, Vice President
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<PAGE>
SECOND AMENDMENT TO FORBEARANCE AGREEMENT
This Second
Amendment to Forbearance Agreement (the
"Amendment") is
entered into as of this 29th day of April, 2009 by and among Ronson
Corporation,
a New Jersey corporation ("Parent"), Ronson Consumer Products
Corporation, a New
Jersey corporation ("RCPC"), Ronson
Aviation, Inc., a New Jersey corporation
("RAI") and Ronson Corporation of Canada Ltd., an Ontario
corporation ("Ronson
Canada") (RCPC and RAI are collectively and
individually referred to as the
"Domestic Borrower" or "Domestic Borrowers"; the
Domestic Borrower and Ronson
Canada are collectively and individually
referred to as the "Borrower" or
"Borrowers", and the Borrowers, together
with Parent are collectively and
individually referred to as the "Obligors") and
Wells Fargo Bank, National
Association ("Lender"), acting through its Wells Fargo Business
Credit operating
division.
RECITALS:
Borrowers
and Lender are parties to a certain Credit
and Security
Agreement dated as of May 30, 2008 (as
amended, modified, supplemented or
restated from time to time, the "Credit
Agreement"), relating to financing by
Lender to Borrowers.
Certain events of
default occurred under the Credit Agreement and, as a
result thereof, Lender and Borrowers
entered into that certain Forbearance
Agreement dated as of March
29,&nb
