Exhibit 10.1
FIFTH AMENDMENT TO FORBEARANCE AGREEMENT
This Fifth Amendment to Forbearance
Agreement (the "Amendment") is entered
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into as of this 2nd day of July, 2009 by and among
Ronson Corporation, a New
Jersey corporation ("Parent"), Ronson
Consumer Products Corporation, a New
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Jersey corporation ("RCPC"), Ronson
Aviation, Inc., a New Jersey corporation
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("RAI") and Ronson Corporation of Canada Ltd., an Ontario
corporation ("Ronson
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Canada") (RCPC and RAI are collectively and
individually referred to as the
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"Domestic Borrower" or "Domestic Borrowers"; the
Domestic Borrower and Ronson
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Canada are collectively and individually
referred to as the "Borrower" or
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"Borrowers", and the Borrowers, together
with Parent are collectively and
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individually referred to as the "Obligors") and
Wells Fargo Bank, National
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Association ("Lender"), acting through its Wells Fargo Business
Credit operating
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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
July 3, 2009.
Borrowers have requested
that Lender amend the definition of Termination
Event to extend the stated expiration date in the
Forbearance Agreement from
July 3, 2009 to July 17, 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 Forbearance
Agreement. As of the date hereof, Section 2(b)
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of the Forbearance Agreement shall be amended and
restated in its entirety to
read as follows:
(b) For purposes of this Agreement, a "Termination Event" shall
mean
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the earliest to occur of (i) July
17, 2009 and (ii) any one or more of the
following:
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(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 (i) the Existing
Events of Default or (ii)
breach by Obligors of their obligation pursuant to Section 6.1(a)
of
the Credit Agreement to deliver audited year end
annual financial
statements for the fiscal year ending December
31, 2008 within 90
days of the end of such fiscal year;
(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.
2. Extension of
Forbearance Agreement. Lender hereby agrees that if,
on
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July 17, 2009, a Termination Event has not occurred
(other than as a result of
the occurrence of July 17, 2009) and either (i)
Hawthorne TTN Holdings, LLC
("Hawthorne") has satisfied the financing contingency set
forth in Section 7 of
that certain Asset Purchase Agreement executed by
Hawthorne on April 24, 2009
(the "APA") pursuant to which
Hawthorne proposes to purchase and
acquire
substantially all of the assets of RAI or (ii)
Obligors have received a firm
letter of intent for the sale of RCPC, the terms of such sale
Lender determines
in its sole
