EXHIBIT 10.1
FOURTH AMENDMENT TO FORBEARANCE AGREEMENT
This Fourth
Amendment to Forbearance Agreement (the
"Amendment") is
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entered into as of this 27th day of May, 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
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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
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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
June 12, 2009.
Borrowers have requested
that Lender amend the definition
of
Termination Event to extend the
stated expiration date in the Forbearance
Agreement from June 12, 2009 to July 3, 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
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of Accommodation Overadvance Limit set
forth in Section 1.1 of the Credit
Agreement is amended and restated in its entirety to read as
follows:
1
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"Accommodation Overadvance Limit" means up to
$750,000 from
the
Accommodation Overadvance Funding Date through the occurrence
of a
Termination Event (as such term
is defined in the Forbearance
Agreement).
2. Amendment to
Forbearance Agreement. As of the date hereof,
Section
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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
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the earliest to occur of (i) July
3, 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 (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.
3. Extension of
Forbearance Agreement. Lender hereby agrees that if, on
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July 3, 2009, a Termination Event has not
occurred (other than as a result of
the occurrence of July 3, 2009) a
