Exhibit 10.1
SEVENTH AMENDMENT TO FORBEARANCE AGREEMENT
------------------------------------------
This Seventh
Amendment to Forbearance Agreement (the "Amendment")
is
---------
entered into as of this 31st day of July, 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
July 31, 2009.
Borrowers have requested
that Lender amend the definition
of
Termination Event to extend the
stated expiration date in the Forbearance
Agreement from July 31, 2009 to November 30, 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) of the Forbearance Agreement shall be amended and
restated in its entirety
to read as follows:
<PAGE>
(b) For purposes of this Agreement, a
"Termination Event"
------------------
shall mean
the earliest to occur of (i) November 30, 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;
(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;
(G) Each of RAI and RCPC fail to have executed Asset
Purchase Agreements for the sale of RAI and RCPC,
respectively,
the purchasers under such Asset Purchase Agreements have
failed
to satisfy any financing
contingencies, and the Lender
determines in its sole discretion the net proceeds of such
sales
are insufficient to provide for
payment in full of all
Indebtedness due and owing to Lender, on or before September
30,
2009.
2.
Amendments to Credit and
Security Agreement. The following
-------------------------------------------------
definitions set forth in Section 1.1 of the Credit
Agreement shall be amended
and restated in their entirety to read as follows:
