FIFTEENTH AMENDMENT TO FORBEARANCE AGREEMENT
Exhibit
10.2
FIFTEENTH AMENDMENT TO
FORBEARANCE AGREEMENT
This
Fifteenth Amendment to Forbearance Agreement (the “Amendment”) is
entered into as of this _____ day of April, 2010 by and among RCLC, Inc.
(formerly known as Ronson Corporation), a New Jersey corporation (“Parent”), RCPC
Liquidating Corp. (formerly known as Ronson Consumer Products Corporation), a
New Jersey corporation (“RCPC”), Ronson
Aviation, Inc., a New Jersey corporation (“RAI”) and RCC Inc.
(formerly known as 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 Xxxxx Fargo Bank, National Association (“Lender”), acting
through its Xxxxx 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. Capitalized terms used but not specifically defined herein
shall have the meanings provided for such terms in the Credit
Agreement.
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”), whereby Lender agreed to forbear from exercising certain of
its rights and remedies available under the Loan Documents as a result of the
Existing Events of Default.
The
Forbearance Agreement expires pursuant to its terms not later than April 23,
2010.
On
February 2, 2010, Parent, RCPC and Ronson Canada consummated a transaction (the
“Zippo Sale”)
pursuant to which RCPC and Ronson Canada sold substantially all of their assets
to Zippo Manufacturing Company and Nosnor, Inc., pursuant to an Asset Purchase
Agreement dated as of October 5, 2010. The net proceeds of the Zippo
Sale were delivered to Lender in accordance with the terms of that certain
letter agreement by and among Lender and Obligors dated as of February 2, 2010
and applied by Lender in accordance with and subject to the Thirteenth Amendment
to Forbearance Agreement dated as of April 1, 2010.
Borrowers
have requested that Lender amend the definition of Termination Event to extend
the stated expiration date in the Forbearance Agreement from April 23, 2010 to
May 5, 2010 in order to provide Borrowers with additional time to consummate the
sale of RAI’s assets to Hawthorne TTN Holdings, LLC pursuant to that certain
Asset Purchase Agreement dated as of May 15, 2009 (as amended, the “RAI APA”) and to
amend certain terms and conditions of the Credit Agreement.
Lender
has considered Borrowers’ requests 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:
(b) For
purposes of this Agreement, a “Termination Event”
shall mean the earliest to occur of (i) May 5, 2010 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 (a) 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 or (b) Section 6.1(c) of the
Credit Agreement to deliver monthly financial statements to Lender for the
months ending October 31, 2009, November 30, 2009, December 31,
2009, January 31, 2010, February 28, 2010 and March 31, 2010 within
30 days of the end of such months;
(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; and
(G) failure
of the Obligors to provide to the Lender no later than April 9, 2010 proof of
renewal of its property and casualty insurance until no earlier than May 3,
2010.
2. Funding of RAI Pending
Closing of the RAI Sale. Obligors acknowledge and agree that
as a result of the consummation of the Zippo Sale, RCPC and Ronson Canada shall
no longer be permitted to request Advances under the Credit Agreement and any
remaining assets of
RCPC
and/or Ronson Canada shall no longer be considered in any borrowing base
calculation. Notwithstanding the foregoing, Lender and Obligors agree
that RAI shall be authorized, pending the closing of the transaction
contemplated by the RAI APA and until the occurrence of a Termination Event, to
request Advances subject to the terms of the Credit Agreement as modified by
this Amendment. Obligors and Lender further agree that Lender shall
have no obligation to make Advances to RAI (i) after the occurrence of a
Termination Event or (ii) if Lender, in its
reasonable discretion, believes that the issuance of the XXX Xxxxx is not
expected to occur by May 5, 2010.
3. Reaffirmation of Forbearance
Fee. Obligors hereby reaffirm their agreement to pay Lender a
forbearance fee in the amount of Five-Hundred Thousand Dollars ($500,000) in
accordance with the terms and conditions set forth in the Seventh Amendment to
Forbearance Agreement dated as of July 31, 2009.
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. Except as
specifically set forth in Paragraph 1 above, 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.
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 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.
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]
IN
WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, do
hereby execute this Amendment the date and year first above
written.
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RCLC,
INC. (f/k/a RONSON CORPORATION)
By: /s/Xxxx
Xxxxxxx
Print
Name: Xxxx Xxxxxxx
Print
Title: Chief Restructuring Officer
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RCPC
LIQUIDATING CORP. (f/k/a/
RONSON
CONSUMER PRODUCTS
CORPORATION)
By: /s/Xxxx
Xxxxxxx
Print
Name: Xxxx Xxxxxxx
Print
Title: Chief Restructuring Officer
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RONSON
AVIATION, INC.
By: /s/Xxxx
Xxxxxxx
Print
Name: Xxxx Xxxxxxx
Print
Title: Chief Restructuring Officer
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RCC
INC. (f/k/a RONSON CORPORATION
OF
CANADA LTD.)
By: /s/Xxxx
Xxxxxxx
Print
Name: Xxxx Xxxxxxx
Print
Title: Chief Restructuring
Officer
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XXXXX
FARGO BANK, NATIONAL ASSOCIATION
By:
/s/Xxxxx
Xxxxxx
Xxxxx Xxxxxx, Vice
President
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