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 Xxxxx Fargo Bank, National
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Association ("Lender"), acting through its Xxxxx 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:
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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) 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 discretion are sufficient to provide for payment in full of all
Indebtedness due and owing to Lender, then the term of the Forbearance Agreement
shall automatically be extended to August 15, 2009 and the Accommodation
Overadvance Limit shall automatically be increased to $1,000,000.
4. Forbearance Fee. The Obligors hereby renew and affirm their
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obligation to pay a forbearance fee in an amount equal to Four Hundred Fifty
Thousand Dollars ($450,000), which fee was fully earned and non-refundable upon
execution and delivery of the Forbearance Agreement, is included as part of the
Indebtedness of Obligors to Lender under the Credit
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Agreement and shall be charged as a Revolving Advance under the Credit Agreement
upon the earlier of (a) the occurrence of a Termination Event or (b) payment of
the Indebtedness.
5. Sums Secured; Estoppel. The Obligors acknowledge and reaffirm that
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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.
6. No Other Changes. Except as explicitly amended by this Amendment,
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all of the terms and conditions of the Forbearance Agreement shall remain in
full force and effect.
7. References. All references in the Forbearance Agreement to "this
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Agreement" shall be deemed to refer to the Forbearance Agreement as amended
hereby.
8. No Waiver. The execution of this Amendment shall not be deemed to be
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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.
9. Waiver and Release of Claims and Defenses. The Obligors hereby waive
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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.
10. Reaffirmation of Loan Documents. The Obligors hereby agree with,
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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.
11. 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.
12. No Preferential Treatment. No Obligor has entered into this
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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.
13. Legal Representation. Each of the parties hereto acknowledge that
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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
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have entered into and executed the within Amendment as a voluntary action and
without coercion or duress of any kind.
14. Partial Invalidity; No Repudiation. If any of the provisions of
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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.
15. Binding Effect. This Amendment is binding upon the parties hereto
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and their respective heirs, administrators, executors, officers, directors,
representatives and agents.
16. Governing Law. This Amendment shall be governed by the laws of the
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State of New York.
17. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO WAIVE THE RIGHT TO
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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.
18. Counterparts. This Amendment and/or any documentation contemplated
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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.
RONSON CORPORATION
By: s/ XXXX XXXXXXX
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Print Name: Xxxx Xxxxxxx
Print Title: Chief Restructuring Officer
RONSON CONSUMER PRODUCTS CORPORATION
By: s/ XXXX XXXXXXX
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Print Name: Xxxx Xxxxxxx
Print Title: Chief Restructuring Officer
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RONSON AVIATION, INC.
By: s/ XXXX XXXXXXX
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Print Name: Xxxx Xxxxxxx
Print Title: Chief Restructuring Officer
RONSON CORPORATION OF CANADA LTD.
By: s/ XXXX XXXXXXX
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Print Name: Xxxx Xxxxxxx
Print Title: Chief Restructuring Officer
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By: s/ XXXXX XXXXXX
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Xxxxx Xxxxxx, Vice President
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