Exhibit 10.1
EIGHTH AMENDMENT TO FORBEARANCE AGREEMENT

This Eighth Amendment to Forbearance Agreement (the “Amendment”) is entered into
as of this 5th day of November, 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 requires, among other things, that (i) each of RAI and
RCPC deliver executed Asset Purchase Agreements for the sale of RAI and RCPC,
respectively, and (ii) the purchasers under such Asset Purchase Agreements
satisfy any financing contingencies thereunder, on or before September 30, 2009
(the “APA Contingencies”).
 
The Borrowers failed to deliver executed Asset Purchase Agreements for the sale
of RAI and RCPC free of the APA Contingencies on or before September 30, 2009,
resulting in a Termination Event under the Forbearance Agreement (the “Existing
Event of Default”).  Borrowers have requested that Lender waive the Existing
Event of Default and amend the definition of Termination Event to extend the
stated expiration date in the Forbearance Agreement from November 30, 2009 to
December 31, 2009, in order to provide Borrowers with additional time to
consummate 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 (i) waive the Existing Event of Default and
(ii) amend the Forbearance Agreement and the Credit Agreement on the terms and
conditions set forth below.
 

 
 

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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.            Waiver of Existing Event of Default.  Lender hereby waives the
Existing Event of Default.  This waiver shall be effective upon Borrowers’
execution and delivery of this Amendment to Lender and Lender’s execution of
this Amendment.  This waiver is being given as a one time accommodation only and
shall not obligate Lender, or be construed to require Lender, to waive any other
or future Defaults or Events of Default under the Credit Agreement, any other or
future defaults or events of default under any other Loan Document or any other
or future Termination Event under the Forbearance Agreement.  This waiver shall
not release Borrowers in any way from any of their duties, obligations,
covenants or agreements under the Loan Documents, from the consequences of any
other or future Defaults or Events of Default under the Credit Agreement, from
any other or future defaults or events of default under the other Loan Documents
or from any other or future Termination Event under the Forbearance Agreement.
 
2.            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) December 31, 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.            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:
 
“Accommodation Overadvance Limit” means up to $2,000,000 from the Accommodation
Overadvance Funding Date through the occurrence of a Termination Event (as such
term is defined in the Forbearance Agreement).
 
“Maximum Line Amount” means $3,500,000, unless this amount is reduced pursuant
to Section 2.12, in which event it means such lower amount.
 

 
 

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4.           Release of Liens.  Obligors acknowledge and agree that Lender shall
have no obligation upon or following the sale of either (a) RAI’s assets to
Hawthorne TTN Holdings, LLC pursuant to that certain Asset Purchase Agreement
dated as of May 15, 2009, as amended, and/or (b) RCPC’s assets to Zippo
Manufacturing, Inc. and Nosnor, Inc., pursuant to that certain Asset Purchase
Agreement dated as of October 5, 2009, to make any loans or advances to the
Obligors.
 
5.            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.
 
6.            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.
 
7.            References.  All references in the Forbearance Agreement to “this
Agreement” shall be deemed to refer to the Forbearance Agreement as amended
hereby.
 
8.            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.
 
9.            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.
 
10.            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.
 
11.            Ratification and Reaffirmation of Loan Documents.  The Obligors
ratify and reaffirm all terms, covenants, conditions and agreements contained in
the Loan Documents.
 
12.            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.
 
13.            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.
 
14.            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
 

 
 

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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 and their respective heirs, administrators, executors, officers,
directors, representatives and agents.
 
16.            Governing Law.  This Amendment shall be governed by the laws of
the State of New York.
 
17.            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.
 
18.            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]
 

 
 

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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/ Joel Getzler
Print Name: Joel Getzler
Print Title: Chief Restructuring Officer
 
RONSON CONSUMER PRODUCTS CORPORATION
 
 
By:  /s/ Joel Getzler
Print Name: Joel Getzler
Print Title: Chief Restructuring Officer
 
RONSON AVIATION, INC.
 
 
By:  /s/ Joel Getlzer
Print Name: Joel Getzler
Print Title: Chief Restructuring Officer
 
RONSON CORPORATION OF CANADA LTD.
 
 
By:  /s/Joel Getzler
Print Name: Joel Getzler
Print Title: Chief Restructuring Officer

 
 

 
 
 

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WELLS FARGO BANK, NATIONAL ASSOCIATION
 
By:    /s/ Peter Gannon                            
         Peter Gannon, Vice President