Exhibit 10.1
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                          CREDIT AND SECURITY AGREEMENT

                                  BY AND AMONG

                               RONSON CORPORATION,
                             RONSON AVIATION, INC.,
                    RONSON CONSUMER PRODUCTS CORPORATION AND
                        RONSON CORPORATION OF CANADA LTD.
                                       AND

                     WELLS FARGO BANK, NATIONAL ASSOCIATION
        Acting through its Wells Fargo Business Credit operating division

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                                  May 30, 2008





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                                                TABLE OF CONTENTS

                                                                                                      Page

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ARTICLE I DEFINITIONS....................................................................................4
   Section 1.1.      Definitions.........................................................................4
   Section 1.2.      Other Definitional Terms; Rules of Interpretation..................................19

ARTICLE II AMOUNT AND TERMS OF THE CREDIT FACILITY......................................................19
   Section 2.1.      Revolving Advances.................................................................19
   Section 2.2.      Procedures for Requesting Advances.................................................19
   Section 2.3.      LIBOR Advances.....................................................................20
   Section 2.4.      Letters of Credit..................................................................21
   Section 2.5.      Special Account....................................................................22
   Section 2.6.      Term Advances......................................................................22
   Section 2.7.      Payment of Term Notes..............................................................22
   Section 2.8.      Interest; Default Interest Rate; Application of Payments; Participations; Usury....23
   Section 2.9.      Fees...............................................................................24
   Section 2.10.     Time for Interest Payments; Payment on Non-Business Days; Computation of Interest
                     and Fees ..........................................................................26
   Section 2.11.     Lockbox and Collateral Account; Sweep of Funds.....................................26
   Section 2.12.     Voluntary Prepayment; Reduction of the Maximum Line Amount; Termination of the
                     Credit Facility by the Borrower....................................................27
   Section 2.13.     Mandatory Prepayment...............................................................27
   Section 2.14.     Revolving Advances to Pay Indebtedness.............................................28
   Section 2.15.     Use of Proceeds....................................................................28
   Section 2.16.     Liability Records..................................................................28

ARTICLE III SECURITY INTEREST; OCCUPANCY; SETOFF........................................................28
   Section 3.1.      Grant of Security Interest.........................................................28
   Section 3.2.      Notification of Account Debtors and Other Obligors.................................28
   Section 3.3.      Assignment of Insurance............................................................29
   Section 3.4.      Occupancy..........................................................................29
   Section 3.5.      License............................................................................30
   Section 3.6.      Financing Statement................................................................30
   Section 3.7.      Setoff.............................................................................31
   Section 3.8.      Collateral.........................................................................31

ARTICLE IV CONDITIONS OF LENDING........................................................................31
   Section 4.1.      Conditions Precedent to the Initial Advances and Letter of Credit..................31
   Section 4.2.      Conditions Precedent to All Advances and Letters of Credit.........................33

ARTICLE V REPRESENTATIONS AND WARRANTIES................................................................34
   Section 5.1.      Existence and Power; Name Chief Executive Office; Inventory and Equipment
                     Locations; Federal  Employer Identification Number and Organizational
                     Identification Number..............................................................34
   Section 5.2.      Capitalization.....................................................................34
   Section 5.3.      Authorization of Borrowing; No Conflict as to Law or Agreements....................34
   Section 5.4.      Legal Agreements...................................................................35


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   Section 5.5.      Subsidiaries.......................................................................35
   Section 5.6.      Financial Condition; No Adverse Change.............................................35
   Section 5.7.      Litigation.........................................................................35
   Section 5.8.      Regulation U.......................................................................35
   Section 5.9.      Taxes..............................................................................35
   Section 5.10.     Titles and Liens...................................................................35
   Section 5.11.     Intellectual Property Rights.......................................................35
   Section 5.12.     Plans..............................................................................36
   Section 5.13.     Default............................................................................37
   Section 5.14.     Intentionally Omitted..............................................................37
   Section 5.15.     Submissions to Lender..............................................................37
   Section 5.16.     Financing Statements...............................................................37
   Section 5.17.     Rights to Payment..................................................................37
   Section 5.18.     Financial Solvency.................................................................37
   Section 5.19.     Inactive Subsidiaries..............................................................38

ARTICLE VI COVENANTS....................................................................................38
   Section 6.1.      Reporting Requirements.............................................................38
   Section 6.2.      Financial Covenants................................................................41
   Section 6.3.      Permitted Liens; Financing Statements..............................................42
   Section 6.4.      Indebtedness.......................................................................43
   Section 6.5.      Guaranties.........................................................................43
   Section 6.6.      Investments and Subsidiaries.......................................................43
   Section 6.7.      Dividends and Distributions........................................................44
   Section 6.8.      Salaries...........................................................................44
   Section 6.9.      Intentionally Omitted..............................................................44
   Section 6.10.     Books and Records; Collateral Examination, Inspection and Appraisals...............44
   Section 6.11.     Account Verification...............................................................45
   Section 6.12.     Compliance with Laws...............................................................45
   Section 6.13.     Payment of Taxes and Other Claims..................................................45
   Section 6.14.     Maintenance of Properties..........................................................45
   Section 6.15.     Insurance..........................................................................46
   Section 6.16.     Preservation of Existence..........................................................46
   Section 6.17.     Delivery of Instruments, etc.......................................................46
   Section 6.18.     Sale or Transfer of Assets; Suspension of Business Operations......................46
   Section 6.19.     Consolidation and Merger; Asset Acquisitions.......................................46
   Section 6.20.     Sale and Leaseback.................................................................46
   Section 6.21.     Restrictions on Nature of Business.................................................46
   Section 6.22.     Accounting.........................................................................46
   Section 6.23.     Discounts, etc.....................................................................47
   Section 6.24.     Plans..............................................................................47
   Section 6.25.     Place of Business; Name............................................................47
   Section 6.26.     Constituent Documents; S Corporation Status........................................47
   Section 6.27.     Performance by the Lender..........................................................48
   Section 6.28.     Affiliate Transactions.............................................................48

ARTICLE VII EVENTS OF DEFAULT, RIGHTS AND REMEDIES......................................................48
   Section 7.1.      Events of Default..................................................................48
   Section 7.2.      Rights and Remedies................................................................50
   Section 7.3.      Right of Redemption with Respect to Owned Intellectual Property....................51
   Section 7.4.      Certain Notices....................................................................51

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ARTICLE VIII MISCELLANEOUS..............................................................................51
   Section 8.1.      No Waiver; Cumulative Remedies; Compliance with Laws...............................51
   Section 8.2.      Amendments, Etc....................................................................51
   Section 8.3.      Notices; Communication of Confidential Information; Requests for Accounting........51
   Section 8.4.      Further Documents..................................................................52
   Section 8.5.      Costs and Expenses.................................................................52
   Section 8.6.      Indemnity..........................................................................52
   Section 8.7.      Participants.......................................................................53
   Section 8.8.      Execution in Counterparts; Telefacsimile Execution.................................53
   Section 8.9.      Retention of Loan Party's Records..................................................53
   Section 8.10.     Binding Effect; Assignment; Complete Agreement; Sharing Information;
                     Confidentiality....................................................................53
   Section 8.11.     Severability of Provisions.........................................................54
   Section 8.12.     Headings...........................................................................54
   Section 8.13.     Cross Guaranty; Subordination......................................................54
   Section 8.14.     Judgment Currency..................................................................56
   Section 8.15.     Appointment of Borrower Representative; Reliance on Notices........................57
   Section 8.16.     Governing Law; Jurisdiction, Venue; Waiver of Jury Trial...........................57

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                          CREDIT AND SECURITY AGREEMENT

                               DATED MAY 30, 2008

         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 WELLS FARGO
BANK,  NATIONAL  ASSOCIATION  (as more fully  defined  in Article I herein,  the
"Lender")  acting through its Wells Fargo Business  Credit  operating  division,
hereby agree as follows:

ARTICLE I

                                   DEFINITIONS

         Section 1.1.  Definitions.  Except as otherwise  expressly  provided in
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this  Agreement,  the following terms shall have the meanings given them in this
Section:

         "Accounts"  shall have the meaning  given it under the UCC or the PPSA,
as applicable.

         "Accounts Advance Rate" means up to eighty-five  percent (85%), or such
lesser rate as the Lender in its sole discretion may deem  appropriate from time
to time;  provided that, as of any date of  determination,  the Accounts Advance
Rate shall be reduced by one (1) percentage  point for each  percentage by which
Dilution is in excess of five percent (5.0%).

         "Advance" means a Revolving Advance,  an Equipment Term Advance or Real
Estate Term Advance.

         "Affiliate"  or   "Affiliates"   means  Parent  and  any  other  Person
controlled by, controlling or under common control with the Borrowers, including
any Subsidiary of the  Borrowers.  For purposes of this  definition,  "control,"
when used with respect to any  specified  Person,  means the power to direct the
management and policies of such Person, directly or indirectly,  whether through
the ownership of voting securities, by contract or otherwise.

         "Aggregate  Face Amount"  means the  aggregate  amount that may then be
drawn under each  outstanding  Letter of Credit,  assuming  compliance  with all
conditions for drawing.

         "Agreement" means this Credit and Security Agreement.

         "Availability"  means the amount,  if any, by which the Borrowing  Base
exceeds the sum of (i) the outstanding  principal balance of the Revolving Notes
and (ii) the L/C Amount.

         "Bonus  Factors" means the factors and formulas of Parent's  Management
Incentive Plan,  based on the annually  budgeted sales and earnings  amounts for
each of the  Borrowers,  upon which the annual bonus  amounts of the  Borrowers'
officers are calculated.

         "Borrower Representative" is defined in Section 8.15.

         "Book Net Worth" means the aggregate of the Owners'  equity in the Loan
Parties, on a consolidated basis, determined in accordance with GAAP.

         "Borrowing  Base" means the Domestic  Borrower  Borrowing  Base and the
Ronson Canada Borrowing Base.

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         "Business  Day" means a day on which the  Federal  Reserve  Bank of New
York is open for business and, if such day relates to a LIBOR Advance,  a day on
which dealings are carried on in the London interbank eurodollar market.

         "Canada Borrowing Base Reserve" means, as of any date of determination,
such amounts  (expressed  as either a specified  amount or as a percentage  of a
specified  category or item) as the Lender may from time to time  establish  and
adjust in reducing Availability (a) to reflect events, conditions, contingencies
or risks which, as determined by the Lender, do or may affect (i) the Collateral
of Ronson Canada, or its value,  including without limitation Priority Payables,
(ii) the assets,  business or prospects of Ronson Canada,  or (iii) the security
interests  and other  rights of the Lender in the  Collateral  of Ronson  Canada
(including  the  enforceability,  perfection  and priority  thereof),  or (b) to
reflect the Lender's reasonable judgment that any collateral report or financial
information  furnished  by or on behalf of the  Borrower to the Lender is or may
have been incomplete,  inaccurate or misleading in any material respect,  or (c)
in  respect  of any state of facts  that  constitutes  a Default  or an Event of
Default.

         "Canada L/C Amount" means the sum of (i) the  Aggregate  Face Amount of
any  outstanding  Letters of Credit for which Ronson  Canada was the  applicant,
plus (ii) the amount of each Obligation of Reimbursement  attributable to Ronson
Canada that either remains unreimbursed or has not been paid through a Revolving
Advance on the Credit Facility.

         "Canadian  Benefit  Plans" means any plan,  fund,  program,  or policy,
whether  oral or written,  formal or informal,  funded or  unfunded,  insured or
uninsured,  providing  employee  benefits,  including  medical,  hospital  care,
dental, sickness, accident,  disability, life insurance,  pension, retirement or
savings benefits, under which a Loan Party has any liability with respect to any
employee or former employee, but excluding any Canadian Pension Plans.

         "Canadian  Insolvency  Statutes" includes the Bankruptcy and Insolvency
Act  (Canada),  the  Companies'  Creditors  Arrangement  Act  (Canada)  and  the
Winding-up  and  Restructuring  Act (Canada) and any other present or future law
relative to bankruptcy, insolvency or other relief for debtors or for or against
the benefit of creditors, as amended from time to time.

         "Canadian  Pension  Plans"  means  each  pension  plan  required  to be
registered  under Canadian  federal or provincial  pension  benefits law that is
maintained  or  contributed  to by a Loan  Party  for its  employees  or  former
employees,  but does not include the Canada  Pension Plan or the Quebec  Pension
Plan as  maintained  by the  Government  of Canada or the  Province  of  Quebec,
respectively.

         "Capital  Expenditures"  means for a period,  any  expenditure of money
during such period for the lease,  purchase or other  acquisition of any capital
asset which is capitalized on a balance sheet in accordance  with GAAP,  whether
payable currently or in the future.

         "Change  of  Control"  means  the  occurrence  of any of the  following
events:

         (a) Any Person or "group" (as such term is used in  Sections  13(d) and
14(d) of the Securities Exchange Act of 1934) who is not a Five Percent Owner on
the Funding Date is or becomes the "beneficial owner" (as defined in Rules 13d-3
and 13d-5 under the Securities  Exchange Act of 1934,  except that a Person will
be deemed to have "beneficial  ownership" of all securities that such Person has
the right to acquire,  whether  such right is  exercisable  immediately  or only
after the passage of time), directly or indirectly,  of more than twenty percent
(20%) of the voting power of all classes of equity securities of a Borrower;

         (b) Any Person or "group" (as such term is used in  Sections  13(d) and
14(d) of the Securities Exchange Act of 1934) who is not a Five Percent Owner on
the Funding Date is or becomes the "beneficial owner" (as defined in Rules 13d-3
and 13d-5 under the Securities  Exchange Act of 1934,  except that a Person will
be deemed to have "beneficial  ownership" of all securities that such Person has
the right to acquire,  whether  such

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right is exercisable immediately or only after the passage of time), directly or
indirectly, of more than twenty percent (20%) of the voting power of all classes
of equity securities of Parent;

         (c) During any  consecutive  two-year  period,  individuals  who at the
beginning  of such period  constituted  the board of  Directors  of the Borrower
(together with any new Directors  whose election to such board of Directors,  or
whose  nomination for election by the Owners of the Borrower,  was approved by a
vote of two  thirds  of the  Directors  then  still in  office  who were  either
Directors at the beginning of such period or whose  election or  nomination  for
election  was  previously  so  approved)  cease for any reason to  constitute  a
majority of the board of Directors of the Borrower then in office;

         (d) During any  consecutive  two-year  period,  individuals  who at the
beginning  of such  period  constituted  the board of  Directors  of the  Parent
(together with any new Directors  whose election to such board of Directors,  or
whose  nomination for election by the Owners of the Borrower,  was approved by a
vote of a  majority  of the  Directors  then  still in  office  who were  either
Directors at the beginning of such period or whose  election or  nomination  for
election  was  previously  so  approved)  cease for any reason to  constitute  a
majority of the board of Directors of the Parent then in office; or

         (e) Any one or more of Louis V. Aronson II or Erwin M. Ganz shall cease
to actively  manage the  Borrower's  day-to-day  business  activities;  provided
however,  a Change of Control  shall not be deemed to have  occurred if Erwin M.
Ganz  shall  cease  to  actively  manage  the  Borrower's   day-to-day  business
activities and a replacement officer,  reasonably acceptable to Lender,  assumes
the duties and responsibilities vacated by Erwin M. Ganz within thirty (30) days
thereafter.

         "Collateral"  means all right of title and  interest of the Borrower in
and to Accounts,  chattel paper and electronic chattel paper,  deposit accounts,
documents,   documents  of  title,   Equipment,   General  Intangibles,   goods,
instruments, Inventory, Investment Property, letter-of-credit rights, letters of
credit,  all sums on deposit  in any  Collateral  Account,  and any items in any
Lockbox;  together with (i) all  substitutions and replacements for and products
of any of the foregoing;  (ii) in the case of all goods,  all accessions;  (iii)
all  accessories,  attachments,  parts,  equipment  and repairs now or hereafter
attached or affixed to or used in connection with any goods;  (iv) all warehouse
receipts, bills of lading and other documents of title now or hereafter covering
such goods;  (v) all  collateral  subject to the Lien of any Security  Document;
(vi) any money,  or other assets of the Borrower that now or hereafter come into
the possession,  custody, or control of the Lender; (vii) all sums on deposit in
the Special Account; (viii) proceeds of any and all of the foregoing; (ix) books
and records of the Borrower,  including all mail or electronic mail addressed to
the  Borrower;  and (x) all of the  foregoing,  whether now owned or existing or
hereafter  acquired  or arising or in which the  Borrower  now has or  hereafter
acquires any rights.

         "Collateral  Account"  means the  "Lender  Account"  as  defined in the
Wholesale  Lockbox and Collection  Account  Agreement,  and any similar  account
established  from time to time by any Borrower with a depositary bank acceptable
to Lender and which is subject to an agreement  among Lender,  such Borrower and
such depositary bank, in form and substance acceptable to Lender.

         "Commercial  Letter of Credit  Agreement" means an agreement  governing
the issuance of documentary letters of credit by the Lender entered into between
the Borrower as applicant and the Lender as issuer, in Lender's customary form.

         "Commitment" means the Lender's commitment to make Advances to , and to
issue Letters of Credit for the account of, the Borrower.

         "Constituent   Documents"   means  with  respect  to  any  Person,   as
applicable,   such   Person's   certificate   of   incorporation,   articles  of
incorporation,  by-laws,  certificate  of formation,  articles of  organization,
limited liability company agreement,  management agreement, operating agreement,
shareholder  agreement,  partnership  agreement or similar document or agreement
governing  such  Person's  existence,  organization  or management or concerning
disposition  of ownership  interests of such Person or voting  rights among such
Person's owners.

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         "Credit  Facility"  means the credit  facility  under  which  Revolving
Advances  and  Letters of Credit may be made  available  to the  Borrower by the
Lender under Article II.

         "Current  Maturities of Long Term Debt" means during a period beginning
and ending on designated dates, the amount of the Borrower's  long-term debt and
capitalized leases which became due during that period.

         "Cut-off Time" means 11:59 a.m. Central Time.

         "Debt" means of a Person as of a given date, all items of  indebtedness
or  liability  which in  accordance  with GAAP would be included in  determining
total  liabilities as shown on the liabilities  side of a balance sheet for such
Person and shall also include the aggregate payments required to be made by such
Person at any time under any lease that is considered a capitalized  lease under
GAAP.

         "Default" means an event that, with giving of notice or passage of time
or both, would constitute an Event of Default.

         "Default  Period"  means  any  period  of time  beginning  on the day a
Default or Event of Default  occurs  and  ending on the date  identified  by the
Lender in  writing as the date that such  Default  or Event of Default  has been
cured or waived.

         "Default Rate" means an annual interest rate in effect during a Default
Period or following the Termination  Date, which interest rate shall be equal to
three percent (3%) over the applicable  Floating Rate or the LIBOR Advance Rate,
as the case may be, as such rate may change from time to time.

         "Deposit Account Control  Agreement" means each deposit account control
agreement  relating to each  deposit  account  maintained  by a Borrower  with a
depository bank,  among Lender,  such Borrower and such depositary bank, in form
and substance acceptable to Lender.

         "Dilution" means, as of any date of determination,  a percentage, based
upon the  experience  of the trailing six (6)month  period ending on the date of
determination,  which is the result of dividing (a) actual bad debt write-downs,
discounts, advertising allowances, credits, or other dilutive items with respect
to the  Accounts  as  determined  by Lender in its sole  discretion  during such
period,   by  (b)  the  Borrower's  net  sales  during  such  period  (excluding
extraordinary items) plus the amount of clause (a).

         "Director"  means a  director  if the Loan  Party is a  corporation,  a
governor  or  manager  if the Loan Party is a limited  liability  company,  or a
general partner if the Loan Party is a partnership.

         "Dollars" or "$" means lawful currency of the United States of America.

         "Domestic Borrower Borrowing Base" means at any time the lesser of:

         (a) The Maximum Line Amount (less  Advances  made to or for the benefit
of Ronson Canada under this Agreement); or

         (b)  Subject  to  change  from  time  to  time  in  the  Lender's  sole
discretion, the sum of:

              (i) The  product  of the  Accounts  Advance  Rate  times  Eligible
Accounts owned by the Domestic Borrowers, plus

              (ii) The lesser of (A) sixty percent (60%), or such lesser rate as
the Lender in its sole  discretion  may deem  appropriate  from time to time, of
Eligible  Inventory owned by the Domestic  Borrowers,  (b)  eighty-five  percent
(85%),  or such  lesser  rate as the  Lender  in its  sole  discretion  may deem
appropriate from time to time, of the Net Orderly  Liquidation Value of Eligible
Inventory owned by the Domestic Borrowers,  or (C)

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$2,250,000  less Advances  made to or for the benefit of Ronson  Canada  against
Eligible Inventory owned by Ronson Canada, less

              (iii) The L/C Amount (less the Ronson Canada L/C Amount), less

              (iv) The Domestic Borrowing Base Reserve, less

              (v)  Indebtedness  that the Domestic  Borrowers  owe to the Lender
that has not yet been  advanced on the  Revolving  Note,  and an amount that the
Lender in its reasonable  discretion  finds on the date of  determination  to be
equal to the Lender's net credit exposure with respect to any swap,  derivative,
foreign  exchange,   hedge,  deposit,   treasury  management  or  other  similar
transaction or arrangement extended to the Domestic Borrowers by the Lender that
is not described in Article II of this  Agreement and any  indebtedness  owed by
the Domestic Borrowers to Wells Fargo Merchant Services, L.L.C.

         "Domestic   Borrowing   Base  Reserve"   means,   as  of  any  date  of
determination,  such  amounts  (expressed  as either a specified  amount or as a
percentage of a specified  category or item) as the Lender may from time to time
establish and adjust in reducing Availability (a) to reflect events, conditions,
contingencies or risks which, as determined by the Lender,  do or may affect (i)
the  Collateral of RCPC and/or RAI, or its value,  (ii) the assets,  business or
prospects of the Borrower,  or (iii) the security  interests and other rights of
the Lender in the  Collateral  (including  the  enforceability,  perfection  and
priority thereof),  or (b) to reflect the Lender's  reasonable judgment that any
collateral  report or  financial  information  furnished  by or on behalf of the
Borrower to the Lender is or may have been incomplete,  inaccurate or misleading
in  any  material  respect,  or (c)  in  respect  of any  state  of  facts  that
constitutes a Default or an Event of Default.

         "ERISA" means the Employee  Retirement  Income Security Act of 1974, as
amended from time to time.

         "ERISA   Affiliate"  means  any  trade  or  business  (whether  or  not
incorporated)  that is a member of a group which includes the Borrower and which
is treated as a single employer under Section 414 of the IRC.

         "Eligible  Accounts"  means all unpaid  Accounts of a Borrower  arising
from the sale or lease of  goods  or the  performance  of  services,  net of any
credits,   but  excluding  any  such  Accounts   having  any  of  the  following
characteristics:

              (i) That  portion  of  Accounts  unpaid 90 days or more  after the
invoice date;

              (ii) That  portion of Accounts  related to goods or services  with
respect to which the Borrower has received  notice of a claim or dispute,  which
are  subject  to a claim of  offset  or a contra  account,  or which  reflect  a
reasonable reserve for warranty claims or returns;

              (iii)  That  portion  of  Accounts  not yet  earned  by the  final
delivery  of goods or that  portion  of  Accounts  not yet  earned  by the final
rendition  of services by the  Borrower to the account  debtor,  including  with
respect to both  goods and  services,  progress  billings,  and that  portion of
Accounts  for  which an  invoice  has not been  sent to the  applicable  account
debtor;

              (iv) Accounts constituting (i) proceeds of copyrightable  material
unless such  copyrightable  material shall have been  registered with the United
States Copyright Office or Canadian Intellectual Property Office, as applicable,
or (ii) proceeds of patentable inventions unless such patentable inventions have
been registered  with the United States Patent and Trademark  Office or Canadian
Intellectual Property Office, as applicable;

              (v) Accounts owed by any unit of  government,  whether  foreign or
domestic (except that there shall be included in Eligible  Accounts that portion
of Accounts owed by such units of government for which the Borrower has provided
evidence  satisfactory  to the Lender  that (A) the Lender has a first  priority
perfected

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security  interest and (B) such Accounts may be enforced by the Lender  directly
against  such unit of  government  under all  applicable  laws and (C) as to any
Accounts due from any Canadian  governmental  unit, the applicable  Borrower has
complied with the Financial Administration Act (Canada); provided, however, that
at no time shall Eligible  Accounts due from the United States government exceed
$100,000);

              (vi) Accounts denominated in any currency other than United States
dollars or Canadian dollars;

              (vii)  Accounts  owed  by (1) an  account  debtor  located  in the
Province of Quebec,  Canada or (2) an account debtor located  outside the United
States or any Province in Canada (other than Quebec) which are not (A) backed by
a bank  letter of credit  naming the Lender as  beneficiary  or  assigned to the
Lender,  in the  Lender's  possession  or control,  and with  respect to which a
control  agreement  concerning  the  letter-of-credit  rights is in effect,  and
acceptable to the Lender in all respects, in its sole discretion, or (B) covered
by a foreign  receivables  insurance policy acceptable to the Lender in its sole
discretion;

              (viii)  Accounts owed by an account debtor that is insolvent,  the
subject of bankruptcy proceedings or has gone out of business;

              (ix) Accounts owed by a Five Percent Owner, Subsidiary, Affiliate,
Officer or employee of the Borrower, including, without limitation, any Accounts
owed from a Loan Party to another Loan Party;

              (x) Accounts not subject to a duly perfected  security interest in
the Lender's favor or which are subject to any Lien (other than a Permitted Lien
described in Section  6.3(a)(iii) and  6.3(a)(vii)) in favor of any Person other
than the Lender;

              (xi)  That  portion  of  Accounts  that  has  been   restructured,
extended, amended or modified;

              (xii)  That  portion of  Accounts  that  constitutes  advertising,
finance charges, service charges or sales or excise taxes;

              (xiii) Accounts owed by an account  debtor,  regardless of whether
otherwise  eligible,  to the extent that the aggregate  balance of such Accounts
exceeds twenty percent (20%) of the aggregate amount of all Eligible Accounts;

              (xiv)  Accounts owed by an account  debtor,  regardless of whether
otherwise eligible,  if twenty-five percent (25%) or more of the total amount of
Accounts due from such debtor is  ineligible  under  clauses (i),  (ii), or (xi)
above; and

              (xv) Accounts, or portions thereof, otherwise deemed ineligible by
the Lender in its sole discretion.

         "Eligible   Equipment"  means  Equipment  of  the  Domestic   Borrowers
designated  by the Lender as eligible  from time to time in its sole  discretion
but excluding any Equipment having any of the following characteristics:

              (i)  Equipment  that is subject to any Lien other than in favor of
the Lender (other than a Permitted  Lien  described in Section  6.3(a)(iii)  and
6.3(a)(vii));

              (ii) Equipment that has not been delivered to the Premises;

              (iii) Equipment in which the Lender does not hold a first priority
security interest;

              (iv) Equipment that is obsolete or not currently saleable;

                                       9
<PAGE>

              (v) Equipment that is not covered by standard "all risk" insurance
for an amount equal to its forced liquidation value;

              (vi)  Equipment  that  requires  proprietary  software in order to
operate in the manner in which it is intended  when such  software is not freely
assignable to the Lender or any potential purchaser of such Equipment;

              (vii)  Equipment   consisting  of  computer  hardware,   software,
tooling, or molds; and

              (viii) Equipment  otherwise  deemed  unacceptable by the Lender in
its sole discretion.

         "Eligible  Inventory" means all Inventory of a Borrower,  valued at the
lower of cost or market in  accordance  with GAAP;  but  excluding any Inventory
having any of the following characteristics:

              (i) Inventory that is: in-transit (other than in-transit Inventory
subject to a Letter of Credit issued by the Lender);  located at any  warehouse,
job site or other premises not approved by the Lender in writing; not subject to
a duly perfected first priority security interest in the Lender's favor; subject
to any lien or  encumbrance  (other than a Permitted  Lien  described in Section
6.3(a)(iii) and 6.3(a)(vii)), that is subordinate to the Lender's first priority
security  interest;  covered  by  any  negotiable  or  non-negotiable  warehouse
receipt,  bill of lading or other  document of title;  on  consignment  from any
Person;  on  consignment  to any Person or subject to any  bailment  unless such
consignee or bailee has executed an agreement with the Lender;

              (ii) Supplies,  packaging,  maintenance parts or sample Inventory,
or customer supplied parts or Inventory;

              (iii) Work-in-process Inventory;

              (iv) Inventory that is damaged,  defective,  obsolete, slow moving
or not currently saleable in the normal course of the Borrower's operations,  or
the amount of such Inventory that has been reduced by shrinkage;

              (v)  Inventory  that the Borrower has  returned,  has attempted to
return,  is in the  process  of  returning  or  intends  to return to the vendor
thereof;

              (vi) Inventory that is perishable or live;

              (vii) Inventory manufactured by the Borrower pursuant to a license
unless  the  applicable  licensor  has agreed in writing to permit the Lender to
exercise its rights and remedies against such Inventory;

              (viii) Inventory that is subject to a Lien (other than a Permitted
Lien described in Section  6.3(a)(iii)  and  6.3(a)(vii)) in favor of any Person
other than the Lender;

              (ix)  Inventory  stored  at  locations  not  owned  or  leased  by
Borrower;

              (x)  Inventory  stored at  locations  owned or leased by  Borrower
holding less than ten (10%) of the aggregate value of the Borrower's  Inventory,
other than Inventory of RAI; and

              (xi) Inventory  otherwise  deemed  ineligible by the Lender in its
sole discretion.

         "Environmental  Law" means any  federal,  state,  provincial,  local or
other  governmental  statute,  regulation,  law or  ordinance  dealing  with the
protection of human health and the environment.

         "Equipment"  shall have the meaning given it under the UCC or the PPSA,
as applicable.

                                       10
<PAGE>

         "Equipment Term Advance" has the meaning set forth in Section 2.6.1.

         "Equipment Term Note" means the Domestic  Borrower's  promissory  note,
payable to the order of the  Lender,  in  substantially  the form of Exhibit B-1
hereto,  as  same  may be  renewed  and  amended  from  time  to  time,  and all
replacements therefor.

         "Event of Default" is defined in Section 7.1.

         "Excess Cash Flow" means for a given period,  on a  consolidated  basis
for the Loan Parties,  the difference  between (i) sum of (1) Net Income and (2)
depreciation and  amortization,  minus,  (ii) the sum of (1) unfinanced  Capital
Expenditures to the extent permitted herein, (2) regularly  scheduled  principal
payments on the Equipment Term Note, the Real Estate Term Note,  other long term
Debt and capital  leases to the extent  permitted  under this  Agreement and (3)
dividends, to the extent permitted herein; each as determined for such period in
accordance with GAAP.

         "Executive  Officer"  means,  when used with reference to a Loan Party,
its president,  its chief executive officer, its chief financial officer and any
vice president of the Parent in charge of a principal business unit, division or
function (such as sales, administration or finance).

         "Existing  Capital One  Mortgage"  means that certain  Mortgage made by
RCPC to North Fork Bank (now known as Capital  One,  N.A.) dated  September  27,
2006 and recorded with the Clerk of Middlesex County,  New Jersey on October 10,
2006 in Mortgage  Book  11875,  Page 534 and  re-recorded  in the same office on
October 22, 2007 in Mortgage Book 12672,  Page 0459, as modified by the Note and
Mortgage Modification  Agreement dated March 26, 2008 and recorded April 8, 2008
with the Clerk of Middlesex  County,  New Jersey in Book 147 at Page 617, a copy
of which is attached hereto as Exhibit E.

         "Financial Covenants" means the covenants set forth in Section 6.2.

         "Five Percent Owner" means the "beneficial  owner" (as defined in Rules
13d-3 and  13d-5  under  the  Securities  Exchange  Act of  1934),  directly  or
indirectly,  of an amount  equal or greater than five percent (5%) of the voting
power of all classes of equity securities of Parent.

         "Floating Rate" means with respect to (i) Revolving  Advances evidenced
by the  Revolving  Note,  an annual  interest rate equal to the sum of the Prime
Rate plus one-half of one percent (.50%), (ii) Equipment Term Advances evidenced
by the Equipment  Term Note, the Prime Rate plus  three-quarters  of one percent
(.75%) and (iii) Real Estate  Term  Advances  evidenced  by the Real Estate Term
Note, the Prime Rate plus one percent (1.00%).

         "Floating  Rate  Advance"  means an  Advance  bearing  interest  at the
Floating Rate.

         "Funding Date" is defined in Section 2.1.

         "Funds from  Operations"  means for a given period,  on a  consolidated
basis for the Loan Parties,  the sum of (i) Net Income,  (ii)  depreciation  and
amortization,  (iii) any increase (or decrease) in deferred  income taxes,  (iv)
any increase (or decrease) in lifo reserves,  and (v) other non-cash items, each
as determined for such period in accordance with GAAP.

         "GAAP" means generally  accepted  accounting  principles,  applied on a
basis  consistent  with  the  accounting  practices  applied  in  the  financial
statements described in Section 5.6.

         "General  Intangibles" means "general  intangibles" as defined in under
the UCC and "intangibles" as defined in the PPSA, as applicable.

                                       11
<PAGE>

         "Guarantor"  means  Parent and every other  Person now or in the future
who agrees to guaranty the Indebtedness.

         "Guaranty" means each unconditional  continuing  guaranty executed by a
Guarantor in favor of the Lender.

         "Hazardous  Substances"  means  pollutants,   contaminants,   hazardous
substances,  hazardous wastes,  petroleum and fractions  thereof,  and all other
chemicals,   wastes,  substances  and  materials  listed  in,  regulated  by  or
identified in any Environmental Law.

         "Inactive Subsidiaries" means Prometcor and Ronson Hydraulics.

         "Indebtedness" is used herein in its most comprehensive sense and means
any and all advances,  debts, obligations and liabilities of the Borrower to the
Lender,  heretofore,  now  or  hereafter  made,  incurred  or  created,  whether
voluntary or involuntary and however arising,  whether due or not due,  absolute
or contingent, liquidated or unliquidated, determined or undetermined, including
under  any  swap,  derivative,   foreign  exchange,   hedge,  deposit,  treasury
management or other similar  transaction or arrangement at any time entered into
by the Borrower with the Lender or with Wells Fargo Merchant  Services,  L.L.C.,
and whether the Borrower may be liable  individually or jointly with others,  or
whether   recovery  upon  such   Indebtedness   may  be  or  hereafter   becomes
unenforceable.

         "Indemnified Liabilities" is defined in Section 8.6

         "Indemnitees" is defined in Section 8.6.

         "IRC" means the Internal  Revenue Code of 1986, as amended from time to
time.

         "Infringement"  or "Infringing"  when used with respect to Intellectual
Property  Rights  means any  infringement  or other  violation  of  Intellectual
Property Rights.

         "Intangible  Assets"  means  all  intangible  assets as  determined  in
accordance  with GAAP and  including  Intellectual  Property  Rights,  goodwill,
accounts due from Affiliates,  Directors, Officers or employees, customer lists,
deferred  charges  or any  securities  or  Debt  of the  Borrower  or any  other
securities  unless the same are readily  marketable  in the US or entitled to be
used as a credit against federal income tax liabilities,  non-compete agreements
and any other  assets  designated  from time to time by the Lender,  in its sole
discretion.

         "Intellectual  Property Rights" means all actual or prospective  rights
arising  in  connection  with any  intellectual  property  or other  proprietary
rights,  including all rights arising in connection  with  copyrights,  patents,
service marks, trade dress, trade secrets,  trademarks,  trade names, designs or
mask works.

         "Interest Payment Date" is defined in Section 2.10(a).

         "Interest Period" means the period that commences on (and includes) the
Business Day on which either a LIBOR  Advance is made or continued or on which a
Floating  Rate  Advance  is  converted  to a LIBOR  Advance  and  ending on (but
excluding) the Business Day numerically  corresponding to such date that is one,
three or six months  thereafter  as  designated  by the  Borrower,  during which
period  the  outstanding  principal  balance  of the LIBOR  Advance  shall  bear
interest at the LIBOR Advance Rate; provided, however, that:
                                    --------  -------
         (a) No Interest  Period may be selected  for an Advance for a principal
amount less than  Five-Hundred  Thousand  Dollars  ($500,000),  and no more than
three (3) different Interest Periods may be outstanding at any one time;

                                       12
<PAGE>

         (b) If an Interest  Period would  otherwise end on a day which is not a
Business  Day,  then the  Interest  Period  shall end on the next  Business  Day
thereafter,  unless that Business Day is the first  Business Day of a month,  in
which  case  the  Interest  Period  shall  end on the last  Business  Day of the
preceding month);

         (c) No Interest Period  applicable to a Revolving Advance may end later
than the Maturity Date; and

         (d) In no event shall the Borrower select Interest Periods with respect
to Advances which, in the aggregate, would require payment of a contracted funds
breakage fee under this Agreement in order to make required principal payments.

         "Inventory"  shall have the meaning given it under the UCC or the PPSA,
as applicable.

         "Investment  Property" shall have the meaning given it under the UCC or
the PPSA, as applicable.

         "L/C  Amount"  means the sum of (i) the  Aggregate  Face  Amount of any
outstanding  Letters  of  Credit,  plus (ii) the  amount of each  Obligation  of
Reimbursement  that either remains  unreimbursed  or has not been paid through a
Revolving Advance on the Credit Facility.

         "L/C  Application"  means an application for the issuance of standby or
documentary  letters  of credit  pursuant  to the  terms of a Standby  Letter of
Credit  Agreement or a Commercial  Letter of Credit Agreement in form acceptable
to the Lender.

         "Lender" means Wells Fargo Bank,  National  Association in its broadest
and  most  comprehensive  sense as a legal  entity,  and is not  limited  in its
meaning to Lender's Wells Fargo Business Credit  operating  division,  or to any
other operating division of Lender.

         "Letter of Credit" is defined in Section 2.4(a).

         "LIBOR" means the rate per annum (rounded upward, if necessary,  to the
nearest  whole 1/8th of one percent (1%))  determined  pursuant to the following
formula:

LIBOR =  Base LIBOR
         ------------------------------------
         100% - LIBOR Reserve Percentage

              (i) "Base LIBOR" means the rate per annum for United States dollar
deposits  quoted by the Lender as the Inter-Bank  Market Offered Rate,  with the
understanding  that  such  rate is  quoted  by the  Lender  for the  purpose  of
calculating  effective rates of interest for loans making reference thereto,  on
the first day of a  Interest  Period  for  delivery  of funds on said date for a
period of time approximately equal to the number of days in such Interest Period
and in an amount  approximately  equal to the  principal  amount  to which  such
Interest Period applies. The Borrower understands and agrees that the Lender may
base its  quotation of the  Inter-Bank  Market  Offered Rate upon such offers or
other market indicators of the Inter-Bank Market as the Lender in its discretion
deems  appropriate  including the rate offered for U.S.  dollar  deposits on the
London Inter-Bank Market.

              (ii)  "LIBOR  Reserve  Percentage"  means the  reserve  percentage
prescribed  by the Board of  Governors  of the  Federal  Reserve  System (or any
successor)  for  "Eurocurrency  Liabilities"  (as defined in Regulation D of the
Federal Reserve Board, as amended),  adjusted by the Lender for expected changes
in such reserve percentage during the applicable Interest Period.

         "LIBOR  Advance"  means a  Revolving  Advance  or a portion of the Real
Estate Term Advance bearing interest at the LIBOR Advance Rate.

                                       13
<PAGE>

         "LIBOR  Advance  Rate"  means with  respect to (i)  Revolving  Advances
evidenced by the  Revolving  Note,  an annual  interest rate equal to the sum of
LIBOR  plus  three-percent  (3%) and (ii)  Real  Estate  Term  Advances,  annual
interest rate equal to the sum of LIBOR plus three and one-half percent (3.5%).

         "Licensed Intellectual Property" is defined in Section 5.11(c).

         "Lien" means any security interest,  mortgage,  deed of trust,  pledge,
lien, charge, encumbrance,  title retention agreement or analogous instrument or
device,  including the interest of each lessor under any  capitalized  lease and
the interest of any bondsman under any payment or performance bond, in, of or on
any assets or properties of a Person, whether now owned or subsequently acquired
and whether arising by agreement or operation of law.

         "Loan  Documents"  means this Agreement,  the Revolving Notes, the Term
Notes,  each  Guaranty,  each L/C  Application,  each  Standby  Letter of Credit
Agreement,   each  Commercial  Letter  of  Credit  Agreement  and  the  Security
Documents,  together with every other  agreement,  note,  document,  contract or
instrument  to which a Loan  Party now or in the future may be a party and which
is required by the Lender.

         "Loan   Party"  or  "Loan   Parties"   shall  mean   individually   and
collectively, Parent and the Borrowers.

         "Lockbox"  means  "Lockbox"  as defined in the  Wholesale  Lockbox  and
Collection  Account  Agreement,  and any other lockbox  established from time to
time by any  Borrower  with a lockbox  agent  acceptable  to Lender and which is
subject to an agreement  among Lender,  such Borrower and such lockbox agent, in
form and substance acceptable to Lender.

         "Material Adverse Effect" means any of the following:

              (i) A material adverse effect on the business, operations, results
of operations, assets, liabilities or financial condition of any Loan Party;

              (ii) A material adverse effect on the ability of any Loan Party to
perform its obligations under the Loan Documents;

              (iii) A material  adverse  effect on the  ability of the Lender to
enforce the  Indebtedness  or to realize the  intended  benefits of the Security
Documents, including a material adverse effect on the validity or enforceability
of any Loan Document or of any rights against any  Guarantor,  or on the status,
existence,  perfection,  priority (subject to Permitted Liens) or enforceability
of any Lien securing payment or performance of the Indebtedness; or

              (iv) Any claim  against  any Loan  Party or  threat of  litigation
which if determined  adversely to such Loan Party would cause such Loan Party to
be  liable  to pay an  amount,  after  allowance  for all  applicable  insurance
coverage,  exceeding  $75,000  or would  result  in the  occurrence  of an event
described in clauses (i), (ii) or (iii) above.

         "Maturity Date" means May 30, 2013.

         "Maximum Line Amount" means  $4,000,000,  unless this amount is reduced
pursuant to Section 2.12, in which event it means such lower amount.

         "Mortgage"  means that certain  Leasehold  Mortgage and  Assignment  of
Rents and Leases of even date herewith upon the Mortgaged Property,  as the same
may be modified, amended or restated from time to time.

                                       14
<PAGE>

         "Mortgaged Property" means that certain real property located in Mercer
County,  New Jersey  subject to that certain lease between  Ronson  Helicopters,
Inc. (now known as Ronson Aviation,  Inc.), as lessee,  and County of Mercer, as
lessor,  dated May 14, 1975, as amended,  as more particularly  described in the
Mortgage.

         "Multiemployer  Plan" means a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) to which the Borrower or any ERISA Affiliate contributes or
is obligated to contribute.

         "Net Cash Flow" means for a given period,  on a consolidated  basis for
the Loan Parties, Net Income, plus depreciation and amortization,  minus the sum
of (a) unfinanced Capital Expenditures, (b) Current Maturities of Long Term Debt
and (c) distributions  and dividends paid by Borrowers,  to the extent permitted
under this Agreement.

         "Net Cash Proceeds"  means in connection  with any asset sale, the cash
proceeds  (including  any cash  payments  received  by way of  deferred  payment
whether pursuant to a note, installment receivable or otherwise, but only as and
when  actually  received)  from such asset  sale,  net of (i)  attorneys'  fees,
accountants' fees,  investment banking fees,  brokerage  commissions and amounts
required to be applied to the  repayment of any portion of the Debt secured by a
Lien not  prohibited  hereunder  on the asset which is the subject of such sale,
and (ii) taxes paid or  reasonably  estimated  to be payable as a result of such
asset sale.

         "Net Forced  Liquidation  Value"  means a  professional  opinion of the
estimated most probable Net Cash Proceeds which could typically be realized at a
properly  advertised  and conducted  public auction sale without  reserve,  held
under forced sale conditions and under economic trends current within 60 days of
the  appraisal.  The opinion  may  consider  physical  location,  difficulty  of
removal,  adaptability,   specialization,   marketability,  physical  condition,
overall appearance and psychological appeal.

         "Net Income" means for a given period, on a consolidated  basis for the
Loan  Parties,   fiscal  year-to-date   after-tax  net  income  from  continuing
operations,  including  extraordinary losses but excluding  extraordinary gains,
all as determined in accordance with GAAP; provided, however, to the extent that
option expenses have been deducted in calculating Net Income, the amount of such
expenses shall be added back to Net Income for purposes of computing  compliance
with Financial Covenants.

         "Net Loss" means for a given period,  on a  consolidated  basis for the
Loan Parties,  fiscal year-to-date after-tax net loss from continuing operations
as determined in accordance  with GAAP;  provided,  however,  to the extent that
option  expenses have been deducted in calculating  Net Loss, the amount of such
expenses  shall be added back to Net Loss for purposes of  computing  compliance
with Financial Covenants.

         "Net Orderly  Liquidation  Value" means a  professional  opinion of the
estimated most probable Net Cash Proceeds which could typically be realized at a
properly advertised and professionally managed liquidation sale, conducted under
orderly  sale  conditions  for an extended  period of time  (usually six to nine
months), under the economic trends existing at the time of the appraisal.

         "Obligation of  Reimbursement"  means the obligation of the Borrower to
reimburse  the  Lender  pursuant  to the terms of the  Standby  Letter of Credit
Agreement and the Commercial  Letter of Credit  Agreement and any applicable L/C
Application.

         "Officer"  means with  respect to the Loan  Parties,  an officer if the
applicable  Loan Party is a corporation,  a manager if the applicable Loan Party
is a limited liability  company,  or a partner if the applicable Loan Party is a
partnership.

         "OFAC" is defined in Section 6.12(c).

                                       15
<PAGE>

         "Overadvance"  means  the  amount,  if any,  by which  the  outstanding
principal  balance of the Revolving Note,  plus the L/C Amount,  is in excess of
the  then-existing  Domestic  Borrower  Borrowing  Base  or  the  Ronson  Canada
Borrowing Base, as applicable.

         "Owned Intellectual Property" is defined in Section 5.11(a).

         "Owner"  means with  respect to the Loan  Parties,  each Person  having
legal or  beneficial  title to an  ownership  interest in the Loan  Parties or a
right to acquire such an interest.

         "PPSA" means the Personal  Property Security Act (Ontario) as in effect
from time to time.

         "Parent" means Ronson Corporation, a New Jersey corporation.

         "Patent  and  Trademark  Security  Agreement"  means  each  Patent  and
Trademark  Security Agreement now or hereafter executed by a Loan Party in favor
of the Lender.

         "Pension  Plan"  means a pension  plan (as  defined in Section  3(2) of
ERISA)  maintained  for  employees  of the Borrower or any ERISA  Affiliate  and
covered by Title IV of ERISA.

         "Permitted Lien" and "Permitted Liens" are defined in Section 6.3(a).

         "Person" means any individual, corporation, partnership, joint venture,
limited   liability   company,   association,   joint  stock   company,   trust,
unincorporated organization or government or any agency or political subdivision
thereof.

         "Plan"  means an employee  benefit  plan (as defined in Section 3(3) of
ERISA) maintained for employees of the Borrower or any ERISA Affiliate.

         "Premises" means all locations where the Borrower conducts its business
and has any rights of possession,  including the locations  legally described in
Exhibit D attached hereto.

         "Prime  Rate"  means at any time the  rate of  interest  most  recently
announced  by the Lender at its  principal  office as its Prime  Rate,  with the
understanding  that the Prime Rate is one of the Lender's base rates, and serves
as the basis upon which  effective  rates of interest are  calculated  for those
loans making  reference  thereto,  and is evidenced by the recording  thereof in
such internal  publication or  publications  as the Lender may  designate.  Each
change in the rate of interest  shall  become  effective  on the date each Prime
Rate change is announced by the Lender.

         "Priority Payables" means amounts due under applicable law and not paid
for vacation pay or other employee benefits,  amounts due and not paid under any
legislation  relating to workers'  compensation,  mechanics  liens or employment
insurance,  all amounts  deducted or withheld and not paid and remitted when due
under the Income Tax Act (Canada) or other provincial taxation statutes, amounts
currently or past due and not contributed, remitted or paid to any Plan or under
the Canada  Pension  Plan,  the Quebec  Pension Plan,  the Pension  Benefits Act
(Ontario),  or any similar legislation and amounts determined by the Lender from
time to time in respect of such portion of the  Collateral as represents a sales
tax, excise tax, goods and services tax or harmonized tax.

         "Prometcor" means Prometcor, Inc., a New Jersey corporation.

         "Real Estate Term Advance" has the meaning set forth in Section 2.6.2.

         "Real Estate Term Note" means the Domestic Borrower's  promissory note,
payable to the order of the  Lender,  in  substantially  the form of Exhibit B-2
hereto,  as  same  may be  renewed  and  amended  from  time  to  time,  and all
replacements therefor.

                                       16
<PAGE>

         "Reportable Event" means a reportable event (as defined in Section 4043
of ERISA),  other than an event for which the 30-day  notice  requirement  under
ERISA has been  waived in  regulations  issued by the Pension  Benefit  Guaranty
Corporation.

         "Revolving Advance" is defined in Section 2.1.

         "Revolving  Note" means the Domestic  Borrower's  revolving  promissory
note,  payable to the order of the Lender in  substantially  the form of Exhibit
A-1  hereto,  as same may be  renewed  and  amended  from time to time,  and all
replacements thereto.

         "Revolving  Notes"  means  the  Revolving  Note and the  Ronson  Canada
Revolving Note.

         "Ronson Canada Borrowing Base" means, at any time the lesser of:

         (a) $700,000; or

         (b)  Subject  to  change  from  time  to  time  in  the  Lender's  sole
discretion, the sum of:

              (i) The  product  of the  Accounts  Advance  Rate  times  Eligible
Accounts owned by Ronson Canada, plus

              (ii) The lesser of (A) sixty percent (60%), or such lesser rate as
the Lender in its sole  discretion  may deem  appropriate  from time to time, of
Eligible Inventory owned by Ronson Canada, (b) eighty-five percent (85%),or such
lesser rate as the Lender in its sole discretion may deem  appropriate from time
to time, of the Net Orderly  Liquidation  Value of Eligible  Inventory  owned by
Ronson Canada, or (C) $700,000, less

              (iii) The Canada L/C Amount, less

              (iv) The Canada Borrowing Base Reserve, less

              (v)  Indebtedness  that Ronson  Canada owes to the Lender that has
not yet been advanced on the Ronson Canada  Revolving  Note,  and an amount that
the Lender in its reasonable discretion finds on the date of determination to be
equal to the Lender's net credit exposure with respect to any swap,  derivative,
foreign  exchange,   hedge,  deposit,   treasury  management  or  other  similar
transaction or  arrangement  extended to Ronson Canada by the Lender that is not
described in Article II of this  Agreement and any  indebtedness  owed by Ronson
Canada to Wells Fargo Merchant Services, L.L.C.

         "Ronson Canada  Indebtedness" is used herein in its most  comprehensive
sense and means any and all advances,  debts,  obligations  and  liabilities  of
Ronson  Canada to the Lender,  heretofore,  now or hereafter  made,  incurred or
created,  whether  voluntary or involuntary and however arising,  whether due or
not due,  absolute or  contingent,  liquidated  or  unliquidated,  determined or
undetermined,  including under any swap,  derivative,  foreign exchange,  hedge,
deposit,  treasury management or other similar transaction or arrangement at any
time entered into by Ronson Canada with the Lender or with Wells Fargo  Merchant
Services,  L.L.C.,  and  whether  Ronson  Canada may be liable  individually  or
jointly  with  others,  or whether  recovery  upon such  Indebtedness  may be or
hereafter becomes unenforceable.

         "Ronson Canada  Revolving Note" means the revolving  promissory note of
Ronson Canada,  payable to the order of the Lender in substantially  the form of
Exhibit A-2 hereto,  as same may be renewed and amended  from time to time,  and
all replacements thereto.

         "Ronson Hydraulics" means Ronson Hydraulics Units Corporation,  a North
Carolina corporation.

                                       17
<PAGE>

         "Security  Agreements"  means each  Security  Agreement  or  Collateral
Pledge  Agreement  now or  hereafter  executed  by a Loan  Party in favor of the
Lender dated the same date as this Agreement

         "Security  Documents" means this Agreement,  the Wholesale  Lockbox and
Collection  Account  Agreement,  the Deposit Account Control  Agreement(s),  the
Security Agreement(s),  the Mortgage, the Patent Security Agreement(s),  and the
Trademark Security Agreement(s),  and any other document delivered to the Lender
from time to time to secure the Indebtedness.

         "Security Interest" is defined in Section 3.1.

         "Special Account" means a specified cash collateral  account maintained
with  Lender  or  another  financial  institution  acceptable  to the  Lender in
connection with Letters of Credit, as contemplated by Section 2.5.

         "Standby Letter of Credit  Agreement" means an agreement  governing the
issuance  of  standby  letters  of credit by Lender  entered  into  between  the
Borrower as applicant and Lender as issuer, in Lender's customary form.

         "Subordinated  Creditors"  means every  Person now or in the future who
agrees to  subordinate  indebtedness  of the Borrower held by that Person to the
payment of the Indebtedness.

         "Subordinated   Indebtedness"   means   indebtedness   subject   to   a
Subordination Agreement acceptable to Lender in its discretion.

         "Subordination Agreement" means a subordination agreement executed by a
Subordinated Creditor in favor of the Lender and acknowledged by the Borrower.

         "Subsidiary" means any Person of which more than fifty percent (50%) of
the outstanding  ownership  interests having general voting power under ordinary
circumstances to elect a majority of the board of directors or the equivalent of
such Person, regardless of whether or not at the time ownership interests of any
other class or classes  shall have or might have  voting  power by reason of the
happening of any contingency, is at the time directly or indirectly owned by the
Borrower, by the Borrower and one or more other Subsidiaries,  or by one or more
other Subsidiaries.

         "Tangible   Net  Worth"  means  Book  Net  Worth,   plus   Subordinated
                                                             ----
Indebtedness  of the Loan Parties,  on a consolidated  basis,  minus  Intangible
                                                               -----
Assets of the Loan Parties, on a consolidated basis.

         "Term Advances" or "Term Advances" means  collectively and individually
the Equipment Term Advance and the Real Estate Term Advance.

         "Termination  Date" means the earliest of (i) the Maturity  Date,  (ii)
the date the  Borrower  terminates  the Credit  Facility,  or (iii) the date the
Lender  demands  payment of the  Indebtedness,  following  an Event of  Default,
pursuant to Section 7.2.

         "Term Note" or "Term Notes" means  collectively  and  individually  the
Equipment Term Note and the Real Estate Term Note.

         "Trademark  Security Agreement" means each Trademark Security Agreement
now or hereafter  executed by a Loan Party in favor of the Lender dated the same
date as this Agreement.

         "UCC"  means  the  Uniform  Commercial  Code  in  effect  in the  state
designated  in  this  Agreement  as the  state  whose  laws  shall  govern  this
Agreement, or in any other state whose laws are held to govern this Agreement or
any portion of this Agreement.

                                       18
<PAGE>

         "Unused Amount" is defined in Section 2.9(b).

         "Wholesale   Lockbox  and  Collection   Account  Agreement"  means  the
Wholesale  Lockbox and Collection  Account Agreement by and between the Borrower
and the Lender.

         Section 1.2. Other Definitional  Terms;  Rules of  Interpretation.  The
                      ----------------------------------------------------
words  "hereof",  "herein" and "hereunder" and words of similar import when used
in this  Agreement  shall  refer  to this  Agreement  as a whole  and not to any
particular  provision of this  Agreement.  All  accounting  terms not  otherwise
defined herein have the meanings  assigned to them in accordance  with GAAP. All
terms  defined in the UCC and not  otherwise  defined  herein have the  meanings
assigned to them in the UCC.  References  to  Articles,  Sections,  subsections,
Exhibits,  Schedules and the like, are to Articles, Sections and subsections of,
or Exhibits or Schedules attached to, this Agreement unless otherwise  expressly
provided. The words "include",  "includes" and "including" shall be deemed to be
followed by the phrase  "without  limitation".  Unless the context in which used
herein otherwise clearly requires, "or" has the inclusive meaning represented by
the phrase "and/or". Defined terms include in the singular number the plural and
in the plural number the singular.  Reference to any  agreement  (including  the
Loan  Documents),  document  or  instrument  means such  agreement,  document or
instrument  as amended or modified and in effect from time to time in accordance
with the terms thereof (and, if applicable,  in accordance with the terms hereof
and the other Loan Documents),  except where otherwise explicitly provided,  and
reference  to any  promissory  note  includes  any  promissory  note which is an
extension or renewal thereof or a substitute or replacement therefor.  Reference
to any law, rule, regulation,  order, decree,  requirement,  policy,  guideline,
directive or interpretation means as amended,  modified,  codified,  replaced or
reenacted,  in  whole or in  part,  and in  effect  on the  determination  date,
including rules and regulations promulgated thereunder.

                                   ARTICLE II

                     AMOUNT AND TERMS OF THE CREDIT FACILITY

         Section 2.1.  Revolving  Advances.  The Lender  agrees,  subject to the
                       -------------------
terms and conditions of this Agreement,  to make advances ("Revolving Advances")
to (a) the Borrower Representative on behalf of the Domestic Borrowers,  and (b)
to Ronson  Canada on  behalf of Ronson  Canada,  from time to time from the date
that all of the  conditions set forth in Section 4.1 are satisfied (the "Funding
Date") to and until (but not including) the Termination Date in an amount not in
excess of the Maximum Line Amount.  The Lender shall have no  obligation  (a) to
make a  Revolving  Advance  to the  extent  that  the  amount  of the  requested
Revolving Advance exceeds  Availability or (b) to make a Revolving Advance to or
for the  benefit  of the  Domestic  Borrowers  to the  extent  the amount of the
requested  Revolving Advance exceeds the Domestic Borrower Borrowing Base or (c)
make a Revolving  Advance to or for the  benefit of Ronson  Canada to the extent
the amount of the Revolving  Advance  exceeds the Ronson Canada  Borrowing Base.
The  Borrower's  obligation to pay the Revolving  Advances shall be evidenced by
the Revolving  Notes and shall be secured by the  Collateral.  Within the limits
set forth in this  Section 2.1,  the  Borrower  may borrow,  prepay  pursuant to
Section 2.12, and reborrow.  Notwithstanding  any other  provision  contained in
this  Agreement  or in any other Loan  Document,  Ronson  Canada shall be liable
under this  Agreement  and under the other Loan  Documents for the Ronson Canada
Indebtedness only.

         Section 2.2.  Procedures  for Requesting  Advances.  The Borrower shall
                       ------------------------------------
comply with the following procedures in requesting Revolving Advances:

         (a) Type of Advances. Each Advance shall be funded as either a Floating
Rate  Advance or a LIBOR  Advance,  as the Borrower  shall  specify in a request
delivered  to the Lender  conforming  to the  requirements  of  Section  2.2(b);
Floating Rate Advances and LIBOR  Advances may be  outstanding at the same time.
Each request for a LIBOR  Advance  shall be in  multiples  of  $100,000,  with a
minimum  request of at least  $500,000.  LIBOR  Advances  shall not be available
during Default Periods.

                                       19
<PAGE>

         (b) Time for Requests.  The Borrower shall request each Advance so that
it is received by Lender not later than the Cut-off  Time on the Business Day on
which the Advance is to be made. Each request that conforms to the terms of this
Agreement shall be effective upon receipt by the Lender,  shall be in writing or
by telephone or telecopy transmission,  and shall be confirmed in writing by the
Borrower if so requested by the Lender,  by (i) an Officer of the  Borrower;  or
(ii) a Person  designated as the Borrower's  agent by an Officer of the Borrower
in a  writing  delivered  to the  Lender;  or  (iii) a Person  whom  the  Lender
reasonably  believes to be an Officer of the Borrower or such a designated agent
, which  confirmation shall specify whether the Advance shall be a Floating Rate
Advance or a LIBOR Advance and, with respect to any LIBOR Advance, shall specify
the  principal  amount of the LIBOR Advance and the Interest  Period  applicable
thereto.  The  Borrower  shall  repay all  Advances  even if the Lender does not
receive such  confirmation and even if the Person  requesting an Advance was not
in fact  authorized  to do so. Any request for an  Advance,  whether  written or
telephonic,  shall be deemed to be a  representation  by the  Borrower  that the
conditions  set forth in Section 4.2 have been  satisfied  as of the time of the
request.

         (c)  Disbursement.  Upon  fulfillment of the applicable  conditions set
forth in Article IV, the Lender shall  disburse  the  proceeds of the  requested
Advance by crediting the Borrower's operating account maintained with the Lender
unless  the  Lender  and  the  Borrower   shall  agree  to  another   manner  of
disbursement.  The Lender may also initiate an Advance and disburse the proceeds
to any third Person in such amounts as the Lender, in its sole discretion, deems
necessary to protect its interest in any Collateral or to purchase Collateral or
to exercise any other rights granted to it by the Borrower under Section 6.27.

         Section 2.3. LIBOR Advances.
                      --------------

         (a) Converting Floating Rate Advances to LIBOR Advances; Procedures. So
long as no Default Period is in effect, the Borrower may convert all or any part
of the principal  amount of any  outstanding  Floating Rate Advance into a LIBOR
Advance by  requesting  that the Lender  convert  same no later than the Cut-off
Time on the Business  Day  immediately  preceding  the Business Day on which the
Borrower wishes the conversion to become  effective.  Each request that conforms
to the terms of this Agreement shall be effective upon receipt by the Lender and
shall be  confirmed  in writing by the Borrower if the Lender so requests by any
Officer or designated  agent  identified in Section 2.2(b) or Person  reasonably
believed by the Lender to be such an Officer or designated agent,  which request
shall specify the Business Day on which the  conversion  is to occur,  the total
amount of the Floating Rate Advance to be converted, and the applicable Interest
Period.  Each such  conversion  shall occur on a Business Day, and the aggregate
amount  of  Floating  Rate  Advances  converted  to LIBOR  Advances  shall be in
multiples of $100,000,  with a minimum  conversion  amount of at least $500,000;
provided,  however  that at no time shall LIBOR  Advances  constitute  more than
seventy-five  percent (75%) of the  aggregate  outstanding  principal  amount of
Advances.

         (b)  Procedures  at End of an  Interest  Period.  Unless  the  Borrower
requests a new LIBOR Advance in accordance  with the procedures set forth below,
or prepays the principal of an outstanding LIBOR Advance at the expiration of an
Interest  Period,  the Lender  shall  automatically  and without  request of the
Borrower  convert each LIBOR  Advance to a Floating Rate Advance on the last day
of the relevant Interest Period. So long as no Default exists,  the Borrower may
cause all or any part of any maturing LIBOR Advance to be renewed as a new LIBOR
Advance by requesting that the Lender  continue the maturing  Advance as a LIBOR
Advance no later than the Cut-off Time on the Business Day immediately preceding
the Business Day  constituting  the first day of the new Interest  Period.  Each
such request  shall be  confirmed  in writing by the Borrower  upon the Lender's
request by any Officer or designated agent  identified in Section 2.2(b),  which
confirmation  shall be  effective  upon  receipt by the Lender,  and which shall
specify  the  amount of the  expiring  LIBOR  Advance  to be  continued  and the
applicable  Interest Period.  Each new Interest Period shall begin on a Business
Day and the amount of each LIBOR Advance shall be in multiples of $100,000, with
a minimum Advance of at least $500,000.

                                       20
<PAGE>

         (c) Setting and Notice of Rates. The Lender shall,  with respect to any
request for a LIBOR  Advance  under  Section 2.2 or a conversion or renewal of a
LIBOR  Advance  under this Section 2.3,  provide the Borrower with a LIBOR quote
for each Interest Period identified by the Borrower on the Business Day on which
the  request was made,  if the  request is  received by the Lender  prior to the
Cut-off Time, or for requests  received by the Lender after the Cut-off Time, on
the next Business Day or on the Business Day on which the Borrower has requested
that the LIBOR Advance be made  effective.  If the Borrower does not immediately
accept a LIBOR quote,  the quoted rate shall expire and any  subsequent  request
from  Borrower  for a LIBOR  quote  shall be subject to  redetermination  by the
Lender of the applicable LIBOR for the LIBOR Advance.

         (d) Taxes and Regulatory  Costs. The Borrower shall pay the Lender with
respect to any Advance,  upon demand and in addition to any other amounts due or
to become due hereunder,  any and all (i)  withholdings,  interest  equalization
taxes, stamp taxes or other taxes (except income and franchise taxes) imposed by
any  domestic  or foreign  governmental  authority  and related in any manner to
LIBOR,  and (ii) future,  supplemental,  emergency or other changes in the LIBOR
Reserve  Percentage,  assessment rates imposed by the Federal Deposit  Insurance
Corporation, or similar requirements or costs imposed by any domestic or foreign
governmental  authority  or  resulting  from  compliance  by the Lender with any
request or  directive  (whether or not having the force of law) from any central
bank or other  governmental  authority and related in any manner to LIBOR to the
extent they are not included in the calculation of LIBOR.  In determining  which
of the foregoing are  attributable to any LIBOR option available to the Borrower
hereunder,  any  reasonable  allocation  made by the Lender among its operations
shall be conclusive and binding upon the Borrower.

         Section 2.4. Letters of Credit.
                      -----------------

         (a) The  Lender  agrees,  subject to the terms and  conditions  of this
Agreement,  to  issue,  at any time  after  the  Funding  Date and  prior to the
Termination  Date, one or more  irrevocable  standby or  documentary  letters of
credit (each, a "Letter of Credit") for the Borrower's account.  The Lender will
not issue any Letter of Credit if the face  amount of the Letter of Credit to be
issued would exceed the lesser of:

              (i) $500,000 less the L/C Amount, or

              (ii) Availability.

         Each Letter of Credit,  if any, shall be issued  pursuant to a separate
L/C Application made by the Borrower. The terms and conditions set forth in each
such L/C  Application  shall  supplement the terms and conditions of the Standby
Letter of Credit  Agreement or the  Commercial  Letter of Credit  Agreement,  as
applicable.

         (b) No Letter of Credit  shall be issued with an expiry date later than
one (1) year from the date of issuance or the Maturity  Date in effect as of the
date of issuance, whichever is earlier.

         (c) Any request for  issuance of a Letter of Credit  shall be deemed to
be a representation by the Borrower that the conditions set forth in Section 4.2
have been satisfied as of the date of the request.

         (d) If a draft is submitted  under a Letter of Credit when the Borrower
is unable,  because a Default Period exists or for any other reason, to obtain a
Revolving Advance to pay the Obligation of Reimbursement, the Borrower shall pay
to the Lender on demand and in immediately  available  funds,  the amount of the
Obligation of Reimbursement together with interest, accrued from the date of the
draft until payment in full at the Default Rate.  Notwithstanding the Borrower's
inability to obtain a Revolving  Advance for any reason,  the Lender may, in its
sole discretion,  make a Revolving  Advance in an amount sufficient to discharge
any outstanding  Obligation of Reimbursement and any accrued but unpaid interest
and fees payable with respect to same.

                                       21
<PAGE>

         Section 2.5. Special Account.  If the Credit Facility is terminated for
                      ---------------
any  reason  while  any  Letter of Credit is  outstanding,  the  Borrower  shall
thereupon  pay the  Lender in  immediately  available  funds for  deposit in the
Special Account an amount equal to the L/C Amount plus any anticipated  fees and
costs.  If the  Borrower  fails to promptly  make any such payment in the amount
required  hereunder,  then the Lender may make a Revolving  Advance  against the
Credit  Facility in an amount  sufficient to fulfill this obligation and deposit
the proceeds to the Special  Account.  The Special  Account shall be an interest
bearing  account  either   maintained  with  the  Lender  or  with  a  financial
institution  acceptable to the Lender.  Any interest earned on amounts deposited
in the Special Account shall be credited to the Special Account.  The Lender may
apply amounts on deposit in the Special Account at any time or from time to time
to the  Indebtedness  in the  Lender's  sole  discretion.  The  Borrower may not
withdraw  any  amounts on deposit in the  Special  Account as long as the Lender
maintains a security interest therein. The Lender agrees to transfer any balance
in the Special  Account to the  Borrower  when the Lender is required to release
its security interest in the Special Account under applicable law.

         Section 2.6. Term Advances.
                      -------------

         2.6.1 Equipment Term Advance.
               ----------------------

         (a) The  Lender  agrees,  subject to the terms and  conditions  of this
Agreement, to make a single advance to the Domestic Borrower on the Funding Date
in  the  amount  of  $837,500  (the  "Equipment  Term  Advance").  The  Domestic
Borrower's  obligation to pay the  Equipment  Term Advance shall be evidenced by
the  Equipment  Term Note and shall be secured by the  Collateral as provided in
Article III.

         (b) Upon fulfillment of the applicable  conditions set forth in Article
IV, the Lender  shall  deposit the  proceeds  of the  requested  Equipment  Term
Advance by crediting the same to the Borrower's demand deposit account specified
in Section  2.2(c).  Upon the  Lender's  request,  the Domestic  Borrower  shall
promptly  confirm each request for an Equipment Term Advance or any  alternative
method of  disbursing a Equipment  Term Advance by executing  and  delivering an
appropriate  confirmation certificate to the Lender. The Domestic Borrower shall
be obligated to repay all Equipment Term Advances  notwithstanding  the Lender's
failure to  receive  such  confirmation  and  notwithstanding  the fact that the
Person  requesting the same was not in fact authorized to do so. Any request for
a Equipment Term Advance, whether written or telephonic, shall be deemed to be a
representation  by the  Domestic  Borrower  that  the  Domestic  Borrower  is in
compliance  with the  conditions  set forth in Section 4.2 as of the time of the
request.

         2.6.2 Real Estate Term Advance.
               ------------------------

         (a) The  Lender  agrees,  subject to the terms and  conditions  of this
Agreement, to make a single advance to the Domestic Borrower on the Funding Date
in the amount of  $2,922,500  (the "Real  Estate Term  Advance").  The  Domestic
Borrower's  obligation to pay the Real Estate Term Advance shall be evidenced by
the Real Estate Term Note and shall be secured by the  Collateral as provided in
Article III.

         (b) Upon fulfillment of the applicable  conditions set forth in Article
IV, the Lender  shall  deposit the  proceeds of the  requested  Real Estate Term
Advance by crediting the same to the Borrower's demand deposit account specified
in Section  2.2(c).  Upon the  Lender's  request,  the Domestic  Borrower  shall
promptly  confirm each request for a Real Estate Term Advance or any alternative
method of disbursing a Real Estate Term Advance by executing  and  delivering an
appropriate  confirmation certificate to the Lender. The Domestic Borrower shall
be obligated to repay all Real Estate Term Advances notwithstanding the Lender's
failure to  receive  such  confirmation  and  notwithstanding  the fact that the
Person  requesting the same was not in fact authorized to do so. Any request for
a Real Estate Term Advance, whether written or telephonic, shall be deemed to be
a representation by the Domestic Borrower,  upon which the Lender may rely, that
the Domestic  Borrower is in compliance with the conditions set forth in Section
4.2 as of the time of the request.

         Section 2.7. Payment of Term Notes. The outstanding  principal  balance
                      ---------------------
of the Term Notes shall be due and payable as follows:

                                       22
<PAGE>

         2.7.1 Equipment Term Note.
               -------------------

         (a) In equal monthly  installments of $13,954.17,  beginning on July 1,
2008, and on the first day of each month thereafter.

         (b)  If the  Lender  at any  time  obtains  an  appraisal  of  Eligible
Equipment as permitted under Section 6.10(d) herein, and the appraisal shows the
aggregate  outstanding  principal  balance of the Equipment Term Note to exceeds
(i) 85% of the Net Orderly  Liquidation Value of Eligible Equipment or (ii) 100%
of the Net Forced  Liquidation  Value of Eligible  Equipment,  then the Domestic
Borrower, upon demand by the Lender, shall immediately prepay the Equipment Term
Note in the amount of such excess.

         (c) All  prepayments  of principal  with respect to the Equipment  Term
Note shall be applied to the most remote  principal  installment or installments
then unpaid; and

         (d) On the Termination Date, the entire unpaid principal balance of the
Equipment  Term Note, and all unpaid  interest  accrued  thereon,  shall also be
fully due and payable.

         2.7.2 Real Estate Term Note.
               ---------------------

         (a) In equal monthly  installments of $16,236.12,  beginning on July 1,
2008, and on the first day of each month thereafter.

         (b) If the Lender at any time  obtains an  appraisal  of the  Mortgaged
Property, as permitted under Section 6.10(d) herein, and the appraisal shows the
aggregate  outstanding  principal balance of the Real Estate Term Note to exceed
70% of the fair  market  value of such  Mortgaged  Property,  then the  Domestic
Borrower,  upon demand by the Lender,  shall immediately  prepay the Real Estate
Term Note in the amount of such excess.

         (c) All  prepayments  of principal with respect to the Real Estate Term
Note shall be applied to the most remote  principal  installment or installments
then unpaid; and

         (d) On the Termination Date, the entire unpaid principal balance of the
Real Estate Term Note, and all unpaid interest  accrued  thereon,  shall also be
fully due and payable.

         Section 2.8. Interest;  Default Interest Rate; Application of Payments;
                      ----------------------------------------------------------
Participations; Usury.
---------------------

         (a)  Interest.  Except as provided in Section 2.3,  Section  2.8(b) and
Section  2.8(e),  the principal  amount of each Advance shall bear interest as a
Floating Rate Advance.

         (b) Default  Interest  Rate.  At any time during any Default  Period or
following the  Termination  Date, in the Lender's  sole  discretion  and without
waiving any of its other rights or remedies, the principal of the Revolving Note
and the Term Notes shall bear  interest at the Default  Rate or such lesser rate
as the Lender may determine, effective as of the first day of the fiscal quarter
in which any Default Period begins through the last day of such Default  Period,
or any shorter  time period that the Lender may  determine.  The decision of the
Lender to impose a rate that is less than the Default  Rate or to not impose the
Default Rate for the entire  duration of the Default Period shall be made by the
Lender  in its sole  discretion  and  shall  not be a waiver of any of its other
rights  and  remedies,  including  its right to  retroactively  impose  the full
Default  Rate for the  entirety  of any such  Default  Period or  following  the
Termination Date.

         (c)  Application  of  Payments.   Payments  shall  be  applied  to  the
Indebtedness  on the  Business  Day of  receipt  by the  Lender in the  Lender's
general  account,  but the amount of  principal  paid shall  continue  to accrue
interest at the interest rate applicable  under the terms of this Agreement from
the calendar day the Lender receives the payment, and continuing through the end
of the first Business Day following receipt of the payment.

                                       23
<PAGE>

         (d) Participations.  If any Person shall acquire a participation in the
Advances or the Obligation of Reimbursement,  the Borrower shall (subject, as to
Ronson Canada,  to the final sentence of Section 2.1) be obligated to the Lender
to pay the full amount of all interest  calculated under this Section 2.8, along
with all other  fees,  charges  and other  amounts  due  under  this  Agreement,
regardless  if such  Person  elects  to  accept  interest  with  respect  to its
participation  at a lower rate than that  calculated  under this Section 2.8, or
otherwise  elects to accept  less than its pro rata share of such fees,  charges
and other amounts due under this Agreement.

         (e) Usury.  In any event no rate change  shall be put into effect which
would  result  in a rate  greater  than  the  highest  rate  permitted  by  law.
Notwithstanding  anything to the contrary  contained in any Loan  Document,  all
agreements  which  either now are or which shall become  agreements  between the
Borrower and the Lender are hereby  limited so that in no  contingency  or event
whatsoever  shall the total  liability  for  payments in the nature of interest,
additional  interest and other charges exceed the  applicable  limits imposed by
any applicable usury laws. If any payments in the nature of interest, additional
interest and other charges made under any Loan Document are held to be in excess
of the limits imposed by any  applicable  usury laws, it is agreed that any such
amount held to be in excess shall be considered payment of principal  hereunder,
and the  indebtedness  evidenced  hereby shall be reduced by such amount so that
the total liability for payments in the nature of interest,  additional interest
and  other  charges  shall not  exceed  the  applicable  limits  imposed  by any
applicable  usury laws, in  compliance  with the desires of the Borrower and the
Lender.  This  provision  shall never be  superseded or waived and shall control
every other  provision  of the Loan  Documents  and all  agreements  between the
Borrower and the Lender, or their successors and assigns.

         Section 2.9. Fees.
                      ----

         (a)  Origination  Fee. The Borrower shall pay the Lender a fully earned
and  non-refundable  origination  fee of  $50,000,  due  and  payable  upon  the
execution of this Agreement.

         (b) Unused Line Fee. For the purposes of this Section  2.9(b),  "Unused
Amount" means the Maximum Line Amount reduced by outstanding  Revolving Advances
and the L/C Amount.  The Borrower agrees to pay to the Lender an unused line fee
at the rate of  one-quarter of one percent (.25%) per annum on the average daily
Unused Amount from the date of this  Agreement to and including the  Termination
Date,  due and  payable  monthly in arrears on the first day of the month and on
the Termination Date.

         (c) Collateral Monitoring Fee. The Borrower agrees to pay to the Lender
a monthly  monitoring  fee in the amount of $1,000 per  month,  due and  payable
monthly in arrears on the first day of each month and on the Termination Date.

         (d)  Collateral  Exam Fees.  The Borrower  shall pay the Lender fees in
connection with any collateral exams,  audits or inspections  conducted by or on
behalf of the  Lender  of any  Collateral  or of the  Borrower's  operations  or
business at the rates  established  from time to time by the Lender  (which fees
are currently $950 per day per collateral  examiner),  together with any related
out-of-pocket costs and expenses incurred by the Lender.

         (e)  Collateral  Monitoring  Service Fees.  The Borrower  shall pay the
Lender  fees in  connection  with any service  conducted  by or on behalf of the
Lender for  purposes  of  identifying  ineligible  Collateral,  calculating  the
Borrowing Base, and performing  related  collateral  monitoring  services at the
rates  established from time to time by the Lender (which fees currently include
an initial  set-up fee of $1,000 and a monthly fee of $100 for each such aging),
together with any  out-of-pocket  costs and expenses  incurred by Lender,  which
fees shall be due and  payable  monthly in arrears on the first day of the month
and on the Termination Date.

         (f) Letter of Credit  Fees.  The  Domestic  Borrowers  shall pay to the
Lender a fee with  respect to each  Letter of Credit that has been issued to any
Borrower,  and Ronson Canada shall be obligated pay to the Lender (to the extent
not paid by the Domestic  Borrowers) a fee with respect to each Letter of Credit
that has been issued to it, which fee shall be calculated on a per diem basis at
an annual rate equal to (i) one and  one-half

                                       24
<PAGE>

percent (1.5%) of the Aggregate Face Amount of documentary letters of credit and
(ii) two percent (2%) of the Aggregate Face Amount of standby letters of credit,
from and  including  the date of issuance of the Letter of Credit until the date
that the Letter of Credit  terminates  or is returned  to the Lender,  which fee
shall be due and  payable  monthly in arrears on the first day of each month and
on the date that the Letter of Credit  terminates  or is returned to the Lender;
provided,  however, effective as of the first day of the fiscal quarter in which
any Default  Period begins through the last day of such Default  Period,  or any
shorter  time  period  that the  Lender  may  determine,  in the  Lender's  sole
discretion  and without  waiving any of its other rights and remedies,  such fee
shall  increase  to five  percent  (5.0%)  of the  Aggregate  Face  Amount.  The
foregoing  fee shall be in addition to any other fees,  commissions  and charges
imposed by Lender with respect to such Letter of Credit.

         (g) Letter of Credit  Administrative Fees. The Domestic Borrowers shall
pay all administrative fees charged by Lender in connection with the honoring of
drafts  under any  Letter of Credit  issued on the  application  of a  Borrower,
amendments  thereto,  transfers  thereof and all other  activity with respect to
such Letters of Credit at the then - current rates  published by Lender for such
services rendered on behalf of customers of Lender generally,  and Ronson Canada
shall pay all  administrative  fees  charged  by Lender in  connection  with the
honoring  of drafts  under any  Letter of Credit  issues on the  application  of
Ronson Canada, amendments thereto, transfers thereof and all other activity with
respect  to such  Letters  of Credit at the then - current  rates  published  by
Lender for such services rendered on behalf of customers of Lender generally, to
the extent not paid by the Domestic Borrowers.

         (h) Termination  and Line Reduction Fees. If (i) the Lender  terminates
the Credit Facility during a Default Period, or if (ii) the Borrower  terminates
or reduces the Credit  Facility on a date prior to the Maturity  Date,  then the
Borrower  shall pay the  Lender  as  liquidated  damages  and not as a penalty a
termination  fee in an amount equal to a  percentage  of the Maximum Line Amount
(or the reduction of the Maximum Line Amount,  as the case may be) calculated as
follows:  (A) two percent  (2%) if the  termination  or  reduction  occurs on or
before the first  anniversary  of the Funding  Date;  (B) one percent (1) if the
termination or reduction occurs after the first anniversary of the Funding Date,
but on or before the second anniversary of the Funding Date; and (C) one-half of
one percent  (.50%) if the  termination  or  reduction  occurs  after the second
anniversary of the Funding Date.

         (i) Prepayment  Fees and  Contracted  Funds Breakage Fees. The Borrower
may prepay the  principal  amount of any LIBOR Advance and the Term Notes at any
time in any  amount,  whether  voluntarily  or by  acceleration,  subject to the
payment of fees as follows:

              (i) If the Equipment Term Note and/or the Real Estate Term Note is
prepaid for any reason other than because of any mandatory  prepayment  required
pursuant to Section 2.13(b) of this Agreement,  the Domestic Borrowers shall pay
to the Lender a prepayment  fee in an amount equal to (i) two percent  (2.0%) of
the amount prepaid,  if prepayment  occurs on or before the first anniversary of
the Funding Date; (ii) one percent (1.0%) of the amount  prepaid,  if prepayment
occurs  after the first  anniversary  of the  Funding  Date but on or before the
second anniversary of the Funding Date; and (iii) one-half of one percent (.50%)
of the amount prepaid,  if prepayment occurs after the second anniversary of the
Funding Date.

              (ii) If the principal amount of any LIBOR Advance is prepaid,  the
Borrowers  shall pay to the Lender  immediately  upon demand a contracted  funds
breakage fee equal to the sum of the  discounted  monthly  differences  for each
month from the month of  prepayment  through  the month in which  such  Interest
Period matures, calculated as follows for each such month:

                   (A) Determine the amount of interest which would have accrued
each month on the amount prepaid at the interest rate  applicable to such amount
had it  remained  outstanding  until  the  last day of the  applicable  Interest
Period.

                                       25
<PAGE>

                   (B)  Subtract  from the  amount  determined  in (A) above the
amount of  interest  which  would have  accrued for the same month on the amount
prepaid for the remaining term of such Interest Period at LIBOR in effect on the
date of  prepayment  for new loans made for such term and in a principal  amount
equal to the amount prepaid.

                   (C) If the  result  obtained  in (B) for any month is greater
than zero, discount that difference by LIBOR used in (B) above.

         The Borrower  acknowledges  that prepayment of any LIBOR Advance or the
Term Notes may result in the Lender  incurring  additional  costs,  expenses  or
liabilities,  and that it is  difficult  to  ascertain  the full  extent of such
costs,  expenses  or  liabilities.  The  Borrower  therefore  agrees  to pay the
above-described prepayment fee and contracted funds breakage fee and agrees that
said amounts represent a reasonable estimate of the prepayment costs, contracted
funds breakage costs, expenses and/or liabilities of the Lender.

         (j) Overadvance  Fees. The Borrower shall pay an Overadvance fee in the
amount of $500.00 for each day or portion  thereof  during which an  Overadvance
exists,  unless the  Overadvance has been agreed to in writing in advance by the
Lender  without  payment of any fee. The acceptance of payment of an Overadvance
fee by the  Lender  shall not be  deemed to  constitute  either  consent  to the
Overadvance  or a waiver of the  resulting  Event of Default,  unless the Lender
specifically  consents  to the  Overadvance  in writing  and waives the Event of
Default on whatever conditions the Lender deems appropriate.

         (k) Other Fees and  Charges.  The  Lender may from time to time  impose
additional  fees and charges as  consideration  for  Advances  made in excess of
Availability  or for other  events  that  constitute  an Event of  Default  or a
Default  hereunder,  including  fees  and  charges  for  the  administration  of
Collateral by the Lender, and fees and charges for the late delivery of reports,
which may be  assessed  in the  Lender's  sole  discretion  on either an hourly,
periodic,  or flat fee basis, and in lieu of or in addition to imposing interest
at the Default Rate.

         Section 2.10. Time for Interest Payments; Payment on Non-Business Days;
                       ---------------------------------------------------------
Computation of Interest and Fees.
--------------------------------

         (a) Time For Interest Payments. Accrued and unpaid interest accruing on
Floating Rate  Advances  shall be due and payable on the first day of each month
and on the Termination  Date (each an "Interest  Payment Date"),  or if any such
day is not a Business Day, on the next  succeeding  Business Day.  Interest will
accrue  from the most  recent  date to which  interest  has been  paid or, if no
interest has been paid,  from the date of advance to the Interest  Payment Date.
If an Interest  Payment Date is not a Business Day, payment shall be made on the
next succeeding  Business Day.  Interest accruing on each LIBOR Advance shall be
due and payable on the last day of the  applicable  Interest  Period;  provided,
however,  for Interest  Periods that are longer than one month,  interest  shall
nevertheless  be due and payable  monthly on the last day of each month,  and on
the last day of the Interest Period.

         (b)  Payment on Non  Business  Days.  Whenever  any  payment to be made
hereunder  shall be stated to be due on a day which is not a Business  Day, such
payment may be made on the next  succeeding  Business Day, and such extension of
time  shall in such case be  included  in the  computation  of  interest  on the
Advances or the fees hereunder, as the case may be.

         (c)  Computation  of  Interest  and  Fees.  Interest  accruing  on  the
outstanding  principal  balance of the Advances and fees  hereunder  outstanding
from  time to time  shall be  computed  on the  basis of  actual  number of days
elapsed in a year of 360 days.

         Section 2.11. Lockbox and Collateral Account; Sweep of Funds.
                       ----------------------------------------------

         (a) Lockbox and Collateral Account.

                                       26
<PAGE>

              (i) The Borrower  shall  instruct  all account  debtors to pay all
Accounts directly to the Lockbox.  If,  notwithstanding  such instructions,  the
Borrower  receives  any payments on Accounts,  the Borrower  shall  deposit such
payments into the Collateral Account.  The Borrower shall also deposit all other
cash  proceeds of Collateral  regardless  of source or nature  directly into the
Collateral  Account.  Until  so  deposited,  the  Borrower  shall  hold all such
payments  and cash  proceeds in trust for and as the  property of the Lender and
shall not commingle  such property with any of its other funds or property.  All
deposits in the Collateral  Account shall constitute  proceeds of Collateral and
shall not constitute payment of the Indebtedness.

              (ii)  All  items  deposited  in the  Collateral  Account  shall be
subject to final payment. If any such item is returned uncollected, the Borrower
will  immediately  pay the Lender,  or, for items  deposited  in the  Collateral
Account,  the bank  maintaining  such account,  the amount of that item, or such
bank at its  discretion  may  charge  any  uncollected  item  to the  Borrower's
commercial account or other account. The Borrower shall be liable as an endorser
on all  items  deposited  in the  Collateral  Account,  whether  or not in  fact
endorsed by the Borrower.

         (b) Sweep of Funds.  The Lender shall from time to time,  in accordance
with the Wholesale Lockbox and Collection Account Agreement,  cause funds in the
Collateral Account to be transferred to the Lender's general account for payment
of the Indebtedness.  Amounts  deposited in the Collateral  Account shall not be
subject  to  withdrawal  by the  Borrower,  except  after  payment  in full  and
discharge of all Indebtedness.

         Section  2.12.  Voluntary  Prepayment;  Reduction  of the Maximum  Line
                         -------------------------------------------------------
Amount;  Termination of the Credit Facility by the Borrower. Except as otherwise
-----------------------------------------------------------
provided  herein,  the  Borrower may prepay the Advances in whole at any time or
from time to time in part.  The Borrower may  terminate  the Credit  Facility or
reduce the  Maximum  Line Amount at any time if it (i) gives the Lender at least
60 days advance written notice prior to the proposed  Termination Date, and (ii)
pays the Lender applicable  termination prepayment and contracted funds breakage
fees,  and Maximum Line Amount  reduction  fees in accordance  with the terms of
this  Agreement.  Any reduction in the Maximum Line Amount shall be in multiples
of $100,000,  and with a minimum reduction of at least $500,000. If the Borrower
terminates  the Credit  Facility or reduces the Maximum Line Amount to zero, all
Indebtedness shall be immediately due and payable, and if the Borrower gives the
Lender less than the required 60 days advance written notice,  then the interest
rate  applicable to borrowings  evidenced by Revolving Note shall be the Default
Rate for the period of time commencing 60 days prior to the proposed Termination
Date through the date that the Lender actually  receives such written notice. If
the Borrower does not wish the Lender to consider renewal of the Credit Facility
on the next Maturity  Date,  then the Borrower shall give the Lender at least 60
days written  notice prior to the Maturity  Date that it will not be  requesting
renewal.  If the Borrower fails to give the Lender such timely notice,  then the
interest rate applicable to borrowings  evidenced by the Revolving Note shall be
the Default Rate for the period of time commencing 60 days prior to the Maturity
Date through the date that the Lender actually receives such written notice.

         Section 2.13. Mandatory Prepayment.
                       --------------------

         (a) Without notice or demand, unless the Lender shall otherwise consent
in a written agreement that sets forth the terms and conditions which the Lender
in its discretion may deem appropriate, including without limitation the payment
of an Overadvance fee, if an Overadvance shall at any time exist with respect to
the Credit Facility,  then the Borrower shall (i) first,  immediately prepay the
Revolving Advances to the extent necessary to eliminate such excess; and (ii) if
prepayment in full of the Revolving  Advances is  insufficient to eliminate such
excess (due, for example,  to the L/C Amount),  pay to the Lender in immediately
available  funds for  deposit  in the  Special  Account  an amount  equal to the
remaining excess. Any voluntary or mandatory  prepayment  received by the Lender
may be applied  to the  Indebtedness,  in such order and in such  amounts as the
Lender in its sole discretion may determine from time to time.

         (b) Within 30 days after  receipt by the Lender of the  audited  annual
financial  statements  of the Parent as required  under  Section  6.1(a) of this
Agreement,  the Domestic Borrower shall pay to the Lender as a prepayment of the
Real Estate Term Note an amount  equal to 25% of the Loan  Parties'  Excess Cash
Flow.  Any

                                       27
<PAGE>

payment  received by the Lender under this Section  2.13(b)  shall be applied in
the  inverse  order of the  installment  due dates and in such order and in such
amounts as the Lender, in its discretion, may from time to time determine.

         Section 2.14.  Revolving Advances to Pay Indebtedness.  Notwithstanding
                        --------------------------------------
the terms of Section 2.1, the Lender may, in its  discretion at any time or from
time to time,  without the  Borrower's  request and even if the  conditions  set
forth in Section  4.2 would not be  satisfied,  make a  Revolving  Advance in an
amount  equal  to the  portion  of the  Indebtedness  from  time to time due and
payable  and may deliver the  proceeds  of any such  Revolving  Advance to Wells
Fargo Merchant Services, L.L.C. in satisfaction of any unpaid obligations due to
Wells Fargo Merchant Services, L.L.C.

         Section 2.15.  Use of Proceeds.  The Borrower shall use the proceeds of
                        ---------------
initial Advances under this Agreement to fully repay  obligations due to Bank of
the West, The CIT Group/Commercial  Services,  Inc., EPIC Aviation, LLC, Banc of
America  Leasing and Louis V. Aronson II, and thereafter  shall use the proceeds
of Advances and each Letter of Credit for ordinary working capital purposes.

         Section 2.16.  Liability Records.  The Lender may maintain from time to
                        -----------------
time, at its discretion, records as to the Indebtedness. All entries made on any
such  record  shall be  presumed  correct  until the  Borrower  establishes  the
contrary.  Upon the  Lender's  demand,  the  Borrower  will admit and certify in
writing the exact principal  balance of the Indebtedness  that the Borrower then
asserts to be outstanding.  Any billing statement or accounting  rendered by the
Lender shall be conclusive and fully binding on the Borrower unless the Borrower
gives the  Lender  specific  written  notice of  exception  within 30 days after
receipt.

                                  ARTICLE III
                      SECURITY INTEREST; OCCUPANCY; SETOFF

         Section 3.1. Grant of Security  Interest.  The Borrower hereby pledges,
                      ---------------------------
assigns  and grants to the  Lender,  for the  benefit of itself and as agent for
Wells  Fargo  Merchant   Services,   L.L.C.,   a  lien  and  security   interest
(collectively  referred to as the  "Security  Interest") in the  Collateral,  as
security  for the  payment  and  performance  of:  (a) all  present  and  future
Indebtedness of the Borrower to the Lender;  (b) all obligations of the Borrower
and rights of the Lender  under this  Agreement;  and (c) all present and future
obligations  of the Borrower to the Lender of other  kinds.  Upon request by the
Lender,  the Borrower will grant to the Lender, for the benefit of itself and as
agent for Wells Fargo  Merchant  Services,  L.L.C.,  a security  interest in all
commercial   tort  claims  that  the  Borrower  may  have  against  any  Person.
Notwithstanding  the foregoing,  the Security Interest of Lender upon Borrower's
Intellectual  Property Rights shall only secure the  Indebtedness  consisting of
and  arising  out of both  the  Real  Estate  Term  Advance,  up to a  limit  of
$1,000,000, and the Equipment Term Advance and shall be subject to the terms and
provisions of Section 7.3 of this  Agreement.  Notwithstanding  any provision to
the contrary  contained in this Agreement,  (a) the Security Interest granted by
Parent in its  interest  in Ronson  Canada  shall be limited as  provided in the
Security  Agreement by Parent in favor of Lender and (b) the  Security  Interest
granted by Ronson Canada hereunder  (including,  without limitation,  the rights
under Section 3.3 hereof) shall secure the Ronson Canada Indebtedness only.

         3.1.1 Existing  Capital One Mortgage.  Nothing in this Agreement  shall
               ------------------------------
create a  Security  Interest  in (a) the  "Mortgaged  Property"  as such term is
defined in the  Existing  Capital One Mortgage or (b) the "Leases" or "Rents" as
such terms are  defined in the  Assignment  of Rents and Leases  made by RCPC to
North Fork Bank (now known as Capital One,  N.A.) dated  September  27, 2006 and
recorded  with the Clerk of  Middlesex  County,  New Jersey on  recorded in Book
11875, Page 560, a copy of which is attached hereto as Exhibit F.

         Section 3.2.  Notification of Account  Debtors and Other Obligors.  The
                       ---------------------------------------------------
Lender may at any time (whether or not a Default  Period then exists) notify any
account  debtor or other Person  obligated to pay the amount due that such right
to payment has been assigned or transferred to the Lender for security and shall
be paid directly to the Lender.  The Borrower will join in giving such notice if
the Lender so requests.  At any time

                                       28
<PAGE>

after the Borrower or the Lender gives such notice to an account debtor or other
obligor, the Lender may, but need not, in the Lender's name or in the Borrower's
name,  demand,  sue for,  collect or receive  any money or  property at any time
payable or receivable on account of, or securing,  any such right to payment, or
grant any  extension to, make any  compromise  or  settlement  with or otherwise
agree to waive,  modify, amend or change the obligations  (including  collateral
obligations) of any such account debtor or other obligor. Upon the occurrence of
an Event of Default and during the continuation  thereof, the Lender may, in the
Lender's  name  or  in  the  Borrower's   name,  as  the  Borrower's  agent  and
attorney-in-fact,  notify the United States Postal Service and/or Canada Post to
change the address for delivery of the Borrower's mail to any address designated
by the Lender, provided that Lender shall also notify Borrower promptly after it
provides  such notice to the United States  Postal  Service  and/or Canada Post,
otherwise  intercept the Borrower's  mail, and receive,  open and dispose of the
Borrower's  mail,  applying all Collateral as permitted under this Agreement and
holding all other mail for the Borrower's account or forwarding such mail to the
Borrower's last known address.

         Section 3.3.  Assignment of Insurance.  As additional  security for the
                       -----------------------
payment and performance of the Indebtedness,  the Borrower hereby assigns to the
Lender  any and all monies  (including  proceeds  of  insurance  and  refunds of
unearned  premiums)  due or to become  due  under,  and all other  rights of the
Borrower  with respect to, any and all policies of insurance  now or at any time
hereafter  covering  the  Collateral  or any  evidence  thereof or any  business
records or valuable papers pertaining  thereto,  and the Borrower hereby directs
the issuer of any such policy to pay all such monies directly to the Lender.  At
any time,  whether or not a Default Period then exists, the Lender may (but need
not), in the Lender's name or in the Borrower's name,  execute and deliver proof
of  claim,  receive  all such  monies,  endorse  checks  and  other  instruments
representing payment of such monies, and adjust, litigate, compromise or release
any claim against the issuer of any such policy.  Any monies received as payment
for any loss under any insurance  policy  mentioned  above (other than liability
insurance  policies) or as payment of any award or compensation for condemnation
or taking by eminent domain,  shall be paid over to the Lender to be applied, at
the option of the Lender,  either to the prepayment of the Indebtedness or shall
be disbursed to the Borrower under staged payment terms reasonably  satisfactory
to the  Lender  for  application  to  the  cost  of  repairs,  replacements,  or
restorations.  Any such repairs, replacements, or restorations shall be effected
with  reasonable  promptness and shall be of a value at least equal to the value
of the items or property destroyed prior to such damage or destruction.

         Section 3.4. Occupancy.
                      ---------

         (a) The Borrower hereby  irrevocably  grants to the Lender the right to
take  possession  of the  Premises at any time during a Default  Period  without
notice or consent, to the exclusion of Borrower.

         (b) The Lender may use the Premises only to hold, process, manufacture,
sell, use, store, liquidate, realize upon or otherwise dispose of items that are
Collateral  and for other  purposes that the Lender may in good faith deem to be
related or incidental purposes.

         (c) The Lender's  right to hold the Premises  shall cease and terminate
upon the earlier of (i) payment in full and  discharge of all  Indebtedness  and
termination  of the Credit  Facility,  and (ii) final sale or disposition of all
items constituting Collateral and delivery of all such items to purchasers.

         (d) The Lender shall not be obligated to pay or account for any rent or
other compensation for the possession,  occupancy or use of any of the Premises;
provided,  however, that if the Lender does pay or account for any rent or other
compensation  for the possession,  occupancy or use of any of the Premises,  the
Borrower shall  reimburse the Lender  promptly for the full amount  thereof.  In
addition,  the Borrower will pay, or reimburse the Lender for, all taxes,  fees,
duties,  imposts,  charges and expenses at any time  incurred by or imposed upon
the  Lender  by  reason  of the  execution,  delivery,  existence,  recordation,
performance  or  enforcement of this Agreement or the provisions of this Section
3.4.

                                       29
<PAGE>

         Section 3.5.  License.  Without  limiting the  generality  of any other
                       -------
Security Document,  each Loan Party hereby grants to the Lender a non-exclusive,
worldwide and royalty-free  license to use or otherwise exploit all Intellectual
Property  Rights of the Loan  Party  for the  purpose  of:  (a)  completing  the
manufacture of any in-process  materials  during any Default Period so that such
materials  become  saleable  Inventory,  all in accordance with the same quality
standards  previously  adopted by the Loan Party for its own  manufacturing  and
subject to the Loan  Party's  reasonable  exercise of quality  control;  and (b)
selling,  leasing or  otherwise  disposing of any or all  Collateral  during any
Default Period.

         Section 3.6. Financing Statement. Each Loan Party authorizes the Lender
                      -------------------
to file from time to time, such financing statements pursuant to the UCC and the
PPSA against collateral  described as "all personal property" or "all assets" or
describing specific items of collateral  including commercial tort claims as the
Lender deems necessary or useful to perfect the Security Interest. All financing
statements  filed  pursuant  to the UCC and the PPSA  before the date  hereof to
perfect the Security  Interest were  authorized by the Loan Party and are hereby
re-authorized. A carbon, photographic or other reproduction of this Agreement or
of any  financing  statements  signed  by the  Loan  Party  is  sufficient  as a
financing  statement  and may be filed as a financing  statement in any state or
province to perfect the security  interests  granted  hereby.  For this purpose,
each Loan Party  represents and warrants that the following  information is true
and correct:

Name and address of Debtor:

Ronson Corporation
Corporate Park III, Campus Drive
PO Box 6707
Somerset, NJ 08875
Federal Employer Identification No. 22-0743290
Organizational Identification No. 7693250000

Ronson Consumer Products Corporation
Corporate Park III, Campus Drive
PO Box 6707
Somerset, NJ 08875
Federal Employer Identification No.  22-2380407
Organizational Identification No.  0100153715

Ronson Aviation, Inc.
Corporate Park III, Campus Drive
PO Box 6707
Somerset, NJ 08875
Federal Employer Identification No. 21-0729844
Organizational Identification No. 7693211000

Ronson Corporation of Canada Ltd.
Corporate Park III, Campus Drive
PO Box 6707
Somerset, NJ 08875
Federal Employer Identification No. 12177 8682 RC0001
Organizational Identification No. 629727

Name and address of Secured Party:

Wells Fargo Bank, National Association
119 West 40th Street, 16th Floor
New York, New York 10018-2500

                                       30
<PAGE>

         Section 3.7.  Setoff.  The Lender may at any time or from time to time,
                       ------
at its sole  discretion  and without  demand and  without  notice to anyone (but
subject,  as to Ronson  Canada,  to the final  sentence of Section 2.1  hereof),
setoff any  liability  owed to the  Borrower by the Lender,  whether or not due,
against any  Indebtedness,  whether or not due. In  addition,  each other Person
holding a  participating  interest in any  Indebtedness  shall have the right to
appropriate or setoff any deposit or other liability then owed by such Person to
the  Borrower,  whether  or not due,  and apply the same to the  payment of said
participating  interest,  as fully as if such  Person had lent  directly  to the
Borrower  the  amount  of such  participating  interest,  subject,  as to Ronson
Canada, to the final sentence of Section 2.1 hereof.

         Section 3.8. Collateral.  This Agreement does not contemplate a sale of
                      ----------
accounts,  contract  rights or chattel  paper,  and,  as  provided  by law,  the
Borrower is entitled to any surplus and shall remain liable for any  deficiency.
The  Lender's  duty of care with respect to  Collateral  in its  possession  (as
imposed by law) shall be deemed  fulfilled  if it exercises  reasonable  care in
physically keeping such Collateral,  or in the case of Collateral in the custody
or possession of a bailee or other third Person,  exercises  reasonable  care in
the  selection  of the bailee or other  third  Person,  and the Lender  need not
otherwise preserve, protect, insure or care for any Collateral. The Lender shall
not be obligated  to preserve  any rights the  Borrower  may have against  prior
parties,  to realize on the  Collateral  at all or in any  particular  manner or
order or to apply any cash proceeds of the Collateral in any particular order of
application.  The Lender has no obligation to clean-up or otherwise  prepare the
Collateral  for sale.  The Borrower  waives any right it may have to require the
Lender to pursue any third Person for any of the Indebtedness.

                                   ARTICLE IV
                              CONDITIONS OF LENDING

         Section 4.1. Conditions Precedent to the Initial Advances and Letter of
                      ----------------------------------------------------------
Credit.  The Lender's  obligation  to make the initial  Advances or to cause any
------
Letters of Credit to be issued shall be subject to the condition  precedent that
the Lender shall have received all of the following,  each properly  executed by
the appropriate party and in form and substance satisfactory to the Lender:

         (a) This Agreement.

         (b) The Revolving Notes and the Term Notes.

         (c) A Standby  Letter of Credit  Agreement  and a Commercial  Letter of
Credit  Agreement,  and L/C  Application  for each  Letter  of  Credit  that the
Borrower wishes to have issued thereunder.

         (d) A true and correct copy of any and all leases pursuant to which the
Borrower is leasing the  Premises,  together  with a landlord's  disclaimer  and
consent with respect to each such lease.

         (e) A true and correct copy of any and all mortgages  pursuant to which
the Borrower has mortgaged the Premises,  together with a mortgagee's disclaimer
and consent with respect to each such mortgage.

         (f) A true and correct copy of any and all agreements pursuant to which
the  Borrower's  property  is in the  possession  of any  Person  other than the
Borrower,  together  with,  in the case of any  goods  held by such  Person  for
resale, (i) a consignee's acknowledgment and waiver of Liens, (ii) UCC financing
statements  and PPSA financing  statements  sufficient to protect the Borrower's
and the  Lender's  interests  in such  goods,  and (iii) UCC  searches  and PPSA
searches  showing that no other  secured  party has filed a financing  statement
against such Person and covering  property  similar to the Borrower's other than
the Borrower, or if there exists any such secured party, evidence that each such
secured party has received notice from the Borrower and the Lender sufficient to
protect the Borrower's and the Lender's  interests in the Borrower's  goods from
any claim by such secured party.

                                       31
<PAGE>

         (g) An acknowledgment  and waiver of Liens from each warehouse in which
the Borrower is storing Inventory.

         (h) A true and correct copy of any and all agreements pursuant to which
the  Borrower's  property  is in the  possession  of any  Person  other than the
Borrower,  together  with, (i) an  acknowledgment  and waiver of Liens from each
subcontractor who has possession of the Borrower's goods from time to time, (ii)
UCC financing statements and PPSA financing statements sufficient to protect the
Borrower's and the Lender's  interests in such goods, and (iii) UCC searches and
PPSA  searches  showing  that no  other  secured  party  has  filed a  financing
statement  covering such Person's property other than the Borrower,  or if there
exists  any such  secured  party,  evidence  that  each such  secured  party has
received  notice  from the  Borrower  and the Lender  sufficient  to protect the
Borrower's and the Lender's  interests in the Borrower's goods from any claim by
such secured party.

         (i) An  acknowledgment  and  agreement in favor of the Lender from each
licensor (i) to the extent  Borrowers  desire to include any Inventory  provided
pursuant to a license  agreement  with such  licensor as Eligible  Inventory and
(ii) of rights  that are  material  to the  operation  of  Borrowers'  business,
together  with a true,  correct  and  complete  copy of all  license  agreements
material to the operation of Borrowers' business.

         (j) The Wholesale Lockbox and Collection Account Agreement.

         (k) Control  agreements with each bank at which the Borrower  maintains
deposit accounts.

         (l) Each Patent Security Agreement.

         (m) Each Trademark Security Agreement.

         (n) Each other Loan Document.

         (o) Current searches of appropriate  filing offices showing that (i) no
Liens have been filed and remain in effect against a Loan Party except Permitted
Liens or Liens held by Persons who have agreed in writing  that upon  receipt of
proceeds of the initial Advances,  they will satisfy,  release or terminate such
Liens in a manner satisfactory to the Lender, and (ii) the Lender has duly filed
all  financing  statements  necessary to perfect the Security  Interest,  to the
extent the Security Interest is capable of being perfected by filing.

         (p) A certificate of the Loan Party's Secretary or Assistant  Secretary
certifying that attached to such certificate are (i) the resolutions of the Loan
Party's Directors and, if required, Owners, authorizing the execution,  delivery
and performance of the Loan Documents, (ii) true, correct and complete copies of
the Loan Party's Constituent Documents,  and (iii) examples of the signatures of
the Loan Party's  Officers or agents  authorized to execute and deliver the Loan
Documents and other instruments, agreements and certificates,  including Advance
requests, on the Borrower's behalf.

         (q) A  current  certificate  issued  by the  Secretary  of State of New
Jersey,  certifying  that the Parent,  RCPC and RAI are in  compliance  with all
applicable  organizational  requirements  of the State of New Jersey and current
certificates  issued by the Companies and Personal  Property  Security Branch of
the Province of Ontario certifying the corporate status of Ronson Canada.

         (r)  Evidence  that the  Borrower  is duly  licensed  or  qualified  to
transact business in all jurisdictions where the character of the property owned
or leased or the nature of the business transacted by it makes such licensing or
qualification necessary.

         (s)  A  certificate  of an  Officer  of  the  Borrower  confirming  the
representations and warranties set forth in Article V.

                                       32
<PAGE>

         (t) Certificates of the insurance required  hereunder,  with all hazard
insurance  containing a lender's loss payable  endorsement in the Lender's favor
and with all liability insurance naming the Lender as an additional insured.

         (u) A separate  Guaranty  from each  Guarantor,  pursuant to which each
Guarantor  unconditionally  guarantees  the  full  and  prompt  payment  of  all
Indebtedness.

         (v) An opinion of counsel to the Loan Parties, addressed to the Lender.

         (w) Payment of all fees due under the terms of this  Agreement  through
the  date of the  initial  Advance  or the  issuance  of any  Letter  of  Credit
hereunder,  and payment of all expenses incurred by the Lender through such date
and that are required to be paid by the Borrower under this Agreement.

         (x)  Evidence  that  after  making  the  initial   Revolving   Advance,
satisfying all obligations owed to the Borrower's  prior lender,  satisfying all
trade payables older than 90 days from invoice date, book overdrafts and closing
costs, Availability shall be not less than $600,000.

         (y) A Customer Identification Information form and such other forms and
verification as the Lender may need to comply with the U.S.A. Patriot Act.

         (z) With respect to the real estate that is  encumbered by the mortgage
of the Lender (i) an  appraisal  ordered by the Lender or its agent of said real
property  and all  improvements  thereon,  conforming  to Uniform  Standards  of
Professional Appraisal Practice and issued by a real estate appraiser acceptable
to the Lender,  reflecting  values  acceptable to the Lender in its  discretion,
(ii) an American Land Title  Association  policy of title  insurance,  with such
endorsements as the Lender may require,  issued by an insurer in such amounts as
the Lender may require,  insuring the Lender's lien on said real estate, subject
only to such  exceptions as the Lender in its discretion  may approve,  together
with such  evidence  relating to the payment of liens or potential  liens as the
Lender  may  require,  and  (iii) an  American  Land  Title  Association  survey
certified  to the  Lender and to the title  company  that is  acceptable  to the
Lender.

         (aa) With respect to the real estate that is encumbered by the mortgage
of the Lender a current  environmental site assessment  indicating that the real
property is subject to no "recognized environmental conditions", as that term is
defined by the American Society for Testing and Materials,  in its standards for
environmental  due  diligence  and is not in need of  remedial  action  to avoid
subjecting its owner to any present or future liability or contingent  liability
with respect to the release of toxic or hazardous wastes or substances.

         (bb) With respect to the real estate that is encumbered by the mortgage
of the Lender (i) a flood hazard  determination form,  confirming whether or not
the parcel is in a flood hazard area and whether or not flood  insurance must be
obtained,  and, if the real  estate is located in a flood  hazard  area,  (ii) a
policy of flood insurance.

         (cc) With respect to the real estate that is encumbered by the mortgage
of the Lender,  copies of management services and maintenance  contracts,  fire,
health and safety reports, certificates of occupancy, leases and rent rolls, and
such other information  relating to the real estate and the improvements thereon
that the Lender in its discretion deems necessary.

         (dd) Such  other  documents  as the Lender in its sole  discretion  may
require.

         Section  4.2.  Conditions  Precedent  to All  Advances  and  Letters of
                        --------------------------------------------------------
Credit. The Lender's obligation to make each Advance or to cause the issuance of
------
a Letter of Credit shall be subject to the further conditions precedent that:

                                       33
<PAGE>

         (a) The  representations  and  warranties  contained  in  Article V are
correct  in all  material  respects  on and as of the  date of such  Advance  or
issuance of a Letter of Credit as though made on and as of such date,  except to
the extent that such  representations and warranties relate solely to an earlier
date; and

         (b) No event has occurred and is continuing,  or would result from such
Advance or  issuance  of a Letter of Credit  which  constitutes  a Default or an
Event of Default.

                                   ARTICLE V
                         REPRESENTATIONS AND WARRANTIES

         Each Loan Party represents and warrants to the Lender as follows:

         Section  5.1.   Existence  and  Power;  Name  Chief  Executive  Office;
                         -------------------------------------------------------
Inventory and Equipment Locations;  Federal Employer  Identification  Number and
--------------------------------------------------------------------------------
Organizational  Identification  Number.  Parent,  RCPC and RAI are corporations,
--------------------------------------
duly  organized,  validly  existing and in good  standing  under the laws of the
State of New Jersey and are duly  licensed or qualified to transact  business in
all  jurisdictions  where the  character of the property  owned or leased or the
nature of the business  transacted by it makes such  licensing or  qualification
necessary,  except where failure so to be licensed or qualified would not have a
Material Adverse Effect. Ronson Canada is a corporation, duly organized, validly
existing and in good  standing  under the laws of the Province of Ontario and is
duly licensed or qualified to transact business in all  jurisdictions  where the
character  of the  property  owned  or  leased  or the  nature  of the  business
transacted by it makes such licensing or qualification  necessary,  except where
failure so to be licensed or qualified would not have a Material Adverse Effect.
Each Loan Party has all  requisite  power and authority to conduct its business,
to own its  properties  and to execute  and  deliver,  and to perform all of its
obligations under, the Loan Documents.  During the seven (7) years preceding the
Funding Date, each Loan Party has done business solely under the names set forth
in Schedule 5.1. Each Loan Party's chief executive office and principal place of
business is located at the address  set forth in  Schedule  5.1,  and all of the
Loan Party's records relating to its business or the Collateral are kept at that
location.  All  Inventory and Equipment is located at that location or at one of
the other locations  listed in Schedule 5.1. The Loan Party's  federal  employer
identification  number and organization  identification number are correctly set
forth in Section 3.6.

         Section 5.2.  Capitalization.  Schedule 5.2  constitutes  a correct and
                       --------------
complete list of all ownership  interests of the Borrowers and rights to acquire
ownership  interests  including  the  record  holder,  number of  interests  and
percentage  interests on a fully  diluted  basis,  and an  organizational  chart
showing the ownership structure of all Subsidiaries of the Loan Parties.

         Section  5.3.  Authorization  of  Borrowing;  No  Conflict as to Law or
                        --------------------------------------------------------
Agreements.  The execution,  delivery and performance by the Loan Parties of the
----------
Loan  Documents and the  borrowings  from time to time  hereunder have been duly
authorized by all necessary corporate action and do not and will not (i) require
any  consent  or  approval  of  the  Loan  Parties'  Owners;  (ii)  require  any
authorization,  consent or approval by, or  registration,  declaration or filing
with, or notice to, any  governmental  department,  commission,  board,  bureau,
agency or instrumentality,  domestic or foreign, or any third party, except such
authorization, consent, approval, registration, declaration, filing or notice as
has been obtained, accomplished or given prior to the date hereof; (iii) violate
any  provision of any law,  rule or  regulation  (including  Regulation X of the
Board of  Governors  of the  Federal  Reserve  System)  or of any  order,  writ,
injunction or decree presently in effect having  applicability to any Loan Party
or of any Loan  Party's  Constituent  Documents;  (iv)  result in a breach of or
constitute  a default  under any  indenture  or loan or credit  agreement or any
other material agreement, lease or instrument to which any Loan Party is a party
or by which it or its properties may be bound or affected;  or (v) result in, or
require,  the  creation  or  imposition  of any Lien  (other  than the  Security
Interest)  upon or with respect to any of the  properties now owned or hereafter
acquired by any Loan Party.

                                       34
<PAGE>

         Section 5.4. Legal Agreements. This Agreement constitutes and, upon due
                      ----------------
execution  by each Loan Party,  the other Loan  Documents  will  constitute  the
legal, valid and binding  obligations of the Loan Parties,  enforceable  against
the Loan Parties in accordance with their respective terms.

         Section 5.5. Subsidiaries.  Except as set forth in Schedule 5.5 hereto,
                      ------------
the Loan Parties have no Subsidiaries.

         Section 5.6. Financial  Condition;  No Adverse Change. The Loan Parties
                      ----------------------------------------
have furnished to the Lender their audited consolidated financial statements for
their fiscal year ended December 31, 2007 and unaudited  consolidated  financial
statements  for the  fiscal-year-to-date  period  ended March 31, 2008 and those
statements   fairly   present  in  all  material   respects  the  Loan  Parties'
consolidated  financial  condition  on the dates  thereof  and the  consolidated
results of their  operations  and cash flows for the periods then ended and were
prepared in accordance  with GAAP.  Since the date of the most recent  financial
statements,  there has been no change in the Loan Parties' business,  properties
or condition (financial or otherwise) which has had a Material Adverse Effect.

         Section 5.7.  Litigation.  There are no actions,  suits or  proceedings
                       ----------
pending or, to the Loan Parties' knowledge,  threatened against or affecting any
Loan Party or any of their Affiliates or the properties of the any Loan Party or
any of their Affiliates before any court or governmental department, commission,
board,  bureau,  agency  or  instrumentality,  domestic  or  foreign,  which  is
reasonably  likely to have a  Material  Adverse  Effect,  except as set forth on
Schedule 5.7.

         Section 5.8.  Regulation U. The Borrower is not engaged in the business
                       ------------
of  extending  credit for the purpose of  purchasing  or carrying  margin  stock
(within the meaning of  Regulation  U of the Board of  Governors  of the Federal
Reserve  System),  and no part of the  proceeds of any  Advance  will be used to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying any margin stock.

         Section 5.9. Taxes.  The Loan Parties have paid or caused to be paid to
                      -----
the proper authorities when due all federal, state, provincial,  and local taxes
required  to be  withheld  by each of them.  The Loan  Parties  have  filed  all
federal,  provincial,  state and local tax returns which to the knowledge of the
Officers of the Borrower,  are required to be filed, and, except as set forth on
Schedule 5.9, the Loan Parties have paid or caused to be paid to the  respective
taxing  authorities  all  taxes as shown on said  returns  or on any  assessment
received by any of them to the extent such taxes have become due.

         Section 5.10. Titles and Liens. The Loan Parties have good and absolute
                       ----------------
title to all Collateral free and clear of all Liens other than Permitted  Liens.
No  financing  statement  filed  pursuant to the UCC or the PPSA naming any Loan
Party as debtor is on file in any office except to perfect only Permitted Liens.

         Section 5.11. Intellectual Property Rights.
                       ----------------------------

         (a) Owned  Intellectual  Property.  Schedule 5.11 is a complete list of
all patents,  applications for patents,  registered trademarks,  applications to
register trademarks,  registered service marks, applications to register service
marks,  registered  designs,  mask works, trade dress and copyrights for which a
Loan Party is an owner of record as of the date hereof (the "Owned  Intellectual
Property").  Except as disclosed on Schedule  5.11, (i) the Loan Parties own the
Owned  Intellectual  Property  free  and  clear of all  restrictions  (including
covenants not to sue a third party), court orders,  injunctions,  decrees, writs
or Liens, whether by written agreement or otherwise,  other than Permitted Liens
(ii) no Person  other  than the Loan  Parties  owns or,  except in the  ordinary
course of business and set forth on Schedule 5.11, has been granted any right in
the Owned Intellectual Property,  (iii) all material Owned Intellectual Property
is valid,  subsisting and  enforceable  and (iv) the Loan Parties have taken all
commercially  reasonable  action  necessary  to  maintain  and protect the Owned
Intellectual Property.

         (b)  Agreements  with  Employees and  Contractors.  Each Loan Party has
entered into a legally  enforceable  agreement  with each of its  employees  and
subcontractors  obligating each such Person to assign to

                                       35
<PAGE>

the Loan Party, without any additional  compensation,  any Intellectual Property
Rights  created,  discovered  or  invented  by such Person in the course of such
Person's  employment  or  engagement  with the Loan Party  (except to the extent
prohibited by law), and further requiring such Person to cooperate with the Loan
Party,  without any  additional  compensation,  in connection  with securing and
enforcing any Intellectual Property Rights therein; provided,  however, that the
foregoing shall not apply with respect to employees and subcontractors whose job
descriptions  are of the  type  such  that no such  assignments  are  reasonably
foreseeable.

         (c) Intellectual Property Rights Licensed from Others. Schedule 5.11 is
a complete  list of all  agreements  under which the Loan Parties have  licensed
Intellectual  Property  Rights  from  another  Person  ("Licensed   Intellectual
Property")as  of the date hereof  other than readily  available,  non-negotiated
licenses of computer  software and other  intellectual  property used solely for
performing   accounting,   word  processing  and  similar  administrative  tasks
("Off-the-shelf  Software")  and a  summary  of any  ongoing  payments  the Loan
Parties are  obligated  to make with  respect  thereto.  Except as  disclosed on
Schedule 5.11 and in written agreements,  copies of which have been given to the
Lender, the Loan Parties' licenses to use the Licensed Intellectual Property are
free and clear of all restrictions,  Liens (other than Permitted  Liens),  court
orders,  injunctions,  decrees,  or  writs,  whether  by  written  agreement  or
otherwise.  Except as  disclosed  on  Schedule  5.11,  the Loan  Parties are not
obligated or under any  liability  whatsoever to make any payments of a material
nature by way of royalties,  fees or otherwise to any owner of,  licensor of, or
other claimant to, any Intellectual Property Rights.

         (d)  Other  Intellectual  Property  Needed  for  Business.  Except  for
Off-the-shelf Software and as disclosed on Schedule 5.11, the Owned Intellectual
Property and the Licensed  Intellectual  Property  constitute  all  Intellectual
Property  Rights as of the date  hereof  used or  necessary  to conduct the Loan
Parties'  business in all material  respects as it is presently  conducted or as
the Loan Parties reasonably foresees conducting it.

         (e)  Infringement.  Except as  disclosed  on  Schedule  5.11,  the Loan
Parties have no knowledge  of, and have not received any written claim or notice
alleging,  any  Infringement of another  Person's  Intellectual  Property Rights
(including  any written  claim that any Loan Party must  license or refrain from
using the  Intellectual  Property  Rights of any third  party)  nor, to the Loan
Parties' knowledge, is there any threatened claim, in each case insofar as would
reasonably be likely to have a Material Adverse Effect.

         Section 5.12. Plans.
                       -----

         (a) Except as set forth on Schedule 5.12 hereto,  as of the date hereof
no Loan Party nor any ERISA  Affiliate  (a)  maintains  or has,  during the past
seven  (7)  years,   maintained  any  Pension  Plan,  (b)   contributes  or  has
contributed,  during the past seven (7) years, to any Multiemployer  Plan or (c)
provides  or has  provided,  during the past  seven (7)  years,  post-retirement
medical or insurance  benefits  with  respect to  employees or former  employees
(other than benefits  required under Section 601 of ERISA,  Section 4980B of the
IRC or applicable state law). No Loan Party nor any ERISA Affiliate has received
any notice that remains  outstanding  or has any knowledge to the effect that it
is not in full compliance in all material respects, with any of the requirements
of  ERISA,  the IRC or  applicable  state  law  with  respect  to any  Plan.  No
Reportable  Event exists in connection with any Pension Plan. Each Plan which is
intended  to qualify  under the IRC is so  qualified  (or may be  modified to be
qualified  without  material  liability  to any  loan  Party),  and no  fact  or
circumstance  exists which may have an adverse effect in any material respect on
the Plan's tax qualified  status.  No Loan Party nor any ERISA Affiliate has (i)
any  accumulated  funding  deficiency  (as  defined in Section  302 of ERISA and
Section  430 of the  IRC)  under  any  Plan,  whether  or not  waived,  (ii) any
liability  under  Section  4201 or 4243 of  ERISA  for any  withdrawal,  partial
withdrawal,  reorganization or other event under any Multiemployer Plan or (iii)
any liability or knowledge of any facts or  circumstances  which could result in
any liability to the Pension Benefit Guaranty Corporation,  the Internal Revenue
Service,  the Department of Labor or any participant in connection with any Plan
(other than routine claims for benefits under the Plan).

                                       36
<PAGE>

         (b) The Canadian Pension Plans are duly registered under the Income Tax
Act (Canada) and all other  applicable laws which require  registration.  Ronson
Canada has  complied  with and  performed  in all  material  respects all of its
obligations  under and in respect of the  Canadian  Pension  Plans and  Canadian
Benefit Plans under the terms thereof, any funding agreements and all applicable
laws   (including  any  fiduciary,   funding,   investment  and   administration
obligations).  All employer and employee payments,  contributions or premiums to
be  remitted,  paid to or in respect of each  Canadian  Pension Plan or Canadian
Benefit  Plan have been paid in a timely  fashion in all  material  respects  in
accordance  with the terms  thereof,  any funding  agreement and all  applicable
laws.  There have been no improper  withdrawals or applications of the assets of
the Canadian Pension Plans or the Canadian Benefit Plans. As of the date hereof,
there are no  outstanding  disputes  (except for  routine  claims for payment of
benefits that do not exceed in the aggregate C$25,000)  concerning the assets of
the Canadian Pension Plans or the Canadian  Benefit Plans.  Each of the Canadian
Pension Plans is fully funded on a solvency basis as disclosed in the valuations
last filed with the applicable governmental authorities and which valuations are
consistent with generally accepted actuarial principles.

         Section  5.13.  Default.  Each  Loan  Party is in  compliance  with all
                         -------
provisions of all agreements,  instruments,  decrees and orders to which it is a
party or by which it or its property is bound or affected, the breach or default
of which would reasonably be likely to have a Material Adverse Effect.

         Section 5.14. Intentionally Omitted.
                       ---------------------

         Section  5.15.   Submissions   to  Lender.   All  financial  and  other
                          ------------------------
information provided to the Lender by or on behalf of a Loan Party in connection
with the Borrower's  request for the credit facilities  contemplated  hereby (i)
except as to projections,  valuations or pro forma financial statements, is true
and  correct in all  material  respects,  (ii) does not omit any  material  fact
necessary,  in light of the  circumstances  under which  provided,  to make such
information not misleading and, (iii) as to projections, valuations or pro forma
financial  statements,  present a good  faith  opinion  as to such  projections,
valuations and pro forma condition and results.

         Section 5.16. Financing Statements.  Each Loan Party has authorized the
                       --------------------
filing of financing  statements pursuant to the UCC and the PPSA sufficient when
filed to perfect the Security Interest and the other security  interests created
by the  Security  Documents.  When such  financing  statements  are filed in the
offices  noted  therein,  the Lender  will have a valid and  perfected  security
interest  in all  Collateral  which is  capable  of being  perfected  by  filing
financing statements. None of the Collateral is or will become a fixture on real
estate, unless a sufficient fixture filing is in effect with respect thereto.

         Section  5.17.  Rights  to  Payment.  Each  right to  payment  and each
                         -------------------
instrument,   document,  chattel  paper  and  other  agreement  constituting  or
evidencing Collateral is (or, in the case of all future Collateral, will be when
arising or issued)  the  valid,  genuine  and  legally  enforceable  obligation,
subject to no defense,  setoff or  counterclaim,  of the account debtor or other
obligor named therein or in the Borrower's  records  pertaining thereto as being
obligated to pay such obligation.

         Section 5.18.  Financial Solvency.  Both before and after giving effect
                        ------------------
to all of the transactions contemplated in the Loan Documents, no Loan Party:

         (a) Was or will be  "insolvent",  as that term is used and  defined  in
Section  101(32)  of the  United  States  Bankruptcy  Code and  Section 2 of the
Uniform Fraudulent Transfer Act;

         (b) Has unreasonably  small capital or is engaged or about to engage in
a business or a transaction for which any remaining assets of the Loan Party are
unreasonably small;

         (c) By executing,  delivering or performing its  obligations  under the
Loan Documents or other documents to which it is a party or by taking any action
with respect thereto,  intends to, nor believes that it will, incur debts beyond
its ability to pay them as they mature;

                                       37
<PAGE>

         (d) By executing,  delivering or performing its  obligations  under the
Loan Documents or other documents to which it is a party or by taking any action
with respect thereto,  intends to hinder, delay or defraud either its present or
future creditors; and

         (e) At this time contemplates filing a petition in bankruptcy or for an
arrangement  or  reorganization  or  similar  proceeding  under  any  law of any
jurisdiction,  nor, to the best  knowledge of the Loan Party,  is the subject of
any actual, pending or threatened bankruptcy,  insolvency or similar proceedings
under any law of any jurisdiction.

         Section 5.19. Inactive Subsidiaries.  None of the Inactive Subsidiaries
                       ---------------------
own any assets,  perform or conduct,  or shall perform or conduct,  any business
activities  whatsoever,  unless (a) Borrowers  provide Lender with prior written
notice of the intent to purchase assets or conduct  business through an Inactive
Subsidiary and (b) such Inactive Subsidiary shall become a co-borrower hereunder
or a guarantor of the Indebtedness, at Lender's discretion.

                                   ARTICLE VI

                                    COVENANTS

         So long as the Indebtedness  shall remain unpaid or the Credit Facility
shall remain  outstanding  (other than in respect of any issued and  outstanding
Letters of Credit  which have been cash  collateralized  pursuant to Section 2.5
hereof at times when the Credit  Facility has otherwise been  terminated and all
other  Indebtedness  has been fully paid and  satisfied),  the Loan Parties will
comply  with the  following  requirements,  unless  the Lender  shall  otherwise
consent in writing:

         Section 6.1. Reporting Requirements.  The Loan Parties will deliver, or
                      ----------------------
cause to be delivered,  to the Lender each of the  following,  which shall be in
form and detail acceptable to the Lender:

         (a) Annual Financial Statements. As soon as available, and in any event
within 90 days after the end of each  fiscal year of the  Parent,  the  Parent's
audited  financial  statements  with  the  unqualified  opinion  of  independent
certified  public  accountants  selected  by the  Parent and  acceptable  to the
Lender,  which annual  financial  statements  shall include the Parent's balance
sheet  as at the end of such  fiscal  year  and the  related  statements  of the
Parent's  income,  retained  earnings  and cash flows for the  fiscal  year then
ended,  prepared  on a  consolidating  and  consolidated  basis to  include  any
Subsidiaries,  all in reasonable  detail and prepared in  accordance  with GAAP,
together with (i) copies of all management letters prepared by such accountants;
and (ii) a certificate of the Parent's chief financial officer stating that such
financial  statements have been prepared in accordance with GAAP, fairly present
in all material respects the Parent's  financial position and the results of its
operations,  whether or not such Officer has knowledge of the  occurrence of any
Default or Event of Default and, if so,  stating in reasonable  detail the facts
with respect thereto, and the computations as to whether or not the Parent is in
compliance with the Financial Covenants.

         (b)  Quarterly  Financial  Statements.  As soon as available and in any
event  within  45  days  after  the  end  of  quarterly   fiscal   period,   the
unaudited/internal  balance sheet and statements of income and retained earnings
of the  Parent  as at the end of and for such  quarter  and for the year to date
period then ended, prepared on a consolidating and consolidated basis to include
any  Subsidiaries,  in  reasonable  detail and stating in  comparative  form the
figures  for the  corresponding  date and  periods  in the  previous  year,  all
prepared in accordance  with GAAP,  subject to year-end  audit  adjustments  and
which fairly present in all material  respects the Parent's  financial  position
and the results of its  operations;  and  accompanied  by a  certificate  of the
Parent's chief financial officer,  substantially in the form of Exhibit C hereto
stating (i) that such financial statements have been prepared in accordance with
GAAP, subject to year-end audit adjustments,  and fairly present in all material
respects the Parent's financial position and the results of its operations, (ii)
whether or not such Officer has  knowledge of the  occurrence  of any Default or
Event of Default not  theretofore  reported and remedied and,

                                       38
<PAGE>

if so, stating in reasonable  detail the facts with respect  thereto,  and (iii)
all relevant facts in reasonable detail to evidence, and the computations as to,
whether or not the Parent is in compliance with the Financial Covenants.

         (c) Monthly Financial Statements. As soon as available and in any event
within 30 days after the end of monthly period, the  unaudited/internal  balance
sheet and statements of income and retained earnings of the Parent as at the end
of and for such month and for the year to date period then ended,  prepared on a
consolidating and consolidated basis to include any Subsidiaries,  in reasonable
detail and stating in comparative  form the figures for the  corresponding  date
and periods in the previous year, all prepared in accordance with GAAP,  subject
to year-end audit  adjustments and which fairly present in all material respects
the  Parent's  financial  position  and  the  results  of  its  operations;  and
accompanied  by  a  certificate  of  the  Parent's  chief   financial   officer,
substantially  in the form of Exhibit C hereto  stating (i) that such  financial
statements have been prepared in accordance with GAAP, subject to year-end audit
adjustments,  and fairly present in all material respects the Parent's financial
position and the results of its operations, (ii) whether or not such Officer has
knowledge of the  occurrence of any Default or Event of Default not  theretofore
reported and remedied and, if so,  stating in  reasonable  detail the facts with
respect thereto,  and (iii) all relevant facts in reasonable detail to evidence,
and the  computations as to, whether or not the Parent is in compliance with the
Financial Covenants.

         (d) Collateral  Reports.  Within 10 days after the end of each month or
more frequently if the Lender so requires,  each Borrower's  accounts receivable
and its accounts payable,  a detailed  perpetual  inventory report, an inventory
certification  report, and a calculation of each Borrower's  Accounts,  Eligible
Accounts,  Inventory  and  Eligible  Inventory  as at the end of such  month  or
shorter time period.

         (e) Projections.  No later than thirty (30) days after the beginning of
each fiscal year, the Loan Parties' projected balance sheets, income statements,
statements  of cash flow and  projected  Availability,  prepared  on a quarterly
basis,  for each quarter of the then current  fiscal  year,  each in  reasonable
detail.  Such items will be certified  by the Officer who is the Parent's  chief
financial officer as being the most accurate projections available and identical
to the  projections  used by the Parent for  internal  planning  purposes and be
delivered  with a  statement  of  underlying  assumptions  and  such  supporting
schedules  and  information  as the  Lender  may in  its  discretion  reasonably
require.

         (f)  Supplemental  Reports.  On the first Business Day of each calendar
week, or more frequently if the Lender so requires,  (a) the Domestic Borrower's
"daily  collateral  reports",  an  inventory  report,   receivables   schedules,
collection reports,  credit memos, cash receipts,  copies of invoices to account
debtors in excess of $25,000, signed and dated shipment documents for goods sold
to said  account  debtors in excess of $25,000  and (b) Ronson  Canada's  "daily
collateral  reports",  an inventory report,  receivables  schedules,  collection
reports,  credit memos, cash receipts,  copies of invoices to account debtors in
excess of $25,000, signed and dated shipment documents and delivery receipts for
goods sold to said account debtors in excess of $25,000.

         (g) Litigation.  Immediately after the commencement thereof,  notice in
writing of all  litigation and of all  proceedings  before any  governmental  or
regulatory  agency  affecting  the Loan Parties  which seek a monetary  recovery
against any Loan Party in excess of $50,000.

         (h)  Defaults.  When any Officer of a Loan Party  becomes  aware of the
probable occurrence of any Default or Event of Default, and no later than 3 days
after such Officer becomes aware of such Default or Event of Default,  notice of
such occurrence,  together with a detailed  statement by an Executive Officer of
the Loan Party stating whether the Default or Event of Default can be cured, and
if so, the steps being taken by the Loan Party to cure such  Default or Event of
Default.

         (i) Plans. As soon as possible, and in any event within 30 days after a
Loan Party knows or has reason to know that any Reportable Event with respect to
any Pension Plan has occurred, a statement signed by the Officer who is the Loan
Party's chief  financial  officer  setting  forth details as to such  Reportable
Event and

                                       39
<PAGE>

the action which the Loan Party proposes to take with respect thereto,  together
with a copy of the  notice  of such  Reportable  Event  to the  Pension  Benefit
Guaranty Corporation. As soon as possible, and in any event within 10 days after
the Loan Party fails to make any quarterly contribution required with respect to
any Pension Plan under Section 412(m) of the IRC, the Loan Party will deliver to
the Lender a  statement  signed by the  Officer  who is the Loan  Party's  chief
financial  officer setting forth details as to such failure and the action which
the Loan Party  proposes to take with respect  thereto,  together with a copy of
any notice of such  failure  required  to be  provided  to the  Pension  Benefit
Guaranty  Corporation.  As soon as  possible,  and in any event  within ten days
after the Loan Party  knows or has  reason to know that it has or is  reasonably
expected  to have any  liability  under  Sections  4201 or 4243 of ERISA for any
withdrawal,  partial  withdrawal,   reorganization  or  other  event  under  any
Multiemployer Plan, the Loan Party will deliver to the Lender a statement of the
Loan Party's chief financial  officer setting forth details as to such liability
and the action which the Loan Party proposes to take with respect thereto.

         (j)  Disputes.  Promptly  upon  knowledge  thereof,  notice  of (i) any
disputes or claims by the Borrower's customers exceeding $20,000 individually or
$50,000 in the aggregate  during any fiscal year;  (ii) credit memos;  and (iii)
any goods returned to or recovered by the Borrower.

         (k) Officers and Directors.  Promptly upon knowledge thereof, notice of
any change in the persons  constituting the Loan Parties' Executive Officers and
Directors.

         (l) Collateral.  Promptly upon knowledge thereof, notice of any loss of
or material damage to any Collateral or of any substantial adverse change in any
Collateral or the prospect of payment thereof.

         (m) Commercial Tort Claims.  Promptly upon knowledge thereof, notice of
any commercial  tort claims it may bring against any Person,  including the name
and address of each  defendant,  a summary of the facts, an estimate of the Loan
Party's damages,  copies of any complaint or demand letter submitted by the Loan
Party, and such other information as the Lender may request.

         (n) Intellectual Property.

              (i) 30 days prior written notice of Loan Party's intent to acquire
material  Intellectual  Property  Rights;  except for transfers  permitted under
Section 6.18,  the Loan Party will give the Lender 30 days prior written  notice
of its intent to  dispose  of  material  Intellectual  Property  Rights and upon
request  shall  provide  the Lender with copies of all  proposed  documents  and
agreements concerning such rights.

              (ii)  Promptly  upon   knowledge   thereof,   notice  of  (A)  any
Infringement of its material  Intellectual  Property Rights by others reasonably
likely to result in a Material  Adverse Effect,  (B) claims that a Loan Party is
Infringing another Person's  Intellectual Property Rights and (C) any threatened
cancellation,  termination or material  limitation of its material  Intellectual
Property Rights.

              (iii)  Promptly upon  receipt,  copies of all  registrations  with
respect to its Intellectual Property Rights.

         (o) Reports to Owners. Promptly upon their distribution,  copies of all
financial  statements,  reports and proxy statements which the Parent shall have
sent to its Owners.

         (p) SEC Filings.  Promptly after the sending or filing thereof (but not
later than (i) 45 days after the then ending fiscal quarter with respect to Form
10-Q and (ii) 90 days  after the end of each  fiscal  year with  respect to Form
10-K)  copies of all regular and periodic  reports  which Parent shall file with
the Securities and Exchange Commission or any national securities exchange.

                                       40
<PAGE>

         (q) Tax Returns of Loan Parties. As soon as possible,  and in any event
no later than fifteen days after they are due to be filed,  copies of the state,
provincial and federal income tax returns and all schedules  thereto of the Loan
Parties.

         (r) Violations of Law. Promptly upon knowledge  thereof,  notice of the
Loan Party's violation of any law, rule or regulation,  the non-compliance  with
which would  reasonably be likely to result in a Material  Adverse Effect on the
Loan Party.

         (s) Other Reports. From time to time, with reasonable  promptness,  any
and all receivables schedules,  inventory reports,  collection reports,  deposit
records,  equipment schedules,  copies of invoices to account debtors,  shipment
documents  and  delivery  receipts  for goods  sold,  and such  other  material,
reports, records or information as the Lender may request.

         (t) Reporting in Dollars. All financial  statements,  reports and other
financial information provided by Borrowers to Lender pursuant to this Agreement
shall be reported in Dollars  and to the extent any amounts are  converted  into
Dollars  from any other  currency  for  purposes of  reporting  pursuant to this
Agreement,  Borrower shall provide to Lender with the  conversion  rates used by
Borrowers for such reporting and supporting  calculations and other  information
as Lender may request from time to time.

         Section 6.2. Financial Covenants.
                      -------------------

         (a)  Minimum  Tangible  Net Worth  (non-cumulative).  The  Parent  will
maintain, during each period described below, its Tangible Net Worth, determined
as of the end of each such  period,  in an amount  not less than the  amount set
forth for each such period (numbers appearing between "< >" are negative):

          -----------------------------------------------------
          Quarter Ending                   Minimum Tangible Net
                                                 Worth
          -----------------------------------------------------
          June 30, 2008                       <$1,650,000>
          -----------------------------------------------------
          September 30, 2008                  <$1,500,000>
          -----------------------------------------------------
          December 31, 2008                   <$1,150,000>
          -----------------------------------------------------

         (b) Minimum Net Income (cumulative).  The Parent will achieve, for each
period described below on a cumulative  fiscal year to date basis, Net Income of
not less than the  amount  set forth for each  such  period  (numbers  appearing
between "< >" are negative):

          -----------------------------------------------------
          Quarter Ending                     Minimum Net Income
          -----------------------------------------------------
          June 30, 2008                          <$530,000>
          -----------------------------------------------------
          September 30, 2008                     <$437,000>
          -----------------------------------------------------
          December 31, 2008                       <$50,000>
          -----------------------------------------------------

         (c) Minimum Net Cash Flow  (cumulative).  The Parent will achieve,  for
each period described below on a cumulative  fiscal year to date basis, Net Cash
Flow of not less  than the  amount  set  forth  for each  such  period  (numbers
appearing between "< >" are negative):

          -----------------------------------------------------
          Quarter Ending            Minimum Net Cash Flow
          -----------------------------------------------------
          June 30, 2008             <$355,000>
          -----------------------------------------------------
          September 30, 2008        <$280,000>
          -----------------------------------------------------
          December 31, 2008         $50,000
          -----------------------------------------------------

         (d) Capital  Expenditures.  The Loan Parties will not incur or contract
to incur Capital  Expenditures of more than $500,000 in the aggregate during any
fiscal year.

                                       41
<PAGE>

         (e)  Establishing   Future  Financial   Covenants.   The  Loan  Parties
acknowledge and agrees that, upon Lender's receipt of projections,  satisfactory
to Lender in its sole  discretion,  for the fiscal year ending December 31, 2009
and each fiscal year thereafter from the Loan Parties, Lender shall consult with
Parent and thereafter reset the foregoing  Financial Covenants in its reasonable
discretion.  The Loan Parties agree to comply with such Financial Covenants,  as
reset.

         (f) Consolidated and  Consolidating  Reports.  All financial  covenants
have been calculated based upon the consolidated results of Parent and Borrowers
and all  financial  statements  provided  pursuant  to this  Agreement  shall be
prepared  and  reported as the  consolidated  and  consolidating  statements  of
Parent,  which  statements  will include the financial  condition and results of
operations of Borrowers.

         Section 6.3. Permitted Liens; Financing Statements.
                      -------------------------------------

         (a) The Loan Parties will not create, incur or suffer to exist any Lien
upon or of any of its assets,  now owned or  hereafter  acquired,  to secure any
indebtedness;  excluding,  however,  from the  operation of the  foregoing,  the
following (each a "Permitted Lien"; collectively, "Permitted Liens"):

              (i)  In  the   case   of  any   Mortgaged   Property,   covenants,
restrictions,  rights,  easements and minor irregularities in title reflected on
Schedule B to a title policy covering such Mortgaged  Property and acceptable to
Lender and which do not materially  interfere with the Loan Party's  business or
operations as presently conducted;

              (ii) Liens in  existence on the date hereof and listed in Schedule
6.3 hereto;

              (iii) The  Security  Interest  and Liens  created by the  Security
Documents;

              (iv) Purchase money Liens relating to the acquisition of machinery
and  equipment of the Borrower not  exceeding  the lesser of cost or fair market
value  thereof not  exceeding  $100,000  for any one purchase or $200,000 in the
aggregate  during any fiscal year,  and so long as no Default  Period is then in
existence and none would exist immediately after such acquisition;

              (v)   Statutory   Liens  of  landlords   and  Liens  of  carriers,
warehousemen,  bailees,  mechanics,  materialmen and other like Liens imposed by
law, created in the ordinary course of business and securing amounts not yet due
(or which are being contested in good faith, by appropriate proceedings or other
appropriate actions which are sufficient to prevent imminent foreclosure of such
Liens),  and  with  respect  to which  adequate  reserves  or other  appropriate
provisions  are being  maintained by the Loan parties in  accordance  with GAAP;
provided,  that Loan Parties shall  immediately pay and satisfy such Lien in the
event there is any risk of forfeiture of any Collateral but may after paying and
satisfying such Lien continue to prosecute any contest relating thereto;

              (vi) Deposits made in the ordinary  course of business of any Loan
Party (including,  without  limitation,  security deposits of leases,  indemnity
bonds, surety bonds and appeal bonds) in connection with workers'  compensation,
unemployment  insurance and other types of social security benefits or to secure
the  performance of tenders,  bids,  contracts  (other than for the repayment or
guarantee  of  borrowed   money  or  purchase  money   obligations),   statutory
obligations  and other  similar  obligations  arising  as a result  of  progress
payments  under  government  contracts,  in an  aggregate  amount  not to exceed
$50,000;

              (vii)  Liens for taxes not yet due and  payable or for taxes being
contested  in good faith by  appropriate  proceedings  which are  sufficient  to
prevent  imminent  foreclosure  of such Liens;  provided,  that  Borrower  shall
immediately  pay  and  satisfy  such  Lien in the  event  there  is any  risk of
forfeiture  of any  Collateral  but may after  paying and  satisfying  such Lien
continue to prosecute any contest relating thereto; and

              (viii) Statutory,  common law or contractual  rights of set-off or
Liens on money  coming into  possession  of any  depository  or other  financial
institution in the ordinary course of business.

                                       42
<PAGE>

         (b) The Loan Parties will not amend any  financing  statements in favor
of the Lender except as permitted by law.

         Section 6.4.  Indebtedness.  The Loan  Parties will not incur,  create,
                       ------------
assume or permit to exist any  indebtedness  or liability on account of deposits
or advances or any  indebtedness  for borrowed money or letters of credit issued
on any Loan Party's behalf, or any other indebtedness or liability  evidenced by
notes, bonds, debentures or similar obligations, except:

         (a) Any existing or future Indebtedness or any other obligations of the
Loan Parties to the Lender;

         (b) Any  indebtedness  of the Loan  Parties  in  existence  on the date
hereof and listed in Schedule 6.4 hereto;

         (c) Any indebtedness relating to Permitted Liens;

         (d) Indebtedness to trade creditors  incurred in the ordinary course of
business;

         (e) Deferred taxes, to the extent permitted or required to be accounted
for under GAAP; and

         (f)  Indebtedness  or  advances  to the  Parent  or to  any  Subsidiary
thereof, a summary of which as of the date hereof is set forth on Schedule 6.28.

         Section 6.5. Guaranties.  The Loan Parties will not assume,  guarantee,
                      ----------
endorse or otherwise  become directly or contingently  liable in connection with
any obligations of any other Person, except:

         (a) The  endorsement of negotiable  instruments by the Loan Parties for
deposit  or  collection  or  similar  transactions  in the  ordinary  course  of
business;

         (b) Guaranties, endorsements and other direct or contingent liabilities
in connection  with the  obligations of other Persons,  in existence on the date
hereof and listed in Schedule 6.4 hereto; and

         (c)  Guaranties  of any  indebtedness  or other  obligation of any Loan
Party,  such as long-term  equipment  leases, or any other Subsidiary of Parent,
consented to in writing by Lender.

         Section 6.6.  Investments and  Subsidiaries.  The Loan Parties will not
                       -----------------------------
make or  permit to exist any loans or  advances  to, or make any  investment  or
acquire any interest whatsoever in, any other Person or Affiliate, including any
partnership or joint  venture,  nor purchase or hold  beneficially  any stock or
other  securities or evidence of  indebtedness of any other Person or Affiliate,
except:

         (a)  Investments in direct  obligations of the United States of America
or any agency or instrumentality thereof whose obligations constitute full faith
and credit  obligations of the United States of America having a maturity of one
year or less,  commercial paper issued by U.S. corporations rated "A 1" or "A 2"
by Standard & Poor's  Ratings  Services  or "P 1" or "P 2" by Moody's  Investors
Service or certificates of deposit or bankers'  acceptances having a maturity of
one year or less issued by members of the Federal Reserve System having deposits
in excess of $100,000,000 (which certificates of deposit or bankers' acceptances
are fully insured by the Federal Deposit Insurance Corporation);

         (b) Travel  advances or loans to the Borrower's  Officers and employees
not exceeding at any one time an aggregate of $50,000;

         (c) Prepaid rent not exceeding one month or security deposits;

         (d)  Investments  in  Subsidiaries  in existence on the date hereof and
listed on Schedule 5.5 hereto;

                                       43
<PAGE>

         (e)  Investments  in, or  advances  to,  the  Subsidiaries  of  Parent,
including,  without  limitation,  loans and  advances to Ronson  Hydraulics  and
Prometcor in an  aggregate  amount not in excess of $20,000 per annum solely for
the  payment  of taxes and other  amounts  required  by  Ronson  Hydraulics  and
Prometcor to otherwise comply with all laws;

         (f)  Advances  on behalf of Officers  and  Directors  under  applicable
indemnification agreements; and

         (g)  Investments  in  marketable  securities  in the amounts  listed on
Schedule 6.6 hereto.

         Section 6.7. Dividends and  Distributions.  No Loan Party shall declare
                      ----------------------------
or pay any dividends  (other than dividends  payable solely in stock of the Loan
Parties)  on any class of its  stock,  or make any  payment  on  account  of the
purchase,  redemption or other  retirement of any shares of such stock, or other
securities or evidence of its  indebtedness or make any  distribution in respect
thereof, either directly or indirectly;  provided however, that the Loan Parties
may  declare  and pay cash  dividends  if,  (i) Lender  gives its prior  written
consent and (ii) after giving effect to any such payment, the Loan Parties would
remain in compliance with the terms of this Agreement.

         Section  6.8.  Salaries.  The Loan Parties  shall not pay  excessive or
                        --------
unreasonable   salaries,   bonuses,   commissions,   consultant  fees  or  other
compensation;  or increase the salary,  Bonus Factors,  commissions,  consultant
fees or other compensation of any Director, Officer or consultant, or any member
of their  families,  by more  than ten  percent  (10%) in any one  year,  either
individually or for all such persons in the aggregate,  or pay any such increase
from any  source  other than  profits  earned in the year of  payment.  The Loan
Parties  shall not revise the Bonus Factors in any material  respect;  provided,
however,  the Loan Parties shall not be authorized to pay bonuses if an Event of
Default exists.

         Section 6.9. Intentionally Omitted.
                      ---------------------

         Section 6.10. Books and Records; Collateral Examination, Inspection and
                       ---------------------------------------------------------
Appraisals.
----------

         (a) Each Loan Party will keep accurate  books of record and account for
itself  pertaining  to the  Collateral  and  pertaining  to the its business and
financial  condition  and such other matters as the Lender may from time to time
request in which true and complete  entries will be made in accordance with GAAP
and, upon the Lender's  request,  will permit any officer,  employee,  attorney,
accountant or other agent of the Lender to audit,  review, make extracts from or
copy any and all company and financial  books and records of the Borrower at all
times during  ordinary  business hours, to send and discuss with account debtors
and other obligors  requests for verification of amounts owed to the Loan Party,
and to discuss the Loan Party's  affairs with any of its  Directors or Executive
Officers.

         (b) Each Loan Party hereby  irrevocably  authorizes all accountants and
third parties to disclose and deliver to the Lender or its designated  agent, at
the Loan Party's expense,  all financial  information,  books and records,  work
papers,  management reports and other information in their possession  regarding
the Loan Party.

         (c)  Each  Loan  Party  will  permit  the  Lender  or  its   employees,
accountants,  attorneys or agents,  to examine and inspect any  Collateral,  the
Mortgaged  Property  or any other  property of any Loan Party at any time during
ordinary business hours.

         (d) The Lender may also,  from time to time,  obtain at the  Borrower's
expense an appraisal of Collateral  and the  Mortgaged  Property by an appraiser
acceptable  to the  Lender  in its sole  discretion.  Borrower's  obligation  to
reimburse  Lender  for the  costs of such  appraisals  shall be  limited  to one
appraisal of each Mortgaged  Property and one appraisal of the other  Collateral
per calendar year,  provided that Borrower shall also be obligated for the costs
of any appraisals obtained by Lender during a Default Period.

                                       44
<PAGE>

         Section 6.11. Account Verification.
                       --------------------

         (a) The  Lender or its agent may at any time and from time to time send
or require  the Loan Party to send  requests  for  verification  of  accounts or
notices of assignment to account debtors and other  obligors.  The Lender or its
agent may also at any time and from time to time telephone  account  debtors and
other obligors to verify accounts.

         (b) Each Loan Party  shall pay when due each  account  payable due to a
Person holding a Permitted Lien (as a result of such payable) on any Collateral.

         Section 6.12. Compliance with Laws.
                       --------------------

         (a) The Loan Parties  shall (i) comply,  and cause each  Subsidiary  to
comply,  with the  requirements  of  applicable  laws and  regulations,  the non
compliance with which would  materially and adversely affect its business or its
financial  condition  and (ii) use and keep the  Collateral,  and  require  that
others use and keep the Collateral,  only for lawful purposes, without violation
of any federal, state, provincial or local law, statute or ordinance.

         (b) The Loan Parties  shall (i) ensure,  and cause each  Subsidiary  to
ensure, that no Owner shall be listed on the Specially  Designated Nationals and
Blocked  Person List or other similar lists  maintained by the Office of Foreign
Assets  Control  ("OFAC"),  the  Department  of the  Treasury or included in any
Executive  Orders,  (ii) not use or permit the use of the proceeds of the Credit
Facility or any other financial  accommodation from the Lender to violate any of
the foreign asset control  regulations  of OFAC or other  applicable  law, (iii)
comply,  and cause each  Subsidiary to comply,  with all applicable Bank Secrecy
Act laws and  regulations,  as  amended  from time to time,  and (iv)  otherwise
comply with the USA  Patriot  Act as  required  by federal law and the  Lender's
policies and practices.

         Section 6.13.  Payment of Taxes and Other Claims. The Loan Parties will
                        ---------------------------------
pay or discharge,  when due, (a) all taxes, assessments and governmental charges
levied or imposed  upon it or upon its income or  profits,  upon any  properties
belonging to it  (including  the  Collateral)  or upon or against the  creation,
perfection or continuance of the Security  Interest,  prior to the date on which
penalties  attach thereto,  (b) all federal,  state,  provincial and local taxes
required to be withheld  by it, and (c) all lawful  claims for labor,  materials
and supplies which, if unpaid, might by law become a Lien upon any properties of
the Loan Parties;  provided,  that the Loan Parties shall not be required to pay
any such  tax,  assessment,  charge  or claim  whose  amount,  applicability  or
validity is being  contested in good faith by  appropriate  proceedings  and for
which proper reserves have been made.

         Section 6.14. Maintenance of Properties.
                       -------------------------

         (a) The Loan Parties will keep and maintain the  Collateral  and all of
their other  properties  necessary  or useful in its  business  in all  material
respects in good  condition,  repair and  working  order  (normal  wear and tear
excepted)  and will  from time to time  replace  or repair  any  material  worn,
defective or broken  parts;  provided,  however,  that nothing in this  covenant
                             --------   -------
shall prevent the Loan Parties from  discontinuing the operation and maintenance
of any of their  properties  if such  discontinuance  is,  in the Loan  Parties'
judgment,  desirable  in the  conduct  of the  Loan  Parties'  business  and not
disadvantageous in any material respect to the Lender. Each Loan Party will take
all commercially reasonable steps necessary to protect and maintain its material
Intellectual Property Rights.

         (b) The Loan  Parties  will  defend the  Collateral  against  all Liens
(other than Permitted  Liens),  claims or demands of all Persons (other than the
Lender) claiming the Collateral or any interest  therein.  The Loan Parties will
keep all Collateral  free and clear of all Liens except  Permitted  Liens.  Each
Loan Party will take all  commercially  reasonable  steps necessary to prosecute
any Person  Infringing its material  Intellectual  Property Rights and to defend
itself against any Person  accusing it of Infringing  any Person's  Intellectual
Property Rights which would reasonably be likely to result in a Material Adverse
Effect.

                                       45
<PAGE>

         Section 6.15. Insurance.  The Loan Parties will obtain and at all times
                       ---------
maintain insurance with insurers  acceptable to the Lender, in such amounts,  on
such terms  (including any  deductibles) and against such risks as may from time
to time be required by the Lender, but in all events in such amounts and against
such risks as is usually  carried by companies  engaged in similar  business and
owning  similar  properties  in the same general areas in which the Loan Parties
operate. Without limiting the generality of the foregoing, the Loan Parties will
at all times maintain  business  interruption  insurance,  and keep all tangible
Collateral   insured  against  risks  of  fire  (including   so-called  extended
coverage),  theft,  collision (for Collateral  consisting of motor vehicles) and
such other risks and in such amounts as the Lender may reasonably request,  with
any loss payable to the Lender to the extent of its  interest,  and all policies
of such  insurance  shall  contain a lender's loss payable  endorsement  for the
Lender's benefit consistent with this Agreement.

         Section 6.16. Preservation of Existence.  Each Loan Party will preserve
                       -------------------------
and  maintain  its  existence  and all of its material  rights,  privileges  and
franchises  necessary  or  desirable  in the normal  conduct of its business and
shall conduct its business in all material respects in an orderly, efficient and
regular manner.

         Section 6.17. Delivery of Instruments, etc. Upon request by the Lender,
                       ----------------------------
each Loan Party will promptly  deliver to the Lender in pledge all  instruments,
documents and chattel paper constituting  Collateral,  duly endorsed or assigned
by the Borrower.

         Section  6.18.  Sale or  Transfer  of Assets;  Suspension  of  Business
                         -------------------------------------------------------
Operations.  No Loan Party will  sell,  lease,  assign,  transfer  or  otherwise
----------
dispose of (i) the stock of any  Subsidiary,  (ii) all or a substantial  part of
its assets,  or (iii) any  Collateral  or any interest  therein  (whether in one
transaction or in a series of  transactions)  to any other Person other than the
sale of  Inventory in the  ordinary  course of business and will not  liquidate,
dissolve or suspend business operations. No Loan Party will transfer any part of
its ownership  interest in any material  Intellectual  Property Rights or permit
any  agreement  under  which  it has  licensed  material  Licensed  Intellectual
Property to lapse, except that the Loan Party may transfer such rights or permit
such  agreements  to lapse  if it  shall  have  reasonably  determined  that the
applicable Intellectual Property Rights are no longer useful in its business. If
the Loan Party transfers any  Intellectual  Property Rights for value,  the Loan
Party  will  pay  over  the  proceeds  to  the  Lender  for  application  to the
Indebtedness. No Loan Party will license any other Person to use any of the Loan
Party's Intellectual Property Rights, except that the Loan Parties may (i) grant
licenses in the ordinary  course of their  business in connection  with sales of
Inventory  or  provision  of services  to their  customers,  and (ii)  otherwise
license their  Intellectual  Property  Rights with the prior written  consent of
Lender, which consent shall not be unreasonably withheld.

         Section 6.19.  Consolidation and Merger;  Asset Acquisitions.  The Loan
                        ---------------------------------------------
Parties will not  consolidate  or amalgamate  with or merge into any Person,  or
permit any other Person to merge into it, or acquire (in a transaction analogous
in  purpose  or  effect  to a  consolidation,  amalgamation  or  merger)  all or
substantially all the assets of any other Person.

         Section 6.20. Sale and Leaseback.  The Loan Parties will not enter into
                       ------------------
any arrangement,  directly or indirectly, with any other Person whereby any Loan
Party shall sell or transfer any real or personal property, whether now owned or
hereafter acquired, and then or thereafter rent or lease as lessee such property
or any part thereof or any other  property  which the Loan Party  intends to use
for  substantially  the same purpose or purposes as the  property  being sold or
transferred.

         Section 6.21. Restrictions on Nature of Business. The Loan Parties will
                       ----------------------------------
not engage in any line of  business  materially  different  from that  presently
engaged in by the Loan Parties and will not purchase, lease or otherwise acquire
assets not related to its business.

         Section 6.22. Accounting.  The Loan Parties will not adopt any material
                       ----------
change in accounting principles other than as required by GAAP. The Loan Parties
will not adopt, permit or consent to any change in its fiscal year.

                                       46
<PAGE>

         Section  6.23.  Discounts,  etc.  After notice from the Lender during a
                         ---------------
Default  Period,  the Loan  Parties  will not  grant  any  discount,  credit  or
allowance  to any  customer  of the Loan  Parties  or accept any return of goods
sold.  If a Default  Period  does not  exist,  Loan  Parties  will not grant any
discount,  credit or allowance to any customer of the Loan Parties or accept any
return of goods sold  other than in the  ordinary  course of their  business  in
accordance  with past  practices and Borrower  shall  include  reference to such
amounts in its reports  provided to Lender  under  Section 6.1 hereof.  The Loan
Parties will not at any time modify, amend, subordinate, cancel or terminate the
obligation of any account debtor or other obligor of the Loan Parties.

         Section 6.24. Plans.
                       -----

         (a) Except as  disclosed  to the  Lender in  writing  prior to the date
hereof, neither the Loan Parties nor any ERISA Affiliate will (i) adopt, create,
assume or become a party to any  Pension  Plan,  (ii)  incur any  obligation  to
contribute  to any  Multiemployer  Plan,  (iii) incur any  obligation to provide
post-retirement  medical or  insurance  benefits  with  respect to  employees or
former employees (other than benefits required by law) or (iv) amend any Plan in
a manner that would materially  increase its funding  obligations  other than as
required by law.

         (b) For each existing, or hereafter adopted,  Canadian Pension Plan and
Canadian  Benefit  Plan,  Borrowers  shall in a timely  fashion  comply with and
perform in all material  respects all of their  obligations under and in respect
of such  Canadian  Pension Plan or Canadian  Benefit Plan,  including  under any
funding  agreements and all applicable laws  (including any fiduciary,  funding,
investment and administration obligations).

              (i) All employer or employee  payments,  contributions or premiums
required to be remitted,  paid to or in respect of each Canadian Pension Plan or
Canadian  Benefit Plan shall be paid or remitted by Borrower in a timely fashion
in accordance with the terms thereof,  any funding agreements and all applicable
laws.

              (ii) Borrower shall not permit its unfunded pension fund and other
employee  benefit plan obligations and liabilities to remain unfunded other than
in accordance with applicable law.

              (iii) Borrower shall deliver to Lender (i) if requested by Lender,
copies of each annual and other return, report or valuation with respect to each
Canadian Pension Plan as filed with any applicable Governmental Authority;  (ii)
promptly after receipt thereof, a copy of any direction, order, notice or ruling
that a Borrower  may receive from any  applicable  Governmental  Authority  with
respect to any Canadian Pension Plan; and (iii)  notification  within 30 days of
any  increases  having a cost to  Borrower in excess of $50,000 per annum in the
aggregate,  in the  benefits of any existing  Canadian  Pension Plan or Canadian
Benefit Plan, or the  establishment of any new Canadian Pension Plan or Canadian
Benefit Plan, or the  commencement  of  contributions  to any such plan to which
Borrower was not previously required to contribute.

         Section 6.25. Place of Business;  Name. No Loan Party will transfer its
                       ------------------------
chief executive office or principal place of business, or move, relocate,  close
or sell any  business  location  except  upon 30 days' prior  written  notice to
Lender.  No Loan  Party will  permit  any  tangible  Collateral  or any  records
pertaining  to the  Collateral  to be located in any state,  province or area in
which,  in the event of such  location,  a  financing  statement  covering  such
Collateral  would be required to be, but has not in fact been, filed in order to
perfect  the  Security  Interest.   No  Loan  Party  will  change  its  name  or
jurisdiction  of  organization  except  upon 30 days'  prior  written  notice to
Lender.

         Section 6.26.  Constituent  Documents;  S Corporation  Status.  No Loan
                        ----------------------------------------------
Party will  become an S  Corporation.  None of RCPC,  RAI or Ronson  Canada will
amend its Constituent  Documents  except to comply with applicable law and shall
promptly  provide Lender with copies of any required  amendments after execution
of same.

                                       47
<PAGE>

         Section 6.27.  Performance by the Lender. If any Loan Party at any time
                        -------------------------
fails to perform or observe any of the  foregoing  covenants  contained  in this
Article VI or elsewhere herein,  and if such failure shall continue for a period
of ten  Business  Days after the Lender gives the Loan  Parties  written  notice
thereof (or in the case of the agreements  contained in Section 6.13 and Section
6.15,  immediately upon the occurrence of such failure,  without notice or lapse
of time),  the Lender may,  but need not,  perform or observe  such  covenant on
behalf and in the name,  place and stead of the Loan Party (or, at the  Lender's
option,  in the  Lender's  name) and may,  but need not,  take any and all other
actions which the Lender may  reasonably  deem necessary to cure or correct such
failure  (including  the  payment  of taxes,  the  satisfaction  of  Liens,  the
performance  of  obligations  owed to  account  debtors or other  obligors,  the
procurement and maintenance of insurance, the execution of assignments, security
agreements and financing  statements,  and the endorsement of instruments);  and
the Loan  Party  shall  thereupon  pay to the Lender on demand the amount of all
monies expended and all costs and expenses (including reasonable attorneys' fees
and legal expenses)  incurred by the Lender in connection with or as a result of
the performance or observance of such agreements or the taking of such action by
the Lender, together with interest thereon from the date expended or incurred at
the Default Rate. To facilitate  the Lender's  performance or observance of such
covenants of the Loan Parties,  each Loan Party hereby irrevocably  appoints the
Lender, or the Lender's delegate,  acting alone, as the Loan Party's attorney in
fact (which appointment is coupled with an interest) with the right (but not the
duty) from time to time to create, prepare, complete,  execute, deliver, endorse
or file in the name  and on  behalf  of the  Borrower  any and all  instruments,
documents, assignments, security agreements, financing statements,  applications
for insurance and other agreements required to be obtained,  executed, delivered
or endorsed by the Loan Party hereunder.

         Section 6.28. Affiliate Transactions. No Loan Party shall enter into or
                       ----------------------
be a party to any agreement or transaction with any Affiliate (including without
limitation any other Loan Party) except in the ordinary  course of, and pursuant
to the reasonable  requirements of, such Loan Party's business and upon fair and
reasonable  terms  that are no less  favorable  to such Loan Party than it would
obtain in a comparable arms length transaction with a Person not an Affiliate of
such Loan Party, and except as set forth on Schedule 6.28.  Notwithstanding  the
foregoing and provided a Default Period does not exist,  Parent, RAI or RCPC may
make  intercompany  loans,  advances  and  extensions  of credit as  hereinabove
contemplated  provided  that, in the case of loans to Ronson Canada (i) any such
loans,  advances  and  extensions  of credit  are  evidenced  by loan  documents
reasonably   acceptable  to  Lender,   Lender's   approval  thereof  not  to  be
unreasonably  withheld or delayed, (ii) the sole originals of the loan documents
relating thereto are delivered to the Lender,  and (iii)  outstanding  principal
balance of any such  loans,  advances  and  extensions  of credit made to Ronson
Canada shall not at any time exceed $550,000.

                                  ARTICLE VII

                     EVENTS OF DEFAULT, RIGHTS AND REMEDIES

         Section  7.1.  Events of Default.  "Event of  Default",  wherever  used
                        -----------------
herein, means any one of the following events:

         (a) Default in the payment of the Revolving  Notes,  the Equipment Term
Note, the Real Estate Term Note, any Obligation of Reimbursement, or any default
with respect to payment of any other  Indebtedness  due from the Loan Parties to
Lender as such Indebtedness becomes due and payable;

         (b)  Default in the  performance,  or breach,  of (i)  Sections  6.1(a)
through  (e) of this  Agreement  and such  breach is not cured  within  five (5)
Business Days after notice by Lender or (ii) any other  covenant or agreement of
the Borrower contained in this Agreement;

         (c) An  Overadvance  arises  as the  result  of  any  reduction  in the
Borrowing  Base, or arises in any manner on terms not  otherwise  approved of in
advance by the Lender in writing,  and such Overadvance  continues for three (3)
Business Days;

                                       48
<PAGE>

         (d) A Change of Control shall occur;

         (e) Any Financial  Covenant shall become  inapplicable due to the lapse
of time  and the  failure  of the  Lender  and the Loan  Parties  to come to any
agreement to amend any such covenant to cover future  periods that is acceptable
to the Lender in the Lender's sole discretion;

         (f) Any Loan Party or any Guarantor  shall be or become  insolvent,  or
admit in writing its or his inability to pay its or his debts as they mature, or
make an  assignment  for the  benefit  of  creditors;  or any Loan  Party or any
Guarantor  shall  apply  for or  consent  to the  appointment  of any  receiver,
trustee,  or similar officer for it or him or for all or any substantial part of
its or his  property;  or such  receiver,  trustee or similar  officer  shall be
appointed  without  the  application  or  consent  of the  Loan  Party  or  such
Guarantor,  as the  case  may be;  or the  Loan  Party  or any  Guarantor  shall
institute  (by  petition,   application,   answer,  consent  or  otherwise)  any
bankruptcy,  insolvency,  reorganization,  arrangement,  readjustment  of  debt,
dissolution,  liquidation or similar proceeding  relating to it or him under the
laws of any  jurisdiction;  or any  such  proceeding  shall  be  instituted  (by
petition,  application  or  otherwise)  against  the  Loan  Party  or  any  such
Guarantor; or any judgment,  writ, warrant of attachment or execution or similar
process shall be issued or levied against a substantial  part of the property of
the Loan Party or any Guarantor;

         (g) A  petition  shall  be filed by or  against  any Loan  Party or any
Guarantor  under the United  States  Bankruptcy  Code,  any Canadian  Insolvency
Statutes  or the laws of any other  jurisdiction  naming  any Loan Party or such
Guarantor as debtor;

         (h) Intentionally omitted;

         (i) Any  representation  or  warranty  made by any  Loan  Party in this
Agreement,  by any Guarantor in any Guaranty  delivered to the Lender, or by any
Loan  Party  (or  any  of  its  Officers)  or any  Guarantor  in any  agreement,
certificate,  instrument or financial statement or other statement  contemplated
by or made or delivered  pursuant to or in connection with this Agreement or any
such Guaranty shall be incorrect in any material respect;

         (j) The rendering  against any Loan Party of an  arbitration  award,  a
final  judgment,  decree or order for the  payment of money in excess of $25,000
and the  continuance  of such  arbitration  award,  judgment,  decree  or  order
unsatisfied  and in effect for any period of 30 consecutive  days without a stay
of execution;

         (k) A default  under any bond,  debenture,  note or other  evidence  of
material  indebtedness  of the Loan  Parties  owed to any Person  other than the
Lender, or under any indenture or other instrument under which any such evidence
of  indebtedness  has  been  issued  or by which it is  governed,  or under  any
material lease or other material contract,  and the expiration of the applicable
period of grace, if any, specified in such evidence of indebtedness,  indenture,
other instrument, lease or contract;

         (l) Any  Reportable  Event,  which the Lender  determines in good faith
might  constitute  grounds for the  termination  of any Pension  Plan or for the
appointment  by the  appropriate  United States  District  Court of a trustee to
administer any Pension Plan, shall have occurred and be continuing 30 days after
written  notice to such  effect  shall  have been  given to a Loan  Party by the
Lender;  or a trustee shall have been appointed by an appropriate  United States
District Court to administer any Pension Plan; or the Pension  Benefit  Guaranty
Corporation  shall have instituted  proceedings to terminate any Pension Plan or
to appoint a trustee to  administer  any  Pension  Plan;  or a Loan Party or any
ERISA Affiliate shall have filed for a distress  termination of any Pension Plan
under  Title IV of ERISA;  or a Loan  Party or any ERISA  Affiliate  shall  have
failed to make any quarterly  contribution  required with respect to any Pension
Plan under Section 412(m) of the IRC, which the Lender  determines in good faith
may, by itself,  or in  combination  with any such  failures that the Lender may
determine are likely to occur in the future,  result in the imposition of a Lien
on a Loan  Party's  assets  in favor of the  Pension  Plan;  or any  withdrawal,
partial  withdrawal,  reorganization  or other event  occurs  with  respect to a

                                       49
<PAGE>

Multiemployer  Plan which results or could reasonably be expected to result in a
material  liability of a Loan Party to the Multiemployer  Plan under Title IV of
ERISA;

         (m) An event  of  default  shall  occur  and be  continuing  under  any
Security Document;

         (n)  Default in the  payment of any amount  owed by a Loan Party to the
Lender other than any  Indebtedness  arising  hereunder and all applicable  cure
periods shall have expired without cure thereof;

         (o) Any Guarantor shall repudiate, purport to revoke or fail to perform
any  obligation  under such  Guaranty  in favor of the  Lender,  any  individual
Guarantor shall die or any other Guarantor shall cease to exist;

         (p) The Lender  believes in good faith that the  prospect of payment in
full of any part of the  Indebtedness,  or that full performance by a Loan Party
under the Loan Documents,  is impaired,  or that there has occurred any material
adverse change in the business or financial condition of a Loan Party;

         (q) There has  occurred  any breach,  default or event of default by or
attributable  to, any Owner of at least twenty  percent  (20%) of the issued and
outstanding common stock of a Loan Party, Director, Executive Officer, Guarantor
or Subsidiary  of the Parent under any agreement  between such person and Lender
and all applicable notice and cure periods have expired; or

         (r) The indictment of any Director,  Executive Officer,  Guarantor,  or
any Owner of at least twenty percent (20%) of the issued and outstanding  common
stock of a Loan Party for a felony  offence  under state,  provincial or federal
law.

         Section 7.2. Rights and Remedies. During any Default Period, the Lender
                      -------------------
may exercise any or all of the following rights and remedies:

         (a) The  Lender  may,  by  notice  to the  Loan  Parties,  declare  the
Commitment to be terminated, whereupon the same shall forthwith terminate;

         (b) The  Lender  may,  by  notice  to the  Loan  Parties,  declare  the
Indebtedness to be forthwith due and payable,  whereupon all Indebtedness  shall
become  and be  forthwith  due  and  payable,  without  presentment,  notice  of
dishonor,  protest or further  notice of any kind, all of which the Loan Parties
hereby expressly waive;

         (c) The Lender  may,  without  notice to the Loan  Parties  and without
further action,  apply any and all money owing by the Lender to the Loan Parties
to the payment of the Indebtedness;

         (d) The Lender may exercise and enforce any and all rights and remedies
available  upon  default to a secured  party  under the UCC and/or the PPSA,  as
applicable,  including  the  right  to take  possession  of  Collateral,  or any
evidence  thereof,  proceeding  without  judicial process or by judicial process
(without  a prior  hearing  or notice  thereof,  which the Loan  Parties  hereby
expressly waive) and the right to sell, lease or otherwise dispose of any or all
of the Collateral  (with or without giving any warranties as to the  Collateral,
title to the Collateral or similar  warranties),  and, in connection  therewith,
the Loan Parties will on demand assemble the Collateral and make it available to
the  Lender  at a place to be  designated  by the  Lender  which  is  reasonably
convenient to both parties;

         (e) The Lender may make demand upon the Borrower  and,  forthwith  upon
such demand, the Borrower will pay to the Lender in immediately  available funds
for deposit in the Special  Account  pursuant to Section 2.5 an amount  equal to
the aggregate  maximum amount  available to be drawn under all Letters of Credit
then   outstanding,   assuming   compliance  with  all  conditions  for  drawing
thereunder;

         (f) The Lender may exercise  and enforce its rights and remedies  under
the Loan Documents;

                                       50
<PAGE>

         (g) The  Lender  may  without  regard  to any  waste,  adequacy  of the
security  or  solvency  of the Loan  Parties,  apply  for the  appointment  of a
receiver  of the  Collateral,  to  which  appointment  the Loan  Parties  hereby
consent,  whether or not foreclosure  proceedings  have been commenced under the
Security Documents and whether or not a foreclosure sale has occurred; and

         (h) The Lender may exercise any other rights and remedies  available to
it by law or agreement.

         (i) Notwithstanding  the foregoing,  upon the occurrence of an Event of
Default  described  in  Section  7.1(f)  or  (g),  the  Indebtedness   shall  be
immediately due and payable automatically without presentment,  demand,  protest
or notice of any kind. If the Lender sells any of the Collateral on credit,  the
Indebtedness will be reduced only to the extent of payments  actually  received.
If the  purchaser  fails to pay for the  Collateral,  the  Lender may resell the
Collateral and shall apply any proceeds actually received to the Indebtedness.

         Section 7.3.  Right of  Redemption  with Respect to Owned  Intellectual
                       ---------------------------------------------------------
Property.  Lender  agrees that if the Loan Parties have fully paid and satisfied
--------
in cash all  Indebtedness  consisting of and arising out of both the Real Estate
Term Advance (up to a limit of $1,000,000)  and the Equipment Term Advance,  not
later than ninety (90) days of the date Lender  delivers a notice of an Event of
Default to the Loan Parties,  Lender shall release its Security  Interest in the
Owned Intellectual Property;  provided,  however, any such release by the Lender
of its  Security  Interest  pursuant  to this  Section  7.3 shall not release or
otherwise  impair the license  granted to Lender pursuant to Section 3.5 of this
Agreement to use the Loan Parties' Intellectual Property Rights.

         Section 7.4. Certain Notices. If notice to a Loan Party of any intended
                      ---------------
disposition of Collateral or any other  intended  action is required by law in a
particular  instance,  such notice shall be deemed  commercially  reasonable  if
given (in the manner specified in Section 8.3) at least ten calendar days before
the date of intended disposition or other action.

                                  ARTICLE VIII

                                  MISCELLANEOUS

         Section 8.1. No Waiver;  Cumulative Remedies;  Compliance with Laws. No
                      ------------------------------------------------------
failure or delay by the Lender in  exercising  any right,  power or remedy under
the Loan Documents  shall operate as a waiver  thereof;  nor shall any single or
partial  exercise  of any such  right,  power or  remedy  preclude  any other or
further  exercise  thereof or the exercise of any other  right,  power or remedy
under the Loan  Documents.  The  remedies  provided  in the Loan  Documents  are
cumulative  and not  exclusive of any  remedies  provided by law. The Lender may
comply with any  applicable  state,  provincial or federal law  requirements  in
connection  with a disposition of the Collateral and such compliance will not be
considered adversely to affect the commercial  reasonableness of any sale of the
Collateral.

         Section 8.2. Amendments, Etc. No amendment,  modification,  termination
                      ---------------
or waiver of any  provision of any Loan  Document or consent to any departure by
the Loan  Parties  therefrom  or any  release  of a Security  Interest  shall be
effective unless the same shall be in writing and signed by the Lender, and then
such waiver or consent shall be effective only in the specific  instance and for
the specific purpose for which given. No notice to or demand on the Loan Parties
in any case shall  entitle  the Loan  Parties to any other or further  notice or
demand in similar or other circumstances.

         Section  8.3.  Notices;   Communication  of  Confidential  Information;
                        --------------------------------------------------------
Requests for Accounting.  Except as otherwise  expressly  provided  herein,  all
-----------------------
notices,  requests, demands and other communications provided for under the Loan
Documents shall be in writing and shall be (a) personally delivered, (b) sent by
first  class  United  States  mail,  (c) sent by  overnight  courier of national
reputation, (d) transmitted by telecopy, or (e) sent as electronic mail, in each
case  delivered  or sent to the  party  to whom  notice  is  being  given to the
business address,  telecopier  number, or e mail address set forth below next to
its signature or, as to each party, at such other business  address,  telecopier
number, or e mail address as it may hereafter  designate in writing to the other
party

                                       51
<PAGE>

pursuant to the terms of this Section. All such notices,  requests,  demands and
other  communications shall be deemed to be an authenticated record communicated
or given on (a) the date received if personally delivered, (b) when deposited in
the  mail if  delivered  by mail,  (c) the  date  delivered  to the  courier  if
delivered  by  overnight  courier,  or (d) the date of  transmission  if sent by
telecopy or by e mail,  except that notices or requests  delivered to the Lender
pursuant to any of the  provisions  of Article II shall not be  effective  until
received by the Lender. All notices,  financial  information,  or other business
records  sent by any  party  to this  Agreement  may be  transmitted,  sent,  or
otherwise communicated via such medium as the sending party may deem appropriate
and  commercially  reasonable;   provided,  however,  that  the  risk  that  the
                                 --------   -------
confidentiality  or privacy of such  notices,  financial  information,  or other
business  records  sent by  either  party  may be  compromised  shall  be  borne
exclusively  by the Loan Parties.  All requests for an accounting  under Section
9-210 of the UCC (i)  shall be made in a writing  signed by a Person  authorized
under Section 2.2(b), (ii) shall be personally delivered,  sent by registered or
certified mail,  return receipt  requested,  or by overnight courier of national
reputation,  (iii)  shall be deemed to be sent when  received  by the Lender and
(iv) shall otherwise  comply with the  requirements of Section 9-210 of the UCC.
The Loan Parties  request that the Lender  respond to all such requests which on
their face appear to come from an authorized  individual and releases the Lender
from any liability for so responding.  The Loan Parties shall pay the Lender the
maximum amount allowed by law for responding to such requests.

         Section 8.4. Further Documents. The Loan Parties will from time to time
                      -----------------
execute,  deliver,  endorse and authorize the filing of any and all instruments,
documents, conveyances,  assignments, security agreements, financing statements,
control  agreements  and other  agreements  and  writings  that the  Lender  may
reasonably request in order to secure, protect,  perfect or enforce the Security
Interest or the  Lender's  rights under the Loan  Documents  (but any failure to
request or assure that a Loan Party executes,  delivers,  endorses or authorizes
the filing of any such item shall not affect or impair the validity, sufficiency
or enforceability of the Loan Documents and the Security Interest, regardless of
whether  any such  item was or was not  executed,  delivered  or  endorsed  in a
similar context or on a prior occasion).

         Section 8.5.  Costs and Expenses.  The Loan Parties shall pay on demand
                       ------------------
all costs and expenses,  including  reasonable  attorneys' fees, incurred by the
Lender in connection with the Indebtedness,  this Agreement, the Loan Documents,
any Letter of Credit  and any other  document  or  agreement  related  hereto or
thereto,  and the transactions  contemplated  hereby,  including all such costs,
expenses and fees  incurred in  connection  with the  negotiation,  preparation,
execution, amendment, administration, performance, collection and enforcement of
the  Indebtedness  and all  such  documents  and  agreements  and the  creation,
perfection, protection, satisfaction, foreclosure or enforcement of the Security
Interest.

         Section 8.6. Indemnity. In addition to the payment of expenses pursuant
                      ---------
to Section 8.5, the Loan Parties shall  indemnify,  defend and hold harmless the
Lender,   and  any  of  its  participants,   parent   corporations,   subsidiary
corporations,  affiliated corporations,  successor corporations, and all present
and future officers, directors, employees, attorneys and agents of the foregoing
(the  "Indemnitees")  from  and  against  any  of the  following  (collectively,
"Indemnified Liabilities"):

              (i) Any and all transfer taxes,  documentary taxes, assessments or
charges  made by any  governmental  authority  by  reason of the  execution  and
delivery of the Loan Documents or the making of the Advances;

              (ii) Any  claims,  loss or damage to which any  Indemnitee  may be
subjected  if any  representation  or  warranty  contained  herein  proves to be
incorrect  in any  respect  or as a  result  of any  violation  of the  covenant
contained in Section 6.12(b) ; and

              (iii) Any and all other liabilities,  losses, damages,  penalties,
judgments,  suits,  claims,  costs and expenses of any kind or nature whatsoever
(including the reasonable fees and  disbursements of counsel) in connection with
the  foregoing  and  any  other   investigative,   administrative   or  judicial
proceedings, whether or not such Indemnitee shall be designated a party thereto,
which may be imposed on, incurred by or asserted against

                                       52
<PAGE>

any such Indemnitee, in any manner related to or arising out of or in connection
with the making of the  Advances  and the Loan  Documents or the use or intended
use of the proceeds of the Advances.

         Notwithstanding  the foregoing,  the Borrower shall not be obligated to
indemnify  any  Indemnitee  for any  Indemnified  Liability  caused by the gross
negligence or willful misconduct of such Indemnitee,  as finally determined by a
court of competent jurisdiction.

         If any  investigative,  judicial or administrative  proceeding  arising
from  any  of the  foregoing  is  brought  against  any  Indemnitee,  upon  such
Indemnitee's  request,  the Loan  Parties,  or  counsel  designated  by the Loan
Parties and satisfactory to the Indemnitee,  will resist and defend such action,
suit or proceeding to the extent and in the manner  directed by the  Indemnitee,
at the Loan Parties' sole costs and expense.  Each  Indemnitee will use its best
efforts to cooperate in the defense of any such action,  suit or proceeding.  If
the foregoing undertaking to indemnify,  defend and hold harmless may be held to
be unenforceable  because it violates any law or public policy, the Loan Parties
shall nevertheless make the maximum contribution to the payment and satisfaction
of each of the Indemnified  Liabilities  which is permissible  under  applicable
law. The Loan  Parties'  obligations  under this  Section 8.6 shall  survive the
termination  of this  Agreement  and the  discharge of the Loan  Parties'  other
obligations hereunder.

         Section 8.7. Participants. The Lender and its participants, if any, are
                      ------------
not partners or joint venturers,  and the Lender shall not have any liability or
responsibility  for any obligation,  act or omission of any of its participants.
All rights and powers specifically  conferred upon the Lender may be transferred
or delegated to any of the Lender's participants, successors or assigns.

         Section 8.8. Execution in Counterparts;  Telefacsimile Execution.  This
                      ---------------------------------------------------
Agreement   and  other  Loan   Documents  may  be  executed  in  any  number  of
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which counterparts,  taken together, shall constitute but
one and  the  same  instrument.  Delivery  of an  executed  counterpart  of this
Agreement  or any other  Loan  Document  by  telefacsimile  shall be  equally as
effective as delivery of an original  executed  counterpart of this Agreement or
such other Loan Document.  Any party delivering an executed  counterpart of this
Agreement  or any other Loan  Document by  telefacsimile  also shall  deliver an
original executed  counterpart of this Agreement or such other Loan Document but
the failure to deliver an  original  executed  counterpart  shall not affect the
validity,  enforceability,  and binding  effect of this  Agreement or such other
Loan Document.

         Section 8.9.  Retention of Loan Party's Records.  The Lender shall have
                       ---------------------------------
no obligation to maintain any electronic  records or any  documents,  schedules,
invoices,  agings,  or other papers delivered to the Lender by any Loan Party or
in connection with the Loan Documents for more than 30 days after receipt by the
Lender. If there is a special need to retain specific records,  the Loan Parties
must inform the Lender of its need to retain those  records with  particularity,
which must be delivered in accordance with the notice  provisions of Section 8.3
within 30 days of the Lender taking control of same.

         Section 8.10. Binding Effect; Assignment;  Complete Agreement;  Sharing
                       ---------------------------------------------------------
Information; Confidentiality. The Loan Documents shall be binding upon and inure
----------------------------
to the  benefit  of the  Loan  Parties  and  the  Lender  and  their  respective
successors and assigns, except that the Loan Parties shall not have the right to
assign their rights  thereunder  or any  interest  therein  without the Lender's
prior written  consent.  To the extent  permitted by law, the Loan Parties waive
and will not assert against any assignee any claims,  defenses or set-offs which
the Loan Parties could assert against the Lender. This Agreement shall also bind
all Persons who become a party to this Agreement as a borrower.  This Agreement,
together  with  the  Loan  Documents,  comprises  the  complete  and  integrated
agreement of the parties on the subject  matter hereof and  supersedes all prior
agreements,  written or oral, on the subject matter  hereof.  To the extent that
any  provision  of this  Agreement  contradicts  other  provisions  of the  Loan
Documents,  this Agreement shall control. Without limiting the Lender's right to
share  information  regarding  the Loan  Parties and their  Affiliates  with the
Lender's participants,  accountants,  lawyers and other advisors, the Lender and
each direct and indirect subsidiary of Wells Fargo & Company may share with each

                                       53
<PAGE>

other any information that they may have in their possession  regarding the Loan
Parties  and  their  Affiliates,  and  the  Loan  Parties  waive  any  right  of
confidentiality  they may have with respect to all such sharing of  information.
Any  other   provision   of  this   Agreement   or  the  other  Loan   Documents
notwithstanding,  Lender and such other parties shall use reasonable  efforts in
accordance  with its  policies  and  procedures  in place  from  time to time to
maintain  the  confidentiality  of the  financial  and business  information  it
obtains from the Loan Parties and to prevent the inappropriate dissemination and
disclosure thereof,  provided,  that nothing in this Agreement or the other Loan
Documents shall prohibit the Lender from providing any information regarding the
Borrower and its Affiliates to internal auditors,  other operating  divisions of
Lender,  Lender  affiliates,  or in  response  to a  request  from a  regulatory
authority having jurisdiction over Lender.

         Section  8.11.  Severability  of  Provisions.  Any  provision  of  this
                         ----------------------------
Agreement  which is  prohibited or  unenforceable  shall be  ineffective  to the
extent  of  such  prohibition  or  unenforceability   without  invalidating  the
remaining provisions hereof.

         Section 8.12.  Headings.  Article,  Section and subsection  headings in
                        --------
this Agreement are included  herein for  convenience of reference only and shall
not constitute a part of this Agreement for any other purpose.

         Section 8.13. Cross Guaranty; Subordination.
                       -----------------------------

         (a) Parent and each  Domestic  Borrower  hereby  agrees  that such Loan
Party  is  jointly  and  severally   liable  for,  and  hereby   absolutely  and
unconditionally  guarantees to Lender,  the full and prompt payment  (whether at
stated  maturity,   by  acceleration  or  otherwise)  and  performance  of,  all
Indebtedness  owed or  hereafter  owing  to  Lender  by each  other  Loan  Party
(including,  without limitation, Ronson Canada). Each Loan Party agrees that its
guaranty   obligation   hereunder  is  a  continuing  guaranty  of  payment  and
performance and not of collection, that its obligations under this Section shall
not be discharged  until payment and  performance,  in full, of the Indebtedness
has occurred,  and that its obligations under this Section shall be absolute and
unconditional, irrespective of, and unaffected by:

                           (1)   the    genuineness,    validity,    regularity,
                  enforceability  or any future amendment of, or change in, this
                  Agreement,  any other Loan  Document  or any other  agreement,
                  document  or  instrument  to which  any  Loan  Party is or may
                  become a party;

                           (2)  the  absence  of  any  action  to  enforce  this
                  Agreement  (including this Section) or any other Loan Document
                  or the waiver or consent by Lender with  respect to any of the
                  provisions thereof;

                           (3) the existence,  value or condition of, or failure
                  to perfect  its  security  interest  in or lien  against,  any
                  security for the Indebtedness or any action, or the absence of
                  any  action,  by  Lender in  respect  thereof  (including  the
                  release of any such security);

                           (4) the insolvency of any Loan Party or Guarantor; or

                           (5) any other  action  or  circumstances  that  might
                  otherwise constitute a legal or equitable discharge or defense
                  of a surety or guarantor.

         Each Loan Party shall be regarded,  and shall be in the same  position,
as principal debtor with respect to the Indebtedness guaranteed hereunder.

         (b)  Waivers  by Loan  Parties.  Each Loan Party  expressly  waives all
rights it may have now or in the future under any statute,  or at common law, or
at law or in equity, or otherwise,  to subrogation,  to compel Lender to marshal
assets or to proceed in respect of the Indebtedness guaranteed hereunder against
any other Loan Party or  Guarantor,  any other party or against any security for
the payment and performance of the Indebtedness before proceeding against, or as
a condition to proceeding against, such Loan Party. It is agreed

                                       54
<PAGE>

among each Loan Party and Lender that the  foregoing  waivers are of the essence
of the  transaction  contemplated by this Agreement and the other Loan Documents
and that,  but for the  provisions of this Section and such waivers,  the Lender
would decline to enter into this Agreement.

         (c) Benefit of Guaranty.  Each Loan Party agrees that the provisions of
this Section are for the benefit of the Lender and its successors,  transferees,
endorsees and assigns, and nothing herein contained shall impair, as between any
other Loan Party and the Lender,  the obligations of such other Loan Party under
the Loan Documents.

         (d)  Election of Remedies.  If the Lender may,  under  applicable  law,
proceed to realize its benefits under any of the Loan Documents  giving Lender a
security  interest  in or lien upon any  Collateral,  whether  owned by any Loan
Party or by any  Guarantor,  either by judicial  foreclosure  or by non judicial
sale or enforcement,  the Lender may, at its sole option, determine which of its
remedies  or  rights it may  pursue  without  affecting  any of its  rights  and
remedies  under  this  Section.  If, in the  exercise  of any of its  rights and
remedies,  Lender  shall  forfeit any of its rights or remedies,  including  its
right  to enter a  deficiency  judgment  against  any  Loan  Party or any  other
Guarantor,  whether  because of any applicable  laws  pertaining to "election of
remedies" or the like,  each Loan Party hereby consents to such action by Lender
and waives any claim based upon such  action.  Any  election  of  remedies  that
results in the denial or  impairment of the right of Lender to seek a deficiency
judgment  against  any Loan  Party  shall  not  impair  any other  Loan  Party's
obligation to pay the full amount of the Indebtedness. In the event Lender shall
bid at any foreclosure or trustee's sale or at any private sale permitted by law
or the  Loan  Documents,  Lender  may bid all or less  than  the  amount  of the
Indebtedness  and the amount of such bid need not be paid by Lender but shall be
credited against the Indebtedness.  The amount of the successful bid at any such
sale,  whether  Lender or any other  party is the  successful  bidder,  shall be
conclusively  deemed  to be the  fair  market  value of the  Collateral  and the
difference between such bid amount and the remaining balance of the Indebtedness
shall be  conclusively  deemed to be the amount of the  Indebtedness  guaranteed
under  this  Section,  notwithstanding  that any  present or future law or court
decision or ruling may have the effect of reducing the amount of any  deficiency
claim to which  Lender  might  otherwise be entitled but for such bidding at any
such sale.

         (e) Liability  Cumulative.  The liability of each Loan Party under this
Section 8.13 is in addition to and shall be cumulative  with all  liabilities of
each Loan Party to Lender under this  Agreement and the other Loan  Documents to
which such Loan Party is a party or in respect of any Indebtedness or obligation
of the other  Loan  Party,  without  any  limitation  as to  amount,  unless the
instrument or agreement evidencing or creating such other liability specifically
provides to the contrary.

         (f) Subordination.

                           (1) Each Loan Party  covenants  and  agrees  that the
                  payment of all indebtedness,  principal,  interest  (including
                  interest which accrues after the  commencement  of any case or
                  proceeding in  bankruptcy,  or for the  reorganization  of any
                  Loan Party or Guarantor), fees, charges, expenses,  attorneys'
                  fees and any other sum,  obligation or liability  owing by any
                  other  Loan   Party  to  such  Loan   Party,   including   any
                  intercompany  loans or trade  payables or royalty or licensing
                  fees  (collectively,   the  "Intercompany  Obligations"),   is
                  subordinated, to the extent and in the manner provided in this
                  Section  8.13(f),   to  the  prior  payment  in  full  of  all
                  Indebtedness  (herein, the "Senior  Obligations") and that the
                  subordination is for the benefit of the Lender, and Lender may
                  enforce such provisions directly.

                           (2) Each Loan Party  executing this Agreement  hereby
                  (i) authorizes  Lender to demand  specific  performance of the
                  terms of this Section  8.13(f),  whether or not any other Loan
                  Party shall have  complied with any of the  provisions  hereof
                  applicable  to it, at any time when such Loan Party shall have
                  failed to comply  with any  provisions  of this  Section  8.13
                  which

                                       55
<PAGE>

                  are applicable to it and (ii)  irrevocably  waives any defense
                  based on the  adequacy  of a  remedy  at law,  which  might be
                  asserted as a bar to such remedy of specific performance.

                           (3) Upon any distribution of assets of any Loan Party
                  in any dissolution,  winding up, liquidation or reorganization
                  (whether in bankruptcy, insolvency or receivership proceedings
                  or  upon  an  assignment  for  the  benefit  of  creditors  or
                  otherwise):

                  (i) The Lender  shall first be entitled to receive  payment in
full in cash of the Senior  Obligations  before any Loan  Party is  entitled  to
receive any payment on account of the Intercompany Obligations.

                  (ii) Any payment or  distribution  of assets of any Loan Party
of any kind or character,  whether in cash, property or securities, to which any
other Loan Party would be entitled  except for the  provisions  of this  Section
8.13(f)(3),  shall be paid by the  liquidating  trustee or agent or other person
making  such  payment or  distribution  directly  to the  Lender,  to the extent
necessary to make  payment in full of all Senior  Obligations  remaining  unpaid
after giving  effect to any  concurrent  payment or  distribution  or provisions
therefor to the Lender.

                  (iii)  In  the  event  that   notwithstanding   the  foregoing
provisions of this Section 8.13(f)(3),  any payment or distribution of assets of
any  Loan  Party  of any  kind  or  character,  whether  in  cash,  property  or
securities,  shall  be  received  by any  other  Loan  Party on  account  of the
Intercompany  Obligations  before all Senior  Obligations are paid in full, such
payment or  distribution  shall be  received  and held in trust for and shall be
paid over to the Lender for application to the payment of the Senior Obligations
until all of the Senior  Obligations  shall have been paid in full, after giving
effect to any concurrent  payment or distribution  or provision  therefor to the
Lender.

No right of the  Lender or any other  present  or future  holders  of any Senior
Obligations to enforce the subordination  provisions herein shall at any time in
any way be  prejudiced  or  impaired by any act or failure to act on the part of
any Loan  Party or by any act or  failure  to act,  in good  faith,  by any such
holder,  or by any  noncompliance  by any  Loan  Party  with the  terms  hereof,
regardless  of any  knowledge  thereof  which  any  such  holder  may have or be
otherwise charged with.

         Section 8.14. Judgment Currency.
                       -----------------

         (a) All Indebtedness shall be payable by the Borrowers in Dollars.  The
Loan  Parties'  obligations  under the Loan  Documents  to make  payments to the
Lender in Dollars shall not be discharged or satisfied by any tender or recovery
pursuant to any  judgment  expressed in or  converted  into any other  currency,
except to the extent  that such  tender or  recovery  results  in the  effective
receipt by the Lender of the full  amount of the  Dollars  payable to the Lender
under the Loan  Documents,  and the Loan Parties shall indemnify the Lender (and
the Lender shall have an additional legal claim) for any difference between such
full amount and the amount  effectively  received by the Lender  pursuant to any
such tender or  recovery.  The  Lender's  determination  of amounts  effectively
received by it shall be conclusive absent manifest error.

         (b) If for the purpose of obtaining or enforcing  any judgment  against
the Loan  Parties  in any court in any  jurisdiction,  it becomes  necessary  to
convert into any currency other than Dollars (such currency being hereinafter in
this Section  referred to as the "Judgment  Currency"),  the conversion shall be
made,  at the option of the Lender,  at the rate of exchange  prevailing  on the
Business Day immediately  preceding the day on which the judgment is given (such
business day being  hereinafter in this Section  referred to as the  "Conversion
Date").

         (c) If there is a change in the rate of exchange prevailing between the
Conversion  Date and the date of actual  payment  of the  amount  due,  the Loan
Parties  covenant and agree to pay such  additional  amounts (if any, but in any
event not a lesser amount) as may be necessary to ensure that the amount paid in
the Judgment Currency,  when converted at the rate of exchange prevailing on the
date of  payment,  will  produce  the  amount of

                                       56
<PAGE>

Dollars  which could have been  purchased  with the amount of Judgment  Currency
stipulated in the judgment or judicial award at the rate of exchange  prevailing
on the Conversion Date.

         (d) Any amount due from the Loan Parties under Section  8.14(c) will be
due as a separate debt and shall not be affected by judgment  being obtained for
any other sums due under or in respect of the Loan Documents.

         (e) The term "rate of exchange" in this Section  means the spot rate at
which the Lender in accordance with its normal practices is able on the relevant
date to purchase Dollars with the Judgment  Currency and includes in either case
any premium and costs of exchange payable by in connection with such purchase.

         Section  8.15.  Appointment  of  Borrower  Representative;  Reliance on
                         -------------------------------------------------------
Notices.  Each Loan Party hereby  designates  Parent as its  representative  and
-------
agent  on its  behalf  (the  "Borrower  Representative")  for  the  purposes  of
executing and delivering any notice of borrowing,  notice of conversion  into or
continuation  of a LIBOR Advance,  request for issuance of a Letter of Credit or
similar  notice,  giving  instructions  with respect to the  disbursement of the
proceeds of Advances,  selecting interest rate options,  effecting  repayment of
Advances,  requesting  issuance of Letters of Credit,  giving and  receiving all
other  notices and consents  hereunder or under any of the other Loan  Documents
and taking all other actions (including in respect of compliance with covenants)
on behalf of any Loan Party under the Loan Documents. Parent hereby accepts such
appointment. Lender may regard any notice or other communication pursuant to any
Loan Document from Borrower Representative as a notice or communication from all
Loan Parties and shall be entitled to rely upon, and shall be fully protected in
relying  upon,  any such  notice or  communication  as such,  and shall give any
notice or  communication  required  or  permitted  to be given to any Loan Party
hereunder  to Borrower  Representative  on behalf of such Loan Party.  Each Loan
Party agrees that each notice, election,  representation and warranty, covenant,
agreement and undertaking made on its behalf by Borrower Representative shall be
deemed  for all  purposes  to have  been  made by such  Loan  Party and shall be
binding  upon and  enforceable  against such Loan Party to the same extent as if
the same had been made directly by such Loan Party.

         Section 8.16. Governing Law; Jurisdiction, Venue; Waiver of Jury Trial.
                       --------------------------------------------------------
The Loan  Documents  shall be governed by and construed in  accordance  with the
substantive  laws (other than  conflict  laws) of the State of New York,  except
that at all times the provisions for the creation, perfection and enforcement of
the liens and security  interests  granted by Ronson Canada  pursuant hereto and
pursuant to the other Loan  Documents  with respect to the  Collateral  owned by
Ronson  Canada may be governed by, and  construed  according to, the laws of the
Province of Ontario,  Canada,  it being  understood  that, to the fullest extent
permitted by the laws of such Province,  the laws of the State of New York shall
govern the construction,  validity and  enforceability of all Loan Documents and
all of the  Indebtedness  arising  hereunder and thereunder.  The parties hereto
hereby (i) consent to the personal  jurisdiction of the state and federal courts
located in the State of New York in connection with any  controversy  related to
this  Agreement;  (ii)  waive any  argument  that venue in any such forum is not
convenient;  (iii) agree that any litigation initiated by the Lender or the Loan
Parties in  connection  with this  Agreement or the other Loan  Documents may be
venued in either  the state or federal  courts  located in the City of New York,
New York  County,  New York;  and (iv) agree that a final  judgment  in any such
suit,  action or  proceeding  shall be  conclusive  and may be enforced in other
jurisdictions  by suit on the judgment or in any other  manner  provided by law.
Each Borrower hereby irrevocably designates and appoints Parent as the designee,
appointee and agent of such Borrower to receive,  accept and acknowledge for and
on  behalf  of such  Borrower  and its  property  service  of any and all  legal
process,  summons, notices and documents which may be served in any such action,
suit or proceeding  relating to the Loan  Documents or the  Indebtedness,  which
service may be made on Parent in accordance with legal procedures prescribed for
such courts. Each Borrower agrees that service upon it or Parent as provided for
herein shall constitute a valid and effective  personal service upon it and that
the failure of Parent to give any notice of such service to any  Borrower  shall
not impair or affect in any way the  validity of such  service.  Nothing  herein
contained  shall,  or shall be construed so as to, limit the right of the Lender
to bring  actions,  suits or  proceedings  with respect to the  obligations  and
liabilities  of the Borrowers  under,  or any other

                                       57
<PAGE>

matter  arising  out  of or in  connection  with,  the  Loan  Documents,  or for
recognition or enforcement of any judgment rendered in any such action,  suit or
proceeding,  in the courts of whatever  jurisdiction  in which the office of the
Lender may be located or assets of the Borrowers may be found or otherwise shall
to Parent seem appropriate,  or to affect the right to service of process in any
jurisdiction in any other manner permitted by the law.

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<PAGE>

         THE LOAN PARTIES AND THE LENDER WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY
ACTION AT LAW OR IN EQUITY OR IN ANY OTHER  PROCEEDING BASED ON OR PERTAINING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective  officers  thereunto duly authorized as of the date
set forth in the initial caption of this Agreement.

<TABLE>
<CAPTION>
<S>                                                         <C>

Ronson Corporation                                           RONSON CORPORATION
Corporate Park III
Campus Drive
P.O. Box 6707                                                By: /s/ Louis V. Aronson II
Somerset, NJ  08875                                              -------------------------
Telecopier: (732) 469-6079                                       Name:  Louis V. Aronson II
Attention:  Louis V. Aronson II                                  Title: President & Chief Executive Officer
e-mail:  dcap@ronsoncorp.com


Ronson Consumer Products Corporation                         RONSON CONSUMER PRODUCTS CORPORATION
3 and 6 Ronson Road
Woodbridge, NJ  07095
Telecopier:  (732) 636-5112                                  By: /s/ Louis V. Aronson II
Attention:  Louis V. Aronson II                                  ------------------------
e-mail:  dcap@ronsoncorp.com                                     Name: Louis V. Aronson II
                                                                 Title: President & Chief Executive Officer

Ronson Aviation, Inc.                                        RONSON AVIATION, INC.
Corporate Park III
Campus Drive
P.O. Box 6707                                                By: /s/ Louis V. Aronson II
Somerset, NJ  08875                                              ------------------------
Telecopier: (732) 469-6079                                       Name: Louis V. Aronson II
Attention:  Louis V. Aronson II                                  Title: President & Chief Executive Officer
e-mail:  dcap@ronsoncorp.com


Ronson Corporation of Canada Ltd.                            RONSON CORPORATION OF CANADA LTD.
Corporate Park III
Campus Drive
P.O. Box 6707                                                By: /s/ Louis V. Aronson II
Somerset, NJ  08875                                              ------------------------
Telecopier: (732) 469-6079                                       Name: Louis V. Aronson II
Attention:  Louis V. Aronson II                                  Title: President & Chief Executive Officer
e-mail:  dcap@ronsoncorp.com



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<PAGE>

Wells Fargo Bank, National Association                       WELLS FARGO BANK,
Wells Fargo Business Credit                                  NATIONAL ASSOCIATION
119 West 40th Street, 16th Floor
New York, New York 10018-2500
Telecopier: 646-728-3279                                     By:  /s/ Peter L. Gannon
Attention:  Relationship Manager for Ronson Corporation          --------------------
e-mail:  Peter.L.Gannon@wellsfargo.com                           Peter L. Gannon,
Christopher.Hill@wellsfargo.com                                  Vice President


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