Unassociated Document


    


     

     

    


    SEVENTEENTH AMENDMENT TO
FORBEARANCE AGREEMENT

    


    This
Seventeenth Amendment to Forbearance Agreement (the “Amendment”) is
entered into as of this 7th day
of May, 2010 by and among RCLC, Inc. (formerly known as Ronson Corporation), a
New Jersey corporation (“Parent”), RCPC
Liquidating Corp. (formerly known as Ronson Consumer Products Corporation), a
New Jersey corporation (“RCPC”), Ronson
Aviation, Inc., a New Jersey corporation (“RAI”) and RCC Inc.
(formerly known as Ronson Corporation of Canada Ltd.), an Ontario corporation
(“Ronson
Canada”) (RCPC and RAI are collectively and individually referred to as
the “Domestic
Borrower” or “Domestic Borrowers”;
the Domestic Borrower and Ronson Canada are collectively and individually
referred to as the “Borrower” or “Borrowers”, and the
Borrowers, together with Parent are collectively and individually referred to as
the “Obligors”)
and Wells Fargo Bank, National Association (“Lender”), acting
through its Wells Fargo Business Credit operating division.

     

    RECITALS:

     

    Borrowers
and Lender are parties to a certain Credit and Security Agreement dated as of
May 30, 2008 (as amended, modified, supplemented or restated from time to time,
the “Credit
Agreement”), relating to financing by Lender to
Borrowers.  Capitalized terms used but not specifically defined herein
shall have the meanings provided for such terms in the Credit
Agreement.

     

    Certain
Events of Default occurred under the Credit Agreement and, as a result thereof,
Lender and Borrowers entered into that certain Forbearance Agreement dated as of
March 29, 2009 (as amended modified, supplemented or restated from time to time,
the “Forbearance
Agreement”), whereby Lender agreed to forbear from exercising certain of
its rights and remedies available under the Loan Documents as a result of the
Existing Events of Default.

     

    The
Forbearance Agreement expires pursuant to its terms not later than May 7,
2010.

     

    On
February 2, 2010, Parent, RCPC and Ronson Canada consummated a transaction (the
“Zippo Sale”)
pursuant to which RCPC and Ronson Canada sold substantially all of their assets
to Zippo Manufacturing Company and Nosnor, Inc., pursuant to an Asset Purchase
Agreement dated as of October 5, 2010.  The net proceeds of the Zippo
Sale were delivered to Lender in accordance with the terms of that certain
letter agreement by and among Lender and Obligors dated as of February 2, 2010
and applied by Lender in accordance with and subject to the Thirteenth Amendment
to Forbearance Agreement dated as of April 1, 2010.

     

    Borrowers
have requested that Lender amend the definition of Termination Event to, among
other things, extend the stated expiration date in the Forbearance Agreement
from May 7, 2010 to June 11, 2010 in order to (i) provide Borrowers with
additional time to (a) consummate the sale of RAI’s assets to Hawthorne TTN
Holdings, LLC (“Hawthorne”) pursuant
to that certain Asset Purchase Agreement dated as of May 15, 2009, as
amended  from time to time, and (b) explore a sale of RAI and/or its
assets to a third-party other than Hawthorne (an “Alternate
Transaction”) and (ii) amend certain terms and conditions of the Credit
Agreement.

     

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


     Lender
has considered Borrowers’ requests and, in an effort to continue working with
Borrowers, hereby agrees to amend the Forbearance Agreement and the Credit
Agreement on the terms and conditions set forth below.

     

    NOW,
THEREFORE, for and in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:

     

    1.            Amendment to Forbearance
Agreement.  As of the date hereof, Section 2(b) of the
Forbearance Agreement shall be amended and restated in its entirety to read as
follows:

     

    (b)           For
purposes of this Agreement, a “Termination Event”
shall mean the earliest to occur of (i) June 11, 2010 and (ii) any one or more
of the following:

     

    (A)           the
failure of the Obligors to comply with the terms, covenants, agreements and
conditions of this Agreement;

     

    (B)           any
representation or warranty made herein shall be incorrect in any material
respect;

     

    (C)           the
occurrence of any Event of Default under the Credit Agreement, other than (i)
the Existing Events of Default or (ii) breach by Obligors of their obligation
pursuant to (a) Section 6.1(a) of the Credit Agreement to deliver audited year
end annual financial statements for the fiscal year ending December 31, 2008
within 90 days of the end of such fiscal year or (b) Section 6.1(c) of the
Credit Agreement to deliver monthly financial statements to Lender for the
months ending October 31, 2009, November 30, 2009, December 31,
2009,  January 31, 2010, February 28, 2010, March 31, 2010 and April
30, 2010 within 30 days of the end of such months;

     

    (D)           Obligors
shall fail to employ a CRO (as defined below) throughout the term of this
Agreement;

     

    (E)           subject
to Paragraph 6(b) below, Obligors shall fail to employ an investment banking
firm reasonably acceptable to Lender to market and sell RAI or its assets
throughout the term of this Agreement and/or such investment banking firm shall
fail to diligently pursue such sale consistent with the terms of its
retention;

     

    (F)           in
the Lender’s discretion, it determines that Parent is no longer actively
pursuing a Liquidity Transaction;

     

    (G)           any
Person, other than Lender, shall exercise its rights and remedies against the
Obligors as a result of defaults or events of defaults arising under any
agreement between Obligors and such Person due to cross-defaults arising from
the Existing Events of Default; and

     

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    (H)           Obligors
shall have executed an asset purchase agreement in connection with an Alternate
Transaction for the sale of RAI and/or its assets to a party other than
Hawthorne and the Freeholders of Mercer County, New Jersey shall have formally
approved the assignment of that certain lease by and between Ronson Helicopters,
Inc. (now known as RAI), as lessee, and County of Mercer, as lessor, dated May
14, 1975 (as amended, the “Lease”) to the
purchaser identified in such asset purchase agreement.

     

    2.            Funding of RAI Pending
Closing of the RAI Sale.  Obligors acknowledge and agree that
as a result of the consummation of the Zippo Sale, RCPC and Ronson Canada shall
no longer be permitted to request Advances under the Credit Agreement and any
remaining assets of RCPC and/or Ronson Canada shall no longer be considered in
any borrowing base calculation.  Notwithstanding the foregoing, Lender
and Obligors agree that RAI shall be authorized, until the occurrence of a
Termination Event, to request Advances subject to the terms of the Credit
Agreement as modified by this Amendment.  Obligors and Lender further
agree that Lender shall have no obligation to make Advances to
RAI  after the occurrence of a Termination Event.

     

    3.            Amendments to Credit and
Security Agreement.

     

    (a)           The
following new definitions shall be added to section 1.1 of the Credit Agreement
in the appropriate alphabetical order and shall read as follows:

     

    “Availability
Block” shall mean a block on availability under the revolving line of credit in
the amount of the Cole Schotz Payment; provided, however, upon
Lender’s receipt of a properly executed Repayment Agreement, the amount of the
Availability Block shall be reduced to zero.

     

    “Cole
Schotz Payment” shall mean an amount equal to $224,396.07, representing the
amount of legal fees and expenses billed to Obligors, and due and owing to Cole,
Schotz, Meisel, Forman & Leonard, P.A. (“Cole Schotz”), for
the period through February 28, 2010; provided, however, Obligors
acknowledge and agree that the Cole Schotz Payment shall not be paid until such
time as Lender has received a properly executed Repayment
Agreement.

     

    “Repayment
Agreement” shall mean a Repayment Agreement, acceptable to Lender in form and
substance in its sole discretion, executed by Cole Schotz in favor of Lender
evidencing Cole Schotz’s agreement to repay to Lender the Cole Schotz
Obligations (as such term is defined in the Repayment Agreement) on the terms
and conditions set forth therein.

     

    (b)           The
following definitions set forth in section 1.1 of the Credit Agreement shall be
amended and restated in their entirety to read as follows:

     

    “Accommodation
Overadvance Limit” means an amount up to $1,325,000 from the date of that
certain Seventeenth Amendment to Forbearance Agreement through the occurrence of
a Termination Event (as such term is defined in the Forbearance
Agreement).

     

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


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

     

    (a)           The
Maximum Line Amount; 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 RAI,
plus

     

    (ii)           The
lesser of (A) thirty-six percent (36%), or such lesser rate as the Lender in its
sole discretion may deem appropriate from time to time, of Eligible Inventory
owned by RAI, (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 RAI, or (C) $200,000,
less

     

    (iii)           The
Domestic Borrowing Base Reserve, less

     

    (iv)           The
Availability Block, 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.

     

    “Maximum
Line Amount” means $2,400,000, unless such amount is reduced pursuant to Section
2.12, in which amount it means such lower amount.”

     

    (c)           Section
2.1.1 of the Credit Agreement is amended and restated in its entirety to read as
follows:

     

    2.1.1           Accommodation
Overadvance.  Notwithstanding anything contained in Section 2.1
or otherwise in this Agreement to the contrary, the Lender agrees, subject to
the terms and conditions of this Agreement, to make Revolving Advances to RAI in
amounts which may cause the outstanding balance of the aggregate Revolving
Advances to exceed the Availability or which may cause the outstanding balance
of Revolving Advances to exceed the Borrowing Base (any such excess Revolving
Advances are herein referred to collectively as “Accommodation
Overadvances”); provided that the
aggregate of any such Accommodation Overadvances outstanding at any one time
shall not exceed the Accommodation Overadvance Limit.  All
Accommodation Overadvances shall constitute Revolving Advances and in no event
shall the total of Revolving Advances exceed the Maximum Line
Amount.  The Accommodation Overadvance shall be exempt from the
provisions of Section 2.13(a) of this Agreement.

     

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


     

     

    4.            Interest Rate on
Accommodation Overadvance.  Obligors acknowledge and agree that
interest on the Accommodation Overadvance shall accrue at a rate equal to the
Prime Rate plus eight percent (8.00%) per annum.

     

    5.            Forbearance
Fee.  Obligors agree that the portion of paragraph 3 of that
certain Seventh Amendment to Forbearance Agreement dated as of July 31, 2009
(the “Seventh
Amendment”), which provided that the forbearance fee in the amount of
Five-Hundred Thousand Dollars ($500,000) would not be charged as a Revolving
Advance under the Credit Agreement until the earlier of (a) the occurrence of a
Termination Event or (b) payment of the Indebtedness, is hereby amended to
provide that Lender shall be permitted to charge the forbearance fee as a
Revolving Advance under the Credit Agreement upon execution of this
Amendment.  Obligors agree that (i) $450,000 of the forbearance fee
was fully earned upon execution of the Forbearance Agreement and that (ii)
$50,000 of the forbearance fee was fully earned upon execution of the Seventh
Amendment, and that the forbearance fee constitutes part of the Indebtedness due
and owing under the Credit Agreement.

     

    6.            Conditions.  Lender’s
agreement to further forbear from exercising its rights and remedies pursuant to
this Agreement is conditioned upon:

     

    (a)           execution
and delivery by the Obligors and Lender of this Agreement;

     

    (b)           unless
otherwise agreed to in writing by the Lender, receipt by Lender, not later than
May 11, 2010, of evidence that Obligors have engaged an investment banking firm
to market RAI and/or its assets on the terms and conditions set forth
below;

     

    (c)           receipt
by Lender, not later than June 5, 2010, of evidence that Obligors have executed
an asset purchase agreement for an Alternate Transaction, which Lender
determines in its reasonable discretion provides sufficient proceeds to repay
and satisfy in full all Indebtedness due and owing to Lender by
Obligors;

    


    (d)           receipt
by Lender, not later than June 10, 2010, of evidence that the Freeholders of
Mercer County, New Jersey have given their consent to assignment of the Lease to
the proposed purchaser in connection with an Alternate Transaction;
and

    


    (e)           such
other matters as Lender may reasonably require.

     

    7.            Engagement of Investment
Banking Firm.  Unless otherwise agreed to in writing by the
Lender, Obligors shall deliver to Lender evidence establishing that the Obligors
have engaged an investment banking firm, including, without limitation, copies
of any engagement letter executed by the Obligors with such investment banking
firm, which engagement letter shall be in form and substance reasonably
acceptable to Lender.  The investment banking firm shall be selected
by Obligors and reasonably acceptable to Lender.  At all times during
the term of the Forbearance Agreement, Obligors will continue to employ the
investment banking firm for the purposes described in the engagement letter,
including for the purpose of marketing and selling RAI and/or its
assets.  Obligors consent to Lender having reasonable access to the
investment

     

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    banking
firm and Obligors hereby agree and consent to Lender meeting with the investment
banking firm without Obligors present and Obligors hereby release and, absent
bad faith, willful misconduct, gross negligence or fraud, agree to hold the
investment banking firm and Lender harmless from any information or discussions
held between the investment banking firm and Lender.

     

    8.            Sums Secured;
Estoppel.  The Obligors acknowledge and reaffirm that their
obligations to Lender as set forth in and evidenced by the Loan Documents are
due and owing without any defenses, set-offs, recoupments, claims or
counterclaims of any kind as of the date hereof.  To the extent that
any defenses, set-offs, recoupments, claims or counterclaims may exist as of the
date hereof, the Obligors waive and release Lender from the same.

     

    9.            No Other Changes.
Except as explicitly amended by this Amendment, all of the terms and conditions
of the Forbearance Agreement shall remain in full force and effect.

     

    10.            References.  All
references in the Forbearance Agreement to “this Agreement” shall be deemed to
refer to the Forbearance Agreement as amended hereby.

     

    11.            No Waiver. Except as
specifically set forth in Paragraph 1 above, the execution of this Amendment
shall not be deemed to be a waiver of any Default or Event of Default under the
Credit Agreement, a waiver of any Termination Event under the Forbearance
Agreement or breach, default or event of default under any Loan Documents or
other document held by Lender, whether or not known to Lender and whether or not
existing on the date of this Amendment.

     

    12.            Waiver and Release of Claims
and Defenses.  The Obligors hereby waive and release all claims
and demands of any nature whatsoever that they now have or may have against
Lender, whether arising under the Loan Documents or by any acts or omissions of
Lender, or any of its directors, officers, employees, affiliates, attorneys or
agents, or otherwise, and whether known or unknown, existing as of the date of
the execution of this Amendment, and further waive and release any and all
defenses of any nature whatsoever to the payment of the Obligations or the
performance of their obligations under Loan Documents.

     

    13.            Reaffirmation of Loan
Documents.  The Obligors hereby agree with, reaffirm and
acknowledge their representations and warranties contained in the Loan
Documents.  Furthermore, the Obligors represent that their
representations and warranties contained in the Loan Documents continue to be
true and in full force and effect.  This agreement, reaffirmation and
acknowledgment is given to Lender by the Obligors without defenses, claims or
counterclaims of any kind.  To the extent that any such defenses,
claims or counterclaims against Lender may exist, the Obligors waive and release
Lender from same.

     

    14.            Ratification and
Reaffirmation of Loan Documents.  The Obligors ratify and
reaffirm all terms, covenants, conditions and agreements contained in the Loan
Documents.

     

    15.            No Preferential
Treatment.  No Obligor has entered into this Amendment to
provide any preferential treatment to Lender or any other
creditor.  No Obligor intends to file for protection or seek relief
under the United States Bankruptcy Code or any similar federal or state law
providing for the relief of debtors.

     

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    16.            Legal
Representation.  Each of the parties hereto acknowledge that
they have been represented by independent legal counsel in connection with the
execution of this Amendment, that they are fully aware of the terms and
conditions contained herein, and that they have entered into and executed the
within Amendment as a voluntary action and without coercion or duress of any
kind.

     

    17.            Partial Invalidity; No
Repudiation. If any of the provisions of this Amendment shall contravene
or be held invalid under the laws of any jurisdiction, this Amendment shall be
construed as if not containing such provisions and the rights, remedies,
warranties, representations, covenants, and provisions hereof shall be construed
and enforced accordingly in such jurisdiction and shall not in any manner affect
such provision in any other jurisdiction, or any other provisions of this
Amendment in any jurisdiction.

     

    18.            Binding
Effect.  This Amendment is binding upon the parties hereto and
their respective heirs, administrators, executors, officers, directors,
representatives and agents.

     

    19.            Governing
Law.  This Amendment shall be governed by the laws of the State
of New York.

     

    20.            WAIVER OF JURY
TRIAL.  EACH OF THE PARTIES HERETO WAIVE THE RIGHT TO A TRIAL
BY JURY, AS TO ANY ACTION WHICH MAY ARISE AS A RESULT OF THE LOAN DOCUMENTS, THE
FORBEARANCE AGREEMENT, THIS AMENDMENT OR ANY DOCUMENT EXECUTED IN CONNECTION
HEREWITH.

     

    21.            Counterparts.  This
Amendment and/or any documentation contemplated or required in connection
herewith may be executed in any number of counterparts, each of which shall be
deemed an original and all of which shall be considered one and the same
document.  Delivery of an executed counterpart of a signature page of
this document by facsimile shall be effective as delivery of a manually executed
counterpart of this document.

     

    [Signature
pages follow]

     

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    IN
WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, do
hereby execute this Amendment the date and year first above
written.

     

    
      	
              RCLC,
      INC. (f/k/a RONSON CORPORATION)

               

              By:  /s/ Joel
      Getzler                                              
      

              Print
      Name: Joel Getzler

              Print
      Title: Chief Restructuring Officer

               

            
	
              RCPC
      LIQUIDATING CORP. (f/k/a/ RONSON 

              CONSUMER
      PRODUCTS CORPORATION)

               

              By:  /s/ Joel
      Getzler                                              
      

              Print
      Name: Joel Getzler

              Print
      Title: Chief Restructuring Officer

               

            
	
              RONSON
      AVIATION, INC.

               

              By:  /s/ Joel
      Getzler                                              
      

              Print
      Name: Joel Getzler

              Print
      Title: Chief Restructuring Officer

               

            
	
              RCC
      INC. (f/k/a RONSON CORPORATION OF CANADA LTD.)

               

              By:  /s/ Joel
      Getzler                                              
      

              Print
      Name: Joel Getzler

              Print
      Title: Chief Restructuring Officer

            


    

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    


    
      	
              WELLS
      FARGO BANK, NATIONAL ASSOCIATION

               

              By:/s/ Peter
      Gannon                                                                                                        

              Peter Gannon, Vice
      President