Document:

Exhibit 10.1

                           CHANGE-IN-CONTROL AGREEMENT
                                BRIDGET J. WALSH

         THIS EMPLOYMENT AGREEMENT (the "Agreement"), is made as of this 2nd day
of August,  2006,  among  PEAPACK-GLADSTONE  BANK  ("Bank"),  a New Jersey state
banking association with its principal office at 190 Main Street, Gladstone, New
Jersey 07934,  PEAPACK-GLADSTONE FINANCIAL CORPORATION ("Peapack"), a New Jersey
Corporation  which  maintains  its  principal  office at 158  Route  206  North,
Gladstone,  New  Jersey  07934  (Peapack  and  the  Bank  collectively  are  the
"Company") and Bridget J. Walsh (the "Executive").

                                   BACKGROUND

         WHEREAS,  the Executive has been continuously  employed by the Bank for
many  years;  WHEREAS,  the  Executive  throughout  his/her  tenure  has  worked
diligently in his/her position in the business of the Bank and Peapack;

         WHEREAS,  the Board of Directors  of the Bank and Peapack  believe that
the future  services of the Executive are of great value to the Bank and Peapack
and that it is  important  for the growth and  development  of the Bank that the
Executive continue in his/her position;

         WHEREAS,  if the Company  receives  any  proposal  from a third  person
concerning a possible  business  combination  with, or  acquisition  of equities
securities of, the Company,  the Board of Directors of the Company (the "Board")
believes  it is  imperative  that the Company and the Board be able to rely upon
the Executive to continue in his/her position,  and that they be able to receive
and rely upon his/her  advice,  if they request it, as to the best  interests of
the Company and its  shareholders,  without  concern that the Executive might be
distracted by the personal uncertainties and risks created by such a proposal;

         WHEREAS,  to achieve that goal, and to retain the Executive's  services
prior to any such activity, the Board of Directors and the Executive have agreed
to enter into this Agreement to govern the Executive's  termination  benefits in
the event of a Change in Control of the Company, as hereinafter defined.

         NOW,  THEREFORE,  to assure the Company that it will have the continued
dedication of the Executive and the  availability  of his/her advice and counsel
notwithstanding  the  possibility,  threat or  occurrence  of a bid to take over
control of the Company,  and to induce the  Executive to remain in the employ of
the Company, and for other good and valuable consideration,  the Company and the
Executive, each intending to be legally bound hereby agree as follows:

<PAGE>

            Definitions
            -----------

               a. Cause. For purposes of this Agreement  "Cause" with respect to
                  -----
the termination by the Company of Executive's  employment shall mean (i) willful
and continued failure by the Executive to perform his/her duties for the Company
under  this/her  Agreement  after at  least  one  warning  in  writing  from the
Company's Board of Directors identifying specifically any such failure; (ii) the
willful  engaging by the Executive in misconduct which causes material injury to
the Company as specified in a written  notice to the Executive from the Board of
Directors;  or (iii)  conviction  of a crime,  other  than a traffic  violation,
habitual  drunkenness,  drug  abuse,  or  excessive  absenteeism  other than for
illness,  after a warning (with respect to drunkenness  or absenteeism  only) in
writing from the Board of Directors  to refrain  from such  behavior.  No act or
failure to act on the part of the Executive  shall be considered  willful unless
done,  or omitted to be done,  by the  Executive  not in good faith and  without
reasonable  belief that the action or omission  was in the best  interest of the
Company.

               b.  Change  in  Control.  "Change  in  Control"  means any of the
                   -------------------
following  events:  (i) when Peapack or a Subsidiary  acquires actual  knowledge
that any  person (as such term is used in  Sections  13(d) and  14(d)(2)  of the
Exchange Act), other than an affiliate of Peapack or a Subsidiary or an employee
benefit plan established or maintained by Peapack,  a Subsidiary or any of their
respective  affiliates,  is or becomes the beneficial  owner (as defined in Rule
13d-3 of the Exchange  Act)  directly or  indirectly,  of  securities of Peapack
representing more than twenty-five percent (25%) of the combined voting power of
Peapack's then outstanding securities (a "Control Person"),  (ii) upon the first
purchase of Peapack's common stock pursuant to a tender or exchange offer (other
than a tender or exchange  offer made by Peapack,  a  Subsidiary  or an employee
benefit plan established or maintained by Peapack,  a Subsidiary or any of their
respective affiliates), (iii) upon the approval by Peapack's stockholders of (A)
a merger or  consolidation  of Peapack with or into another  corporation  (other
than a merger or  consolidation  which is approved by at least two-thirds of the
Continuing  Directors (as hereinafter  defined) and the definitive agreement for
which  provides  that at least  two-thirds  of the directors of the surviving or
resulting corporation immediately after the transaction are Continuing Directors
(a   "Non-Control   Transaction")),   (B)  a  sale  or  disposition  of  all  or
substantially  all  of  Peapack's  assets  or  (C)  a  plan  of  liquidation  or
dissolution of Peapack,  (iv) if during any period of two (2) consecutive years,
individuals  who at the  beginning  of such  period  constitute  the Board  (the
"Continuing  Directors")  cease for any reason to constitute at least two-thirds
thereof or,  following a  Non-Control  Transaction,  two-thirds  of the board of
directors  of  the  surviving  or  resulting  corporation;   provided  that  any
individual  whose  election  ornomination  for election as a member of the Board
(or,  following  a  Non-Control  Transaction,  the  board  of  directors  of the
surviving  or  resulting  corporation)  was  approved  by a  vote  of  at  least
two-thirds  of the  Continuing  Directors  then in office shall be  considered a
Continuing Director, or (v) upon a sale of (A) common stock of the Bank if after
such sale any person (as such term is used in Section  13(d) and 14(d)(2) of the
Exchange  Act) other than  Peapack,  an employee  benefit  plan  established  or
maintained  by  Peapack  or a  Subsidiary,  or  an  affiliate  of  Peapack  or a
Subsidiary,  owns  a  majority  of  the  Bank's  common  stock  or  (B)  all  or
substantially  all of the Bank's  assets  (other than in the ordinary  course of
business). No person shall be considered a Control Person for purposes of clause
(i) above if (A) such person is or becomes  the  beneficial  owner,  directly or
indirectly,  of more than ten percent  (10%) but less than  twenty-five  percent
(25%) of the combined voting power of Peapack's then  outstanding  securities if
the  acquisition  of all voting  securities  in excess of ten percent  (10%) was
approved in advance by a majority of the Continuing  Directors then in office or
(B) such person  acquires in excess of ten percent (10%) of the combined  voting
power of Peapack's then outstanding voting securities in violation of law and by
order of a court of competent jurisdiction, settlement or otherwise, disposes or
is required to dispose of all securities acquired in violation of law.

<PAGE>

               c.  Contract  Period.  "Contract  Period"  shall  mean the period
                   ----------------
commencing the day  immediately  preceding a Change in Control and ending on the
earlier of (i) the third  anniversary of the Change in Control or (ii) the death
of the Executive.  For the purpose of this Agreement,  a Change in Control shall
be  deemed  to  have  occurred  at  the  date  specified  in the  definition  of
Change-in-Control.

               d. Exchange Act. "Exchange Act" means the Securities Exchange Act
                  ------------
of 1934, as amended.

               e.  Good  Reason.   When  used  with  reference  to  a  voluntary
                   ------------
termination by Executive of his/her  employment with the Company,  "Good Reason"
shall mean any of the following,  if taken without  Executive's  express written
consent:

                  (1) The  assignment  to Executive  of any duties  inconsistent
with,  or the  reduction of powers or  functions  associated  with,  Executive's
position,   title,   duties,   responsibilities  and  status  with  the  Company
immediately prior to a Change in Control;  any removal of Executive from, or any
failure to re-elect  Executive to, any  position(s) or office(s)  Executive held
immediately  prior to such  Change in  Control.  A change in title or  positions
resulting  merely  from a merger of the  Company  into or with  another  bank or
company which does not downgrade in any way the Executive's  powers,  duties and
responsibilities shall not meet the requirements of this paragraph;

                  (2) A  reduction  by the  Company in  Executive's  annual base
compensation  as in  effect  immediately  prior to a Change  in  Control  or the
failure to award Executive annual increases in accordance herewith;

                  (3) A failure  by the  Company to  continue  any bonus plan in
which  Executive  participated  immediately  prior to the Change in control or a
failure by the Company to continue Executive as a participant in such plan on at
least the same basis as Executive  participated in such plan prior to the Change
in Control;

                  (4) The Company's  transfer of Executive to another geographic
location outside of New Jersey or more than 25 miles from his/her present office
location,  except for  required  travel on the  Company's  business to an extent
substantially   consistent  with   Executive's   business   travel   obligations
immediately prior to such Change in Control;

                  (5) The  failure  by the  Company  to  continue  in effect any
employee benefit plan, program or arrangement (including, without limitation the
Company's  retirement  plan,  benefit  equalization  plan,  life insurance plan,
health and accident plan,  disability plan,  deferred  compensation plan or long
term stock incentive plan) in which Executive is participating immediately prior
to a Change in Control (except that the Company may institute or continue plans,
programs  or  arrangements   providing  Executive  with  substantially   similar
benefits);  the taking of any action by the Company which would adversely affect
Executive's  participation in or materially reduce  Executive's  benefits under,
any of such plans,  programs or  arrangements;  the failure to continue,  or the
taking of any action  which would  deprive  Executive,  of any  material  fringe
benefit enjoyed by Executive immediately prior to such Change in Control; or the
failure by the  Company to provide  Executive  with the number of paid  vacation
days to  which  Executive  was  entitled  immediately  prior to such  Change  in
Control;

<PAGE>

                  (6) The  failure  by the  Company to obtain an  assumption  in
writing of the  obligations  of the  Company to perform  this  Agreement  by any
successor to the Company and to provide such  assumption to the Executive  prior
to any Change in Control; or

                  (7) Any purported termination of Executive's employment by the
Company during the term of this Agreement which is not effected  pursuant to all
of the requirements of this Agreement;  and, for purposes of this Agreement,  no
such purported termination shall be effective.

               f. Subsidiary.  "Subsidiary" means any corporation in an unbroken
                  ----------
chain of corporations, beginning with Peapack, if each of the corporations other
than the last  corporation  in the unbroken  chain owns stock  possessing 50% or
more of the total  combined  voting  power of all classes of stock in one of the
other corporations in such chain.

            2.  Employment.  The Company  hereby agrees to employ the Executive,
                ----------
and the Executive hereby accepts employment, during the Contract Period upon the
terms and conditions set forth herein.

            3.  Position.  During the  Contract  Period the  Executive  shall be
                --------
employed  as Senior  Vice  President  of  Peapack  and the Bank,  or such  other
corporate or divisional  profit center as shall then be the principal  successor
to the business,  assets and properties of the Company,  with  substantially the
same  title and the same  duties  and  responsibilities  as before the Change in
Control.  The  Executive  shall devote  his/her  full time and  attention to the
business of the Company,  and shall not during the Contract Period be engaged in
any other business activity. This paragraph shall not be construed as preventing
the Executive from managing any  investments of his/her which do not require any
service on his/her part in the operation of such investments.

            4.  Cash  Compensation.  The  Company  shall  pay to  the  Executive
                ------------------
compensation for his/her services during the Contract Period as follows:

               a. Base Salary.  A base annual  salary equal to the annual salary
                  -----------
in effect as of the Change in  Control.  The annual  salary  shall be payable in
installments in accordance with the Company's usual payroll method.

               b.  Annual  Bonus.  An annual  cash  bonus  equal to at least the
                   -------------
average of the  bonuses  paid to the  Executive  in the three years prior to the
Change in  Control.  The bonus  shall be  payable  at the time and in the manner
which the Company paid such bonuses prior to the Change in Control.

               c. Annual  Review.  The Board of Directors of the Company  during
                  --------------
the Contract Period shall review annually,  or at more frequent  intervals which
the Board  determines is  appropriate,  the Executive's  compensation  and shall
award him/her  additional  compensation to reflect the Executive's  performance,
the  performance  of the Company and  competitive  compensation  levels,  all as
determined in the discretion of the Board of Directors.

<PAGE>

            5. Expenses and Fringe Benefits.
               ----------------------------

               a. Expenses.  During the Contract Period,  the Executive shall be
                  --------
entitled to  reimbursement  for all business  expenses  incurred by him/her with
respect to the business of the Company in the same manner and to the same extent
as such expenses were previously  reimbursed to him/her immediately prior to the
Change in Control.

               b.  Supplemental  Retirement Plan. During the Contract Period, if
                   -----------------------------
the Executive was entitled to benefits under any  supplemental  retirement  plan
prior to the Change in Control,  the  Executive  shall be entitled to  continued
benefits  under such plan  after the Change in Control  and such plan may not be
modified to reduce or eliminate such benefits during the Contract Period.

               c. Club  Membership  and  Automobile.  If prior to the  Change in
                  ---------------------------------
Control,  the  Executive was entitled to membership in a country club and/or the
use of an automobile, he/she shall be entitled to the same membership and/or use
of an automobile at least comparable to the automobile  provided to him prior to
the Change in Control.

               d.  Other  Benefits.  The  Executive  also shall be  entitled  to
                   ---------------
vacations and sick days, in accordance  with the practices and procedures of the
Company, as such existed immediately prior to the Change in Control.  During the
Contract  Period,  the  Executive  also shall be entitled to  hospital,  health,
medical and life insurance,  and any other benefits enjoyed,  from time to time,
by senior officers of the Company,  all upon terms as favorable as those enjoyed
by other  senior  officers  of the  Company.  Notwithstanding  anything  in this
paragraph 5(d) to the contrary, if the Company adopts any change in the benefits
provided  for senior  officers  of the  Company,  and such  policy is  uniformly
applied to all  officers of the Company  (and any  successor  or acquiror of the
Company, if any),  including the chief executive officer of such entities,  then
no such change shall be deemed to be contrary to this paragraph.

            6.  Termination  for  Cause.  The  Company  shall  have the right to
                -----------------------
terminate the Executive for Cause, upon written notice to him of the termination
which  notice  shall  specify the reasons for the  termination.  In the event of
termination  for  Cause  the  Executive  shall not be  entitled  to any  further
benefits under this Agreement.

            7. Disability.  During the Contract Period if the Executive  becomes
               ----------
permanently  disabled,  or is unable to perform  his/her duties  hereunder for 4
consecutive  months  in any 12 month  period,  the  Company  may  terminate  the
employment of the Executive.  In such event, the Executive shall not be entitled
to any further benefits under this Agreement.

            8. Death Benefits.  Upon the  Executive's  death during the Contract
               --------------
Period,  his/her estate shall not be entitled to any further benefits under this
Agreement.

            9.  Termination  Without Cause or Resignation  for Good Reason.  The
                ----------------------------------------------------------
Company may terminate the Executive  without Cause during the Contract Period by
written notice to the Executive  providing four weeks notice.  The Executive may
resign for Good Reason  during the  Contract  Period  upon four  weeks'  written
notice to the Company specifying facts and circumstances  claimed to support the
Good Reason.  The  Executive  shall be entitled to give a Notice of  Termination
that his/her  employment is being  terminated for Good Reason at any time during
the Contract  Period,  not later than twelve  months after any  occurrence of an
event  stated  to  constitute  Good  Reason.  If  the  Company   terminates  the
Executive's  employment  during  the  Contract  Period  without  Cause or if the
Executive  Resigns for Good  Reason,  the Company  shall,  subject to Section 12
hereof:

<PAGE>

         (a) Within 20 business days of the  termination  of employment  pay the
Executive a lump sum  severance  payment in an amount equal to three (3.0) times
the highest annual cash compensation,  consisting solely of salary and bonus, as
well as any 401(k)  deferral,  paid to the Executive during any calendar year in
each of the three  calendar  years  immediately  prior to the Change in Control,
along with any  Gross-Up  Payment due under  Section 12 hereof for the  calendar
year of the termination; and

         (b)  Continue  to provide the  Executive  during the  remainder  of the
Contract  Period with health,  hospitalization  and medical  insurance,  as were
provided at the time of the termination of his/her  employment with the Company,
at the Company's  cost  (subject to standard  deductibles  and co-pays,  and the
Executive's  continuing  payment  of  his/her  part of the  premium  for  family
coverage, if applicable).

         The Executive shall not have a duty to mitigate the damages suffered by
him/her in connection with the termination by the Company of his/her  employment
without Cause or a resignation  for Good Reason during the Contract  Period.  If
the Company fails to pay the Executive the lump sum amount due him/her hereunder
or the Gross-Up Payment due under Section 12 hereof,  or to provide him/her with
the  health,  hospitalization  and  medical  insurance  benefits  due under this
section,  the  Executive,  after giving 10 days'  written  notice to the Company
identifying the Company's failure, shall be entitled to recover from the Company
all of his/her  reasonable  legal fees and expenses  incurred in connection with
his/her enforcement against the Company of the terms of this/her Agreement.  The
Executive  shall be denied  payment of his/her legal fees and expenses only if a
court finds that the Executive  sought  payment of such fees without  reasonable
cause and not in good faith.

            10. Resignation Without Good Reason. The Executive shall be entitled
                -------------------------------
to resign from the  employment  of the  Company at any time during the  Contract
Period without Good Reason, but upon such resignation the Executive shall not be
entitled to any additional compensation for the time after which he ceases to be
employed by the Company,  and shall not be entitled to any of the other benefits
provided  hereunder.  No such  resignation  shall be effective unless in writing
with four weeks' notice thereof.

            11. Non-Disclosure of Confidential Information.
                ------------------------------------------

               a.  Non-Disclosure  of  Confidential  Information.  Except in the
                   ---------------------------------------------
course of his/her employment with the Company and in the pursuit of the business
of the Company or any of its  subsidiaries  or affiliates,  the Executive  shall
not, at any time during or following the Contract  Period,  disclose or use, any
confidential  information  or  proprietary  data  of the  Company  or any of its
subsidiaries or affiliates.  The Executive agrees that, among other things,  all
information  concerning  the identity of and the  Company's  relations  with its
customers is confidential information.

               b. Specific  Performance.  Executive agrees that the Company does
                  ---------------------
not have an  adequate  remedy at law for the breach of this  section  and agrees
that he shall be subject to injunctive relief and equitable remedies as a result
of the  breach  of this  section.  The  invalidity  or  unenforceability  of any
provision  of this  Agreement  shall not  affect  the  force  and  effect of the
remaining valid portions.

               c.  Survival.  This section shall survive the  termination of the
                   --------
Executive's employment hereunder and the expiration of this Agreement.

<PAGE>

            12. Gross-Up for Taxes.
                ------------------

            a. Additional Payments. If, for any taxable year, Executive shall be
               -------------------
liable for the payment of an excise tax under  Section 4999 or other  substitute
or similar tax  assessment  (the "Excise  Tax") of the Internal  Revenue Code of
1986, as amended (the "Code"),  including  the  corresponding  provisions of any
succeeding  law,  with  respect to any  payments  under  this  Section 12 or any
payments  and/or  benefits under this Agreement or under any benefit plan of the
Company  applicable  to Executive  individually  or generally to  executives  or
employees of the Company, then, the Company shall pay to the Executive,  subject
to Section 15 hereof by paying the withholding for the Executive,  an additional
amount  (the  "Gross-Up  Payment")  such  that the net  amount  retained  by the
Executive,  after  deduction of any Excise Tax on such payments and benefits and
any federal,  state and local income tax and Excise Tax upon  payments  provided
for in this/her  Section 12, shall be equal to the payments due to the Executive
hereunder  and the  payments  and/or  benefits  due to the  Executive  under any
benefit plan of the Company.  Each Gross-Up  Payment shall be made in good funds
upon the later of (i) five (5) days after the date the  Executive  notifies  the
Company or the Company receives notice from the certified public accounting firm
of its need to make  such  Gross-Up  Payment,  or (ii)  the date of any  payment
causing the  liability  for such Excise Tax. The amount of any Gross-Up  Payment
under this section shall be computed by a nationally recognized certified public
accounting firm designated jointly by the Company and the Executive. The cost of
such  services  by the  accounting  firm  shall be paid by the  Company.  If the
Company and the Executive are unable to designate  jointly the accounting  firm,
then the firm shall be the accounting firm used by the Company immediately prior
to the Change in Control.

            b. IRS Disputed  Claims.  The Executive  shall notify the company in
               --------------------
writing  of  any  claim  by  the  Internal  Revenue  Service  ("IRS")  that,  if
successful,  would  require the payment by the Company of a Gross-Up  Payment in
addition to that  payment  previously  paid by the Company  pursuant to this/her
section.  Such  notification  shall be given an soon as practicable but no later
than fifteen (15)  business  days after the  Executive is informed in writing of
such claim and shall  apprise the Company of the nature of such claim,  the date
on which  such  claim is  requested  to be  paid,  and  attach a copy of the IRS
notice.  The Executive  shall not pay such claim prior to the  expiration of the
thirty  (30) day period  following  the date on which the  Executive  gives such
notice  to the  Company  (or such  shorter  period  ending  on the date that any
payment of taxes with respect to such claim is due). If the Company notifies the
Executive in writing  prior to the  expiration of such period that it desires to
contest such claim, the Executive shall:

               (i) Give the Company any information  reasonably requested by the
Company relating to such claim;

               (ii) Take such action in connection with contesting such claim as
the Company shall  reasonably  request in writing from time to time,  including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company;

               (iii)   Cooperate  with  the  Company  in  good  faith  in  order
effectively to contest such claim; and

               (iv)  Permit  the  Company  to  participate  in  any  proceedings
relating to such claim;  provided,  however that the Company  shall pay directly
all costs and expenses  (including  legal and accounting  fees, as well as other
expenses and any additional  interest and  penalties)  incurred by the Executive
and the Company in  connection  with an IRS levy,  contest or claim and provided
further that the Company  shall not take any action or fail to make any Gross-Up
Payment  so as to cause the  assessment  of any IRS levy and the  Company  shall
cause any levy so assessed to be immediately released by payment of the Gross-Up
Amount, together with all costs, interest and penalties.

<PAGE>

            13. Term and Effect Prior to Change in Control.
                ------------------------------------------

               a.  Term.  Except  as  otherwise  provided  for  hereunder,  this
                   ----
Agreement  shall  commence on the date  hereof and shall  remain in effect for a
period of 3 years from the date hereof (the "Initial  Term") or until the end of
the Contract Period, whichever is later. The Initial Term shall be automatically
extended for an additional  one year period on the  anniversary  date hereof (so
that the Initial Term is always 3 years)  unless,  prior to a Change in Control,
the  Chairman of the Board of Directors  of Peapack  notifies  the  Executive in
writing  at any time that the  Contract  is not so  extended,  in which case the
Initial Term shall end upon the later of (i) 3 years after the date  hereof,  or
(ii) 2 years after the date of such written notice.

               b. No Effect Prior to Change in Control. This Agreement shall not
                  ------------------------------------
effect any rights of the Company to terminate the Executive prior to a Change in
Control  or any  rights  of the  Executive  granted  in any other  agreement  or
contract or plan with the  Company.  The rights,  duties and  benefits  provided
hereunder shall only become effective upon and after a Change in Control. If the
full-time  employment  of the  Executive  by the Company is ended for any reason
prior to a Change in  Control,  this/her  Agreement  shall  thereafter  be of no
further force and effect.

            14.  Severance  Compensation and Benefits Not in Derogation of Other
                 ---------------------------------------------------------------
Benefits. Anything to the contrary herein contained notwithstanding, the payment
--------
or  obligation  to pay any  monies,  or  granting  of any  benefits,  rights  or
privileges to Executive as provided in this/her  Agreement  shall not be in lieu
or  derogation of the rights and  privileges  that the Executive now has or will
have under any plans or programs of or agreements with the Company,  except that
if the Executive received any payment hereunder, he/she shall not be entitled to
any payment under the Company's severance policies for officers and employees.

            15.  Payroll  and  Withholding  Taxes.  All  payments  to be made or
                 --------------------------------
benefits to be provided  hereunder by the Company shall be subject to applicable
federal and state payroll or withholding  taxes.  Any Gross-Up  Payment shall be
made in the form of  withholding  taxes and shall not be paid to the  Executive,
but shall be sent to the IRS in the  ordinary  course of the  Company's  payroll
withholding.

            16.   Miscellaneous.   This  Agreement  is  the  joint  and  several
                  -------------
obligation  of the Bank  and  Peapack.  The  terms  of this  Agreement  shall be
governed by, and interpreted and construed in accordance with the provisions of,
the laws of New Jersey.  This  Agreement  supersedes  all prior  agreements  and
understandings  with respect to the matters covered hereby,  including expressly
any prior agreement with the Company concerning  change-in-control benefits. The
amendment  or  termination  of  this  Agreement  may be made  only in a  writing
executed by the Company and the  Executive,  and no amendment or  termination of
this/her  Agreement shall be effective  unless and until made in such a writing.
This Agreement shall be binding upon any successor  (whether direct or indirect,
by  purchase,  merge,  consolidation,   liquidation  or  otherwise)  to  all  or
substantially  all of the assets of the Company.  This  Agreement is personal to
the Executive  and the Executive may not assign any of his/her  rights or duties
hereunder but this  Agreement  shall be  enforceable  by the  Executive's  legal
representatives,  executors or administrators. This Agreement may be executed in
two or more  counterparts,  each of which  shall be deemed an  original,  and it
shall not be necessary  in making proof of this  Agreement to produce or account
for more than one such counterpart.

                           (signature page to follow)

<PAGE>

            IN WITNESS  WHEREOF,  Peapack-Gladstone  Bank and  Peapack-Gladstone
Financial Corporation each have caused this Agreement to be signed by their duly
authorized  representatives  pursuant  to  the  authority  of  their  Boards  of
Directors,  and the Executive has personally executed this Agreement,  all as of
the day and year first written above.

ATTEST:                                     PEAPACK-GLADSTONE
                                            FINANCIAL CORPORATION

/s/ Robert M. Rogers                        By: /s/ Frank A. Kissel
----------------------------                --------------------------------
Robert M. Rogers, President                 Frank A. Kissel, Chairman

ATTEST:                                     PEAPACK-GLADSTONE BANK

/s/ Robert M. Rogers                        By: Frank A. Kissel
----------------------------                --------------------------------
Robert M. Rogers, President                 Frank A. Kissel, Chairman

WITNESS:

/s/ Robert M. Rogers                        /s/ Bridget J. Walsh
----------------------------                --------------------------------
Robert M. Rogers, President                 Bridget J. Walsh, Executive10.1

                               FINANCING AGREEMENT

                    THE CIT GROUP/COMMERCIAL SERVICES, INC.,
                           as agent for itself and for
                               CIT FINANCIAL LTD.

                                   (as Lender)

                                       and

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

                                 (as Borrowers)

                              Dated: July 31, 2006

<PAGE>
<TABLE>
<CAPTION>

                                      TABLE OF CONTENTS
                                                                                    Page
<S>                                                                                   <C>
SECTION 1.   Definitions...............................................................1

   1.1   Defined Terms.................................................................1

SECTION 2.   Conditions Precedent.....................................................15

SECTION 3.   Revolving Loans and Collections..........................................18

   3.1   Funding Conditions and Procedures............................................18

   3.2   Handling of Proceeds of Collateral; Cash Dominion............................19

   3.3   Collective Borrowing Arrangement; Revolving Loan Account.....................20

   3.4   Repayment of Overadvances....................................................20

   3.5   Application of Proceeds of Collateral........................................21

   3.6   Monthly Statement............................................................21

   3.7   Access to CIT's System.......................................................21

SECTION 4.   Term Loans...............................................................22

   4.1   Promissory Notes Evidencing Term Loans.......................................22

   4.2   Initial Term Loan............................................................22

   4.4   Provisions Regarding all Term Loans..........................................22

SECTION 5.   Letters of Credit........................................................23

   5.1   Assistance and Purpose.......................................................23

   5.2   Authority to Charge Revolving Loan Account...................................23

   5.3   Indemnity Relating to Letters of Credit......................................23

   5.4   Compliance of Goods, Documents and Shipments with Agreed Terms...............23

   5.5   Handling of Goods, Documents and Shipments...................................23

                                       ii
<PAGE>

   5.6   Compliance with Laws; Payments of Levies and Taxes...........................24

   5.7   Subrogation Rights...........................................................24

SECTION 6.   Collateral...............................................................24

   6.1   Grant of Security Interest...................................................24

   6.2   Limited License..............................................................25

   6.3   Representations, Covenants and Agreements Regarding Collateral Generally.....25

   6.4   Representations Regarding Accounts and Inventory.............................25

   6.5   Covenants and Agreements Regarding Accounts and Inventory....................26

   6.6   Covenants and Agreements Regarding Equipment.................................26

   6.7   General Intangibles..........................................................27

   6.8   Commercial Tort Claims.......................................................27

   6.9   Letter of Credit Rights......................................................27

   6.10   Special Provisions Relating to Specified Intellectual Property..............27

   6.12   Reference to Other Loan Documents...........................................27

   6.13   Credit Balances; Additional Collateral......................................27

SECTION 7.   Representations, Warranties and Covenants................................28

   7.1   Representations and Warranties...............................................28

   7.2   Affirmative Covenants........................................................29

   7.3   Financial Covenants..........................................................35

   7.4   Negative Covenants...........................................................36

SECTION 8.   Interest, Fees and Expenses..............................................37

   8.1   Interest.....................................................................37

                                      iii
<PAGE>

   8.2   Default Interest Rate........................................................38

   8.3   Fees and Expenses Relating to Letters of Credit..............................38

   8.4   Out of Pocket Expenses.......................................................39

   8.5   Line of Credit Fee; Collection Days..........................................39

   8.6   Loan Facility Fee; Application of Deposits and Commitment Fee................39

   8.7   Administrative Management Fee................................................39

   8.8   Standard Operational Fees....................................................39

   8.9   Intentionally left blank.....................................................39

   8.10   Intentionally left blank....................................................39

   8.11   Early Termination Fee and Prepayment Premium................................39

   8.12   Capital Adequacy............................................................39

   8.13   Taxes, Reserves and Other Conditions........................................40

   8.14   Authority to Charge Revolving Loan Account..................................40

SECTION 9.   Powers...................................................................41

   9.1   Authority....................................................................41

   9.2   Limitations on Exercise......................................................41

SECTION 10.   Events of Default and Remedies..........................................41

   10.1   Events of Default...........................................................41

   10.2   Remedies With Respect to Outstanding Loans..................................42

   10.3   Remedies With Respect to Collateral.........................................43

   10.4   General Indemnity...........................................................44

SECTION 11.   Termination.............................................................44

                                       iv
<PAGE>

SECTION 12.   Miscellaneous...........................................................45

   12.1   Waivers.....................................................................45

   12.2   Entire Agreement; Amendments................................................45

   12.3   Usury Limit.................................................................45

   12.4   Severability................................................................45

   12.5   Waiver of Jury Trial; Service of Process....................................45

   12.6   Notices.....................................................................46

   12.7   Joint and Several Liability.................................................47

   12.8   Choice of Law...............................................................48

   12.9   Choice of Forum.............................................................48

   12.10   Interpretative Provisions..................................................48

   12.11   Counterparts, Etc..........................................................48

EXHIBITS
--------

   Exhibit A - Form of Initial Term Loan Promissory Note

   Exhibit B - Form of Initial Additional Term Loan Promissory Note

   Exhibit C - Form of Compliance Certificate

SCHEDULES
---------

   Schedule 1.1(a) - Permitted Encumbrances

   Schedule 1.1(b) - Permitted Indebtedness

   Schedule 1.1(c) - Permitted Tax Liens

   Schedule 1.1(d) - Description  of Real Estate

   Schedule 7.1(b) - Company and  Collateral Information

   Schedule 7.1(f) - Environmental  Matters Schedule 7.1(g) - Litigation

   Schedule 7.1(h) -  Subsidiaries  and  Affiliates

   Schedule 7.4(i) - Related Party Transactions

   Schedule 7.4(l) - Bank Accounts

</TABLE>

                                       v
<PAGE>

         THE CIT GROUP/COMMERCIAL  SERVICES, INC., a New York corporation,  with
an office located at 1211 Avenue of the Americas,  New York, NY 10036,  as agent
("CIT") for itself and for CIT FINANCIAL LTD., an Ontario corporation ("Canadian
Lender")  (collectively   "Lenders"),  is  pleased  to  confirm  the  terms  and
conditions  under which CIT shall make  revolving  loans,  a term loan and other
financial accommodations to RONSON CORPORATION, ,a New Jersey corporation,  with
a principal place of business at Corporate Park III-Campus Drive,  Somerset,  NJ
08875  ("Ronson"),  RONSON  AVIATION,  INC.,  a New Jersey  corporation,  with a
principal place of business at Trenton-Mercer County Airport, Ewing Township, NJ
08628 ("RAI"), RONSON CONSUMER PRODUCTS COMPANY a New Jersey corporation, with a
principal place of business at Corporate Park  III-Campus  Drive,  Somerset,  NJ
08875 ("RCPC"),  and RONSON CORPORATION OF CANADA LTD., an Ontario  corporation,
with a principal  place of business at 5810 Ambler Drive,  Mississauga,  Ontario
L4W 4S5 ("Ronson Canada", and together with Ronson, RAI, and RCPC, individually,
a "Company" and collectively, the "Companies").

SECTION 1.   Definitions
             -----------

         1.1  Defined Terms. As used in this Financing Agreement:
              -------------

         Accounts  shall mean all of the  Companies'  present  and  future:  (a)
         --------
accounts (as defined in the UCC);  (b)  instruments,  documents,  chattel  paper
(including  electronic  chattel  paper) (all as defined in the UCC);  (c) unpaid
seller's  or  lessor's  rights  (including  rescission,  replevin,  reclamation,
repossession  and  stoppage in transit)  relating  to the  foregoing  or arising
therefrom;  (d)  rights  to any  goods  represented  by  any  of the  foregoing,
including rights to returned,  reclaimed or repossessed  goods; (e) reserves and
credit  balances  arising  in  connection  with or  pursuant  to this  Financing
Agreement; (f) guaranties, other supporting obligations, payment intangibles and
letter of credit rights (all as defined in the UCC);  (g) insurance  policies or
rights relating to any of the foregoing;  (h) general intangibles  pertaining to
any of the foregoing  (including  rights to payment,  including those arising in
connection with bank and non-bank  credit cards),  and all books and records and
any electronic media and software relating thereto; (i) notes, deposits or other
property of the Companies' account debtors securing the obligations owed by such
account debtors to the Companies; and (j) all Proceeds of any of the foregoing.

         Administrative Management Fee shall mean an amount equal to $15,000 per
         -----------------------------
annum, payable in accordance with Section 8.7 of this Financing Agreement.

         Airport Lease shall mean that certain agreement and lease dated May 14,
         -------------
1975 (as amended, modified or supplemented from time to time) between the County
of  Mercer  and  RAI,   relating  to  those  certain  premises  located  at  the
Trenton-Mercer County Airport as more particularly described therein.

         Applicable  Margin shall mean, with respect to (a) the Revolving Loans,
         ------------------
one half of one percent (0.50%) per annum, and (b) the Term Loans, three percent
(3.00%) per annum, and (c) documentary Letters of Credit, two percent (2.0%) per
annum,  and (d) standby  Letters of Credit,  two and one half percent (2.5%) per
annum.

         Appraisal  Deficiency  shall  have the  meaning  given to such  term in
         ---------------------
Section 7.2(i) of this Financing Agreement.

         Availability Reserve  shall mean, as to any Company, an amount equal to
         --------------------
the sum of:

         (a) the Ronson Tax Lien  Reserve  and any other  reserve  which CIT may
         establish  from  time to time  pursuant  to the  express  terms of this
         Financing Agreement; plus

         (b) (i) three (3) months  rental  payments or similar  charges for each
         Company's leased premises or other Collateral  locations for which such
         Company  has not  delivered  to CIT a  landlord's  waiver  in form  and
         substance reasonably  satisfactory to CIT within thirty (30) days after
         the Closing Date,  and (ii) three (3) months  estimated  payments (plus
         any other  fees or  charges  owing by any  Company)  to any  applicable
         warehousemen  or third party  processor  for which such Company has not
         delivered to CIT a  warehouseman's  or  processor's  waiver in form and
         substance reasonably  satisfactory to CIT within thirty (30) days after
         the  Closing  Date  (as  determined  by  CIT  in  the  exercise  of its
         reasonable  business  judgment),  provided  that  any of the  foregoing
         amounts shall

<PAGE>

         be adjusted from time to time hereafter upon (x) delivery to CIT of any
         such  acceptable  waiver,  (y) the  opening or closing of a  Collateral
         location  and/or (z) any  change in the  amount of  rental,  storage or
         processor payments or similar charges; plus

         (c) any reserve that CIT may  establish  from time to time with respect
         to Priority Payables for Ronson Canada; plus

         (d) such other reserves against Net Availability as CIT deems necessary
         in the exercise of its reasonable  business judgment as a result of (i)
         negative forecasts and/or trends in any Company's  business,  industry,
         prospects,  profits,  operations  or financial  condition or (ii) other
         issues,  circumstances or facts that could otherwise  negatively impact
         any Company or its business, prospects, profits, operations,  industry,
         financial condition or assets.

         Borrowing  Base  shall mean as to any  Company,  at any time the sum at
         ---------------
such  time of:  (a)  eighty-five  percent  (85%) of such  Company's  outstanding
Eligible  Accounts  Receivable,  provided,  however,  that if the then  Dilution
Percentage  is greater than five percent (5%),  then the rate of advance  herein
shall be reduced by the amount of such excess Dilution  Percentage;  plus (b) an
amount not to exceed the lesser of (i) fifty  five  percent  (55%) of  aggregate
value of such  Company's  Eligible  Inventory,  valued  at the  lower of cost or
market on a first in, first out basis;  or (ii) eighty five percent (85%) of the
Net Orderly Liquidation Value of such Company's  Inventory,  less (c) the amount
of the  Availability  Reserve in effect at such time.  Notwithstanding  anything
herein to the  contrary,  (a) the  aggregate  advances  to all of the  Companies
against Eligible  Inventory shall not exceed  $1,500,000,  and (b) the aggregate
advances to Ronson  Canada shall not exceed  $600,000  (or the  Canadian  Dollar
Equivalent thereof).

         Business  Day shall mean any day on which CIT and  JPMorgan  Chase Bank
         -------------
are open for business.

         Canadian  Business Day shall mean any day in which  Canadian  chartered
         ----------------------
banks in Toronto, Ontario and the Canadian Lender are open for business.

         Canadian Dollar Equivalent" shall mean at any time (a) as to any amount
         --------------------------
denominated  in Canadian  Dollars,  the amount  thereof and (b) as to any amount
denominated in U.S.  Dollars or any other  currency,  the  equivalent  amount in
Canadian  Dollars  calculated  by Agent at such time  using the then  applicable
Exchange Rate in effect on the Business Day of determination.

         Canadian Dollar(s) shall mean the lawful currency of Canada.
         ------------------

         Canadian  Prime Rate shall mean a  fluctuating  interest rate per annum
         --------------------
equal  to at  all  times  to  the  rate  of  interest  announced  publicly  from
time-to-time  by publication as the Bloomberg  PRIMECAN Screen as its base rate;
provided  that such rate is not  necessarily  the best rate  offered by Canadian
Lender to its customers,  and should CIT be unable to determine such rate,  such
other  indication of the prevailing  prime rate of interest as may reasonably be
chosen by CIT.

         Canadian  Rate Loans shall mean any loans or advances  made pursuant to
         --------------------
this Financing  Agreement that bear interest based upon the Canadian Prime Rate.
The parties  acknowledge  that all Revolving Loans to Ronson Canada are Canadian
Rate Loans.

         Capital   Expenditures  shall  mean,  for  any  period,  the  aggregate
         ----------------------
expenditures of the Companies during such period on account of property,  plant,
equipment or similar fixed assets that, in conformity with GAAP, are required to
be reflected on a Consolidated Balance Sheet.

         Capital Lease shall mean any lease of property (whether real,  personal
         -------------
or mixed) which, in conformity with GAAP, is accounted for as a capital lease or
a Capital Expenditure on a Consolidated Balanced Sheet.

                                       2
<PAGE>

         Casualty  Proceeds  shall mean (a) payments or other  proceeds  from an
         ------------------
insurance  carrier with respect to any loss,  casualty or damage to  Collateral,
and (b) payments  received on account of any condemnation or other  governmental
taking of any of the Collateral.

         Change of  Control  shall  mean  either:  (a) the  failure  of Louis V.
         ------------------
Aronson II to remain  actively  engaged in the management of the Companies;  (b)
the failure of Louis V. Aronson II  (together  with his spouse) to own of record
and beneficially (in the aggregate),  at least 25% of the issued and outstanding
common stock of Ronson;  or (c) the failure of Ronson to continue to own 100% of
the issued and outstanding capital stock in any other Company.

         Chase Bank Rate shall mean the rate of interest per annum  announced by
         ---------------
JPMorgan Chase Bank (or its successor)  from time to time as its "prime rate" in
effect at its principal office in New York City. (The prime rate is not intended
to be the  lowest  rate  of  interest  charged  by  JPMorgan  Chase  Bank to its
borrowers).

         Chase Bank Rate Loans shall mean any loans or advances made pursuant to
         ---------------
this Financing  Agreement that bear interest based upon the Chase Bank Rate. The
parties  acknowledge that all Revolving Loans to the Domestic Companies and both
Term Loans are Chase Bank Rate Loans.

         CIT's Bank Account shall mean CIT's bank account at JPMorgan Chase Bank
         ------------------
(or its successor) in New York, New York

         CIT's  Canadian Bank Account shall mean Canadian  Lender's U.S.  Dollar
         ----------------------------
bank account and Canadian  Lender's  Canadian  Dollar bank account,  at Canadian
Imperial Bank of Commerce (or its successor) in Toronto,  Ontario,  Canada or at
such other financial institution in Canada as CIT shall determine.

         CIT's System shall mean CIT's StuckeyNet or other  internet-based  loan
accounting and reporting system.

         Closing Date shall mean the date on which this  Financing  Agreement is
         ------------
executed by the parties hereto and delivered to CIT.

         Collateral  shall mean all assets of the Companies,  including  without
         ----------
limitation,  all present and future  Accounts,  Equipment,  Inventory  and other
Goods, Documents of Title, General Intangibles, Investment Property, the Airport
Lease  and  Other  Collateral,  but in all cases  other  than the Real  Property
Collateral and the Minority Ronson Canada Interest;  provided, however, that the
Collateral  shall extend to Specified  Intellectual  Property solely in order to
secure the  Obligations  consisting  of and arising from the Initial  Additional
Term Loan (it being  acknowledged  that upon  satisfaction of such  Obligations,
CIT's security interest in the Specified Intellectual Property shall be released
and the Specified Intellectual Property shall no longer constitute Collateral).

         Collection  Days shall mean a period of one (1)  Business Day after the
         ----------------
deposit of proceeds of  Collateral  or other  monies into CIT's Bank  Account or
CIT's  Canadian  Bank  Account,  as the case may be, for which  interest  may be
charged on the  aggregate  amount of such  deposits at the rate  provided for in
Section 8.1 or 8.2 (if applicable) of this Financing Agreement.

         Commitment  Letter shall mean the Commitment Letter dated June 29, 2006
         ------------------
issued by CIT to, and accepted by, the Companies.

         Consolidated  Balance Sheet shall mean a consolidated balance sheet for
         ---------------------------
the  Companies,  eliminating  all  inter-company  transactions  and  prepared in
accordance with GAAP.

         Consolidating  Balance Sheet shall mean a Consolidated Balance Sheet of
         ---------------------------
the Companies plus  individual  balance  sheets for the  Companies,  showing all
eliminations of inter-company transactions and prepared in accordance with GAAP.

         Copyrights  shall  mean all of the  Companies'  present  and  hereafter
         ----------
acquired copyrights, copyright registrations, recordings, applications, designs,
styles,  licenses,  marks,  prints and labels bearing any of the foregoing,  all
reissues  and

                                       3
<PAGE>

renewals  thereof,   all  licenses  thereof,   all  other  general   intangible,
intellectual  property  and other  rights  pertaining  to any of the  foregoing,
together with the goodwill associated therewith,  and all income,  royalties and
other Proceeds of any of the foregoing.

         Default  shall  mean  any  event  specified  in  Section  10.1  hereof,
         -------
regardless  of whether any  requirement  for the giving of notice,  the lapse of
time,  or both,  or any other  condition,  event or act,  has  occurred  or been
satisfied.

         Default  Rate of Interest  shall mean a rate of  interest  equal to two
         -------------------------
percent  (2%)  per  annum  greater  than  the  interest  rate  accruing  on  the
Obligations  pursuant  to Section  8.1  hereof,  which CIT shall be  entitled to
charge the  Companies  in the manner set forth in Section 8.2 of this  Financing
Agreement.

         Depository  Account  shall  mean each  bank  account  (and the  related
         -------------------
lockbox,  if any)  subject to CIT's  control that is  established  by CIT or the
Companies  pursuant  to  Section  2.1(j) or  Section  3.2(c)  of this  Financing
Agreement.

         Depository Account Control Agreement shall mean a three-party agreement
         ------------------------------------
in form and substance  satisfactory to CIT among CIT, the applicable Company and
the bank which will maintain a Depository  Account,  (a) which provides CIT with
control of such  Depository  Account and provides for the transfer of funds in a
manner  consistent  with the  provisions  of  Section  3.2(b) of this  Financing
Agreement, and (b) pursuant to which such bank agrees that (i) all cash, checks,
wires and other items received or deposited into the Depository  Account are the
property of CIT, and (ii) except as otherwise provided in the Depository Account
Control Agreement,  such bank has no lien upon, or right of set off against, the
Depository Account and any cash, checks, wires and other items from time to time
on deposit therein.

         Dilution  Percentage  shall mean,  with respect to the Companies in the
         --------------------
aggregate  during  any  period of  measurement,  the  quotient  (expressed  as a
percentage)  obtained by dividing  (a) the  aggregate  amount of the  Companies'
non-cash  reductions against Trade Accounts  Receivable,  during such period, by
(b) the aggregate  amount of the Companies'  gross sales during such period,  as
determined  by CIT in the  exercise of its  reasonable  business  judgment.  The
Dilution  Percentage  shall be  determined  by CIT based on its  reviews  of the
periodic  financial and collateral  reports submitted by the Companies to CIT as
well  as the  results  of  the  periodic  field  examinations  of the  Companies
conducted by CIT from time to time.  The period of measurement  for  calculating
the  Dilution  Percentage  shall be  determined  by CIT from time to time in the
exercise of its reasonable business judgment.

         Documentation  Fees shall mean (a) all reasonable  expenses incurred in
         -------------------
connection  with or by CIT's in-house and outside legal counsel in  negotiating,
documenting,  preparing  for  and  attending  a  closing  with  respect  to this
Financing   Agreement,   the  Collateral   and/or   Obligations   (exclusive  of
Out-of-Pocket Expenses), plus (b) subsequent to the Closing Date, the reasonable
fees of CIT's legal counsel, whether or not in-house legal counsel,  relating to
any and all modifications,  waivers,  releases, legal file reviews or additional
collateral with respect to this Financing  Agreement,  the Collateral and/or the
Obligations (all exclusive of Out-of-Pocket Expenses).

         Documents  of Title  shall mean all present  and future  documents  (as
         -------------------
defined  in the  UCC),  and any and all  warehouse  receipts,  bills of  lading,
shipping  documents,  chattel  paper,  instruments  and similar  documents,  all
whether  negotiable  or  non-negotiable,  together  with all Inventory and other
Goods relating thereto, and all Proceeds of any of the foregoing.

         Domestic  Company(ies) shall mean each and all of Ronson, RCPC and RAI,
         ----------------------
as the context may require.

         Early  Termination Date shall mean a date prior to any Termination Date
         -----------------------
on  which  (i) the  Companies  (or any one of  them)  terminate  this  Financing
Agreement or the  Revolving  Line of Credit or (ii) after the  occurrence  of an
Event of Default  that has not been  waived in writing  by CIT,  this  Financing
Agreement  is  terminated  as  contemplated  by  Section  10.2  hereof  (whether
automatically or by CIT).

         Early  Termination  Fee  shall  mean an  amount  equal  to the  product
         -----------------------
obtained by  multiplying  (a) the maximum amount of the Revolving Line of Credit
times (b) (i) two percent (2%) if the Early Termination Date occurs on or before
the first  anniversary  of the Closing Date,  (ii) one percent (1%) if the Early
Termination  Date occurs after the first  anniversary of the Closing Date but on
or before the second anniversary of the Closing Date; and (iii) one-half percent

                                       4
<PAGE>

(0.5%) if the Early Termination Date occurs after the second  anniversary of the
Closing Date but prior to the date which is ten (10)  Business Days prior to the
initial or any subsequent Termination Date.

         EBITDA shall mean, for any period, all net earnings of the Companies on
         ------
a consolidated  basis for such period,  plus all interest,  tax  obligations and
depreciation and amortization  expense of the Companies on a consolidated  basis
for such period,  all determined in conformity  with GAAP on a basis  consistent
with the latest audited financial statements of the Companies, but excluding the
effect of extraordinary and/or nonrecurring gains or losses for such period.

         Electronic  Transmission  shall have the meaning  given to such term in
         ------------------------
Section 7.2(g) of this Financing Agreement.

         Eligible Accounts  Receivable shall mean, as to any Company,  the gross
         -----------------
amount of such Company's Trade Accounts  Receivable that are subject to a valid,
exclusive,  first priority and fully perfected security interest in favor of CIT
(and as to Accounts owned by Ronson  Canada,  such Accounts are subject to valid
exclusive first priority liens under the PPSA),  which conform to the warranties
contained  herein and which,  at all times,  continue to be acceptable to CIT in
the exercise of its reasonable business judgment, less, without duplication, the
sum of:

         (a) actual returns,  discounts,  claims,  credits and allowances of any
         nature (whether issued, owing, granted, claimed or outstanding), plus

         (b) reserves for such Trade Accounts Receivable that arise from, or are
         subject to or include:  (i) sales to the United States of America,  any
         state or other  governmental  entity  (domestic  or  foreign)or  to any
         agency,  department or division  thereof,  except for any such sales to
         the  United  States  of  America,  any  State,  political  subdivision,
         department, agency or instrumentality thereof, as to which such Company
         has  complied  with the  Assignment  of Claims Act of 1940 or any other
         applicable  statute,  rules or regulation to CIT's  satisfaction in the
         exercise of its reasonable business judgment; (ii) foreign sales, other
         than sales which  otherwise  comply with all of the other  criteria for
         eligibility hereunder and are (x) secured by letters of credit (in form
         and substance  satisfactory to CIT) issued or confirmed by, and payable
         at,  banks  acceptable  to CIT having a place of business in the United
         States of America or, in the case of Ronson Canada, a place of business
         in  Canada,  or  are  covered  by  foreign  accounts  credit  insurance
         satisfactory to CIT in all respects on which CIT is noted as additional
         insured and loss payee,  or (y) as to Accounts owned by Ronson,  RAI or
         RCPC, to customers residing in Canada,  provided that such Accounts are
         payable in United  States  Dollars and as to  Accounts  owned by Ronson
         Canada, to customers residing in Canada, then in either U.S. Dollars or
         Canadian  Dollars  (provided,  that,  at any time  promptly  upon CIT's
         request,  Ronson Canada (or any other Company, upon the request of CIT)
         shall execute and deliver, or cause to be executed and delivered,  such
         other  agreements,  documents and instruments as may be required by CIT
         to perfect the  security  interests  of CIT and/or  Canadian  Lender in
         those Accounts of an account debtor with its chief executive  office or
         principal  place of business in Canada in accordance  with the PPSA and
         other  applicable  laws of the  Province  of Canada in which such chief
         executive  office or principal place of business is located and take or
         cause to be taken such other and further  actions as CIT may request to
         enable CIT and/or Canadian Lender as secured party with respect thereto
         to collect such  Accounts  under the  applicable  Federal or Provincial
         laws of  Canada) ; (iii)  Accounts  that  remain  unpaid  more than the
         earlier of ninety (90) days from  invoice  date or sixty (60) days from
         due date; (iv) contra accounts;  (v) sales to any subsidiary (direct or
         indirect),  or parent (direct or indirect),  of any Company,  or to any
         other person or entity  otherwise  affiliated  with any Company or with
         any shareholder  known by Ronson to own greater than three percent (3%)
         of the issued and outstanding capital stock of such Company, subsidiary
         (direct or indirect)  or parent  (direct or indirect) of any Company in
         any way;  (vi) bill and hold  (deferred  shipment,  consignment  sales,
         guaranteed  sales,  sale and  return,  sale on  approval or other terms
         under  which  payment  by the  account  debtor  may be  conditional  or
         contingent;  (vii) sales to any customer which is either (w) insolvent,
         (x)   the   debtor   in  any   bankruptcy,   insolvency,   arrangement,
         reorganization,  receivership or similar  proceedings under any federal
         or state law, (y) negotiating, or has called a meeting of its creditors
         for  purposes  of  negotiating,  a  compromise  of  its  debts,  or (z)
         financially  unacceptable to CIT or has a credit rating unacceptable to
         CIT; (viii) all sales to any customer if fifty percent (50%) or more of
         the  aggregate  dollar  amount  of all  outstanding  invoices  to  such
         customer  are unpaid  more than the  earlier  of ninety  (90) days from
         invoice  date or sixty  (60)  days  from due  date;  (ix)  sales to any
         customer and/or its affiliates to the extent the aggregate  outstanding
         amount of such sales

                                       5
<PAGE>

         at any  time  exceed  thirty  percent  (30%)  or more  of all  Eligible
         Accounts Receivable of all Companies,  in the aggregate,  at such time;
         (x)  pre-billed  receivables  and  receivables  arising  from  progress
         billings;  (xi)  sales by  Ronson,  RAI or RCPC not  payable  in United
         States currency; and (xii) sales by Ronson Canada not payable in either
         U.S. Dollars or Canadian Dollars; plus

         (c)  reserves  established  by  CIT to  account  for  increases  in the
         Companies'  Dilution  Percentage  above five percent  (5.0%),  and such
         other reserves against Trade Accounts Receivable as CIT deems necessary
         in the  exercise  of its  reasonable  business  judgment  and which are
         customary  either in the commercial  finance industry or in the lending
         practices of CIT.

         Eligible In-Transit  Inventory shall mean all finished goods Inventory,
         ------------------------------
which is in overseas  transit to one of the Company's  locations,  and which (a)
has been paid for and is owned by such  Company,  (b) is fully  insured,  (c) is
subject to a first  priority  security  interest  in and lien upon such goods in
favor of CIT (except for any  possessory  lien upon such goods in the possession
of a freight carrier or shipping  company  securing only the freight charges for
the  transportation  of  such  goods  to  such  Company),  (d) is  evidenced  or
deliverable pursuant to documents, notices, instruments, statements and bills of
lading  that are  satisfactory  to CIT in its  sole  discretion  and  have  been
delivered to CIT or an agent acting on its behalf,  and (e) is otherwise  deemed
to be "Eligible Inventory" hereunder.

         Eligible  Inventory  shall  mean the  gross  amount  of the  Companies'
         -------------------
Inventory  that is  subject  to a valid,  exclusive,  first  priority  and fully
perfected security interest in favor of CIT and which conforms to the warranties
contained  herein and which,  at all times  continues to be acceptable to CIT in
the exercise of its reasonable business judgment, including, without limitation,
Eligible   In-Transit   Inventory,   less,   without   duplication,    (a)   all
work-in-process,  (b) all supplies (other than raw materials), (c) as to Ronson,
RAI and RCPC, all Inventory not present in the United States of America,  and as
to Ronson  Canada,  all  Inventory  not  present  in Canada,  (d) all  Inventory
returned  or rejected by such  Company's'  customers  (other than goods that are
undamaged  and  resalable  in the  normal  course of  business)  and goods to be
returned to such Company's  suppliers,  (e) all Inventory in transit (other than
Eligible In-Transit  Inventory) or in the possession of a warehouseman,  bailee,
third party processor, or other third party, unless such warehouseman, bailee or
third party has executed a notice of security  interest  agreement  (in form and
substance  satisfactory  to CIT),  and (f) the  amount  of such  other  reserves
against  Inventory  as CIT deems  necessary  in the  exercise of its  reasonable
business judgment,  including,  without limitation,  reserves for special order,
licensed  or  private  label  goods,  discontinued,   slow-moving  and  obsolete
Inventory, market value declines, bill and hold (deferred shipment), consignment
sales, shrinkage and any applicable customs, freight, duties and Taxes.

         Equipment  shall  mean  all of each  Company's  present  and  hereafter
         ---------
acquired equipment (as defined in the UCC) including,  without  limitation,  all
machinery,   equipment,   rolling  stock,  furnishings  and  fixtures,  and  all
additions,  substitutions and replacements thereof,  wherever located,  together
with all attachments,  components,  parts,  equipment and accessories  installed
thereon or affixed thereto and all Proceeds of any of the foregoing.

         ERISA shall mean the Employee  Retirement  Income Security Act of 1974,
         -----
as  amended  from  time to  time,  and the  rules  and  regulations  promulgated
thereunder from time to time.

         Event(s)  of  Default  shall  have the  meaning  given to such  term in
         ---------------------
Section 10.1 of this Financing Agreement.

         Exchange  Rate shall mean the  prevailing  spot rate of  exchange of JP
         --------------
Morgan Chase Bank or, if such rate is not  available  from JP Morgan Chase Bank,
or such other bank as Agent may reasonably  select for the purpose of conversion
of one currency to another,  at or around 11:00 a.m. New York City time,  on the
date  on  which  any  such  conversion  of  currency  is to be made  under  this
Agreement.

         Financing  Agreement  shall  mean  this  Financing  Agreement  and  all
         --------------------
exhibits and schedules attached or otherwise  identified hereto, as the same may
be amended, modified, restated or supplemented from time to time.

         Fixed Charge  Coverage Ratio shall mean,  for any period,  the quotient
         ----------------------------
(expressed  as a ratio)  obtained by dividing  (a) EBITDA of the  Companies on a
consolidated  basis for such period by (b) Fixed  Charges of the  Companies on a
consolidated basis for such period.

                                       6
<PAGE>

         Fixed Charges shall mean,  for any period,  the sum of (a) all interest
         -------------
obligations  (including  the  interest  component  of  Capital  Leases)  of  the
Companies on a consolidated basis paid or due during such period, (b) the amount
of all  scheduled  fees  paid to CIT  during  such  period,  (c) the  amount  of
principal  repaid  or  scheduled  to be  repaid  on the  Term  Loans  and  other
Indebtedness of the Companies on a consolidated  basis (other than the Revolving
Loans)  during such period,  (d)  unfinanced  Capital  Expenditures  (other than
Qualified  Hangar  Construction  Expenses),  as incurred by the  Companies  on a
consolidated basis during such period,  (e) all federal,  state and local income
and capital tax expenses  (other than on account of the Ronson Tax Lien) due and
payable by the Companies on a consolidated basis during such period, and (f) the
amount of all distributions or dividends,  or the purchase,  redemption or other
acquisition  of equity  interests  by Ronson,  for cash in an amount  during any
fiscal year in an amount not to exceed $200,000 for such fiscal year,  provided,
however,  that no Default or Event of Default shall have occurred or would occur
or result from the making of any such distribution.

         Funds Administrator shall mean Ronson Corporation.,  in its capacity as
         -------------------
the  borrowing  agent and loan  funds  administrator  for  itself  and the other
Companies under this Financing Agreement.

         GAAP shall mean generally accepted accounting  principles in the United
         ----
States of America as in effect  from time to time and for the period as to which
such accounting principles are to apply.

         General  Intangibles  shall  mean  all of each  Company's  present  and
         --------------------
hereafter  acquired  general  intangibles  (as  defined  in the UCC),  and shall
include, without limitation, all present and future right, title and interest in
and to: (a) all Trademarks,  (b) Patents, utility models, industrial models, and
designs,  (c)  Copyrights,   (d)  trade  secrets,  (e)  licenses,   permits  and
franchises,  (f) any other  forms of  intellectual  property,  (g) all  customer
lists, distribution agreements, supply agreements,  blueprints,  indemnification
rights and tax  refunds,  (h) all monies and claims for monies now or  hereafter
due and payable in connection with the foregoing, including, without limitation,
payments for  infringement  and royalties  arising from any licensing  agreement
between  any  Company  and  any  licensee  of  any  of  such  Company's  General
Intangibles, and (i) all Proceeds of any of the foregoing.

         Goods shall mean all present and hereafter acquired "Goods", as defined
         -----
in the UCC, and all Proceeds thereof.

         Guaranteed  Obligations  shall  mean  any  and  all  obligations  of  a
         -----------------------
Guarantor under any Guaranty executed and delivered to CIT by such Guarantor.

         Guaranty(ies)  shall  mean  each  and  all of the  guaranty  agreements
         -------------
executed and delivered to CIT by Guarantors.

         Guarantors shall mean the Limited Guarantor,  Ronson Hydraulics and any
         ----------
future guarantor of all or any part of the Obligations.

         Indebtedness  shall  mean,  without  duplication,  with  respect to any
         ------------
Person,  all liabilities  and  obligations,  whether or not  contingent,  (a) in
respect of borrowed  money or evidenced by bonds,  notes,  debentures or similar
instruments;  (b)  representing  the balance deferred and unpaid of the purchase
price of any  property  or services  (other  than an account  payable to a trade
creditor  incurred in the ordinary course of business of such Person and payable
in accordance with customary trade practices);  (c) representing  obligations as
lessee  under  leases  which have been,  or should be, in  accordance  with GAAP
recorded  as Capital  Leases;  (d) any  contractual  obligation,  contingent  or
otherwise,  of  such  Person  to  pay  or be  liable  for  the  payment  of  any
indebtedness described in this definition of another Person, including,  without
limitation,  any such indebtedness,  directly or indirectly  guaranteed,  or any
agreement  to purchase,  repurchase,  or  otherwise  acquire such  indebtedness,
obligation  or liability or any security  therefor,  or to provide funds for the
payment or discharge thereof, or to maintain solvency,  assets, level of income,
or  other  financial  condition;  (e)  with  respect  to  redeemable  stock  and
redemption  or  repurchase  obligations  under any capital stock or other equity
securities issued by such Person; (f) with respect to surety bonds (whether bid,
performance or otherwise),  letters of credit,  banker's acceptances,  drafts or
similar  documents  or  instruments  issued for such  Person's  account;  (g) in
respect of  indebtedness of another Person for borrowed money or indebtedness of
another Person  otherwise  described in this definition  which is secured by any
consensual lien,  security interest,  collateral  assignment,  conditional sale,
mortgage,  deed of trust,  or other  encumbrance  on any  asset of such  Person,
whether or not such  obligations,  liabilities or indebtedness are assumed by or

                                       7
<PAGE>

are a personal  liability of such Person, all as of such time; (h) arising under
swap  agreements,  cap agreements and collar  agreements and other agreements or
arrangements  designed to protect such person against  fluctuations  in interest
rates or currency or commodity  values;  (i) of any partnership or joint venture
in which such Person is a general partner or a joint venturer to the extent such
Person is liable  therefor as a result of such  Person's  ownership  interest in
such entity, except to the extent that the terms of such indebtedness  expressly
provide that such Person is not liable  therefor or such Person has no liability
therefor as a matter of law;  and (j)  relating to the  principal  and  interest
portions of all rental  obligations of such Person under any synthetic  lease or
similar  off-balance  sheet financing where such transaction is considered to be
borrowed  money for tax purposes  but is  classified  as an  operating  lease in
accordance with GAAP.

         Indemnified  Party shall have the meaning given to such term in Section
         ------------------
10.4 of this Financing Agreement.

         Initial  Additional Term Loan shall mean the term loan in the principal
         -----------------------------
amount of $750,000 made by CIT to Ronson,  RCPC and RAI,  jointly and severally,
on or about the Closing  Date on the terms and  conditions  set forth in Section
4.2 of this Financing Agreement

         Initial Term Loan shall mean the term loan in the  principal  amount of
         -----------------
$195,000 made by CIT to Ronson, RCPC and RAI, jointly and severally, on or about
the Closing  Date on the terms and  conditions  set forth in Section 4.2 of this
Financing Agreement.

         Inventory  shall  mean  all of each  Company's  present  and  hereafter
         ---------
acquired inventory (as defined in the UCC) including,  without  limitation,  all
merchandise  and  inventory  in all  stages of  production  (from raw  materials
through work-in-process to finished goods), and all additions, substitutions and
replacements  thereof,  wherever located,  together with all goods and materials
used or  usable in  manufacturing,  processing,  packaging  or  shipping  of the
foregoing, and all Proceeds of any of the foregoing.

         Investment  Property  shall  mean  all of each  Company's  present  and
         --------------------
hereafter acquired "Investment  Property",  as defined in the UCC, together with
all stock and other equity  interests in the  Companies'  subsidiaries,  and all
Proceeds thereof.

         Issuing  Bank  shall  mean any bank  issuing a Letter  of Credit  for a
         -------------
Company.

         Letters  of Credit  shall mean all  letters of credit  issued for or on
         ------------------
behalf of a Company with the  assistance of CIT by an Issuing Bank in accordance
with Section 5 hereof.

         Letter of Credit Guaranty shall mean any guaranty or similar  agreement
         -------------------------
delivered  by CIT to an Issuing  Bank of a  Company's  reimbursement  obligation
under such Issuing Bank's  reimbursement  agreement,  application  for letter of
credit or other like document.

         Letter of Credit  Guaranty  Fee shall  mean the fee that CIT may charge
         -------------------------------
the Companies  under Section  8.3(a) of this  Financing  Agreement for issuing a
Letter of Credit  Guaranty or  otherwise  assisting  the  Companies in obtaining
Letters of Credit.

         Letter of Credit  Sub-Line  shall mean the  commitment of CIT to assist
         --------------------------
Ronson, RAI and RCPC in obtaining Letters of Credit in an aggregate amount of up
to $500,000.

         Limited  Guarantor  shall  mean  Louis  V.  Aronson  II in the  limited
         ------------------
capacity set forth in his Guaranty.

         Line of Credit shall mean the commitment of CIT in an aggregate  amount
         --------------
equal to $3,945,000 to (a) make  Revolving  Loans  pursuant to Section 3 of this
Financing  Agreement,  (b)  assist  any  Company  in  opening  Letters of Credit
pursuant to Section 5 of this  Financing  Agreement  and (c) make the Term Loans
pursuant to Section 4 of this Financing Agreement,.

         Line of Credit Fee shall mean, for any month,  the product  obtained by
         ------------------
multiplying  (a) (i) the amount of the  Revolving  Line of Credit minus (ii) the
average daily principal balance of Revolving Loans and the average daily

                                       8
<PAGE>

undrawn amount of Letters of Credit outstanding during such month, times (b) one
quarter of one percent (0.25%) per annum for the number of days in said month.

         Loan  Documents  shall mean this  Financing  Agreement,  the Promissory
         ---------------
Notes, the Guaranties,  the other closing documents executed by the Companies or
the Guarantors, and any other ancillary loan and security agreements executed by
the  Companies  or the  Guarantors  from  time to time in  connection  with this
Financing Agreement,  all as may be renewed,  amended,  restated or supplemented
from time to time.

         Loan Facility Fee shall mean the fee payable to CIT in accordance with,
         -----------------
and pursuant to, the provisions of Section 8.6 of this Financing Agreement.

         Material  Adverse Effect shall mean a material adverse effect on either
         ------------------------
(a) the business, condition (financial or otherwise),  operations,  performance,
properties  or  prospects  of any  Company,  (b) the  ability of any  Company to
perform  its  obligations  under  this  Financing  Agreement  or any other  Loan
Document,  or to enforce its rights against account debtors of such Company, (c)
the value of the  Collateral  or (d) the  ability of CIT  and/or the  Lenders to
enforce  the  Obligations  or its  rights  and  remedies  under  this  Financing
Agreement or any of the other Loan Documents.

         Minority  Ronson Canada  Interest  shall mean the interest of Ronson in
         ---------------------------------
thirty-four percent (34%) of the shares of Ronson Canada.

         Net Availability shall mean, as to any Company, at any time, the amount
         ----------------
by which (a) the Borrowing Base of such Company at such time exceeds (b) the sum
at such time of (i) the principal  amount of all outstanding  Revolving Loans of
such Company,  plus (ii) the undrawn amount of all outstanding Letters of Credit
issued on behalf of such Company.

         Net Orderly  Liquidation  Value shall mean, at any time,  the aggregate
         -------------------------------
value,  expressed as a percentage of cost, of the  Companies'  Inventory at such
time in an orderly liquidation, taking into account all costs, fees and expenses
estimated  to be  incurred  by CIT  in  connection  with  such  liquidation,  as
determined  by CIT,  based  upon the most  recent  appraisal  of the  Companies'
Inventory  conducted  by an  independent  appraiser  satisfactory  to CIT in all
respects,  including,  without  limitation,  the  form,  scope  and  methodology
pursuant to which such appraiser conducts such appraisal, and such other factors
as CIT may deem appropriate in the exercise of its reasonable business judgment.

         Obligations shall mean: (a) all loans, advances and other extensions of
         -----------
credit made by CIT and/or Lenders to the Companies (or any of them) or to others
for the Companies' account (including,  without limitation, all Revolving Loans,
all Term Loans and all  obligations  of CIT under Letter of Credit  Guaranties);
(b) any and all other  indebtedness,  obligations and  liabilities  which may be
owed by the Companies (or any of them) to CIT and/or the Lenders and arising out
of, or incurred in connection with, this Financing Agreement or any of the other
Loan  Documents  (including  all  Out-of-Pocket   Expenses  and  any  applicable
Documentation  Fees),  whether (i) now in existence or incurred by the Companies
(or any of them) from time to time hereafter,  (ii) secured by pledge, lien upon
or  security  interest  in any  Company's  assets or  property  or the assets or
property  of  any  other  person,  firm,  entity  or  corporation,   (iii)  such
indebtedness is absolute or contingent,  joint or several, matured or unmatured,
direct or indirect,  or (iv) the  Companies are liable to CIT and/or the Lenders
for such indebtedness as principal,  surety,  endorser,  guarantor or otherwise;
(c) all indebtedness,  obligations and liabilities owed by the Companies (or any
of them) to CIT and/or the Lenders under any other  agreement or arrangement now
or hereafter  entered into between the  Companies  (or any of them),  on the one
hand,  and CIT  and/or  the  Lenders,  on the other  hand,  whether  or not such
agreement  or  arrangement  relates  to the  transactions  contemplated  by this
Financing Agreement; (d) indebtedness,  obligations and liabilities incurred by,
or  imposed  on, CIT and/or  the  Lenders  as a result of  environmental  claims
relating to any Company's  operations,  premises or waste disposal  practices or
disposal  sites;  (e) the  Companies'  liabilities  to CIT and/or the Lenders as
maker or endorser on any promissory note or other  instrument for the payment of
money;  and (f) the  Companies'  liabilities to CIT and/or the Lenders under any
instrument of guaranty or indemnity, or arising under any guaranty,  endorsement
or undertaking  which CIT and/or the Lenders may make or issue to others for the
account of the Companies (or any of them), including any accommodations extended
by CIT with  respect to  applications  for Letters of Credit,  CIT's  and/or the
Lenders' acceptance of drafts or CIT's and/or the Lenders'  endorsement of notes
or other instruments for the Companies' account and benefit.

                                       9
<PAGE>

         Operating  Leases  shall mean all  leases of  property  (whether  real,
         -----------------
personal or mixed) other than Capital Leases.

         Other  Collateral  shall mean all of the  Companies':  (a)  present and
         -----------------
hereafter  established  lockbox,  blocked  account  and other  deposit  accounts
maintained  with any bank or  financial  institution  into which the proceeds of
Collateral are or may be deposited (including the Depository Accounts); (b) cash
and other monies and  property in the  possession  or control of CIT  (including
negative  balances in the Revolving Loan Account and cash collateral held by CIT
pursuant to this Financing  Agreement);  (c) books,  records,  invoices,  ledger
cards, bills of lading and other shipping evidence, statements,  correspondence,
credit files and other data relating to the  Collateral  or any account  debtor,
together  with tapes,  disks and related  data  processing  software at any time
evidencing or containing information relating to any of the Collateral described
herein  or  otherwise   necessary  or  helpful  in  the  collection  thereof  or
realization thereon; and (d) all Proceeds of any of the foregoing.

         Out-of-Pocket  Expenses  shall mean all of CIT's  and/or  the  Lenders'
         -----------------------
present and future costs,  fees and expenses  incurred in  connection  with this
Financing Agreement and the other Loan Documents, including, without limitation,
(a) the cost of lien searches  (including tax lien and judgment lien  searches),
pending  litigation  searches and similar  items,  (b) fees and taxes imposed in
connection  with the  filing  of any  financing  statements  or  other  personal
property security  documents;  (c) all costs and expenses incurred by CIT and/or
the Lenders in opening and maintaining  the Depository  Accounts and any related
lockboxes,  depositing  checks,  and receiving and transferring funds (including
charges  imposed on CIT  and/or the  Lenders  for  "insufficient  funds" and the
return of deposited checks);  (d) any amounts paid by, incurred by or charged to
CIT by an Issuing Bank under any Letter of Credit or the reimbursement agreement
relating  thereto,  any  application  for  Letter  of  Credit,  Letter of Credit
Guaranty or other like document which pertains  either directly or indirectly to
Letters of Credit, and CIT's standard fees relating to the Letters of Credit and
any drafts thereunder;  (e) title insurance premiums,  real estate survey costs,
note taxes,  intangible  taxes and mortgage or recording taxes and fees; (f) all
appraisal fees and expenses payable by the Companies  hereunder,  and all costs,
fees and  expenses  incurred  by CIT and/or the Lenders in  connection  with any
action taken under Section 7.2(a) hereof,  including reasonable travel, meal and
lodging  expenses  of CIT and/or the Lenders  personnel;  (g) all costs that CIT
and/or  the  Lenders  may incur to  maintain  the  Required  Insurance,  and all
reasonable  costs,  fees and  expenses  incurred  by CIT and/or  the  Lenders in
connection  with the  collection of Casualty  Proceeds and the monitoring of any
repair or  restoration  of any Real  Estate;  (h) all  reasonable  costs,  fees,
expenses and disbursements of outside counsel hired by CIT and/or the Lenders to
consummate the transactions  contemplated by this Financing Agreement (including
the  documentation  and  negotiation  this Financing  Agreement,  the other Loan
Documents and all amendments,  supplements and restatements thereto or thereof),
and to advise CIT and/or the Lenders as to matters  relating to the transactions
contemplated hereby; (i) all costs, fees and expenses incurred by CIT and/or the
Lenders in connection  with any action taken under Section 10.3 hereof;  and (j)
without  duplication,  all costs,  fees and expenses  incurred by CIT and/or the
Lenders in connection with the collection, liquidation,  enforcement, protection
and defense of the  Obligations,  the  Collateral  and CIT's and/or the Lenders'
rights under this Financing Agreement,  including,  without limitation, all fees
and  disbursements  of in-house  and  outside  counsel to CIT and/or the Lenders
incurred as a result of a workout, restructuring,  reorganization,  liquidation,
insolvency  proceeding and in any appeals arising  therefrom,  whether  incurred
before,  during or after the  termination  of this  Financing  Agreement  or the
commencement  of any case with respect to the  Companies  (or any of them),  any
Guarantor or any  subsidiary  of a Company (as the case may be) under the United
States Bankruptcy Code or any similar statute.

         Overadvances  shall mean, at any time,  the amount by which (a) the sum
         ------------
at such time of the principal amount of all outstanding Revolving Loans plus the
undrawn  amount of all  outstanding  Letters of Credit exceeds (b) the aggregate
Borrowing  Base  at  such  time  (all  as  determined   based  on  U.S.   Dollar
Equivalents).

         Patents shall mean all of the Companies' present and hereafter acquired
         -------
patents, patent applications,  registrations, all reissues and renewals thereof,
all licenses thereof,  all inventions and improvements  claimed thereunder,  all
general intangible,  intellectual  property and other rights of any Company with
respect thereto, and all income, royalties and other Proceeds of the foregoing.

         Permitted Distributions shall mean:
         -----------------------

         (a)  dividends  from a  wholly-owned  subsidiary  of a Company  to such
         Company;

                                       10
<PAGE>

         (b) dividends  payable solely in stock or other equity interests of the
         Companies;

         (c)  distributions  or  dividends  by a Company  to Ronson in an amount
         sufficient to enable Ronson to pay such Company's  reasonable  share of
         income or franchise Taxes owed by Ronson, due as a result of the filing
         by Ronson of a  consolidated,  combined  or unitary tax return in which
         the operations of the Companies are included;

         (d)  distributions or dividends,  or the purchase,  redemption or other
         acquisition  of  equity  interests,  for cash in an amount  during  any
         fiscal year in an amount not to exceed  $200,000  for such fiscal year,
         provided,  however,  that no  Default  or Event of  Default  shall have
         occurred  or would occur as a result of or after  giving  effect to any
         such distribution; and

         (e) the payment of management  fees by the other Companies to Ronson in
         an aggregate amount not to exceed  $2,750,000 for the fiscal year ended
         2006, and for each fiscal year  thereafter,  an amount not greater than
         10%  more  than  the  maximum  amount   permitted   hereunder  for  the
         immediately preceding fiscal year.

         Permitted  Encumbrances  shall mean:  (a) liens existing on the Closing
         -----------------------
Date on specific  items of  Equipment as set forth on Schedule  1.1(a)  attached
hereto;  (b) Purchase Money Liens; (c) 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  Companies  in
accordance  with GAAP; (d) deposits made (and the liens thereon) in the ordinary
course of business  of any  Company  (including,  without  limitation,  security
deposits  for  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;  (e) liens
granted to CIT  and/or  the  Lenders  by the  Companies;  (f) liens of  judgment
creditors,  provided  that such liens do not exceed  $50,000 in the aggregate at
any time (other than liens bonded or insured to the reasonable  satisfaction  of
CIT); (g) Permitted Tax Liens;  (h) easements  (including,  without  limitation,
reciprocal easement  agreements and utility  agreements),  encroachments,  minor
defects or irregularities in title, variation and other restrictions, charges or
encumbrances (whether or not recorded) affecting the Real Estate, if applicable,
and which in the aggregate (i) do not materially  interfere with the occupation,
use or enjoyment by any Company of its  business or property so  encumbered  and
(ii) in the reasonable business judgment of CIT, do not materially and adversely
affect  the  value of such Real  Estate,  (i) liens  against  the Real  Property
Collateral,  arising  in  connection  with a  Permitted  Realty  Financing;  (j)
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;  and (k) any lien renewing,  or extending any lien permitted
by clauses (a) through (j) hereof.

         Permitted Indebtedness shall mean: (a) current Indebtedness maturing in
         ----------------------
less than one year and  incurred  in the  ordinary  course of  business  for raw
materials,  supplies,  equipment,  services,  Taxes or labor;  (b)  Indebtedness
secured by Purchase Money Liens; (c)  Indebtedness  arising under the Letters of
Credit and this  Financing  Agreement;  (d)  deferred  Taxes and other  expenses
incurred  in the  ordinary  course  of  business;  (e)  Subordinated  Debt;  (f)
Permitted  Intercompany  Loans;  (g)  Indebtedness  arising in connection with a
Permitted Realty Financing,  (h) other Indebtedness existing on the Closing Date
and set forth on Schedule 1.1(b) attached hereto,  (i) guarantees of any Company
in respect of Indebtedness otherwise permitted hereunder; (j) loans and advances
to Ronson  Hydraulics and Prometcor  pursuant to and in accordance  with Section
7.4(h)(ii)(w)  hereof,  and (k)  obligations  (contingent  or  otherwise) of any
Company under any swap  transaction or similar  transaction  entered into in the
ordinary  course of business and not for speculative  purposes,  consistent with
past practices.

         Permitted  Intercompany  Loan  shall  mean a loan made by a Company  to
         -----------------------------
another Company,  but only so long as (a) such loan is evidenced by a promissory
note,  the original of which shall be  delivered to CIT, and (b) the  promissory
note evidencing  such loan provides (in form and substance  satisfactory to CIT)
that the repayment  thereof is subordinated to the full and final payment of the
Obligations.

                                       11
<PAGE>

         Permitted Realty Financing shall mean the incurrence of Indebtedness to
         --------------------------
a third party institutional lender in the amount of at least $1,800,000, secured
only by a first lien and mortgage upon the Real Property Collateral, or any part
thereof, on terms and conditions  reasonably  satisfactory to CIT, provided that
(i) no Default  that has not been  cured or Event of  Default  that has not been
waived in writing by CIT has occurred, (ii) no Default or Event of Default would
occur as a result of the Permitted Realty Financing, and (iii) contemporaneously
with the consummation  after the date hereof of the Permitted Realty  Financing,
the  proceeds of such  Permitted  Realty  Financing  are paid to CIT and applied
against the outstanding balance of the Companies' Revolving Line of Credit.

         Permitted  Tax Liens shall mean (a) liens  existing on the Closing Date
         --------------------
as set forth on Schedule 1.1(c) attached hereto; and (b) liens for Taxes not due
and payable and liens for Taxes that any Company is contesting in good faith, by
appropriate  proceedings which are sufficient to prevent imminent foreclosure of
such liens, and with respect to which adequate  reserves are being maintained by
such Company in  accordance  with GAAP;  provided that in either case under this
clause (b),  such liens (i) are not filed of record in any public  office,  (ii)
other than with respect to Real Estate,  are not senior in priority to the liens
granted  by any such  Company to CIT,  or (iii) do not secure  taxes owed to the
United States of America (or any  department or agency  thereof) or any State or
State authority,  if applicable State law provides for the priority of tax liens
in a manner similar to the laws of the United States of America.

         Person shall mean any  individual,  sole  proprietorship,  partnership,
         ------
corporation, limited liability company, limited liability partnership,  business
trust, unincorporated association, joint stock corporation, trust, joint venture
or other entity or any government or any agency or  instrumentality or political
subdivision thereof.

         PPSA shall mean the Personal  Property Security Act as in effect in the
         ----
Province  of  Ontario  or any  other  Canadian  Federal  or  Provincial  statute
pertaining  to  the  granting,  perfecting,  priority  or  ranking  of  security
interests,  liens,  hypothecs on personal property,  and any successor statutes,
together with any regulations thereunder, in each case as in effect from time to
time. References to sections of the PPSA shall be construed to also refer to any
successor sections.

         Prepayment  Premium shall mean an amount equal to the product  obtained
         -------------------
by  multiplying  the  principal  amount of the portion of the Initial  Term Loan
prepaid  (irrespective  of whether such prepayment is a voluntary  prepayment by
the Companies (or any of them) or a mandatory  prepayment  following an Event of
Default (other than mandatory  prepayments  from Surplus Cash as contemplated by
this Financing  Agreement) as a result of which the credit facilities under this
Financing   Agreement   and/or  this  Financing   Agreement  are  terminated  as
contemplated  by Section 10.2 hereof (whether  automatically  or by CIT)) by (i)
two percent (2%) if such prepayment occurs on or before the first anniversary of
the Closing  Date,  (ii) one percent  (1%) if such  prepayment  occurs after the
first anniversary of the Closing Date but on or before the second anniversary of
the Closing Date, and (iii) one-half  percent (0.5%) if such  prepayment  occurs
after second  anniversary of the Closing Date but prior to the date which is ten
(10) Business Days prior to the initial or any subsequent  Termination Date. For
purpose of clarity,  no Prepayment  Premium shall apply to the prepayment of all
or any portion of the Initial Additional Term Loan.

         Priority  Payables shall mean, as to Ronson Canada at any time, (i) the
         ------------------
full amount of the  liabilities  of Ronson  Canada at such time which (1) have a
trust  imposed to provide  for  payment or a security  interest,  pledge,  lien,
hypothec  or charge  ranking or capable of ranking  senior to or pari passu with
security interests,  liens, hypothecs or charges securing the Obligations on any
of the  Accounts  or  Inventory  of Ronson  Canada  under  Federal,  Provincial,
Territorial,  county, district,  municipal, or local law in Canada or (2) have a
right imposed to provide for payment  ranking or capable of ranking senior to or
pari passu with the  Obligations  under local or  national  law,  regulation  or
directive,   including,  but  not  limited  to,  claims  for  unremitted  and/or
accelerated  rents,  taxes,  wages,  withholdings  taxes,  VAT and other amounts
payable to an insolvency administrator,  employee withholdings or deductions and
vacation pay, workers' compensation obligations, government royalties or pension
fund  obligations in each case to the extent such trust,  or security  interest,
lien,  hypothec or charge has been or may be imposed,  and (ii) the amount equal
to the  percentage  applicable to Inventory in the  calculation of the Borrowing
Base  of  Ronson  Canada  multiplied  by the  aggregate  value  of the  Eligible
Inventory which CIT, in good faith,  considers is or may be subject to retention
of title by a supplier  or a right of a supplier to recover  possession  thereof
under Federal, Provincial,  Territorial,  county, district,  municipal, or local
law in Canada,  where  such  supplier's  right has  priority  over the  security
interests,  liens,  hypothecs or charges  securing the  Obligations,

                                       12
<PAGE>

including,  without  limitation,  Eligible  Inventory  subject  to a right  of a
supplier to  repossess  goods  pursuant to Section  81.1 of the  Bankruptcy  and
Insolvency Act (Canada) or any applicable laws granting revendication or similar
rights to unpaid suppliers or any similar laws of Canada or any other applicable
jurisdiction  (provided,  that, to the extent  Inventory has been identified and
has been  excluded  from  Eligible  Inventory,  the amount owing to the supplier
shall not be considered a Priority Payable).

         Proceeds  shall  have  the  meaning  given  to such  term  in the  UCC,
         --------
including, without limitation, all Casualty Proceeds.

         Prometcor shall mean Prometcor, Inc., a New Jersey corporation.
         ---------

         Promissory Notes shall mean the notes in the form of Exhibit A attached
         ----------------
hereto,  delivered by the Companies (or any of them) to CIT to evidence the Term
Loan(s).

         Purchase Money Liens shall mean liens on any item of Equipment acquired
         --------------------
by a Company after the date of this Financing Agreement,  provided that (a) each
such lien shall attach only to the Equipment acquired,  (b) a description of the
Equipment  so  acquired  is  furnished  by  such  Company  to  CIT,  and (c) the
indebtedness  incurred by the  Companies in  connection  with such  acquisitions
shall not exceed $50,000 in the aggregate in any fiscal year of the Companies.

         Qualified  Hangar  Construction  Expenses  shall  mean  all  costs  and
         -----------------------------------------
expenses  incurred  by one or more  of the  Companies  in  connection  with  the
construction of and improvements to the premises  located at the  Trenton-Mercer
County  Airport  consisting  of a hangar  facility  and  ancillary  improvements
covering  approximately  19,200  square feet of space,  which costs and expenses
shall not exceed  $2,250,000 in the aggregate  during the term of this Financing
Agreement.

         Real Estate  shall mean all of the  Companies'  present and future fee,
         -----------
leasehold  and  appurtenant  and other  interests in real  property,  including,
without  limitation,  the real property owned by the Companies as of the Closing
Date and described on Schedule  1.1(d)  attached  hereto,  and the  improvements
thereto  (to the extent  constituting  an  interest  in real  property)  and all
fixtures attached to or installed in or upon such  improvements,  and all leases
and rights of use and occupancy and all rent and other  payments with respect to
the foregoing.

         Real  Property  Collateral  shall mean all Real Estate  (other than the
         --------------------------
Airport Lease), including,  without limitation,  (i) that certain real property,
together  with all  improvements  thereon  owned in fee by RCPC and located at 3
Ronson  Road,  Woodbridge,  New Jersey,  and (ii) that  certain  real  property,
together  with all  improvements  thereon  owned in fee by RCPC and located at 6
Ronson Road,  Woodbridge,  New Jersey,  together  with all  Proceeds  therefrom,
including,  without limitation, the collateral securing the obligations incurred
in connection with the Permitted Realty Financing.

         Regulatory  Change  shall mean any  change  after the  Closing  Date in
         ------------------
United States federal,  state or foreign law or regulation  (including,  without
limitation,  Regulation  D of the  Board of  Governors  of the  Federal  Reserve
System), or the adoption or making after the Closing Date of any interpretation,
directive or request  applying to a class of lenders  including  CIT of or under
any United  States  federal,  state or foreign law or  regulation,  in each case
whether  or not having  the force of law and  whether  or not  failure to comply
therewith would be unlawful.

         Required  Insurance  shall  have the  meaning  provided  for in Section
         -------------------
7.2(c) of this Financing Agreement.

         Revolving  Line of  Credit  shall  mean the  commitment  of CIT to make
         --------------------------
Revolving  Loans  pursuant to Section 3 of this  Financing  Agreement and assist
Ronson,  RAI and RCPC in opening Letters of Credit pursuant to Section 5 of this
Financing,  in an aggregate  amount equal to  $3,000,000;  except that Revolving
Loans to Ronson  Canada  shall be limited to $600,000  (or the  Canadian  Dollar
Equivalent thereof).

         Revolving  Loan Account shall mean the account on CIT's books,  in each
         -----------------------
Company's  name , in which  each  Company  will be charged  with all  applicable
Obligations under this Financing  Agreement when due or incurred by CIT, whether
consisting of Revolving Loans, Term Loans or other Obligations.

                                       13
<PAGE>

         Revolving  Loans  shall mean the loans and  advances  made from time to
         ----------------
time to or for the account of each of the Companies by CIT pursuant to Section 3
of this Financing Agreement.

         Ronson Canada Obligations shall mean: (a) all loans, advances and other
         -------------------------
extensions  of credit made by CIT and/or  Lenders to Ronson  Canada or to others
for Ronson Canada's account (including,  without limitation, all Revolving Loans
and all obligations of CIT under Letter of Credit  Guaranties for the benefit of
Ronson Canada); (b) any and all other indebtedness,  obligations and liabilities
which may be owed by Ronson Canada to CIT and/or the Lenders and arising out of,
or incurred in connection  with,  this  Financing  Agreement or any of the other
Loan Documents (including all Out-of-Pocket  Expenses attributable to the Ronson
Canada  Obligations and any applicable  Documentation  Fees  attributable to the
Ronson Canada  Obligations),  whether (i) now in existence or incurred by Ronson
Canada  from  time to time  hereafter,  (ii)  secured  by  pledge,  lien upon or
security  interest  in Ronson  Canada's  assets  or  property  or the  assets or
property  of  any  other  person,  firm,  entity  or  corporation,   (iii)  such
indebtedness is absolute or contingent,  joint or several, matured or unmatured,
direct or  indirect,  or (iv) Ronson  Canada is liable to CIT and/or the Lenders
for such indebtedness as principal,  surety,  endorser,  guarantor or otherwise;
(c) all  indebtedness,  obligations and liabilities owed by Ronson Canada to CIT
and/or the Lenders  under any other  agreement or  arrangement  now or hereafter
entered into between Ronson Canada, on the one hand, and CIT and/or the Lenders,
on the other hand,  whether or not such agreement or arrangement  relates to the
transactions   contemplated  by  this  Financing  Agreement;  (d)  indebtedness,
obligations and  liabilities  incurred by, or imposed on, CIT and/or the Lenders
as a  result  of  environmental  claims  relating  to  any  of  Ronson  Canada's
operations,  premises or waste disposal  practices or disposal sites; (e) Ronson
Canada's  liabilities  to CIT and/or the  Lenders  as maker or  endorser  on any
promissory  note or other  instrument  for the payment of money;  and (f) Ronson
Canada's  liabilities to CIT and/or the Lenders under any instrument of guaranty
or indemnity,  or arising under any guaranty,  endorsement or undertaking  which
CIT and/or  the  Lenders  may make or issue to others for the  account of Ronson
Canada,   including  any   accommodations   extended  by  CIT  with  respect  to
applications  for Letters of Credit,  CIT's  and/or the Lenders'  acceptance  of
drafts or CIT's and/or the Lenders'  endorsement  of notes or other  instruments
for Ronson Canada's account and benefit.

         Ronson  Hydraulics  shall mean Ronson  Hydraulic Units  Corporation,  a
         ------------------
North Carolina corporation.

         Ronson  Tax Lien  shall  mean  that  certain  lien of the  State of New
         ----------------
Jersey,  Division of Taxation,  for unpaid taxes,  penalties and other  charges,
against Ronson,  recorded on May 24, 2006 with the Superior Court of New Jersey,
Law Division,  County of Somerset, at Book 5897, Page 1134-1136,  Instrument No.
2006033607.

         Ronson Tax Lien Reserve shall mean that certain Availability Reserve in
         -----------------------
an amount of not less than the sum of the outstanding balance due at any time of
the Ronson Tax Lien.

         Solvent shall mean,  with respect to any Company on a particular  date,
         -------
that on such date (a) the fair value of the tangible and intangible  property of
such  Company  is  greater  than the  total  amount  of  liabilities,  including
contingent  liabilities,  of such Company; (b) the present fair salable value of
the tangible and  intangible  assets of such Company is not less than the amount
that will be required to pay the probable liability of such Company on its debts
as they become  absolute  and mature;  (c) such  Company does not intend to, nor
does it believe (or reasonably  should have believed) that it will,  incur debts
or liabilities  beyond its ability to pay as such debts and liabilities  mature;
and (d) such  Company is not  engaged in a business or  transaction,  and is not
about to engage in a business or transaction,  for which such Company's property
would   constitute  an  unreasonably   small  capital  or  would  be  considered
unreasonably  small in relation to such business or  transaction.  The amount of
contingent  liabilities  (such  as  litigation,   guarantees  and  pension  plan
liabilities)  at any time shall be computed as the amount which, in light of all
the facts and  circumstances  existing at the time,  represents  the net present
value of the amount which can be  reasonably  be expected to become an actual or
matured liability.

         Specified  Intellectual Property shall mean all of Ronson's right title
         --------------------------------
and interest in and to the registered trademark "Ronson" under applicable United
States  trademark law and under common law,  together with all of the Companies'
right,  title and interest in and to Trademarks,  Copyrights,  Patents and other
proprietary and  intellectual  property  rights,  and all Proceeds of any of the
foregoing.

                                       14
<PAGE>

         Subordinated  Debt shall mean all indebtedness of Ronson Hydraulics and
         ------------------
the  Companies  (and  the  note(s)   evidencing  such   indebtedness)   that  is
subordinated to the prior payment and  satisfaction of the Obligations  pursuant
to a Subordination Agreement.

         Subordination  Agreement  shall  mean  (a) an  agreement  (in  form and
         ------------------------
substance   satisfactory  to  CIT)  among  one  or  more  of  the  Companies,  a
subordinating   creditor  and  CIT,  pursuant  to  which  Subordinated  Debt  is
subordinated to the prior payment and satisfaction of the  Obligations,  and (b)
any note, indenture, note purchase agreement or similar instrument or agreement,
pursuant to which the  indebtedness  evidenced  thereby or issued  thereunder is
subordinated  to the  Obligations by the express terms of such note,  indenture,
note purchase agreement or similar instrument or agreement.

         Surplus  Cash  shall  mean for any fiscal  year of the  Companies,  the
         -------------
excess of the  EBITDA of the  Companies  for such  fiscal  year  minus the Fixed
Charges of the Companies for such fiscal year.

         Taxes shall mean all federal,  state,  provincial,  municipal and other
         -----
governmental taxes, levies,  charges, claims and assessments which are or may be
owed or collected by the Companies with respect to their  business,  operations,
Collateral or otherwise.

         Term Loans shall mean  collectively  the Initial Term Loan, the Initial
         ----------
Additional Term Loan and any additional term loans.

         Termination Date shall mean the date occurring three (3) years from the
         ----------------
Closing Date and the same date in every year thereafter.

         Trade  Accounts  Receivable  shall mean that portion of each  Company's
         ---------------------------
Accounts which arises from the sale of Inventory or the rendition of services in
the ordinary course of such Company's business.

         Trademarks  shall  mean all of the  Companies'  present  and  hereafter
         ----------
acquired  trademarks,   trademark   registrations,   recordings,   applications,
tradenames,  trade styles, corporate names, business names, service marks, logos
and any other designs or sources of business  identities,  prints and labels (on
which any of the foregoing may appear),  all reissues and renewals thereof,  all
licenses thereof, all other general intangible,  intellectual property and other
rights pertaining to any of the foregoing, together with the goodwill associated
therewith, and all income, royalties and other Proceeds of any of the foregoing.

         UCC shall mean the Uniform  Commercial  Code as the same may be amended
         ---
and in effect from time to time in the State of New York; provided,  however, in
the event  that,  by reason of  mandatory  provisions  of law,  the  attachment,
perfection or priority of CIT's security  interest in any Collateral is governed
by the Uniform  Commercial Code as enacted and in effect in a jurisdiction other
than the state of New York, or if CIT's  security  interest in any Collateral is
governed by the PPSA, then the term "UCC" shall mean the Uniform Commercial Code
(including the PPSA) as enacted and in effect in such other jurisdiction  solely
for  the  purposes  of  the  provisions  hereof  relating  to  such  attachment,
perfection  or  priority  and  for  purposes  of  definitions  related  to  such
provisions.

         U.S.  Dollar  Equivalent  shall  mean at any time (a) as to any  amount
         ------------------------
denominated in U.S. Dollars,  the amount thereof at such time, and (b) as to any
amount denominated in any other currency,  the equivalent amount in U.S. Dollars
calculated  by CIT in good faith at such time using the Exchange  Rate in effect
on the Business Day of determination.

         U.S. Prime Rate shall mean a fluctuating  interest rate per annum equal
         ---------------
to at all times to the rate of interest  announced publicly from time-to-time by
publication as the Bloomberg PRIME Screen as its U.S. prime rate;  provided that
such rate is not  necessarily  the best rate  offered by Canadian  Lender to its
customers,  and  should  CIT be  unable  to  determine  such  rate,  such  other
indication of the prevailing  prime rate of interest as may reasonably be chosen
by CIT.

         Working Day shall mean any  Business  Day on which  dealings in foreign
         -----------
currencies and exchanges between banks may be transacted.

                                       15
<PAGE>

         SECTION 2.   Conditions Precedent to Initial Funding.
                      ---------------------------------------

         The  obligation  of CIT to make the  initial  loans and to  assist  the
Companies in obtaining initial Letters of Credit hereunder, immediately prior to
or concurrently with the making of such loans or the issuance of such Letters of
Credit,  is  subject  to the  satisfaction  or waiver in  writing  by CIT of the
following conditions precedent:

         (a) Lien  Searches.  CIT shall have received tax lien,  judgment  lien,
             --------------
litigation,  UCC and PPSA searches from all jurisdictions reasonably required by
CIT,  and such  searches  shall  verify that CIT has a first  priority  security
interest in the Collateral, subject to Permitted Encumbrances.

         (b)  Casualty  Insurance.  Each  Company  shall have  delivered  to CIT
              -------------------
evidence  satisfactory  to CIT that all Required  Insurance is in full force and
effect,  and CIT shall have confirmed that CIT has been named as a loss payee or
additional   insured  with  respect  to  the  Required  Insurance  in  a  manner
satisfactory to CIT.

         (c) UCC Filings.  All UCC financing  statements  and similar  documents
             -----------
required  to be filed in order to  create in favor of CIT a first  priority  and
exclusive  perfected  security  interest in the Collateral and all assets of the
Guarantors  (to the extent that such a security  interest  may be perfected by a
filing under the UCC or applicable  law), shall have been properly filed in each
office in each jurisdiction  required (provided that, in the case of the Limited
Guarantor,  such security  interest  shall relate  solely to the assets  pledged
thereby). CIT shall have received (i) acknowledgement copies of all such filings
(or, in lieu thereof, CIT shall have received other evidence satisfactory to CIT
that all such  filings have been made),  and (ii)  evidence  that all  necessary
filing fees,  taxes and other expenses related to such filings have been paid in
full.

         (d)  Resolutions.  CIT shall have received a copy of the resolutions of
              -----------
the Board of Directors of each Company  authorizing the execution,  delivery and
performance of the Loan  Documents to be executed by each Company,  certified by
the  Secretary  or  Assistant  Secretary  of each Company as of the date hereof,
together with a certificate of such  Secretary or Assistant  Secretary as to the
incumbency  and  signature of the  officer(s)  executing  the Loan  Documents on
behalf of each Company.

         (e)  Organizational  Documents.  CIT shall have  received a copy of the
              -------------------------
Certificate  or Articles of  Incorporation  of each  Company,  certified  by the
applicable authority in each Company's State of incorporation, and copies of the
by-laws (as amended  through the date hereof) of each Company,  certified by the
Secretary or an Assistant Secretary thereof.

         (f)  Officer's  Certificate.   CIT  shall  have  received  an  executed
              ----------------------
Officer's  Certificate  for each Company,  satisfactory in form and substance to
CIT,  certifying  that  as of the  Closing  Date  (i)  the  representations  and
warranties contained herein are true and correct in all material respects,  (ii)
each Company is in  compliance  with all of the terms and  provisions  set forth
herein and (iii) no Default or Event of Default has occurred.

         (g)  Appraisals.  CIT shall  have  received  and be  satisfied  with an
              ----------
appraisal of the Companies' Inventory conducted by an appraiser selected by CIT.
In addition,  CIT shall have received appraisals of the Companies' fixed assets,
which appraisals shall be by an appraiser acceptable to CIT and shall indicate a
net orderly  liquidation value of a minimum amount acceptable to CIT in its sole
discretion,  with  respect  to the  Equipment  on which CIT has (or will have) a
first priority security interest.  CIT hereby acknowledges that CIT is satisfied
with the results of the appraisals of (i) the Companies'  Inventory  dated on or
around May 11,  2006,  and (ii) the  Companies'  fixed assets dated on or around
April  30,  2006,  each of which was  performed  by HILCO,  which  appraiser  is
acceptable to CIT.

         (h) Disbursement Authorizations.  The Companies shall have delivered to
             ---------------------------
CIT all  information  necessary for CIT to issue wire transfer  instructions  on
behalf of each Company for the initial and subsequent  loans and/or  advances to
be made under this Financing Agreement, including disbursement authorizations in
form acceptable to CIT.

         (i)  Examination & Verification;  Net  Availability;  Projections.  CIT
              ------------------------------------------------------------
shall  have  completed  and  be  satisfied  with  an  updated   examination  and
verification of the Trade Accounts  Receivable,  Inventory and books and

                                       16
<PAGE>

records of the  Companies,  and such  examination  shall indicate that (i) after
giving  effect to all loans,  advances  and  extensions  of credit to be made at
closing, the Companies shall have opening aggregate Net Availability of not less
than $600,000  (with all of the  Companies'  aggregate  debts,  obligations  and
accounts payable being within sixty (60) days of their stated due date or within
otherwise  agreed-upon  terms,  and with all fees and expenses  associated  with
entering  into the Line of Credit  having  been  paid),  and (ii) no change  has
occurred since March 30, 2006 having a Material Adverse Effect. In addition, the
Companies shall have delivered to CIT, and CIT shall be satisfied with,  balance
sheet,  income  statement,  cash flows and Net Availability  projections for the
Companies  on a  consolidated  basis,  after  giving  effect  to  the  financing
arrangements  contemplated herein,  prepared on a monthly basis through December
31, 2006 and on a quarterly basis through December 31, 2007.

         (j) Depository  Accounts;  Payment Direction.  (i) The Companies or CIT
             ----------------------------------------
shall have  established  one or more  Depository  Accounts  with  respect to the
collection of Accounts and the deposit of proceeds of Collateral,  and (ii) CIT,
the  applicable  Company  and each  depository  bank shall have  entered  into a
Depository Account Control Agreement with respect to each Depository Account.

         (k) Existing  Credit  Agreements.  (i) The Companies'  existing  credit
             ----------------------------
agreements  with Bank of America,  N.A. and Canadian  Imperial  Bank of Commerce
shall be  terminated,  (ii) all loans and  obligations  of the Companies and the
Guarantors with respect thereto shall be paid or satisfied in full utilizing the
proceeds of the initial  Revolving  Loans and the initial  Term Loans to be made
under this Financing  Agreement,  and (iii) all liens and security  interests in
favor of Bank of  America,  N.A.  and  Canadian  Imperial  Bank of  Commerce  in
connection therewith shall be terminated and/or released upon such payment.

         (l) Guaranty and Related Documents.  The Guarantors shall have executed
             ------------------------------
and delivered to CIT (i) the Guaranties and all other  agreements,  certificates
and instruments required by CIT in connection therewith, and (ii) if applicable,
the items described in Sections 2.1(d), 2.1(e) and 2.1(m) hereof with respect to
the Guarantors.

         (m) Opinions.  Subject to the filing,  priority and remedies provisions
             --------
of the UCC, the provisions of the Bankruptcy Code,  insolvency statutes or other
like laws,  the equity powers of a court of law and such other matters as may be
agreed upon with CIT,  counsel for the Companies and the  Guarantors  shall have
delivered to CIT opinion(s)  satisfactory to CIT opining,  inter alia, that each
Loan Document to which any Company or any Guarantor is a party is valid, binding
and  enforceable  in  accordance  with its terms,  as  applicable,  and that the
execution,  delivery and  performance  by each Company and each Guarantor of the
Loan  Documents  to  which  such  person  or  entity  is a party  are  (i)  duly
authorized,  (ii) do not  violate  any  terms,  provisions,  representations  or
covenants  in the  articles of  incorporation,  by-laws or other  organizational
agreement of such Company or such Guarantor (other than the Limited  Guarantor),
as the case may be,  and (iii) to the best  knowledge  of such  counsel,  do not
violate  any  terms,  provisions,  representations  or  covenants  in  any  loan
agreement, mortgage, deed of trust, note, security agreement, indenture or other
material  contract to which any Company is a signatory,  or by which any Company
or any  Guarantor  (or any  Company's  or any  Guarantor's  assets)  are  bound,
together with such other opinions reasonably requested by CIT.

         (n) Legal Restraints/Litigation. As of the Closing Date, there shall be
             ---------------------------
no (x)  injunction,  writ or restraining  order  restraining or prohibiting  the
consummation  of the financing  arrangements  contemplated  under this Financing
Agreement,  or (y)  suit,  action,  investigation  or  proceeding  (judicial  or
administrative)  pending against any Company,  any Guarantor,  any subsidiary of
any Company or any of their assets,  which,  in the opinion of CIT, if adversely
determined, could have a Material Adverse Effect.

         (o)  Additional  Documents.  The  Companies  shall  have  executed  and
              ---------------------
delivered  to CIT  the  Loan  Documents  necessary  to  consummate  the  lending
arrangement contemplated by this Financing Agreement.

         (p)  Background  Checks.  CIT shall have received and be satisfied with
              ------------------
background  checks on key managers and stockholders of each Company as CIT shall
designate.

         (q)  Landlord/Warehouseman/Bailee  Waivers.  CIT  shall  have  received
              -------------------------------------
executed waiver and subordination letters in form and substance  satisfactory to
CIT from all third party landlords, warehouseman and bailees where Collateral is
located.

                                       17
<PAGE>

         (r) Commitment Letter.  Each Company shall have fully complied with all
             -----------------
of the terms and conditions of the Commitment Letter.

         (s) Pledge  Agreement Each Company shall have executed and delivered to
             -----------------
CIT a stock pledge agreement in form and substance  satisfactory to CIT covering
all capital stock in such Company's  subsidiaries  owned by such Company (except
that the pledge by Ronson of its shares of Ronson Canada shall be limited to 66%
of  such   outstanding   shares  of  Ronson  Canada)  together  with  all  stock
certificates  and duly executed stock powers (undated and in blank) with respect
thereto.

         (t) Collateral Assignment of Airport Lease. RAI shall have executed and
             --------------------------------------
delivered to CIT an executed collateral  assignment of lease with respect to the
Airport Lease, in form and substance satisfactory to CIT.

         (u)  Subordinated   Debt.  CIT  shall  have  received  a  Subordination
              -------------------
Agreement  executed by each holder of the  Subordinated  Debt (or the trustee or
agent for such holder).

Upon the execution of this Financing  Agreement and the initial  disbursement of
the initial loans hereunder,  all of the above  conditions  precedent shall have
been deemed satisfied,  except as the Companies and CIT shall otherwise agree in
a separate writing.

SECTION 3.  Revolving Loans and Collections
            -------------------------------

         3.1      Funding Conditions and Procedures.
                  ---------------------------------

         (a) Amounts and Requests.  Subject to the terms and  conditions of this
             --------------------
Financing  Agreement,  CIT  agrees  to make  loans  and  advances  to the  Funds
Administrator  on behalf of the Companies on a revolving basis (i.e.  subject to
the limitations set forth herein, each Company, through the Funds Administrator,
may borrow,  repay and reborrow  Revolving Loans). In no event shall CIT have an
obligation  to make a  Revolving  Loan  to any  Company,  nor  shall  the  Funds
Administrator or any Company be entitled to request or receive a Revolving Loan,
if (i) a Default or Event of Default shall have occurred and remain  outstanding
on the date of  request  for  such  Revolving  Loan or the  date of the  funding
thereof,  (ii) the amount of such  Revolving  Loan,  when added to the principal
amount of the Revolving Loans outstanding plus the undrawn amount of all Letters
of Credit on the date of the  request  therefor or the  funding  thereof,  would
exceed the  Revolving  Line of Credit,  or (iii) amount of such  Revolving  Loan
would exceed the Net  Availability  of the  Companies on the date of the request
therefor or the funding  thereof.  Any request for a Revolving Loan (i) by or on
behalf of a Domestic Company must be received from the Funds Administrator by an
officer of CIT no later than 11:00 a.m., New York City time, on the Business Day
on which  such  Revolving  Loan is  required  and (ii) by or on behalf of Ronson
Canada must be received  from the Fund's  Administrator  by an officer of CIT no
later than 11:00 a.m. New York City time on the  Canadian  Business Day prior to
the Canadian Business Day on which such Revolving Loan is required. For purposes
of this Financing Agreement and notwithstanding  anything herein or in any other
Loan  Document to the contrary,  (i) all Loans  advanced to Ronson Canada (or to
the Funds  Administrator  on behalf of Ronson  Canada and whether  requested  by
Ronson Canada or the Funds  Administrator) shall be made by and accounted for on
the  books of  Canadian  Lender  (whether  or not  administered  by CIT) and all
payments of interest thereon and repayments of principal  thereof made by Ronson
Canada or on Ronson Canada's behalf by the Funds Administrator (whether remitted
directly  to  Canadian  Lender or to CIT)  shall be deemed  made to and shall be
accounted  for on the books of Canadian  Lender,  (ii) all requests for Loans by
Ronson Canada (or by the Funds Administrator on behalf of Ronson Canada) will be
denominated  in either U.S.  Dollars or Canadian  Dollars,  as  requested by the
Funds  Administrator,  however all  financial  reports and  financial  summaries
provided by Ronson Canada to Lender will be denominated in U.S.  Dollars,  (iii)
all Loans  advanced to the Companies,  excluding  Ronson Canada (or to the Funds
Administrator  on behalf of any Company),  will be advanced in U.S.  Dollars and
all Loans advanced to Ronson Canada (or to the Funds  Administrator on behalf of
Ronson Canada) whether advanced by CIT or by Canadian  Lender,  will be advanced
in either U.S.  Dollars or Canadian  Dollars,  as requested by Ronson Canada (or
the Funds Administrator), (iv) all rights, powers and remedies of CIT under this
Financing  Agreement or the other Loan  Documents(including  without  limitation
those arising  after an Event of Default),  as they relate to Ronson Canada may,
in CIT's sole  discretion,  be  delegated  to and  carried  out and  enforced by
Canadian  Lender,  (v) the  amount  of any  Revolving  Loan to be made to Ronson
Canada shall not exceed the Net  Availability  for

                                       18
<PAGE>

Ronson Canada on the date of the request therefor or the funding  thereof,  (vi)
the amount of the Revolving Loans to be made to Ronson Canada, when added to the
principal  amount of the Revolving  Loans  outstanding to Ronson Canada plus the
undrawn  amount of all Letters of Credit issued for the account of Ronson Canada
(if any) on the date of request therefor or the funding thereof,  may not exceed
$600,000, and (vii) Ronson Canada shall be liable under this Financing Agreement
and the other Loan Documents for the Ronson Canada Obligations only.

         (b) Phone and Electronic Loan Requests.  The Companies hereby authorize
             ----------------------------------
CIT to make Revolving Loans to the Funds  Administrator  based upon a telephonic
or e-mail request (or, if permitted by CIT, based upon a request posted on CIT's
System) made by any officer or other  employee of the Funds  Administrator  that
the Funds  Administrator  has authorized in writing to request  Revolving  Loans
hereunder,  as reflected by CIT's  records.  Each  telephonic,  e-mail or posted
request  by  the  Funds  Administrator  shall  be  irrevocable,  and  the  Funds
Administrator  agrees to confirm  any such  request  for a  Revolving  Loan in a
writing  approved  by CIT and signed by such  authorized  officer  or  employee,
within one (1) Business Day of CIT's  request for such  confirmation.  CIT shall
have  the  right to rely on any  telephonic,  e-mail  or  posted  request  for a
Revolving  Loan made by anyone  purporting to be an officer or other employee of
the Funds  Administrator that the Funds  Administrator has authorized in writing
to request Revolving Loans hereunder, without further investigation.

         (c)  Reaffirmation of  Representations  and Warranties.  Except for the
              -------------------------------------------------
representations  and  warranties  set forth in Sections  6.8 and 6.9, all of the
representations and warranties made by the Companies in this Financing Agreement
shall be  deemed  to be  remade  by the  Companies  each  time  that  the  Funds
Administrator  requests  a  Revolving  Loan or a Letter  of  Credit  under  this
Financing   Agreement,   and  each  such   request   shall  also   constitute  a
representation  and warranty by the Companies  that,  after giving effect to the
requested  Revolving  Loan or Letter of  Credit,  no Default or Event of Default
shall have occurred and remain outstanding.

         (d) Funds  Administrator  Appointment.  Each Company hereby irrevocably
             ---------------------------------
appoints the Funds  Administrator,  as agent for such Company on its behalf,  to
(i) request Revolving Loans from CIT, (ii) to give and receive notices under the
Loan Documents and (iii) take all other action which the Funds  Administrator or
the Companies are permitted or required to take under this Financing Agreement.

         (e) Foreign  Currency  Obligations.  Each  Company  will make  payments
             ------------------------------
relative to each  Obligation in the currency (the "Original  Currency") in which
such  Company  receives  loans and  advances.  If such  Company  makes  payments
relative to any  Obligation  to CIT in a currency (the "Other  Currency")  other
than the  Original  Currency  (whether  voluntarily  or  pursuant to an order or
judgment  of a  court  or  tribunal  of any  jurisdiction),  such  payment  will
constitute a discharge of the liability of such Company  hereunder in respect of
such Obligation only to the extent of the amount of the Original  Currency which
CIT is able to purchase at New York, New York with the amount it receives on the
date of receipt.  If the amount of the  Original  Currency  which CIT is able to
purchase  is less  than the  amount  of such  currency  originally  due to it in
respect to the relevant  Obligation,  such Company will  indemnify  and save CIT
harmless  from  and  against  any loss or  damage  arising  as a result  of such
deficiency.   This  indemnity  will   constitute  an  obligation   separate  and
independent from the other  obligations  contained in this Financing  Agreement,
will give  rise to a  separate  and  independent  cause of  action,  will  apply
irrespective  of any  indulgence  granted by CIT and will continue in full force
and effect  notwithstanding  any  judgment or order in respect of any amount due
hereunder or under any judgment or order.

         3.2      Handling of Proceeds of Collateral; Cash Dominion.
                  -------------------------------------------------

         (a) Collection of Accounts and Other Proceeds. The Companies,  at their
             -----------------------------------------
expense,  will  enforce  and collect  payments  and other  amounts  owing on all
Accounts in the ordinary course of the Companies'  business subject to the terms
hereof.  The Companies agree to direct their account debtors to send payments on
all Accounts directly to a lockbox associated with a Depository Account,  and to
include on all of the  Companies'  invoices the address of such a lockbox as the
sole address for remittance of payment.  Notwithstanding  the foregoing,  should
any Company ever receive any payment on an Account or other Proceeds of the sale
of  Collateral,  including  checks,  cash,  receipts  from credit card sales and
receipts, notes or other instruments or property with respect to any Collateral,
such Company  agrees to hold such proceeds in trust for CIT,  separate from such
Company's other property and funds, and to deposit such proceeds directly into a
Depository  Account on or before  the next  Business  Day after  receipt by such
Company.

                                       19
<PAGE>

         (b)  Transfer of Funds from  Depository  Accounts.  Funds  remaining on
              --------------------------------------------
deposit in a Depository  Account shall be  transferred to CIT's Bank Account (in
the case of the Domestic  Companies)  and to CIT's Canadian Bank Account (in the
case of Ronson  Canada) on each Business Day (and in the case of Ronson  Canada,
on each Canadian  Business Day) in accordance  with the terms and  provisions of
the applicable Depository Account Control Agreement,  and the Companies agree to
take all actions  reasonably  required by CIT or any bank at which a  Depository
Account is  maintained  in order to  effectuate  the  transfer  of funds in this
manner.  Subject to charges for  Collection  Days,  all amounts  received from a
Depository Account and any other Proceeds of the Collateral deposited into CIT's
Bank Account or CIT's  Canadian  Bank  Account,  as the case may be,  will,  for
purposes  of  calculating  Net  Availability  and  interest,  be credited to the
respective Company's Revolving Loan Account on the date of deposit in CIT's Bank
Account or CIT's Canadian Bank Account, as the case may be. No checks, drafts or
other  instruments  received by CIT shall constitute final payment to CIT unless
and until such instruments have actually been collected.

         (c) New  Depository  Accounts.  Each  Company  agrees  not to open  any
             -------------------------
lockbox  or new  bank  account  into  which  Proceeds  of  Collateral  are to be
delivered  or  deposited  unless  concurrently  with the opening of such lockbox
and/or bank  account,  CIT,  such Company and the bank which will  maintain such
lockbox  or at which  such  account  will be  maintained,  execute a  Depository
Account  Control  Agreement  with  respect to such lockbox  and/or  related bank
account.  Upon  compliance  with the terms set forth above,  such lockbox and/or
bank  account  shall  constitute  a  Depository  Account  for  purposes  of this
Financing Agreement.

         (d) Credit Card Receipts. The Companies agree to direct all credit card
             --------------------
processors  handling  proceeds of sale of Inventory to transfer all funds due to
such Companies  pursuant to such arrangement  directly to a Depository  Account.
Promptly  after the  establishment  of any credit card  processing or depository
relationship,  such Company agrees to notify CIT in writing of the establishment
of such  relationship  and shall cause the credit card  processor to execute and
deliver to CIT an agreement in form and substance  satisfactory to CIT, pursuant
to which the credit card processor agrees to deposit all sums due to the Company
pursuant to such arrangement directly to a Depository Account.

         3.3    Collective Borrowing Arrangement; Revolving Loan Account.
                --------------------------------------------------------

         (a) Management of Borrowing  Arrangements.  The Companies have informed
             -------------------------------------
CIT that: in order to increase the efficiency and  productivity of each Company,
and to best utilize the borrowing  powers of the Companies in the most effective
and  cost  efficient  manner  and to  avoid  adverse  effects  on the  operating
efficiencies  of each  Company and the  existing  back office  practices  of the
Companies,  each Company has requested that all Revolving Loans,  Term Loans and
other advances be disbursed  solely upon the request of the Funds  Administrator
and to bank accounts in the name of the respective Companies,  managed solely by
the Funds  Administrator,  it being the intent and desire of the Companies  that
the Funds  Administrator  manage for the benefit of each Company the expenditure
and usage of such funds.

         (b)  Revolving Loan Account.  CIT shall charge the applicable Company's
              ----------------------
Revolving Loan Account for all loans and advances made by CIT for the benefit of
such  Company,  as requested  by the Funds  Administrator  or otherwise  for any
Company's account, and for all any other Obligations of such Company,  including
Out-of-Pocket  Expenses,  when  due  and  payable  hereunder.   Subject  to  the
provisions  of Section  3.5 below,  CIT will  credit  the  applicable  Company's
Revolving  Loan  Account with all amounts  received by CIT from each  Depository
Account or from  others for such  Company's'  account,  including,  as set forth
above, all amounts received by CIT in payment of Accounts, and such amounts will
be applied to payment of the Obligations of such Company in the order and manner
set forth  herein.  In no event  shall  prior  recourse  to any Account or other
security  granted to or by the  Companies  be a  prerequisite  to CIT's right to
demand payment of any of the Obligations.  In addition, the Companies agree that
CIT shall have no  obligation  whatsoever  to perform in any  respect any of the
Companies' contracts or obligations relating to the Accounts.

         3.4  Repayment  of  Overadvances.  If at any  time  (a)  the sum of the
              ---------------------------
outstanding  balance of Revolving  Loans and undrawn amount of Letters of Credit
exceed the  Revolving  Line of Credit (all as  determined  based on U.S.  Dollar
Equivalents),  or (b) an Overadvance  exists,  the amount of such excess (in the
case of clause (a)) or the amount of the Overadvance (in the case of clause (b))
shall be immediately  due and payable,  unless CIT otherwise  agrees in writing.

                                       20
<PAGE>

Should CIT for any reason honor  requests for  Overadvances,  such  Overadvances
shall be made in CIT's sole  discretion and subject to any additional  terms CIT
deems necessary.

         3.5    Application of Proceeds of Collateral.
                -------------------------------------

         (a)  Generally.  Unless this  Financing  Agreement  expressly  provides
              ---------
otherwise,  so long as no  Event of  Default  shall  have  occurred  and  remain
outstanding,  CIT agrees to apply (i) all Proceeds of a Company's Trade Accounts
Receivable to such  Company's  Revolving  Loans,  (ii) all Proceeds of all other
Collateral of the Domestic Companies, first to the last maturing installments of
principal of the Initial  Additional  Term Loan until fully repaid,  and then to
the last maturing  installments  of principal of the Initial Term Loan (in order
of first to mature) until fully repaid,  and (iii) any other payment received by
CIT with respect to the Obligations, in such order and manner as CIT shall elect
in the exercise of its reasonable business judgment. Subject to the terms of the
preceding  sentence,  so long as no Event of  Default  shall have  occurred  and
remain  outstanding,  if CIT receives  Proceeds of Collateral or other  payments
that exceed the  outstanding  principal  amount of  Revolving  Loans,  the Funds
Administrator may request,  in writing,  that CIT remit such excess to the Funds
Administrator.

         (b) Application of Proceeds During an Event of Default.  If an Event of
             --------------------------------------------------
Default shall have occurred and remain  outstanding,  CIT may apply all Proceeds
of  Collateral  and all other  payments  received  by CIT to the  payment of the
Obligations  in such  manner  and in such  order  as CIT may  elect  in its sole
discretion.

         3.6  Monthly  Statement.  After the end of each  month,  CIT  agrees to
              ------------------
prepare and make  available  to the  Companies  (by mail,  facsimile,  e-mail or
posting to CIT's System,  as mutually agreed to by the Funds  Administrator  and
CIT), a statement  showing the accounting for the charges,  loans,  advances and
other  transactions  occurring  between  CIT and  the  Companies  and the  Funds
Administrator  during that month.  Absent manifest error, each monthly statement
shall  be  deemed   correct  and  binding   upon  each  Company  and  the  Funds
Administrator  and shall  constitute an account stated between the Companies and
the Funds  Administrator  and CIT unless CIT  receives  a written  statement  of
exception from the Companies or the Funds Administrator  within thirty (30) days
of the date of such monthly statement.

         3.7  Access  to  CIT's   System.   CIT  shall   provide  to  the  Funds
              --------------------------
Administrator  access to CIT's System  during  normal  business  hours,  for the
purposes  of  (i)  obtaining   information   regarding  loan  balances  and  Net
Availability,  and (ii) if permitted by CIT, making requests for Revolving Loans
and submitting borrowing base certificates.  Such access shall be subject to the
following  terms,  in  addition  to all terms set forth on the website for CIT's
System:

         (a) CIT shall provide to the Funds  Administrator  an initial  password
for secured access to CIT's System.  The Funds  Administrator  shall provide CIT
with a list of officers and employees that are  authorized  from time to time to
access CIT's System, and the Funds  Administrator  agrees to limit access to the
password and CIT's System to such authorized  officers and employees.  After the
initial  access,  the Funds  Administrator  shall be solely  responsible for (i)
changing and maintaining the integrity of the Funds Administrator's password and
(ii) any unauthorized use of the Funds Administrator's  password or CIT's System
by any Company's officers and employees.

         (b) The Companies shall use CIT's System and the Companies' information
thereon  solely for the  purposes  permitted  above,  and shall not access CIT's
System for the benefit of third parties or provide any information obtained from
CIT's System to third parties.  CIT makes no representation that loan balance or
Net  Availability  information  is or will  be  available,  accurate,  complete,
correct or current at all times.  CIT's System may be inoperable or inaccessible
from time to time, whether for required website  maintenance,  upgrades to CIT's
System, or for other reasons, and in any such event the Funds Administrator must
obtain loan balance and Net Availability information,  and (if permitted by CIT)
make requests for Revolving Loans and submit borrowing base  certificates  using
other available means.

         (c) The Companies  hereby confirm and agree that CIT's System  consists
of proprietary  software,  data,  tools,  scripts,  algorithms,  business logic,
website designs and interfaces and related  intellectual  property,  information
and documentation.  CIT's System and related intellectual property,  information
and documentation are the sole and exclusive  property of CIT, and the Companies
shall  have no right,  title or  interest  therein  or  thereto,  except for the
limited  right to access  CIT's System for the purposes  permitted  above.  Upon
termination of this Financing Agreement, the Companies agree to cease any use of
CIT's System.

                                       21
<PAGE>

         (d) All agreements,  covenants and  representations and warranties made
by  the  Funds  Administrator   and/or  the  Companies  in  any  borrowing  base
certificate submitted to CIT by means of CIT's System are incorporated herein by
reference and shall be deemed made by each Company.

SECTION 4.   Term Loans
             ----------

         4.1  Promissory  Notes   Evidencing   Initial  Term  Loan  and  Initial
              ------------------------------------------------------------------
Additional Term Loan. The Domestic Companies agree to execute and deliver to CIT
--------------------
Promissory  Notes,  dated the date hereof, to evidence the Initial Term Loan and
the Initial  Additional  Term Loan to be extended to the  Domestic  Companies by
CIT.

         4.2  Initial Term Loan and Initial Additional Term Loan
              --------------------------------------------------

         (a) Funding of Initial Term Loan and Initial Additional Term Loan. Upon
             -------------------------------------------------------------
CIT's receipt of the Promissory  Notes  evidencing the Initial Term Loan and the
Initial  Additional Term Loan, and the  satisfaction of the conditions set forth
in Section 2.1, CIT agrees to make such Term Loans to the Domestic Companies.

         (b)  Repayment of Initial Term Loan and Initial  Additional  Term Loan.
              -----------------------------------------------------------------
The principal  amount of the Initial Term Loan and the Initial  Additional  Term
Loan shall be due and payable in sixty (60) equal consecutive  monthly principal
installments  of $3,250.00 in respect of the Initial Term Loan and $12,500.00 in
respect of the  Initial  Additional  Term Loan,  in both  cases,  commencing  on
September  1, 2006 and on the first day of each month  thereafter  until paid in
full,  subject to  acceleration  and payment in full, as more fully set forth in
Section 4.4(a).

         4.3   Reserved.
               --------

         4.4   Provisions Regarding all Term Loans.
               -----------------------------------

         (a) Repayment Upon Termination.  In the event this Financing  Agreement
             --------------------------
or the Revolving Line of Credit is terminated  automatically  as contemplated by
Section 10.2 herein or by either CIT or the Companies for any reason whatsoever,
all Term Loans,  together with all accrued  interest  thereon and the applicable
Prepayment  Premium,  shall be due and payable in full on the effective  date of
such  termination,   notwithstanding  any  other  provision  of  this  Financing
Agreement or the Promissory Notes to the contrary.

         (b) Optional Prepayments.  The Domestic Companies, at their option, may
             --------------------
prepay any Term Loan at any time, in whole or in part, provided that on the date
of such  prepayment,  there shall be due and payable (i) accrued interest on the
principal  so prepaid  to the date of such  prepayment  and (ii) the  Prepayment
Premium  due  with  respect  to such  prepayment  (except  with  respect  to any
prepayment of all or a portion of the Initial Additional Term Loan).

         (c)  Mandatory  Prepayments  from Surplus  Cash.  In the event that the
              ------------------------------------------
Companies have  generated  Surplus Cash in any fiscal year, on the date which is
one hundred twenty (120) days after the end of such fiscal year,  there shall be
due and  payable  from the  Domestic  Companies a  mandatory  prepayment  of the
Initial Additional Term Loan in an amount equal to thirty-five  percent (35%) of
the Surplus Cash for such fiscal year.

         (d)  Application  of  Prepayments.  Except  as  CIT  and  the  Domestic
              ----------------------------
Companies shall otherwise  agree in a separate  writing,  each prepayment of the
Term  Loans  (whether  voluntary  or  mandatory)  shall be  applied  to the last
maturing installments of principal of the Term Loans until fully repaid.

         (e) No Reborrowing.  To the extent repaid,  the principal amount of any
             --------------
Term Loan may not be reborrowed under this Section 4.

         (f) Authority to Charge Revolving Loan Account.  The Domestic Companies
             ------------------------------------------
hereby authorize CIT, without notice to the Domestic Companies,  to charge their
Revolving  Loan  Accounts  with all  payments  due under this  Section 4 as such
amounts  become due. Any amount  charged to the Revolving Loan Accounts shall be
deemed a Chase  Bank Rate Loan  hereunder  and shall bear  interest  at the rate
provided in Section  8.1 (or  Section  8.2,  if  applicable)  of this

                                       22
<PAGE>

Financing  Agreement.  The Domestic Companies confirm that any charges which CIT
may make to the Revolving  Loan  Accounts as provided  herein will be made as an
accommodation to the Domestic Companies and solely at CIT's discretion.

SECTION 5.   Letters of Credit.
             -----------------

         In  order to assist Ronson,  RAI and/or RCPC in establishing or opening
Letters of Credit with an Issuing Bank,  the Companies  have  requested that CIT
join in the applications for such Letters of Credit, and/or guarantee payment or
performance of such Letters of Credit and any drafts or  acceptances  thereunder
through the issuance of one or more Letter of Credit Guaranties, thereby lending
CIT's credit to such Companies,  and CIT has agreed to do so. These arrangements
shall be handled by CIT subject to  satisfaction  of the conditions set forth in
Section 2.1 hereof and the terms and conditions set forth below.

         5.1  Assistance  and Purpose.  Within the Revolving  Line of Credit and
              -----------------------
subject to sufficient Net Availability,  CIT shall assist Ronson,  RAI, and RCPC
in obtaining Letters of Credit in an aggregate undrawn amount outstanding at any
time not to exceed the Letter of Credit Sub-Line.  The term, form and purpose of
each Letter of Credit and all  documentation  in connection  therewith,  and any
amendments,  modifications or extensions thereof, must be mutually acceptable to
CIT, the Issuing Bank and the Funds  Administrator,  provided that the Companies
shall  not  request  a Letter of Credit to  support  the  purchase  of  domestic
Inventory  or to secure  present or future  Indebtedness  owed to  suppliers  of
domestic  Inventory.  Notwithstanding  any  other  provision  of this  Financing
Agreement  to the  contrary,  if a Default  or an Event of  Default  shall  have
occurred and remain outstanding,  CIT's assistance in connection with any Letter
of Credit shall be in CIT's sole discretion.

         5.2 Authority to Charge  Revolving Loan Account.  The Companies  hereby
             -------------------------------------------
authorize CIT,  without notice to the Companies,  to charge their Revolving Loan
Accounts with the amount of all indebtedness, liabilities and obligations of any
kind incurred by CIT under a Letter of Credit Guaranty, including the charges of
an Issuing Bank, as such  indebtedness,  liabilities and obligations are charged
to or paid by CIT, or, if earlier,  upon the  occurrence of an Event of Default.
Any amount charged to a Revolving Loan Account shall be deemed a Chase Bank Rate
Loan  hereunder and shall incur interest at the rate provided in Section 8.1 (or
Section 8.2, if applicable) of this Financing  Agreement.  The Companies confirm
that any charges which CIT may make to the  Revolving  Loan Accounts as provided
herein will be made as an  accommodation  to the  Companies  and solely at CIT's
discretion.

         5.3 Indemnity Relating to Letters of Credit. Subject to Section 3.1(a),
             ---------------------------------------
each Company, jointly and severally,  unconditionally  indemnifies CIT and holds
CIT harmless from any and all loss,  claim or liability  incurred by CIT arising
from any transactions or occurrences  relating to Letters of Credit  established
or opened for any Company's  account,  the Collateral  relating  thereto and any
drafts or acceptances thereunder, and all Obligations thereunder,  including any
such loss,  claim or  liability  arising from any error,  omission,  negligence,
misconduct  or other  action taken by an Issuing  Bank,  other than for any such
loss,  claim  or  liability  arising  out of the  gross  negligence  or  willful
misconduct by CIT with respect to a Letter of Credit  Guaranty.  This  indemnity
shall survive the  termination of this Financing  Agreement and the repayment of
the Obligations.

         5.4 Compliance of Goods, Documents and Shipments with Agreed Terms. CIT
             --------------------------------------------------------------
shall not be responsible for: (a) the existence,  character,  quality, quantity,
condition,  packing, value or delivery of the goods purporting to be represented
by any  documents  relating  to any  Letter of  Credit;  (b) any  difference  or
variation in the character,  quality,  quantity,  condition,  packing,  value or
delivery of the goods from that expressed in such  documents;  (c) the validity,
sufficiency or genuineness  of such  documents or of any  endorsements  thereon,
even  if  such  documents  should  in fact  prove  to be in any or all  respects
invalid,  insufficient,  fraudulent or forged;  (d) the time,  place,  manner or
order in which shipment is made; (e) partial or incomplete shipment,  or failure
or omission to ship any or all of the goods referred to in the Letters of Credit
or documents relating thereto;  (f) any deviation from instructions;  (g) delay,
default, or fraud by the shipper and/or anyone else in connection with the goods
or the shipping  thereof;  or (h) any breach of contract  between the shipper or
vendors and any Company.

         5.5 Handling of Goods,  Documents and  Shipments.  The Companies  agree
             --------------------------------------------
that any action taken by CIT, if taken in good faith, or any action taken by the
Issuing  Bank of whatever  nature,  under or in  connection  with the Letters

                                       23
<PAGE>

of Credit,  the Letter of Credit Guaranties,  drafts or acceptances  relating to
Letters  of  Credit,  or the goods  subject  thereto,  shall be  binding on each
Company  and  shall  not  result  in  any  liability  whatsoever  of  CIT to the
Companies.  CIT shall have the full right and  authority,  in CIT's name, to (a)
clear and resolve any questions of  non-compliance  of  documents,  (b) give any
instructions  as to  acceptance  or  rejection of any  documents  or goods,  (c)
execute any and all steamship or airway guaranties (and applications  therefor),
indemnities  or delivery  orders,  (d) grant any  extensions of the maturity of,
time of payment for, or time of  presentation  of, any drafts,  acceptances,  or
documents, and (e) agree to any amendments, renewals, extensions, modifications,
changes  or  cancellations  of any  of the  terms  or  conditions  of any of the
applications,  the Letters of Credit,  the Letter of Credit Guaranties or drafts
or acceptances  relating to Letters of Credit. An Issuing Bank shall be entitled
to comply with and honor any and all such documents or  instruments  executed by
or  received  solely from CIT,  without  any notice to or any  consent  from the
Companies  or the  Funds  Administrator.  Notwithstanding  any  prior  course of
conduct or dealing with respect to the  foregoing  (including  amendments to and
non-compliance   with  any  documents,   and/or  the  Companies'  or  the  Funds
Administrator's  instructions with respect thereto), CIT may exercise its rights
under  this  Section  5.5 in its  sole  but  reasonable  business  judgment.  In
addition, each Company and the Funds Administrator agree, in connection with, as
the case may be, the Letters of Credit, the Letter of Credit Guaranties,  drafts
or acceptances  relating to Letters of Credit, or the goods subject thereto, not
to:  (a) at any time,  (i)  execute  any  application  for  steamship  or airway
guaranties,  indemnities  or delivery  orders,  (ii) grant any extensions of the
maturity  of,  time of payment  for,  or time of  presentation  of, any  drafts,
acceptances  or  documents,   or  (iii)  agree  to  any  amendments,   renewals,
extensions,  modifications,  changes  or  cancellations  of any of the  terms or
conditions of any of the applications, Letters of Credit, drafts or acceptances;
and (b) if an Event of Default shall have occurred and remain  outstanding,  (i)
clear and resolve any questions of  non-compliance of documents or (ii) give any
instructions as to acceptances or rejection of any documents or goods.

         5.6 Compliance  with Laws;  Payment of Levies and Taxes.  The Companies
             ---------------------------------------------------
agree  that (a) all  necessary  import  and  export  licenses  and  certificates
necessary  for the  import  or  handling  of the  Collateral  will  be  promptly
procured,  (b) all foreign and domestic  governmental  laws and  regulations  in
regard to the  shipment  and  importation  of the  Collateral  or the  financing
thereof will be promptly and fully  complied  with,  and (c) any  certificate in
that regard that CIT may at any time request will be promptly  furnished to CIT.
In  connection  herewith,  the  Companies  represent and warrant to CIT that all
shipments made under any Letter of Credit are and will be in compliance with the
laws and  regulations  of the  countries in which the  shipments  originate  and
terminate,  and are  not  prohibited  by any  such  laws  and  regulations.  The
Companies assume all risk,  liability and  responsibility  for, and agree to pay
and  discharge,  all present and future  local,  state,  provincial,  federal or
foreign Taxes,  duties,  or levies pertaining to the importation and delivery of
the  Collateral.  Any embargo,  restriction,  law,  custom or  regulation of any
country,  state,  provincial,  city, or other political  subdivision,  where the
Collateral is or may be located,  or wherein payments are to be made, or wherein
drafts  may be  drawn,  negotiated,  accepted,  or  paid,  shall be  solely  the
Companies' risk, liability and responsibility.

         5.7 Subrogation Rights. Upon any payments made to an Issuing Bank under
             ------------------
a Letter of Credit  Guaranty,  CIT shall  acquire by  subrogation,  any  rights,
remedies,  duties or obligations  granted to or undertaken by the Companies,  or
any of them, to the Issuing Bank in any  application  for Letter of Credit,  any
standing  agreement  relating  to Letters of Credit or  otherwise,  all of which
shall be deemed to have been granted to CIT and apply in all respects to CIT and
shall be in addition to any rights,  remedies,  duties or obligations  contained
herein.

SECTION 6.   Collateral
             ----------

         6.1 Grant of Security Interest.  (a) As security for the prompt payment
             --------------------------
in full of all  Obligations,  each Company  hereby pledges and grants to CIT for
the benefit of all Lenders a continuing general lien upon, and security interest
in, all the Collateral in which such Company has rights, provided, however, that
the foregoing pledge,  grant, lien and security interest shall (x) not extend to
any asset or property not assignable or capable of being  encumbered as a matter
of law, and (y) extend to the Specified Intellectual Property solely in order to
secure the  Obligations  consisting  of and arising from the Initial  Additional
Term Loan, and shall be released at such time as the  Obligations  consisting of
and  arising  from  the  Initial  Additional  Term  Loan  have  been  fully  and
indefeasibly paid, satisfied and discharged.

         (b)  Extent of  Security  Interests.  The  security  interests  granted
              ------------------------------
hereunder  shall,   subject  to  the  provisions   contained  in  paragraph  (a)
immediately preceding, extend and attach to:

                                       24
<PAGE>

         (i) all  Collateral  which  is  presently  in  existence  or  hereafter
acquired  and  which is owned by any  Company  or in which any  Company  has any
interest,  whether held by such Company or by others for such Company's account,
and  wherever  located,  and,  if any  Collateral  is  Equipment,  whether  such
Company's interest in such Equipment is as owner, lessee or conditional vendee;

         (ii) all Equipment  whether the same constitutes  personal  property or
fixtures,  including,  but without limiting the generality of the foregoing, all
dies, jigs, tools, benches, molds, tables,  accretions,  component parts thereof
and additions thereto, as well as all accessories, motors, engines and auxiliary
parts used in connection with, or attached to, the Equipment; and

         (iii) all  Inventory  and any portion  thereof  which may be  returned,
rejected,  reclaimed  or  repossessed  by either CIT or the  Companies  from the
Companies' customers, as well as to all supplies, goods, incidentals,  packaging
materials,  labels and any other items which contribute to the finished goods or
products  manufactured or processed by the Companies,  or to the sale, promotion
or shipment thereof.

         (c) Ronson  Canada.  Notwithstanding  any  provision to the contrary in
this  Financing  Agreement  or any other Loan  Document,  the liens and security
interests  granted by Ronson  Canada  hereunder  shall secure the Ronson  Canada
Obligations only.

         6.2 Limited License.  Regardless of whether CIT's security interests in
             ---------------
any of the General Intangibles has attached or is perfected, each Company hereby
irrevocably  grants to CIT a  royalty-free,  non-exclusive  license  to use such
Company's Trademarks, Copyrights, Patents and other proprietary and intellectual
property rights, in connection with the (i) advertisement for sale, and the sale
or other  disposition of, any finished goods Inventory by CIT in accordance with
the provisions of this Financing Agreement, and (ii) the manufacture,  assembly,
completion  and  preparation  for  sale of any  unfinished  Inventory  by CIT in
accordance with the provisions of this Financing Agreement.

         6.3    Representations, Covenants  and  Agreements Regarding Collateral
                ----------------------------------------------------------------
Generally.
---------

         (a) Representations and Warranties.  The Companies hereby represent and
             ------------------------------
warrant to CIT that except for  Permitted  Encumbrances,  (i) upon the filing of
UCC financing statements covering the Collateral in all required  jurisdictions,
this  Financing  Agreement  creates  a  valid,  perfected,  first  priority  and
exclusive   security   interest  in  all  personal  property  of  the  Companies
constituting  Collateral as to which perfection may be achieved by filing,  (ii)
CIT's  security  interests in the Collateral  constitute,  and will at all times
constitute, first priority and exclusive liens on the Collateral, and (iii) each
Company  is, or will be at the time  additional  Collateral  is acquired by such
Company,  the absolute owner of such  additional  Collateral  with full right to
pledge, sell, transfer and create a security interest therein, free and clear of
any and all claims or liens other than Permitted Encumbrances.

         (b)  Covenants.  The  Companies,  at their  expense,  agree to  forever
              ---------
warrant  and defend the  Collateral  from any and all claims and  demands of any
other person, other than holders of Permitted Encumbrances.

         6.4  Representations  Regarding  Accounts and Inventory.  The Companies
              --------------------------------------------------
represent and warrant to CIT that:

         (a) each Trade  Account  Receivable is based on an actual and bona fide
sale and delivery of Inventory  or rendition of services to  customers,  made by
the Companies in the ordinary course of their business;

         (b) the Inventory being sold and the Trade Accounts  Receivable created
by such sales are the exclusive property of the Companies and are not subject to
any lien, consignment arrangement,  encumbrance,  security interest or financing
statement whatsoever, other than Permitted Encumbrances;

         (c) the invoices  evidencing such Trade Accounts  Receivable are in the
name of the Companies;

         (d)  the  Inventory  or  services  giving  rise  to any  Trade  Account
Receivable have been shipped or rendered,  as the case may be, and the customers
therefor owe and are  obligated  to pay the full amounts  stated in the invoices

                                       25
<PAGE>

according to their terms,  without  dispute,  offset,  defense,  counterclaim or
contra,  except for disputes and other matters arising in the ordinary course of
business of which the  Companies  have  notified CIT pursuant to Section  7.2(g)
hereof; and

         (e) the  Companies'  Inventory is marketable in the ordinary  course of
the  Companies'  businesses,  and no Inventory has been produced in violation of
the Fair Labor Standards Act (29 U.S.C. ss.201 et seq.), as amended.

         6.5    Covenants and Agreements Regarding Accounts and Inventory.
                ---------------------------------------------------------
         (a) Each  Company  confirms to CIT that all Taxes and fees  relating to
such Company's  business,  such Company's  sales,  and the Accounts or Inventory
relating thereto, are such Company's sole responsibility,  and that same will be
paid by such Company when due,  subject to Section 7.2(d) hereof,  and that none
of said Taxes or fees  represent a lien on or claim against the Accounts,  other
than a Permitted Tax Lien.

         (b) Each Company  agrees not to acquire any  Inventory on a consignment
basis,  nor co-mingle its Inventory with any goods of its customers or any other
person (whether pursuant to any bill and hold sale or otherwise).

         (c) Each Company  agrees to maintain  such books and records  regarding
Accounts and Inventory as CIT  reasonably  may require and agrees that the books
and records of such  Company  will  reflect  CIT's  interest in the Accounts and
Inventory.  In support of the continuing assignment and security interest of CIT
in the Accounts and Inventory, the Companies also agree to deliver to CIT all of
the schedules, reports and other information described in Section 7.2(g) of this
Financing  Agreement.  The  Companies'  failure to  maintain  their books in the
manner  provided  herein or to deliver to CIT any of the  foregoing  information
shall in no way  affect,  diminish,  modify  or  otherwise  limit  the  security
interests granted to CIT in the Accounts and Inventory.

         (d)  Each  Company  agrees to issue  credit  memoranda  promptly  after
accepting returns or granting  allowances,  and to deliver to CIT copies of such
credit memoranda as and when required to do so under Section 7.2(g) hereof.

         (e) Each Company  agrees to  safeguard,  protect and hold all Inventory
for CIT's account and to make no sale or other disposition thereof except in the
ordinary course of such Company's business,  on open account and on commercially
reasonable terms consistent with such Company's past practices.  Notwithstanding
the ordinary  course of any Company's  business or any Company's past practices,
each Company agrees not to sell Inventory on a consignment basis, nor retain any
lien on or security  interest in any Inventory  sold by such Company.  As to any
sale or other  disposition of Inventory,  CIT shall have all of the rights of an
unpaid  seller,  including  stoppage  in  transit,   replevin,   rescission  and
reclamation. Each Company agrees to handle all Proceeds of sales of Inventory in
accordance with the provisions of Section 3.2 hereof.

         6.6    Covenants and Agreements Regarding Equipment.
                --------------------------------------------

         (a)  Maintenance of Equipment.  Each Company agrees to (i) maintain the
              ------------------------
Equipment in as good and substantial repair and condition as the Equipment owned
by such Company is now maintained  (or at the time that CIT's security  interest
may attach to such Equipment),  reasonable wear and tear excepted, (ii) make any
and all repairs and replacements when and where necessary,  and (iii) safeguard,
protect and hold all  Equipment  owned by such  Company in  accordance  with the
terms hereof and subject to CIT's security interest.  The Equipment will only be
used by the Companies in the operation of their  respective  businesses and will
not be sold or held for sale or lease,  except as expressly  provided in Section
6.6(b) below.

         (b)  Sales of Equipment.  The Companies may sell obsolete  Equipment or
              ------------------
surplus Equipment from time to time, provided that in each such instance: (i) no
Event of Default shall have occurred and remain  outstanding at the time of such
sale; (ii) the aggregate fair market value of the Equipment subject to sale does
not  exceed  $50,000  in any  fiscal  year of the  Companies;  and (iii) all net
proceeds of such sales are either (x) promptly delivered by the Companies to CIT
by deposit to the Depository Account,  for application against the Term Loans in
the manner  provided in Section  4.4(d)  hereof (and if the Term Loans have been
fully repaid,  for  application to other  Obligations

                                       26
<PAGE>

in such  manner  and in such  order  as CIT may  elect  in the  exercise  of its
reasonable  business  judgment),  or (y)  within 90 days of such  sale,  used to
purchase replacement  Equipment that the Companies determine in their reasonable
business  judgment to have a value at least equal to the Equipment sold.  Except
as set  forth  above,  the  Companies  agree  not to  sell,  transfer,  lease or
otherwise  dispose of any item of Equipment without CIT's prior written consent.
Upon the sale, transfer, lease or other disposition of Equipment, CIT's security
interest in the Equipment shall, without break in continuity and without further
formality or act,  continue in, and attach to, all  Proceeds.  All such Proceeds
shall  not be  commingled  with the  Companies;  other  property,  but  shall be
delivered promptly by the Companies to CIT by deposit to the Depository Account,
and the  Companies  shall  notify CIT  promptly of the deposit and the amount of
such Proceeds.  As to any such sale, transfer,  lease or other disposition,  CIT
shall have all of the rights of an unpaid seller, including stoppage in transit,
replevin, rescission and reclamation.

         6.7 General  Intangibles.  Each Company  represents and warrants to CIT
             --------------------
that such Company  possesses  all General  Intangibles  necessary to conduct its
business as presently conducted.  Each Company agrees to maintain such Company's
rights in, and the value of, all such General  Intangibles,  and to pay when due
all payments  required to maintain in effect any licensed rights.  The Companies
shall provide CIT with adequate notice of the acquisition of rights with respect
to any  additional  Patents,  Trademarks  and Copyrights so that CIT may, to the
extent permitted under the documentation granting such rights or applicable law,
perfect its security interest hereunder in such rights in a timely manner.

         6.8 Commercial Tort Claims. Each Company represents and warrants to CIT
             ----------------------
that as of the date  hereof,  such Company  holds no interest in any  commercial
tort  claim.  If any  Company at any time holds or  acquires a  commercial  tort
claim,  such  Company  agrees to  promptly  notify CIT in writing of the details
thereof, and in such writing such Company shall grant to CIT a security interest
in such commercial tort claim and in the Proceeds thereof, all upon the terms of
this Financing Agreement.

         6.9 Letter of Credit Rights.  Each Company and the Funds  Administrator
             -----------------------
represents  and warrants to CIT that as of the date hereof,  such Company or the
Funds  Administrator  is not the  beneficiary  of any letter of  credit.  If any
Company or the Funds  Administrator  becomes a  beneficiary  under any letter of
credit, such beneficiary agrees to promptly notify CIT, and upon request by CIT,
such beneficiary  agrees to either (a) cause the issuer of such letter of credit
to consent to the  assignment  of the  proceeds  of such letter of credit to CIT
pursuant to an agreement in form and substance satisfactory to CIT, or (b) cause
the issuer of such letter of credit to name CIT as the transferee beneficiary of
such letter of credit.

         6.10 Special Provisions  Relating to Specified  Intellectual  Property.
              -----------------------------------------------------------------
Upon the full payment, satisfaction and discharge of the Initial Additional Term
Loan,  CIT will  thereupon  release its lien upon and  security  interest in the
Specified Intellectual Property.

         6.11   Intentionally left blank.
                ------------------------

         6.12 Reference to Other Loan Documents. Reference is hereby made to the
              ---------------------------------
other  Loan  Documents  for  additional  representations,  covenants  and  other
agreements  of the  Companies  regarding  the  Collateral  covered  by such Loan
Documents.

         6.13   Credit Balances; Additional Collateral.
                --------------------------------------

         (a) The rights and security  interests  granted to CIT hereunder  shall
continue  in full force and  effect,  notwithstanding  the  termination  of this
Financing Agreement or the fact that the Revolving Loan Account may from time to
time  be  temporarily  in a  credit  position,  until  the  termination  of this
Financing  Agreement  and the full and final  payment  and  satisfaction  of the
Obligations  (other than  Obligations in respect of Letter of Credit  Guaranties
collateralized  pursuant to Section 11 hereof).  Any reserves or balances to the
credit of the Companies (in the Revolving  Loan Account or  otherwise),  and any
other  property or assets of the Companies (or any of them) in the possession of
CIT,  may be held by CIT as Other  Collateral,  and  applied in whole or partial
satisfaction  of  such  Obligations  when  due,  subject  to the  terms  of this
Financing Agreement.  The liens and security interests granted to CIT herein and
any other

                                       27
<PAGE>

lien or  security  interest  which  CIT  may  have in any  other  assets  of the
Companies secure payment and performance of all present and future  Obligations,
subject to the terms of this Financing Agreement.

         (b) Notwithstanding CIT's security interests in the Collateral,  to the
extent  that the  Obligations  are now or  hereafter  secured  by any  assets or
property other than the Collateral, or by the guaranty,  endorsement,  assets or
property of any other person, CIT shall have the right in its sole discretion to
determine  which rights,  security,  liens,  security  interests or remedies CIT
shall at any time pursue,  foreclose upon,  relinquish,  subordinate,  modify or
take any other action with respect to, without in any way modifying or affecting
any of such rights,  security,  liens, security interests or remedies, or any of
CIT's rights under this Financing Agreement.

SECTION 7.   Representations, Warranties and Covenants
             -----------------------------------------

         7.1 Initial Disclosure  Representations  and Warranties.  The Companies
             ---------------------------------------------------
represent and warrant to CIT that:

         (a) Financial  Condition.  (i) The amount of each Company's  assets, at
             --------------------
fair valuation, exceeds the book value of such Company's liabilities,  (ii) each
Company is generally  able to pay its debts as they become due and payable,  and
(iii) each  Company  does not have  unreasonably  small  capital to carry on its
business  as   currently   conducted   absent   extraordinary   and   unforeseen
circumstances. All financial statements of the Companies previously furnished to
CIT present fairly,  in all material  respects,  the financial  condition of the
Companies  as  of  the  date  of  such  financial  statements.   The  Companies,
individually and on a consolidated  basis are Solvent after giving effect to (a)
the Revolving  Loans,  the Term Loans,  and the Letters of Credit (if any) to be
made or extended on the Closing Date or such other date as the Revolving  Loans,
Term Loans, and Letters of Credit requested hereunder are made or extended,  (b)
the disbursement of the proceeds of such Revolving Loans and Term Loans pursuant
to the instructions of the Funds Administrator,  and (c) the payment and accrual
of all  transaction  costs  in  connection  with  the  foregoing,  and  (d)  the
termination  of all  Indebtedness  owed to Bank of America,  N.A.  and  Canadian
Imperial Bank of Commerce.

         (b)  Organization  Matters;   Collateral  Locations.   Schedule  7.1(b)
              ----------------------------------------------
attached  hereto  correctly and completely  sets forth (i) each Company's  exact
name, as currently  reflected by the records of such Company's  jurisdiction  of
incorporation or formation, (ii) each Company's jurisdiction of incorporation or
formation,  (iii) each  Company's  federal  employer or business  identification
number and State organization or other identification  number (if any), and (iv)
the  address of each  Company's  chief  executive  office and all  locations  of
Collateral.

         (c)  Power and Authority; Conflicts; Enforceability.
              ----------------------------------------------

         (i) Each  Company has full power and  authority  to execute and deliver
this Financing Agreement and the other Loan Documents to which such Company is a
party, and to perform all of such Company's obligations thereunder.

         (ii) The  execution  and  delivery  by each  Company of this  Financing
Agreement and the other Loan Documents to which such Company is a party, and the
performance of such Company's obligations thereunder,  have been duly authorized
by all necessary  corporate or other relevant action, and do not (w) require any
consent or  approval  of any  director,  shareholder,  partner or member of such
Company that has not been obtained,  (x) violate any term, provision or covenant
contained  in  the  organizational  documents  of  such  Company  (such  as  the
certificate or articles of  incorporation,  certificate  of origin,  partnership
agreement,  by-laws or operating agreement),  (y) violate, or cause such Company
to be in default under,  any law,  rule,  regulation,  order,  judgment or award
applicable  to such Company or its assets,  or (z) violate any term,  provision,
covenant or  representation  contained  in, or  constitute a default  under,  or
result in the creation of any lien under, any loan agreement,  lease, indenture,
mortgage,  deed of trust, note,  security agreement or pledge agreement to which
such Company is a signatory  or by which such  Company or any of such  Company's
assets are bound or affected.

         (iii) This  Financing  Agreement and the other Loan  Documents to which
the  Companies (or any of them) are parties  constitute  legal valid and binding
obligations of the Companies,  enforceable in accordance  with their  respective
terms,  subject to applicable  bankruptcy,  insolvency,  moratorium,  fraudulent
transfer and other laws affecting  creditors' rights  generally,  and subject to
general  principles of equity,  regardless of whether considered in a proceeding
at law or in equity.

                                       28
<PAGE>

         (d)  Schedules.  Each  of the  Schedules  attached  to  this  Financing
              ---------
Agreement set forth a true,  correct and complete  description  of the matter or
matters covered thereby.

         (e) Compliance  with Laws.  Each Company and such Company's  properties
             ---------------------
are in compliance with all federal,  provincial, state and local acts, rules and
regulations,  and  all  orders  of any  federal,  state  or  local  legislative,
administrative or judicial body or official, except to the extent the failure to
so comply would not have a Material  Adverse  Effect.  Each Company has obtained
and maintains all permits,  approvals,  authorizations and licenses necessary to
conduct its business as presently conducted, except to the extent the failure to
have  such  permits,  approvals,  authorizations  or  licenses  would not have a
Material Adverse Effect.

         (f) Environmental Matters. Except as set forth on Schedule 7.1(f):
             ---------------------

         (i)  None of the  operations  of any  Company  are the  subject  of any
federal,  provincial,  state or local  investigation  to  determine  whether any
remedial   action  is  needed  to  address  the  presence  or  disposal  of  any
environmental  pollution,  hazardous  material or environmental  clean-up of the
Real Estate or any of such Company's  leased real property that could reasonably
be  expected  to have a Material  Adverse  Effect.  No  enforcement  proceeding,
complaint,  summons, citation, notice, order, claim, litigation,  investigation,
letter  or  other  communication  from a  federal,  provincial,  state  or local
authority  has been filed  against or  delivered  to any  Company,  regarding or
involving any release of any  environmental  pollution or hazardous  material on
any real property now or previously owned or operated by such Company that could
reasonably be expected to have a Material Adverse Effect.

         (ii) No Company has any known contingent  liability with respect to any
release  of any  environmental  pollution  or  hazardous  material  on any  real
property  now or  previously  owned  or  operated  by such  Company  that  could
reasonably be expected to have a Material Adverse Effect.

         (iii) Each Company is in compliance  with all  environmental  statutes,
acts,  rules,  regulations  and  orders  applicable  to the  operation  of  such
Company's business, except to the extent that the failure to so comply would not
have a Material Adverse Effect.

         (g) Pending Litigation.  Except as set forth in Schedule 7.1(g),  there
             ------------------
exist no  actions,  suits or  proceedings  of any kind by or against any Company
pending in any court or before any  arbitrator or  governmental  body or, to the
best of  such  Company's  knowledge,  threatened  against  such  Company,  that,
individually  or in the  aggregate,  could  reasonably  be  expected  to  have a
Material Adverse Effect.

         (h)  Subsidiaries  and  Affiliates.  Except  as set  forth in  Schedule
              -----------------------------
7.1(h), the Companies have no existing  subsidiaries.  Each of Ronson Hydraulics
and Prometcor,  (i) is inactive and engaged in no business or operations (except
for Prometcor,  which is engaged in ongoing environmental  clean-up activities),
and (ii)  other  than  deferred  income  tax  assets,  and in the case of Ronson
Hydraulics, a note receivable from Ronson in the approximate amount of $188,931,
has net assets of less than $10,000.

         7.2  Affirmative  Covenants.  Until the  termination  of this Financing
              ----------------------
Agreement and the full and final  payment and  satisfaction  of the  Obligations
(other than Obligations in respect of Letter of Credit Guaranties collateralized
pursuant to Section 11 hereof), and unless otherwise approved in writing by CIT:

         (a) Maintenance of Financial Records;  Inspections. Each Company agrees
             ----------------------------------------------
to maintain books and records pertaining to such Company's  financial matters in
such detail, form and scope as CIT reasonably shall require. The Companies agree
that CIT or its agents may enter upon any Company's  premises at any time during
normal  business  hours,  and from  time to time,  in order to (i)  examine  and
inspect the books and records of any Company,  and make copies  thereof and take
extracts  therefrom,  and (ii) verify,  inspect and perform  physical counts and
other valuations of the Collateral and any and all records  pertaining  thereto.
The  Companies  irrevocably  authorize  all  accountants  and third  parties  to
disclose and deliver directly to CIT, at the Companies'  expense,  all financial
statements and information,  books,  records, work papers and management reports
generated  by  them  or in  their  possession  regarding  the  Companies

                                       29
<PAGE>

or the Collateral.  All costs,  fees and expenses  incurred by CIT in connection
with such examinations,  inspections, physical counts and other valuations shall
constitute Out-of-Pocket Expenses for purposes of this Financing Agreement.

         (b)  Further  Assurances.  Each  Company  agrees  to  comply  with  the
              -------------------
requirements of all state,  provincial and federal laws in order to grant to CIT
valid and perfected first priority security interests in the Collateral, subject
only to the Permitted Encumbrances. CIT is hereby authorized by the Companies to
file  any  financing  statements,  continuations  and  amendments  covering  the
Collateral  without the Companies'  signatures in accordance with the provisions
of the UCC.  The  Companies  hereby  consent  to and  ratify  the  filing of any
financing  statements  covering the Collateral by CIT on or prior to the Closing
Date. The Companies agree to do whatever CIT reasonably may request from time to
time, by way of (i) filing notices of liens,  financing statements,  amendments,
renewals  and  continuations  thereof,  (ii)  cooperating  with CIT's agents and
employees,  (iii) keeping  Collateral  records,  (iv)  transferring  proceeds of
Collateral  to CIT's  possession  in  accordance  with the terms  hereof and (v)
performing  such further acts as CIT  reasonably  may require in order to effect
the purposes of this  Financing  Agreement,  including  the execution of control
agreements with respect to Depository Accounts and Investment Property.

         (c) Insurance and Condemnation.
             --------------------------

         (i) Required  Insurance.  The Companies agree to maintain  insurance on
             -------------------
all Real Estate, Equipment and Inventory under such policies of insurance,  with
such insurance companies, in such reasonable amounts and covering such insurable
risks  as  are at all  times  reasonably  satisfactory  to  CIT  (the  "Required
Insurance").  All policies  covering the Equipment and Inventory are, subject to
the rights of any holder of a Permitted  Encumbrance  having  priority  over the
security  interests of CIT, to be made  payable  solely to CIT, in case of loss,
under a standard non-contributory "mortgagee", "secured party" or "lender's loss
payable" clause or endorsement,  and are to contain such other provisions as CIT
reasonably  may require to fully  protect  CIT's  interest in the  Inventory and
Equipment and to any payments to be made under such policies.  Each loss payable
endorsement in favor of CIT shall provide (x) for not less than thirty (30) days
prior written notice to CIT of the exercise of any right of cancellation and (y)
that CIT's  right to payment  under any  property  insurance  policy will not be
invalidated by any act or neglect of, or any breach of warranty or condition by,
the Companies (or any of them) or any other party.  If an Event of Default shall
have occurred and remain  outstanding,  CIT, subject to the rights of any holder
of a Permitted  Encumbrance  having priority over the security interests of CIT,
shall have the sole right, in the name of CIT or the Companies (or any of them),
to file  claims  under any  insurance  policies,  to  receive,  receipt and give
acquittances for any payments that may be payable thereunder, and to execute any
and all endorsements,  receipts, releases,  assignments,  reassignments or other
documents  that  may be  necessary  to  effect  the  collection,  compromise  or
settlement of any claims under any such insurance policies.

         (ii) CIT's Purchase of Insurance. Unless the Companies provide CIT with
              ---------------------------
evidence of the Required  Insurance in the manner set forth in Section 7.2(c)(i)
above,  CIT may purchase  insurance at the  Companies'  expense to protect CIT's
interests in the Collateral.  The insurance  purchased by CIT may, but need not,
protect the Companies' interests in the Collateral, and therefore such insurance
may not pay any claim  which the  Companies  may make or any claim which is made
against the Companies in connection with the Collateral. The Companies may later
request that CIT cancel any insurance purchased by CIT, but only after providing
CIT with satisfactory  evidence that the Companies have the Required  Insurance.
If CIT purchases  insurance  covering all or any portion of the Collateral,  the
Companies  shall  be  responsible  for the  costs of such  insurance,  including
interest (at the applicable rate set forth hereunder) and other charges accruing
on the purchase price therefor,  until the effective date of the cancellation or
the expiration of the insurance,  and CIT may charge all of such costs, interest
and other  charges to the Revolving  Loan Account.  The costs of the premiums of
any  insurance  purchased  by CIT may  exceed the costs of  insurance  which the
Companies  may be able to purchase on their own. In the event that CIT purchases
insurance,  CIT will notify the  Companies of such  purchase  within thirty (30)
days after the date of such purchase. If, within thirty (30) days after the date
of  receipt  of such  notice,  the  Companies  provide  CIT with  proof that the
Companies  had the  Required  Insurance  as of the date on which  CIT  purchased
insurance and the Companies have  continued at all times  thereafter to have the
Required Insurance, then CIT agrees to cancel the insurance purchased by CIT and
credit the  Revolving  Loan  Account for the amount of all costs,  interest  and
other charges  associated with such insurance that CIT previously charged to the
Revolving Loan Account.

         (iii) Application of Insurance and Condemnation Proceeds. So long as no
               --------------------------------------------------
Default or Event of Default shall have occurred and remain outstanding as of the
date of CIT's receipt of any Casualty Proceeds:

                                       30
<PAGE>

         (w)  In  the  event  of  any  loss  or  damage  to  any   Inventory  by
condemnation,  fire or other casualty, CIT agrees to apply the Casualty Proceeds
first to repay the outstanding Revolving Loans, and then to repay the Term Loans
in the manner set forth in Section 4.4(d).

         (x) In the event of any loss or damage to any item of Collateral  other
than Inventory by condemnation, fire or other casualty, if the Casualty Proceeds
relating to such condemnation,  fire or other casualty are less than or equal to
$50,000,  CIT agrees to apply such  Casualty  Proceeds to repay the  outstanding
Revolving Loans.

         (y) In the  event of any loss or  damage  to any item of  Equipment  by
condemnation,  fire or other casualty, if the Casualty Proceeds relating to such
condemnation, fire or other casualty exceed $50,000, the Companies may elect (by
delivering  written notice to CIT within ten (10) Business Days following  CIT's
receipt of such Casualty  Proceeds) to replace or repair such item of Equipment.
If the Companies elect to replace or repair any item of Equipment, CIT initially
shall apply all such Casualty  Proceeds to the  outstanding  Revolving Loans and
will  establish  an  Availability  Reserve in an amount  equal to such  Casualty
Proceeds.  CIT agrees to reduce this Availability  Reserve  dollar-for-dollar as
and when  payments  then are due  under  the  contract(s)  for the  purchase  of
replacement  Equipment  or the  repair  of such  item  of  Equipment.  Upon  the
replacement  or  completion  of  repair  of such  item of  Equipment,  CIT  will
eliminate any remaining Availability Reserve established hereunder.

         (z) In the event of any loss or damage to any Real Estate leased by the
Companies by  condemnation,  fire or other  casualty,  the Companies may use the
Casualty  Proceeds in the manner  required or permitted  by the lease  agreement
relating thereto.

If a Default or an Event of Default shall have  occurred and remain  outstanding
as of the date of CIT's receipt of any Casualty Proceeds, or if the Companies do
not or cannot  elect to use the  Casualty  Proceeds  in the  manner set forth in
paragraphs (y) or (z) above,  CIT may,  subject to the rights of any holder of a
Permitted  Encumbrance having priority over the security interests of CIT, apply
the Casualty  Proceeds to the payment of the  Obligations  in such manner and in
such order as CIT may elect in its sole discretion.

         (d)  Payment of Taxes.  The  Companies  agree to pay when due all Taxes
              ----------------
lawfully  levied,  assessed  or imposed  upon the  Companies  or the  Collateral
(including  all  sales  taxes  collected  by  the  Companies  on  behalf  of the
Companies' customers in connection with sales of Inventory and all payroll taxes
and  contributions  collected  by the  Companies  on  behalf  of the  Companies'
employees),  unless the Companies are  contesting  such Taxes in good faith,  by
appropriate proceedings,  and is maintaining adequate reserves for such Taxes in
accordance  with GAAP.  Notwithstanding  the  foregoing,  if a lien securing any
Taxes is filed in any  public  office  or a  garnishment  order  issued  for the
payment  of such  Taxes and such  lien is not a  Permitted  Tax  Lien,  then the
Companies  shall  pay all Taxes  secured  by such  lien or the  subject  of such
garnishment order  immediately and remove such lien of record promptly.  Pending
the payment of such Taxes and removal of such lien, CIT may, at its election and
without  curing or waiving  any Event of Default  which may have  occurred  as a
result  thereof,  (i)  establish an  Availability  Reserve in the amount of such
Taxes (or such other amount as CIT shall deem appropriate in the exercise of its
reasonable business judgment) or (ii) pay such Taxes on behalf of the Companies,
and the amount paid by CIT shall become an  Obligation  which is due and payable
on demand by CIT.

         (e) Compliance With Laws.
             --------------------

         (i) The Companies agree to comply with all federal,  provincial,  state
and  local  acts,  rules  and  regulations,  and  all  orders  of  any  federal,
provincial,  state or local  legislative,  administrative  or  judicial  body or
official,  if the  failure to so comply  would have a Material  Adverse  Effect,
provided that the Companies may contest any acts, rules, regulations, orders and
directions  of such  bodies or  officials  in any  reasonable  manner  which CIT
determines,  in the  exercise  of its  reasonable  business  judgment,  will not
materially and adversely effect CIT's rights or priorities in the Collateral.

         (ii) Without  limiting the  generality of the  foregoing,  each Company
agrees to comply with all environmental  statutes,  acts, rules,  regulations or
orders, as presently existing or as adopted or amended in the future, applicable
to the  ownership  and/or use of such  Company's  real property and operation of
such  Company's  business,  if the

                                       31
<PAGE>

failure to so comply would have a Material  Adverse Effect.  No Company shall be
deemed to have breached any provision of this Section  7.2(e) if (x) the failure
to comply with the  requirements of this Section 7.2(e) resulted from good faith
error or innocent  omission,  (y) such Company promptly commences and diligently
pursues a cure of such breach and (z) such failure is cured  within  thirty (30)
days following the Companies' receipt of notice from CIT of such failure,  or if
such breach cannot in good faith be cured within thirty (30) days  following the
Companies' receipt of such notice, then such breach is cured within a reasonable
time frame  based on the  extent  and  nature of the  breach  and the  necessary
remediation,  and in conformity  with any applicable  consent order,  consensual
agreement and applicable law.

         (f)  Notices  Concerning  Environmental,  Employee  Benefit and Pension
              ------------------------------------------------------------------
Matters. The Companies agree to notify CIT in writing of:
-------

         (i) any  expenditure  (actual or  anticipated) in excess of $50,000 for
environmental  clean-up,  environmental  compliance or environmental testing and
the impact of said expenses on the affected Company's working capital;

         (ii) any Company's receipt of notice from any local, state,  provincial
or federal authority advising the Companies of any environmental liability (real
or potential) arising from such Company's  operations,  its premises,  its waste
disposal practices, or waste disposal sites used by such Company; and

         (iii) any Company's  receipt of notice from any governmental  agency or
any  sponsor of any  "multiemployer  plan" (as that term is defined in ERISA) to
which such Company has  contributed,  relating to any of the events described in
Section 10.1(g) hereof.

The Companies  agree to provide CIT promptly with copies of all such notices and
other information pertaining to any matter set forth above if CIT so requests.

         (g) Collateral  Reporting and  Information.  (i) The Companies agree to
             --------------------------------------
furnish to CIT:

         (1) On each date on which the  Companies  request  or are to  receive a
Revolving Loan or the issuance of a Letter of Credit (but more  frequently  upon
CIT's  reasonable  request),  a borrowing base certificate in form and substance
satisfactory to CIT,  certified by the treasurer or chief  financial  officer of
the Funds  Administrator (or any other authorized officer  satisfactory to CIT),
together  with such  confirmatory  schedules of Trade  Accounts  Receivable  and
Inventory  (in  form  and  substance  satisfactory  to CIT) as CIT may  request,
including,  without limitation, sales journals, invoice registers, cash receipts
journals or collection reports,  deposit and receipts detail, copies of invoices
and shipping evidence,  credit and debit memos and/or adjustment registers,  and
updated inventory reports.

         (2) On or before the 15th day of each  month,  a detailed  and  summary
aging  report of Trade  Accounts  Receivable  existing as of the last day of the
preceding month and a roll-forward  of Trade Accounts  Receivable from the first
day of the preceding month through the last day of the preceding  month,  all in
such form as CIT  reasonably  shall  require,  certified by the treasurer or the
chief  financial  officer of the Funds  Administrator  (or any other  authorized
officer satisfactory to CIT), together with (x) a reconciliation, as of the last
day of the preceding  month, of the Companies'  Trade Accounts  Receivable aging
report to the Companies' general ledger, and (y) information sufficient to allow
CIT to (A)  reconcile,  as of the  date of such  report,  the  Companies'  Trade
Accounts  Receivable  aging report to the applicable  borrowing base certificate
delivered by the Companies to CIT, and (B) update the amount of ineligible Trade
Accounts Receivable.

         (3) At least once each week (but more frequently upon CIT's  reasonable
request),  a summary of Inventory  (containing  such detail from the  Companies'
perpetual  inventory  as CIT may  require)  as of the last  Business  Day of the
preceding week, together with information  sufficient to allow CIT to update the
amount of ineligible Inventory.

         (4) On or before the 15th day of each month,  an aged trial  balance of
all the Companies' accounts payable as of the last day of the preceding month.

         (5) On or  before  the  last  day of each  month,  a copy  of the  bank
statement for the Companies' primary operating account for the preceding month.

                                       32
<PAGE>

         (6) Together with the  collateral  information  described in clause (i)
above,   disclosure   of  (x)  all  matters   adversely   affecting  the  value,
enforceability  or  collectibility  of  the  Trade  Accounts  Receivable  of the
Companies, (y) all customer disputes, offsets, defenses, counterclaims, returns,
rejections  and all reclaimed or repossessed  merchandise or goods,  and (z) all
matters adversely  effecting the value of the Inventory,  all in such detail and
format as CIT reasonably may require.

         (7)  Prior  written  notice  of  any  change  in  the  location  of any
Collateral  and any  material  change in type,  quantity,  quality or mix of the
Inventory.

         (8) From time to time, access to the Companies'  computers,  electronic
media,  software  programs  (including  any  electronic  records,  contracts and
signatures) and such other  documentation and information  relating to the Trade
Accounts  Receivable,  Inventory  and other  Collateral  as CIT  reasonably  may
require.

         (ii) The Companies may deliver to CIT any borrowing  base  certificate,
collateral  report or other  material that the Companies are required to deliver
to CIT under  clauses (1),  (2),  (3) and (4) of Section  7.2(g)(i) by e-mail or
other  electronic  transmission (an "Electronic  Transmission"),  subject to the
following terms:

         (1) Each Electronic Transmission must be sent by the treasurer or chief
financial officer of the Funds  Administrator  (or any other authorized  officer
satisfactory  to  CIT),  and  must be  addressed  to the  loan  officer  and the
collateral analyst of CIT that handle the Companies'  account,  as designated by
CIT from time to time. If any Electronic  Transmission is returned to the sender
as undeliverable,  the material included in such Electronic Transmission must be
delivered  to the  intended  recipient  in the manner  required by Section  12.6
hereof.

         (2) Each certificate,  collateral report or other material contained in
an Electronic  Transmission  must be in a "pdf" or other imaging  format and, to
the  extent  that such  material  must be  certified  by an officer of the Funds
Administrator  under this  Section  7.2(g),  must  contain the  signature of the
officer submitting the Electronic Transmission. As provided in Section 12.6, any
signature on a certificate,  collateral report or other material contained in an
Electronic  Transmission shall constitute a valid signature for purposes hereof.
CIT may rely upon, and assume the authenticity  of, any such signature,  and any
material  containing such signature shall constitute an  "authenticated"  record
for purposes of the Uniform  Commercial Code and shall satisfy the  requirements
of any applicable statute of frauds.

         (3) Each Electronic Transmission must contain the name and title of the
officer of the Funds Administrator transmitting the Electronic Transmission, and
shall include following text in the body of the Electronic Transmission:

          "Pursuant to the Financing  Agreement dated July [___], 2006 among The
          CIT  Group/Commercial  Services,  Inc.  ("CIT"),  Ronson  Corporation,
          Ronson Aviation, Inc., Ronson Consumer Products Corporation and Ronson
          Corporation  of Canada,  Ltd.  (collectively,  the  "Companies"),  the
          undersigned  __________  [title of  submitting  officer]  of the Funds
          Administrator  hereby  delivers  to CIT  the  Companies'  ____________
          [describe submitted reports].  The Funds  Administrator,  on behalf of
          the  Companies,  represents  and  warrants  to CIT that the  materials
          included  in this  Electronic  Transmission  are  true,  correct,  and
          complete  in all  material  respects.  The name of the  officer of the
          Funds Administrator set forth in this e-mail constitutes the signature
          of such officer,  and this e-mail shall  constitute  an  authenticated
          record of the Company."

         (4) The  Companies  agree to  maintain  the  original  versions  of all
certificates,  collateral reports and other materials  delivered to CIT by means
of an  Electronic  Transmission  and  agrees  to  furnish  to CIT such  original
versions  within five (5)  Business  Days of CIT's  request for such  materials,
signed  and  certified  (to  the  extent  required  hereunder)  by  the  officer
submitting the Electronic Transmission.

(iii)  Each  Company  authorizes  the  Funds  Administrator,  on  behalf of such
Company,  to deliver to CIT all borrowing base certificates,  collateral reports
and other  material that the Companies are required to deliver to CIT under this
Section  7.2(g).  Each Company  hereby  authorizes  CIT to regard such Company's
printed name or rubber stamp  signature on  assignment  schedules or invoices as
the equivalent of a manual  signature by such Company's  authorized  officers or

                                       33
<PAGE>

agents. The Companies' failure to promptly deliver to CIT any schedule,  report,
statement  or other  information  set  forth in this  Section  7.2(g)  shall not
affect,  diminish,  modify or otherwise  limit CIT's  security  interests in the
Collateral.

         (h) Financial Reporting. The Companies agree to furnish to CIT:
             -------------------

         (i) within (x) ninety  (90) days after the end of each  fiscal  year of
each Company,  a  Consolidated  Balance Sheet as at the close of such year,  and
consolidated  statements  of profit and loss and cash flow of the  Companies for
such year,  and (y) one hundred  twenty  (120) days after the end of each fiscal
year of each  Company,  a  Consolidating  Balance  Sheet as at the close of such
year,  and  consolidating  statements  of  profit  and loss and cash flow of the
Companies for such year, in each case audited by independent  public accountants
selected  by the  Companies  and  satisfactory  to CIT,  together  with  (1) the
unqualified opinion of the accountants  preparing such financial  statements and
(2) if requested by CIT, such accountants' management practice letter.

         (ii)  within  thirty  (30)  days  after  the end of each  month,  (x) a
Consolidated  Balance Sheet and a  Consolidating  Balance Sheet as at the end of
such month, (y) consolidated and consolidating statements of profit and loss and
cash flow of the Companies  for such month and for the period  commencing on the
first day of the  current  fiscal year  through  the end of such month,  and (z)
comparative statements of profit and loss and cash flow of the Companies for the
same  month  and same  fiscal  year-to-date  period in the  prior  fiscal  year,
certified by the treasurer or chief financial officer of the Funds Administrator
(or any other authorized officer satisfactory to CIT);

         (iii) within ten (10) days after filing by each Company,  copies of all
(x) financial reports, registration statements and other documents filed by such
Company with the U.S. Securities and Exchange  Commission,  as and when filed by
such  Company,  and (ii)  annual  reports  filed  pursuant  to ERISA (or similar
applicable  Canadian laws) in connection  with each benefit plan of such Company
subject to ERISA (or such similar applicable Canadian laws); and

         (iv) no later  than  thirty  (30) days prior to the  beginning  of each
fiscal year of the Companies, monthly projections of the Companies' Consolidated
Balance  Sheet  and   Consolidating   Balance  Sheet,   and   consolidated   and
consolidating  statements of profits and loss and cash flow of the Companies, as
well as monthly  projected  Net  Availability  for the Companies for such fiscal
year.

         Each  financial  statement  which the  Companies are required to submit
pursuant  to  clauses  (i) and (ii) above must be  accompanied  by an  officer's
certificate  substantially  in the form set forth on Exhibit C attached  hereto,
signed by the treasurer or chief  financial  officer of the Funds  Administrator
(or any other authorized officer  satisfactory to CIT). In addition,  should the
Companies modify their accounting principles and procedures from those in effect
on the  Closing  Date,  the  Companies  agree  to  prepare  and  deliver  to CIT
statements of  reconciliation in form and substance  reasonably  satisfactory to
CIT.

         (i) Asset  Appraisals.  From time to time upon the  request of CIT (but
             -----------------
not more frequently than once in any twelve-month  period, so long as no Default
or Event of Default shall have occurred during such period), the Companies agree
to permit CIT to perform  appraisals of the Companies'  Inventory and Equipment.
The Companies agree to reimburse CIT for the costs and expenses  relating to (i)
one  Equipment  appraisal  in any  twelve-month  period,  so long as no Event of
Default shall have occurred and remain outstanding, and (ii) all such appraisals
performed while an Event of Default remains outstanding. All appraisals shall be
performed  by  qualified  appraisers  selected  by CIT.  To the extent  that the
Companies  are required by this Section  7.2(i) to reimburse CIT for CIT's costs
and expenses  relating to appraisals,  such costs and expenses shall  constitute
Out-of-Pocket  Expenses.  If the sum of  eighty  five  percent  (85%) of the net
orderly  liquidation value of the machinery and equipment that served as a basis
for the amount  advanced under the Initial Term Loan as set forth in any updated
Equipment  appraisal  is less than the then  outstanding  balance of the Initial
Term Loan  ("Appraisal  Deficiency"),  then the  Companies  (other  than  Ronson
Canada) shall pay the Appraisal  Deficiency to CIT on the first day of the first
month immediately following the date of such updated Equipment Appraisals,  as a
prepayment against the Initial Term Loan (free of any Prepayment  Premium).  The
prepayments  contemplated  by this Section 7.2(i) are in addition to, and not in
lieu of, the  payments  due under the Term  Loans,  as set forth in Section 4 of
this Financing Agreement.

                                       34
<PAGE>

         (j)  Business  Qualification.  The  Companies  agree to  qualify  to do
              -----------------------
business,  and to remain qualified to do business and in good standing,  in each
jurisdiction  where the failure to so qualify or to remain  qualified or in good
standing, would have a Material Adverse Effect.

         (k)  Anti-Money  Laundering  and Terrorism  Regulations.  The Companies
              --------------------------------------------------
agree to comply with all applicable  anti-money  laundering and terrorism  laws,
regulations and executive orders in effect from time to time (including, without
limitation,  the USA Patriot Act (Pub. L. No. 107-56)). The Companies also agree
to  ensure  that no  person  who owns a  controlling  interest  in or  otherwise
controls the  Companies  (or any of them) is a person  designated  under Section
1(b), (c) or (d) of Executive Order No. 13224 (issued September 23, 2001) or any
other similar Executive Order. The Companies  acknowledge that CIT's performance
hereunder is subject to compliance with all such laws, regulations and executive
orders,  and in furtherance of the foregoing,  the Companies agree to provide to
CIT  all  information  about  the  Companies'  ownership,  officers,  directors,
customers and business  structure as CIT  reasonably may require to comply with,
such laws, regulations and executive orders.

         (l) Ronson Tax Lien. The Companies agree to make payments on account of
             ---------------
the Ronson Tax Lien in an amount of at least  $25,000 each month,  or such other
greater  amounts  necessary  to ensure that the Ronson Tax Lien is  satisfied in
full on or before February 1, 2007. The Companies further agree to submit to CIT
evidence  of each and every such  payment  made  within five (5) days after such
payment is made. Upon receipt by CIT of satisfactory  evidence of a payment, CIT
shall reduce the Ronson Tax Lien Reserve by the amount of such payment.

         (m) Environmental Reports. The Companies agree to deliver to CIT copies
             ---------------------
of any environmental reports (including the Companies' waste disposal practices)
conducted  in  connection  with and in  contemplation  of the  Permitted  Realty
Financing  within thirty (30) days after the Closing  Date.  The reports must be
satisfactory to CIT in its reasonable  business judgment,  and must not disclose
or indicate  any  liability  (real or  potential)  arising out of any  Company's
premises,  its operations,  its waste disposal practices or waste disposal sites
used by any  Company,  that  could  reasonably  be  expected  to have a Material
Adverse Effect.

         7.3 Financial Covenants.  Until termination of this Financing Agreement
             -------------------
and the full and final payment and  satisfaction of all Obligations  (other than
Obligations in respect of Letter of Credit Guaranties collateralized pursuant to
Section 11 hereof), the Companies agree on a consolidated basis:

         (a)  Intentionally left blank
              ------------------------

                                       35
<PAGE>

         (b) Fixed Charge  Coverage.  To maintain a Fixed Charge Coverage Ratio,
             ----------------------
calculated for each of the periods set forth below, of not less than:

                  Fiscal Period                                    Ratio
                  -------------                                    -----

         3-month period ending September 30, 2006                1.0 to 1.0
         6-month period ending December 31, 2006                 1.15 to 1.0
         9-month period ending March 31, 2007                    1.05 to 1.0
         12-month period ending June 30, 2007, and each          1.0 to 1.0
         12-month period ending at the end of each fiscal
         quarter thereafter                                      1.05 to 1.0

         (c) Operating  Leases and Capital  Expenditures.  Not to (i) enter into
             -------------------------------------------
any  Operating  Lease if after giving effect  thereto the aggregate  obligations
with respect to Operating  Leases during any fiscal year would exceed  $350,000;
or (ii) contract for,  purchase,  make  expenditures  for,  lease  pursuant to a
Capital  Lease  or  otherwise   incur   obligations   with  respect  to  Capital
Expenditures  (whether subject to a security  interest or otherwise)  during any
fiscal year of the Companies in the aggregate amount in excess of:

         (x)      $2,700,000 for the fiscal year ending December 31, 2006;
         (y)      $1,000,000 for the fiscal year ending December 31, 2007; and
         (z)      $400,000 for the fiscal year ending December 31, 2008, and for
                  each fiscal year thereafter.

         7.4 Negative  Covenants.  Until termination of this Financing Agreement
             -------------------
and full and final  payment  and  satisfaction  of all  Obligations  (other than
Obligations in respect of Letter of Credit Guaranties collateralized pursuant to
Section  11  hereof),  and unless  otherwise  approved  in writing by CIT,  each
Company  agrees not to, and will cause each  Guarantor  (other  than the Limited
Guarantor) and each subsidiary of such Company not to:

         (a) Liens and  Encumbrances.  Mortgage,  assign,  pledge,  transfer  or
             -----------------------
otherwise permit any lien, charge,  security  interest,  encumbrance or judgment
(whether  as a result of a purchase  money or title  retention  transaction,  or
other security interest,  or otherwise) to exist on any of the Collateral or its
other assets, whether now owned or hereafter acquired,  except for the Permitted
Encumbrances.

         (b)  Indebtedness.  Incur or create  any  Indebtedness  other  than the
              ------------
Permitted Indebtedness.

         (c) Sale of Assets. Sell, lease, assign,  transfer or otherwise dispose
             --------------
of (i) Collateral,  except as otherwise specifically permitted by this Financing
Agreement,  or (ii) all or any substantial part of its assets,  if any, which do
not constitute  Collateral,  except as otherwise  specifically permitted by this
Financing Agreement.

         (e) Corporate  Change.  (i) Merge,  consolidate or amalgamate  with any
             -----------------
other entity (other than a Company),  (ii) change its name or principal place of
business, (iii) change its structure or organizational form, or reincorporate or
reorganize in a new jurisdiction,  (iv) enter into or engage in any operation or
activity  materially  different  from  that  presently  being  conducted  by the
Company,  any Guarantor or any  subsidiary of such Company,  as the case may be;
provided that any Company,  any Guarantor and any subsidiary of such Company may
change its name or its  principal  place of  business  so long as the  Companies
provide CIT with thirty (30) days prior written notice thereof and such Company,
any Guarantor or any  subsidiary of such Company,  as the case may be,  executes
and delivers to CIT,  prior to making such change,  all documents and agreements
required by CIT in order to ensure that the liens and security interests granted
to CIT hereunder continue in effect without any break or lapse in perfection.

         (f) Guaranty  Obligations.  Assume,  guarantee,  endorse,  or otherwise
             ---------------------
become liable upon the obligations of any person,  firm,  entity or corporation,
except (i) pursuant to the cross-corporate  guarantees and by the endorsement of
negotiable  instruments for deposit or collection or similar transactions in the
ordinary course of business, and (ii) Permitted Indebtedness.

                                       36
<PAGE>

         (g)  Dividends  and  Distributions.  Declare  or pay  any  dividend  or
              -----------------------------
distribution of any kind on, or purchase,  acquire, redeem or retire, any of its
equity  interests  (of any class or type  whatsoever),  whether now or hereafter
issued and outstanding, other than Permitted Distributions.

         (h) Investments; Loans. (i) Create any new subsidiary, or (ii) make any
             ------------------
advance  or  loan  to,  or any  investment  in,  any  firm,  entity,  person  or
corporation, other than (w) Permitted Intercompany Loans; and 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
such entities to otherwise  comply with all laws,  (x) advances to employees for
business  expenses  arising in the ordinary  course of business in the aggregate
outstanding  amount not in excess of $50,000 per annum,  (y)  investments in the
form of cash equivalents or marketable  securities (as defined under GAAP), swap
contracts  or  similar  transactions  entered  into in the  ordinary  course  of
business  and not for  speculative  purposes  and  extensions  of  credit in the
ordinary course of business (in each case,  consistent with past practice),  and
(z)   advances   on  behalf  of  officers   and   directors   under   applicable
indemnification arrangements,  consistent with past practice, provided, however,
that no Event of Default shall have occurred and be  outstanding at the time any
such  advance  is made,  or would  occur as a result  of the  making of any such
advance,  or (iii)  acquire  all or  substantially  all of the assets of, or any
capital stock or any equity interests in, any firm, entity or corporation, other
than  current  investments  of such  Company in  existing  subsidiaries  of such
entities.

         (i) Related Party Transactions. Except as set forth on Schedule 7.4(i),
             --------------------------
enter into any transaction,  including,  without limitation, any purchase, sale,
lease, loan or exchange of property,  with any shareholder,  officer,  director,
parent (direct or indirect),  subsidiary (direct or indirect) or other person or
entity otherwise  affiliated with the Companies,  or any subsidiary of a Company
(other than a  transaction  with one or more other  Companies),  unless (i) such
transaction  otherwise complies with the provisions of this Financing Agreement,
(ii)  such  transaction  is  pursuant  to  the  reasonable  requirements  of the
Companies, or any subsidiary of a Company, as the case may be, and upon fair and
reasonable  terms no less favorable to such entity than such entity could obtain
in a comparable arms length transaction with an unrelated third party, and (iii)
no Event of Default shall have occurred and remain  outstanding at the time such
transaction occurs, or would occur after giving effect to such transaction.

         (j) Restricted  Payments.  (i) Make any payment of the principal of, or
             --------------------
interest on, any  Subordinated  Debt, or purchase,  acquire or redeem any of the
Subordinated Debt, unless (x) such payment, purchase,  acquisition or redemption
is expressly  permitted by the terms of the applicable  Subordination  Agreement
and  (y) no  Default  or  Event  of  Default  shall  have  occurred  and  remain
outstanding  on the date on which such payment or transaction  occurs,  or would
occur  as a  result  thereof;  (ii)  other  than  with  respect  to a  Permitted
Distribution,  pay any  management,  consulting  or  other  similar  fees to any
shareholder,  director,  parent  (direct  or  indirect),  subsidiary  (direct or
indirect) or other person or entity otherwise affiliated with the Companies,  or
any subsidiary of a Company.

         (k) Fiscal Year. Change such Company's fiscal year.
             -----------

         (l) Bank  Accounts.  Establish any  depository,  checking or other bank
             --------------
account of any kind with any financial  institution (other than the accounts set
forth on Schedule 7.4(l)) without CIT's prior written consent.

SECTION 8.   Interest, Fees and Expenses
             ---------------------------

         8.1   Interest.
               --------

         (a) Interest on Revolving Loans.  Interest on the outstanding principal
             ---------------------------
balance of the Revolving Loans shall be due and payable monthly on the first day
of each  month and shall  accrue  at a rate per  annum  equal to the  Applicable
Margin  plus (i) in the case of loans to the  Domestic  Companies  (all of which
shall be denominated in U.S. Dollars), the Chase Bank Rate, and (ii) in the case
of U.S. Dollar  denominated loans to Ronson Canada,  the U.S. Prime Rate, and in
the case of Canadian  Dollar  denominated  loans to Ronson Canada,  the Canadian
Prime Rate, in each case on the average net principal  balance of such Revolving
Loans at the  close of each day  during  the  immediately  preceding  month,  as
reflected by CIT's  System.  In the event of any change in said Chase Bank Rate,
U.S.  Prime Rate or Canadian  Prime Rate, as the case may be, the rate set forth
in the first sentence of this Section  8.1(a) shall change,  effective as of the
date of such change, so as to remain equal to the Applicable Margin plus the new
Chase Bank Rate,  new U.S.  Prime

                                       37
<PAGE>

Rate, or new Canadian  Prime Rate, as the case may be. All interest  rates shall
be calculated based on a 360-day year and actual days elapsed.

         (b) Interest on Term Loans.  Interest on the portions of the  principal
             ----------------------
balance  of the Term  Loans  shall be  payable  monthly on the first day of each
month and shall accrue at a rate per annum equal to the  Applicable  Margin plus
the Chase  Bank Rate.  In the event of any  change in said Chase Bank Rate,  the
rate set  forth in the first  sentence  of this  Section  8.1(b)  shall  change,
effective as of the date of such change, so as to remain equal to the Applicable
Margin plus the new Chase Bank Rate.  All  interest  rates  shall be  calculated
based on a 360-day year and actual days elapsed.

         (c) Additional Disclosure Regarding Interest on Loans to Ronson Canada.
             ------------------------------------------------------------------

                  (i)  For  purposes  of  disclosure   under  the  Interest  Act
(Canada),  where interest is calculated  pursuant thereto at a rate based upon a
three hundred sixty (360) day year or three  hundred  sixty-five  (365) day year
(the "First  Rate"),  the rate or  percentage  of interest on a yearly  basis is
equivalent  to such First Rate  multiplied  by the actual  number of days in the
year divided by three hundred sixty (360) or three hundred  sixty-five (365), as
applicable.

                  (ii)  Notwithstanding  the provisions of this Section 8 or any
other  provision of this  Financing  Agreement,  in no event shall the aggregate
"interest"  (as  that  term is  defined  in  Section  347 of the  Criminal  Code
(Canada))  with respect to any Loans by or on behalf of Canadian  Lender  exceed
the  effective  annual rate of interest  on the  "credit  advanced"  (as defined
therein) lawfully permitted under Section 347 of the Criminal Code (Canada). The
effective  annual rate of  interest  for such  purpose  shall be  determined  in
accordance with generally accepted  actuarial  practices and principles over the
term of the applicable Loan by or on behalf of Canadian Lender, and in the event
of a dispute,  a certificate of a Fellow of the Canadian  Institute of Actuaries
appointed by Agent will be conclusive for the purposes of such determination.

                  (iiii) A certificate of an authorized  signing  officer of CIT
as to each rate of interest payable  hereunder from time to time absent manifest
error shall be conclusive evidence of such rate.

                  (iv) For greater certainty, unless otherwise specified in this
Financing Agreement or any of the other Loan Documents, as applicable,  whenever
any amount is payable  under this  Financing  Agreement or any of the other Loan
Documents  by  the  Companies  as  interest  or  as a  fee  which  requires  the
calculation  of an amount  using a  percentage  per  annum,  each  party to this
Financing Agreement acknowledges and agrees that such amount shall be calculated
as of the date payment is due without  application  of the "deemed  reinvestment
principle"  or the  "effective  yield  method." As an example,  when interest is
calculated and payable  monthly,  the rate of interest  payable per month is one
twelfth (1/12) of the stated rate of interest per annum.

         8.2 Default  Interest Rate. Upon the occurrence of an Event of Default,
             ----------------------
all  Obligations  may  thereafter,  at the election of CIT, bear interest at the
Default  Rate of  Interest  irrespective  of  whether  such  Event of Default is
waived. The Default Rate of Interest may be applied  retroactively from the date
upon  which the Event of Default  occurred,  notwithstanding  that CIT  obtained
knowledge  of such Event of Default at a later  date.  If an Event of Default is
waived by CIT, any Default  Rate of Interest  imposed by CIT shall not apply and
continue  beyond the end of the fiscal  quarter  then in effect at the time such
Event of Default is waived.

         8.3   Fees and Expenses Relating to Letters of Credit.
               -----------------------------------------------

         (a) Letter of Credit Guaranty Fee. In  consideration of the issuance of
             -----------------------------
any Letter of Credit  Guaranty by CIT or other  assistance  of CIT in  obtaining
Letters of Credit  pursuant to Section 5 hereof,  Ronson,  RAI and RCPC agree to
pay to CIT a Letter of Credit  Guaranty Fee equal to the  Applicable  Margin per
annum on the face amount of each Letter of Credit. All Letter of Credit Guaranty
Fees shall be due and payable monthly on the first day of each month.

         (b) Charges of Issuing  Bank.  Ronson,  RAI and RCPC agree to reimburse
             ------------------------
CIT for any and all charges,  fees,  commissions,  costs and expenses charged to
CIT for their account by an Issuing Bank in connection  with, or arising out of,
Letters of Credit or out of transactions  relating  thereto,  when charged to or
paid by CIT, or as may be due upon any termination of this Financing Agreement.

                                       38
<PAGE>

         8.4 Out-of Pocket  Expenses.  The Companies  agree to reimburse CIT for
             -----------------------
all Out-of-Pocket Expenses when charged to or paid by CIT.

         8.5 Line of Credit Fee; Collection Days. On the last day of each month,
             -----------------------------------
commencing  with the month in which the Closing Date  occurs,(a)  the  Companies
agree  to pay to CIT the  Line of  Credit  Fee,  and (b) CIT  shall  charge  the
Companies  for interest at the rate set forth in Section 8.1 (or Section 8.2, if
applicable) hereof on the Collection Days for the immediately preceding month.

         8.6 Loan Facility Fee;  Application of Deposits and Commitment  Fee. To
             ---------------------------------------------------------------
induce CIT to enter into this Financing Agreement and to extend to the Companies
the Line of Credit,  the  Companies  agreed to pay to CIT a Loan Facility Fee in
the amount of  $39,450.00,  which was paid by the  Companies and fully earned by
CIT as a  commitment  fee in  connection  with the  issuance  of the  Commitment
Letter.  Any unused due diligence deposit held by CIT pursuant to the Commitment
Letter shall be credited to the Revolving Loan Account.

         8.7 Administrative Management Fee. On the Closing Date and on the first
             -----------------------------
day of the month  following  the month in which each annual  anniversary  of the
Closing  Date  occurs,  the  Companies  agree  to pay to CIT the  Administrative
Management Fee, which shall be fully earned when paid.

         8.8  Standard  Operational  Fees.  In  addition  to the  Administrative
              ---------------------------
Management Fee and all Out-of-Pocket Expenses incurred by CIT in connection with
any action taken under  Section  7.2(a)  hereof (but without  duplication),  the
Companies  agree to pay to CIT (a) all  Documentation  Fees,  (b) CIT's standard
charges  for any  employee  of CIT  used  to  conduct  any of the  examinations,
verifications,  inspections,  physical counts and other valuations  described in
Section 7.2(a) hereof (currently $1,000 per person, per day), and CIT's standard
charges  for  each  wire  transfer  made  by CIT to or for  the  benefit  of the
Companies  (currently $30) and for Dunn and Bradstreet searches conducted by CIT
for any Company's account  (currently $65),  provided that such standard charges
may be increased by CIT from time to time. Such charges shall be due and payable
in accordance with CIT's standard practices, as in effect from time to time.

         8.9    Intentionally left blank.
                ------------------------

         8.10   Intentionally left blank.
                ------------------------

         8.11 Early  Termination  Fee and Prepayment  Premium.  In the event the
              -----------------------------------------------
Companies  terminate the Revolving Line of Credit or this Financing Agreement on
an Early Termination Date, the Early Termination Fee shall be due and payable in
full on the date of termination. In the event the Domestic Companies voluntarily
prepay the Initial Term Loan, in whole or in part, on an Early Termination Date,
the Prepayment  Premium  applicable  thereto shall be due and payable in full on
the date of such prepayment. In the event this Financing Agreement is terminated
pursuant to Section  10.2 hereof  (whether  automatically  or by CIT),  an Early
Termination  Fee and Prepayment  Premium shall be due and payable in full on the
date of termination.

         8.12  Capital  Adequacy.  In the  event  that  CIT  (or  any  financial
               -----------------
institution  that purchases from CIT a participation in the loans made by CIT to
the Companies  hereunder),  subsequent  to the Closing  Date,  determines in the
exercise of its reasonable  business  judgment that (x) any change in applicable
law, rule, regulation or guideline regarding capital adequacy, or (y) any change
in the  interpretation  or administration  thereof,  or (z) compliance by CIT or
such financial  institution with any new request or directive  regarding capital
adequacy  (whether or not having the force of law) of any central  bank or other
governmental or regulatory  authority,  has or would have the effect of reducing
the rate of  return  on  CIT's  or such  financial  institution's  capital  as a
consequence of its obligations hereunder to a level below that which CIT or such
financial  institution  could have  achieved  but for such change or  compliance
(taking into consideration CIT's or such financial  institution's  policies with
respect  to  capital  adequacy)  by an  amount  deemed  material  by CIT or such
financial institution in the exercise of their reasonable business judgment, the
Companies  agree to pay to CIT, no later than five (5) days following  demand by
CIT, such additional  amount or amounts as will compensate CIT or such financial
institution for such reduction in rate of return.  In determining such amount or
amounts, CIT and such financial  institution may use any reasonable averaging or
attribution  methods.  The protection of this Section 8.12 shall be available

                                       39
<PAGE>

to CIT and such financial  institution  regardless of any possible contention of
invalidity or inapplicability  with respect to the applicable law, regulation or
condition. A certificate of CIT or such financial institution setting forth such
amount or amounts as shall be  necessary  to  compensate  CIT or such  financial
institution with respect to this Section 8.12 and the calculation thereof,  when
delivered  to the  Companies,  shall be  conclusive  and binding on each Company
absent manifest error. In the event CIT or such financial  institution exercises
its rights pursuant to this Section 8.12, and subsequent thereto determines that
the  amounts  paid  by the  Companies  exceeded  the  amount  which  CIT or such
financial  institution  actually  required to compensate  CIT or such  financial
institution  for any  reduction  in rate of return on its  capital,  such excess
shall be returned to the Companies by CIT or such financial institution,  as the
case may be.

         8.13.  Taxes,  Reserves  and Other  Conditions.  In the event  that any
                ---------------------------------------
applicable law, treaty or governmental  regulation,  or any change therein or in
the  interpretation  or  application  thereof,  or  compliance by CIT (or by any
financial  institution that purchases from CIT a participation in the loans made
by CIT to the Companies hereunder) with any new request or directive (whether or
not  having  the  force of law) of any  central  bank or other  governmental  or
regulatory authority, shall:

         (a) subject CIT or such  financial  institution  to any tax of any kind
whatsoever  (including without limitation any withholding taxes) with respect to
this  Financing  Agreement or the other Loan  Documents,  or change the basis of
taxation of payments to CIT or such financial  institution  of principal,  fees,
interest or any other  amount  payable  hereunder or under any of the other Loan
Documents  (except  for  changes in the rate of tax on the overall net income of
CIT  or  such  financial   institution  by  the  federal   government  or  other
jurisdiction in which it maintains its principal office);

         (b) impose,  modify or hold  applicable any reserve,  special  deposit,
assessment or similar  requirement against assets held by, or deposits in or for
the account of,  advances or loans by, or other  credit  extended by CIT or such
financial institution by reason of or in respect to this Financing Agreement and
the Loan Documents,  including (without  limitation) pursuant to Regulation D of
the Board of Governors of the Federal Reserve System; or

         (c) impose on CIT or such  financial  institution  any other  condition
with respect to this Financing Agreement or any other document;

and the result of any of the  foregoing  is to (i)  increase  the cost to CIT of
making,  renewing  or  maintaining  CIT's loans  hereunder  (or the cost to such
financial  institution  in  participating  in such  loans) by an  amount  deemed
material by CIT or such financial  institution in the exercise of its reasonable
business  judgment,  or (ii)  reduce  the  amount  of any  payment  (whether  of
principal,  interest or otherwise) in respect of any of the loans made hereunder
by an amount that CIT or such financial  institution deems to be material in the
exercise of its reasonable business judgment, the Companies agree to pay to CIT,
no later than five (5) days following  demand by CIT, such additional  amount or
amounts as will  compensate CIT or such financial  institution for such increase
in cost or reduction  in payment,  as the case may be. A  certificate  of CIT or
such  financial  institution  setting  forth such  amount or amounts as shall be
necessary to compensate CIT or such financial  institution  with respect to this
Section 8.13 and the calculation thereof, when delivered to the Companies, shall
be conclusive and binding on each Company absent  manifest  error.  In the event
CIT or such financial  institution exercises its rights pursuant to this Section
8.13, and subsequent  thereto  determines that the amounts paid by the Companies
in whole or in part exceeded the amount which CIT or such financial  institution
actually  required  to  compensate  CIT or such  financial  institution  for any
increase in cost or reduction  in payment,  such excess shall be returned to the
Companies by CIT or such financial institution, as the case may be.

         Notwithstanding  any  other  provisions  contained  in  this  Financing
Agreement,  CIT hereby  acknowledges and agrees that CIT (excluding the Canadian
Lender) will not sell a  participation  in the loans made by CIT  (excluding the
Canadian Lender) to the Companies hereunder to any financial institution that is
not a "United  States person"  (within the meaning of Section  7701(a)(3) of the
Internal  Revenue Code of 1986,  as amended),  or not  otherwise  entitled to an
exemption from  withholding tax on all or any portion of the payments to be made
hereunder.

         8.14 Authority to Charge  Revolving Loan Account.  The Companies hereby
              -------------------------------------------
authorize  CIT to charge their  Revolving  Loan  Accounts with the amount of all
payments  due under  this  Section 8 as such  payments  become  due.  Any amount
charged to the Revolving Loan Accounts of the Domestic Companies shall be deemed
a Chase Bank Rate Loan  hereunder and any amount  charged to the Revolving  Loan
Account of Ronson Canada shall be deemed a Canadian

                                       40
<PAGE>

Rate Loan hereunder and in each case shall bear interest at the rate provided in
Section 8.1 (or Section 8.2, if  applicable) of this  Financing  Agreement.  The
Companies  confirm  that any charges  which CIT may make to the  Revolving  Loan
Account as provided herein will be made as an accommodation to the Companies and
solely at CIT's discretion.

SECTION 9.   Powers
             ------

         9.1  Authority.  The Companies  hereby  authorize CIT, or any person or
              ---------
agent which CIT may designate,  at the Companies' cost and expense,  to exercise
all of the following  powers,  which  authority  shall be irrevocable  until the
termination  of this  Financing  Agreement  and the full and final  payment  and
satisfaction of the Obligations:

         (a) To receive,  take,  endorse,  sign, assign and deliver,  all in the
name of CIT or the  Companies  (or any of  them),  any  and all  checks,  notes,
drafts, and other documents or instruments relating to the Collateral;

         (b) To receive, open and dispose of all mail addressed to the Companies
(or any of them) and to notify  postal  authorities  to change the  address  for
delivery thereof to such address as CIT may designate;

         (c) To request from customers  indebted on Accounts at any time, in the
name of CIT, information concerning the amounts owing on the Accounts;

         (d) To request from customers  indebted on Accounts at any time, in the
name  of the  Companies  (or  any of  them),  any  certified  public  accountant
designated  by CIT or any other  designee  of CIT,  information  concerning  the
amounts owing on the Accounts;

         (e) To transmit  to  customers  indebted  on  Accounts  notice of CIT's
interest  therein and to notify  customers  indebted on Accounts to make payment
directly to CIT for the Companies' account; and

         (f) To take or bring,  in the name of CIT or the  Companies  (or any of
them),  all steps,  actions,  suits or  proceedings  deemed by CIT  necessary or
desirable to enforce or effect collection of the Accounts.

         9.2  Limitations on Exercise.  Notwithstanding  any other  provision of
              -----------------------
this  Financing  Agreement  to the  contrary,  the powers set forth in  Sections
9.1(b),  (e) and (f) may only be  exercised  if an Event of  Default  shall have
occurred and remain outstanding.

SECTION 10.   Events of Default and Remedies
              ------------------------------

         10.1 Events of Default.  Each of the following  events shall constitute
              -----------------
an "Event of Default" under this Agreement:

         (a) the cessation of the business of any Company or any subsidiary of a
Company,  or the  calling of a meeting of the  creditors  of any  Company or any
subsidiary of a Company for purposes of compromising its debts and obligations;

         (b) the  failure  of any  Company  or any  subsidiary  of a Company  to
generally meet its debts as those debts mature;

         (c) (i) the  commencement by any Company or any subsidiary of a Company
of  any  bankruptcy,  insolvency,  arrangement,  reorganization,   receivership,
assignment for the benefit of creditors or similar proceedings under any federal
or state law or under any applicable  Canadian or Provincial law or statute;  or
(ii) the commencement  against any Company or any subsidiary of a Company of any
bankruptcy, insolvency, arrangement,  reorganization,  receivership,  assignment
for the benefit of  creditors or similar  proceeding  under any federal or state
law or under any  applicable  Canadian or Provincial law or statute by creditors
of any of them, but only if such  proceeding is not contested by such Company or
any  subsidiary of such  Company,  as  applicable,  within ten (10) days and not
dismissed  or vacated  within  thirty (30) days of  commencement,  or any of the
actions or relief sought in any such proceeding  shall occur or be authorized by
such Company or any subsidiary of a Company;

                                       41
<PAGE>

         (d)  the  breach  or  violation   by  any  Company  of  any   warranty,
representation  or covenant  contained in this Financing  Agreement  (other than
those referred to in Section  10.1(e) below) or any of the other Loan Documents,
provided  that such  breach or  violation  shall not be deemed to be an Event of
Default  unless such  Company  fails to cure such breach or  violation  to CIT's
satisfaction  within twenty (20) days from the date of such breach or violation;
provided, however, that, such twenty (20) day period shall not apply in the case
of (i) any  failure to observe  any such  representation,  warranty  or covenant
which is not capable of being cured at all or within such twenty (20) day period
or which has been the subject of a prior failure  within a six (6) month period,
or (ii)  an  intentional  breach  by  such  Company  or  Guarantor  of any  such
representation, warranty or covenant;

         (e)  the  breach  or  violation   by  any  Company  of  any   warranty,
representation  or covenant  contained in Sections 3.2,  6.3, 6.4, 6.5,  6.6(b),
7.1(a),  7.1(b), 7.1(d), 7.2(b), 7.2(c), 7.2(d), 7.2(f), 7.2(g), 7.2(h), 7.3 and
7.4;

         (f) the failure of the Companies to pay any of the  Obligations  within
five (5) Business Days of the due date thereof,  provided that nothing contained
herein shall  prohibit CIT from  charging  such  amounts to the  Revolving  Loan
Account on the due date thereof;

         (g) any Company  shall (i) engage in any  "prohibited  transaction"  as
defined in ERISA, (ii) incur any "accumulated  funding deficiency" as defined in
ERISA,  (iii) incur any "reportable  event" as defined in ERISA,  (iv) terminate
any  "plan",  as defined in ERISA or (v) become  involved in any  proceeding  in
which the Pension Benefit Guaranty  Corporation  shall seek  appointment,  or is
appointed,  as trustee or administrator of any "plan",  as defined in ERISA, and
with respect this Section  10.1(g),  such event or condition  either (x) remains
uncured for a period of thirty (30) days from date of occurrence  and (y) could,
in CIT's reasonable  business judgment,  subject any Company to any tax, penalty
or other liability having a Material Adverse Effect;

         (h) the  occurrence  of any default or event of default  (after  giving
effect to any  applicable  grace or cure  period)  under  any of the other  Loan
Documents,  or any of the other Loan Documents  ceases to be valid,  binding and
enforceable in accordance with its terms;

         (i) the  occurrence  of any default or event of default  (after  giving
effect to any applicable grace or cure period) under any instrument or agreement
evidencing or governing (i) the Subordinated Debt or (ii) other  Indebtedness of
the Companies (or any of them) having a principal amount in excess of $50,000;

         (j) the Companies (or any of them) shall modify the terms or provisions
of any agreement, instrument or other document relating to any Subordinated Debt
without CIT's prior written  consent,  unless such  modification is permitted by
the applicable Subordination Agreement;

         (k) a Change of Control shall occur;

         (l) a final  judgment  for the  payment  of money in excess of  $50,000
shall be rendered  against any Company or any  Guarantor  other than the Limited
Guarantor  (other than a judgment as to which a financially  sound and reputable
insurance  company  has  acknowledged  coverage of such claim in  writing),  and
either (i) within thirty (30) days after the entry of such  judgment,  shall not
have been discharged or stayed pending (or if stayed pending  appeal,  shall not
have been discharged within thirty (30) days after the entry of a final order of
affirmance on appeal), or (ii) enforcement proceedings shall be commenced by any
holder of such judgment;

         (m)  any  other  event  shall  have  occurred  that  has  had or  could
reasonably be expected to have a Material Adverse Effect; or.

         (n) any Guarantor  shall attempt to terminate its Guaranty or deny that
such Guarantor has any liability  thereunder,  or any Guaranty shall be declared
null and void and of no further force and effect.

         10.2 Remedies With Respect to Outstanding Loans. Upon the occurrence of
              ------------------------------------------
a Default or an Event of Default and continuing thereafter unless and until such
Default is cured to CIT's satisfaction or such Event of Default is

                                       42
<PAGE>

waived  by CIT in  writing,  at the  option  of CIT,  all  loans,  advances  and
extensions  of credit  provided  for in  Sections  3, 4 and 5 of this  Financing
Agreement thereafter shall be made in CIT's sole discretion,  and the obligation
of CIT to make Revolving  Loans,  and to assist the Companies in opening Letters
of Credit, shall cease. In addition, upon the occurrence of an Event of Default,
CIT may, at its option (a) declare all Obligations  immediately due and payable,
(b) charge the Companies the Default Rate of Interest on all then outstanding or
thereafter incurred Obligations in lieu of the interest provided for in Sections
8.1 of this Financing  Agreement,  and (c) immediately  terminate this Financing
Agreement upon notice to the Companies. Notwithstanding the foregoing, (x) CIT's
commitment  to make loans,  advances and  extensions  of credit  provided for in
Sections 3, 4 and 5 of this Financing  Agreement  automatically  shall terminate
without any  declaration,  notice or demand by CIT upon the  commencement of any
proceeding  described  in  Section  10.1(c),  and (y) this  Financing  Agreement
automatically  shall terminate and all Obligations  shall become due and payable
immediately  without  any  declaration,  notice  or  demand  by  CIT,  upon  the
commencement of any proceeding described in clause (i) of Section 10.1(c) or the
occurrence of an Event of Default  described in clause (ii) of Section  10.1(c).
The  exercise  of any option is not  exclusive  of any other  option that may be
exercised at any time by CIT.

         10.3   Remedies With Respect to Collateral.
                -----------------------------------

         (a) General.  Immediately  after the occurrence of an Event of Default,
CIT may, at its option,  to the extent  permitted by applicable  law: (a) remove
from any  premises  where  same may be  located  any and all books and  records,
computers, electronic media and software programs associated with any Collateral
(including  electronic records,  contracts and signatures  pertaining  thereto),
documents,  instruments and files,  and any  receptacles or cabinets  containing
same, relating to the Accounts, and CIT may use, at the Companies' expense, such
of the  Companies'  personnel,  supplies  or space at any  Company's  places  of
business or otherwise,  as may be necessary to properly  administer  and control
the Accounts or the handling of collections and realizations  thereon; (b) bring
suit, in the name of the Companies (or any of them) or CIT, and generally  shall
have all other rights respecting the Accounts,  including,  without  limitation,
the  right to (i)  accelerate  or  extend  the  time of  payment,  (ii)  settle,
compromise,  release in whole or in part any amounts  owing on any  Accounts and
(iii) issue  credits in the name of the  Companies  (or any of them) or CIT; (c)
sell,  assign  and  deliver  the  Collateral  and  any  returned,  reclaimed  or
repossessed  merchandise,  with or without  advertisement,  at public or private
sale, for cash, on credit or otherwise, at CIT's sole option and discretion, and
CIT may bid or  become a  purchaser  at any such  sale,  free  from any right of
redemption,  which  right is  hereby  expressly  waived  by the  Companies;  (d)
foreclose CIT's security  interests in the Collateral by any available  judicial
procedure,  or take possession of any or all of the Collateral  without judicial
process,  and to enter any premises  where any Collateral may be located for the
purpose of taking possession of or removing the same; and (e) exercise any other
rights and remedies  provided in law, in equity,  by any other Loan  Document or
contract  or   otherwise.   CIT  shall  have  the  right,   without   notice  or
advertisement,  to sell,  lease, or otherwise  dispose of all or any part of the
Collateral  whether  in its then  condition  or  after  further  preparation  or
processing, in the name of the Companies (or any of them) or CIT, or in the name
of such other party as CIT may designate, either at public or private sale or at
any broker's board, in lots or in bulk, for cash or for credit,  with or without
warranties or  representations  (including,  without  limitation,  warranties of
title, possession,  quiet enjoyment and the like), and upon such other terms and
conditions as CIT in its sole discretion may deem advisable,  and CIT shall have
the right to purchase at any such sale. If any  Inventory  and  Equipment  shall
require rebuilding,  repairing,  maintenance or preparation,  CIT shall have the
right,  at its option,  to do such of the  aforesaid  as is  necessary,  for the
purpose of putting the  Inventory  and  Equipment in such  saleable  form as CIT
shall deem appropriate.  The Companies agree, at the request of CIT, to assemble
the Inventory and Equipment,  and to make it available to CIT at premises of the
Companies or elsewhere and to make  available to CIT the premises and facilities
of the  Companies  for the purpose of CIT's taking  possession  of,  removing or
putting the  Inventory  and  Equipment in saleable  form.  If notice of intended
disposition  of any  Collateral  is  required by law, it is agreed that ten (10)
days notice shall  constitute  reasonable  notification and full compliance with
the law.  The net cash  proceeds  resulting  from CIT's  exercise  of any of the
foregoing rights (after deducting all  Out-of-Pocket  Expenses relating thereto)
shall be applied by CIT to the  payment of the  Obligations,  whether  due or to
become  due,  in such order as CIT may elect,  and the  Companies  shall  remain
liable  to CIT for any  deficiencies,  and CIT in turn  agrees  to  remit to the
Companies or their successors or assigns, any surplus resulting therefrom.  Upon
CIT's request,  the Companies shall pay to CIT, in immediately  available funds,
an amount equal to 110% of the face amount of any outstanding  Letters of Credit
to be held by CIT as cash collateral.  In furtherance of the foregoing,  CIT may
withhold any credit balances in the Revolving Loan Account to cover such amount.
The enumeration of the foregoing rights is not intended to be exhaustive and the
exercise of any right shall not  preclude the exercise of any other right of CIT
under  applicable  law or the  other  Loan  Documents,  all of  which  shall  be
cumulative.

                                       43
<PAGE>

         (b) Specified Intellectual  Property.  Notwithstanding any provision to
the  contrary  contained  in this  Financing  Agreement,  CIT may not assert any
right,  title or interest in or to the Specified  Intellectual  Property  (other
than the commencement of foreclosure proceedings upon the occurrence of an Event
of  Default)  unless,  during the period  extending  ninety  (90) days after the
commencement of such foreclosure  proceedings,  the Companies have not satisfied
all Obligations consisting of and arising from the Initial Additional Term Loan.

         10.4  General  Indemnity.  In addition to the  Companies'  agreement to
               ------------------
reimburse CIT for Out-of-Pocket Expenses, but without duplication, the Companies
hereby agree to indemnify CIT and its officers, directors,  employees, attorneys
and agents (each,  an  "Indemnified  Party")  from,  and to defend and hold each
Indemnified  ------------------  Party  harmless  against,  any and all  losses,
liabilities, obligations, claims, actions, judgments, suits, damages, penalties,
costs,  fees,  expenses  (including  reasonable  attorney's fees) of any kind or
nature which at any time may be imposed on,  incurred  by, or asserted  against,
any Indemnified Party:

         (a) as a result of CIT's  exercise of (or failure to  exercise)  any of
CIT's  rights and  remedies  hereunder  or any other Loan  Document,  including,
without  limitation,  (i) any  sale or  transfer  of the  Collateral,  (ii)  the
preservation,  repair,  maintenance,  preparation  for sale or  securing  of any
Collateral,  and  (iii)  the  defense  of  CIT's  interests  in  the  Collateral
(including the defense of claims brought by the Companies (or any of them), as a
debtor-in-possession  or  otherwise,  any secured or unsecured  creditors of the
Companies (or any of them), or any trustee or receiver in bankruptcy);

         (b) as a result of any environmental  pollution,  hazardous material or
environmental clean-up relating to the Real Estate, the Companies' operation and
use of the Real Estate, and the Companies' off-site disposal practices;

         (c) arising from or relating to (i) the  maintenance  and  operation of
any Depository Account, (ii) any Depository Account Control Agreements and (iii)
any action  taken (or  failure  to act) by any  Indemnified  Party with  respect
thereto;

         (d) in connection  with any regulatory  investigation  or proceeding by
any regulatory  authority or agency having  jurisdiction  over the Companies (or
any of them); and

         (e)  otherwise   relating  to  or  arising  out  of  the   transactions
contemplated by this Financing  Agreement and the other Loan  Documents,  or any
action taken (or failure to act) by any Indemnified Party with respect thereto;

provided that an Indemnified  Party's  conduct in connection with the any of the
foregoing matters does not constitute gross negligence or willful misconduct, as
finally determined by a court of competent  jurisdiction.  This  indemnification
shall survive the  termination of this  Financing  Agreement and the payment and
satisfaction  of  the   Obligations.   CIT  may  from  time  to  time  establish
Availability  Reserves with respect to this  indemnity as CIT may deem advisable
in the exercise of its reasonable  business  judgment,  and upon  termination of
this  Financing  Agreement,  CIT may hold  such  reserves  as cash  reserves  as
security for this indemnity.

SECTION 11.   Termination
              -----------

         Except as otherwise  provided in Section 10.2 hereof, CIT may terminate
this  Financing  Agreement  and the Line of Credit only as of the initial or any
subsequent  Termination  Date,  and then only by giving the  Companies  at least
ninety  (90)  days  prior  written  notice  of  termination.  If this  Financing
Agreement  is  terminated  as  contemplated  by  Section  10.2  hereof  (whether
automatically or by CIT) prior to any Termination  Date, the Companies shall pay
to CIT  any  Early  Termination  Fee and  Prepayment  Premium  due  and  payable
hereunder,  on the date of termination.  The Companies,  or any one of them, may
terminate this  Financing  Agreement at any time prior to any  Termination  Date
upon thirty (30) days prior written  notice to CIT,  provided that the Companies
pay to CIT any Early  Termination  Fee and  Prepayment  Premium  due and payable
hereunder on the date of termination.  In view of the impracticality and extreme
difficulty of ascertaining actual damages and by mutual agreement of the parties
as to a reasonable  calculation of CIT's lost profits as a result thereof,  such
Early  Termination  Fee and  Prepayment  Premium shall  constitute a part of the
Obligations,  be  presumed  to be the  amount of damages  sustained  by CIT as a
result of such  early  termination  and the  Companies  agree

                                       44
<PAGE>

that  such  fees  are  reasonable  under  currently  existing  circumstances.  A
termination  by any one Company shall be deemed a termination  by all Companies.
THIS  FINANCING   AGREEMENT,   UNLESS  TERMINATED  AS  HEREIN  PROVIDED,   SHALL
AUTOMATICALLY   CONTINUE  FROM  TERMINATION   DATE  TO  TERMINATION   DATE.  All
Obligations  shall become due and payable in full on the date of any termination
hereunder  and,  pending a final  accounting of the  Obligations,  the Companies
shall pay to CIT, in immediately  available funds, an amount sufficient to cover
any contingent Obligations then outstanding, including, but not limited to, 110%
of the face  amount of any  outstanding  Letters  of Credit to be held by CIT as
cash  collateral.  In furtherance of the foregoing,  CIT may withhold any credit
balances  in the  Revolving  Loan  Account  to cover such  amount.  All of CIT's
rights,  liens and security  interests  granted  pursuant to the Loan  Documents
shall continue  after any  termination  of this  Financing  Agreement  until all
Obligations  have  been  fully  and  finally  paid  and  satisfied  (other  than
Obligations collateralized as aforesaid).

SECTION 12.   Miscellaneous
              -------------

         12.1  Waivers.   The   Companies   hereby  waive   diligence,   demand,
               -------
presentment,  protest and any notices  thereof as well as notices of nonpayment,
intent to accelerate and  acceleration.  No waiver of an Event of Default by CIT
shall be effective unless such waiver is in writing and signed by CIT, and shall
be binding as against both  Lenders.  No delay or failure of CIT to exercise any
right or remedy hereunder, whether before or after the happening of any Event of
Default,  shall impair any such right or remedy, or shall operate as a waiver of
such right or remedy,  or as a waiver of such Event of Default.  A waiver on any
one occasion shall not be construed as a bar to or waiver of any right or remedy
on any future  occasion.  No single or partial  exercise  by CIT of any right or
remedy precludes any other or further exercise  thereof,  or precludes any other
right or remedy.

         12.2 Entire  Agreement;  Amendments.  This Financing  Agreement and the
              ------------------------------
other Loan Documents:  (a) constitute the entire agreement between the Companies
and CIT; (b) supersede any prior agreements  (including the agreements set forth
in the  Commitment  Letter);  (c) may be amended only by a writing signed by the
Companies  and CIT (which  shall be binding as against  both  Lenders);  and (d)
shall bind and benefit the Companies and CIT and their respective successors and
assigns, except that no Company shall not have the right to assign (by operation
of law or otherwise) its rights or obligations  hereunder or any interest herein
without the prior  written  consent of CIT.  Should the  provisions  of any Loan
Document  conflict  with  the  provisions  of  this  Financing  Agreement,   the
provisions of this Financing Agreement shall apply and govern.

         12.3 Usury Limit.  In no event shall the Companies,  upon demand by CIT
              -----------
for payment of any indebtedness relating hereto, by acceleration of the maturity
thereof,  or  otherwise,  be obligated to pay interest and fees in excess of the
amount permitted by law.  Regardless of any provision herein or in any agreement
made in connection herewith,  CIT shall never be entitled to receive,  charge or
apply, as interest on any indebtedness  relating hereto, any amount in excess of
the maximum amount of interest  permissible  under  applicable  law. If CIT ever
receives,  collects  or applies  any such  excess,  it shall be deemed a partial
repayment of principal and treated as such. If as a result, the entire principal
amount  of the  Obligations  is paid in  full,  any  remaining  excess  shall be
refunded to the Companies. This Section 12.3 shall control every other provision
of the Financing  Agreement,  the other Loan  Documents and any other  agreement
made in connection herewith.

         12.4  Severability.  If  any  provision  hereof  or of any  other  Loan
               ------------
Document is held to be illegal or  unenforceable,  such provision shall be fully
severable, and the remaining provisions of the applicable agreement shall remain
in full  force  and  effect  and  shall  not be  affected  by  such  provision's
severance.  Furthermore,  in lieu of any such  provision,  there  shall be added
automatically  as a part of the  applicable  agreement  a legal and  enforceable
provision as similar in terms to the severed provision as may be possible.

         12.5 WAIVER OF JURY TRIAL;  SERVICE OF PROCESS.  EACH COMPANY,  CIT AND
              -----------------------------------------
THE  LENDERS  EACH  HEREBY  WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING  ARISING OUT OF OR RELATING TO THE LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREUNDER. EACH COMPANY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE
OF PROCESS AND CONSENTS TO SERVICE OF PROCESS BY

                                       45
<PAGE>

CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED.  IN NO EVENT WILL CIT BE
LIABLE FOR LOST PROFITS OR OTHER SPECIAL OR CONSEQUENTIAL DAMAGES.

         12.6 Notices.  Except as otherwise herein provided, any notice or other
              -------
communication required hereunder shall be in writing (messages sent by e-mail or
other electronic  transmission (other than by telecopier) shall not constitute a
writing,  however  any  signature  on  a  document  or  other  writing  that  is
transmitted  by e-mail or  telecopier  shall  constitute a valid  signature  for
purposes  hereof),  and shall be deemed to have been  validly  served,  given or
delivered when received by the recipient if hand  delivered,  sent by commercial
overnight courier or sent by facsimile, or three (3) Business Days after deposit
in the United States mail, with proper first class postage prepaid and addressed
to the party to be notified as follows:

         (a)      if to CIT, from and after the date hereof  through  October 1,
                  2006, at:

                  The CIT Group/Commercial Services, Inc.
                  1211 Avenue of the Americas
                  12th Floor
                  New York, NY  10036
                  Attn: Regional Credit Manager
                  Telecopier No.: (212) 382-6875;

                  And after October 1, 2006, at:

                  The CIT Group/Commercial Services, Inc.
                  11 West 42nd Street
                  11th Floor
                  New York, NY  10017
                  Attn: Regional Credit Manager
                  Telecopier No.: (212) 382-6875;

With a courtesy copy of any notice to CIT's counsel at:

                  Stradley Ronon Stevens & Young, LLP
                  2600 One Commerce Square
                  Philadelphia, PA  19103
                  Attention: Gary P. Scharmett, Esquire
                  Telecopier No.: (215) 564-8120

         (b)      if to the Companies (or any of them) at:

                  Ronson Corporation
                  Corporate Park III
                  Campus Drive
                  P.O. Box 6707
                  Somerset, NJ  08875
                  Attn: Mr. Louis V. Aronson II
                  Telecopier No.: (732) 469-6079

                                       46
<PAGE>

With a courtesy copy of any notice to Companies' counsel at:

                  McCarter & English, LLP
                  Four Gateway Center
                  100 Mulberry Street
                  Newark, NJ  07102
                  Attn: Andrew T. Berry, Esquire
                  Telecopier No.: (973) 624-7070; or

         (c)      to such other address as any party may designate for itself by
                  like notice.

Each  of  the  Companies  hereby  designates  the  Funds  Administrator  as  its
representative  and agent on its behalf for the purposes of giving and receiving
all  notices  and  consents  under  this  Financing  Agreement,  the other  Loan
Documents or under any other documents,  instrument or agreement related thereto
and taking all other actions (including in respect of compliance with covenants)
on behalf of itself and/or each of the other Companies under the Loan Documents.
The Funds  Administrator  hereby  accepts such  appointment.  CIT may regard any
notice or other  communication  pursuant to any of the Loan  Documents  from the
Funds Administrator as a notice or communication from each of the Companies, and
may give any notice or communication required or permitted to be given to any of
the Companies under any of the Loan Documents to the Funds  Administrator.  Each
of the Companies agrees that each notice, election, representation and warranty,
covenant,   agreement  and   undertaking   made  on  its  behalf  by  the  Funds
Administrator  shall be deemed for all purposes to have been made by such entity
and shall be binding upon and enforceable against such entity to the same extent
as if the same had been made directly by such entity.

         12.7     Joint and Several Liability.
                  ---------------------------

         (a) Joint and Several  Liability.  All  Revolving  Loans and Term Loans
made to the Domestic  Companies  shall be deemed jointly funded to, and received
by, such Companies.  Each Domestic  Company jointly and severally agrees to pay,
and shall be jointly and severally  liable for the payment and  performance  of,
all Obligations.  Each Domestic  Company  acknowledges and agrees that the joint
and several  liability  of such Company is provided as an  inducement  to CIT to
provide loans and other financial accommodations to the Companies, and that each
such loan or other financial  accommodation shall be deemed to have been done or
extended by CIT in consideration of, and in reliance upon, the joint and several
liability of the  Domestic  Companies.  The joint and several  liability of each
Domestic Company hereunder is absolute, unconditional and continuing, regardless
of the validity or enforceability of any of the Obligations,  or the fact that a
security interest or lien in any Collateral may not be enforceable or subject to
equities or defenses  or prior  claims in favor of others,  or may be invalid or
defective in any way and for any reason.  Each Domestic  Company  hereby waives:
(i) all  notices to which such  Company may be  entitled  as a  co-obligor  with
respect  to  the  Obligations,  including,  without  limitation,  notice  of (x)
acceptance  of this  Financing  Agreement,  (y) the  making  of  loans  or other
financial  accommodations  under this  Financing  Agreement,  or the creation or
existence of the Obligations,  and (z) presentment,  demand,  protest, notice of
protest  and  notice  of  non-payment;  and (ii) all  defenses  based on (w) any
modification  (or series of  modifications)  of this Financing  Agreement or the
other  Loan  Documents  that may  create  a  substituted  contract,  or that may
fundamentally alter the risks imposed on such Company hereunder, (x) the release
of any other Company from its duties this Financing  Agreement or the other Loan
Documents,  or the extension of the time of performance  of any other  Company's
duties  hereunder  or  thereunder,  (y) the  taking,  releasing,  impairment  or
abandonment of any Collateral,  or the settlement,  release or compromise of the
Obligations or any other  Company's or Guarantor's  liabilities  with respect to
all or any portion of the  Obligations,  or (z) any other act (or any failure to
act) that  fundamentally  alters the risks  imposed on such Company by virtue of
its joint and several  liability  hereunder.  It is the intent of each  Domestic
Company by this paragraph to waive any and all suretyship  defenses available to
such  Company  with  respect to the  Obligations,  whether  or not  specifically
enumerated above.

         (b) Subrogation and Contribution  Rights.  Each Domestic Company hereby
agrees that until the full and final payment and satisfaction of the Obligations
and the termination of this Financing Agreement,  such Company will not exercise
any  subrogation,  contribution  or other  right or  remedy  against  any  other
Domestic Company or any security

                                       47
<PAGE>

for  any of the  Obligations  arising  by  reason  of  such  Domestic  Company's
performance or satisfaction  of its joint and several  liability  hereunder.  In
addition,  each Domestic Company agrees that (i) such Company's right to receive
any payment of amounts due with  respect to such  subrogation,  contribution  or
other rights is subordinated  to the full and final payment and  satisfaction of
the  Obligations,  and  (ii)  such  Company  agrees  not to  demand,  sue for or
otherwise  attempt to collect any such payment  until the full and final payment
and  satisfaction  of the  Obligations  and the  termination  of this  Financing
Agreement.

         12.8 CHOICE OF LAW. THE VALIDITY,  INTERPRETATION  AND  ENFORCEMENT  OF
              -------------
THIS FINANCING  AGREEMENT AND THE OTHER LOAN DOCUMENTS  SHALL BE GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT ANY OTHER LOAN
DOCUMENT  INCLUDES  AN EXPRESS  ELECTION  TO BE  GOVERNED BY THE LAWS OF ANOTHER
JURISDICTION.

         12.9 Choice of Forum. . Each Company,  CIT and the Lenders  irrevocably
              ---------------
consent and submit to the non-exclusive  jurisdiction of the courts of the State
of New York and the United States  District  Court for the Southern  District of
New York,  whichever CIT may elect,  and waive any  objection  based on venue or
forum non conveniens with respect to any action instituted therein arising under
this  Financing  Agreement  or any of the  other  Loan  Documents  or in any way
connected with or related or incidental to the dealings of the parties hereto in
respect of this  Financing  Agreement or any of the other Loan  Documents or the
transactions  related  hereto or thereto,  in each case  whether now existing or
hereafter arising, and whether in contract, tort, equity or otherwise, and agree
that any dispute  with  respect to any such  matters  shall be heard only in the
courts described above (except that CIT shall have the right to bring any action
or  proceeding  against any  Company or its  property in the courts of any other
jurisdiction which CIT deems necessary or appropriate in order to realize on the
Collateral  or to  otherwise  enforce  its rights  against  such  Company or its
property).

         12.10   Interpretative Provisions.
                 -------------------------

         (a) All  references  to the plural  herein shall also mean the singular
and to the  singular  shall also mean the plural  unless the  context  otherwise
requires.

         (b) All references to the Companies,  Guarantor(s)  and CIT pursuant to
the definitions set forth in the recitals hereto, or to any other person herein,
shall include their  respective  successors and assigns and, in the case of CIT,
shall refer to it individually and include the Canadian Lender,  and refer to it
in its capacity as agent for itself and the Canadian Lender, where appropriate.

         (c) The word  "including"  when used in this Financing  Agreement shall
mean  "including,  without  limitation"  and the word  "will"  when used in this
Financing  Agreement  shall be  construed to have the same meaning and effect as
the word "shall."

         (d) A Default shall remain outstanding until such Default is cured in a
manner  satisfactory  to CIT,  if such  Default  is  capable  of being  cured as
determined  by CIT and an Event of Default shall remain  outstanding  until such
Event of Default is waived in writing by CIT.

         (e) In the  computation  of periods of time from a specified  date to a
later specified date, the word "from" means "from and including," the words "to"
and "until" each mean "to but excluding"  and the word  "through"  means "to and
including."

         (f) The captions and headings of this Agreement are for  convenience of
reference only and shall not affect the interpretation of this Agreement.

         12.11 Counterparts, Etc. . This Financing Agreement or any of the other
               --------------------
Loan  Documents  may be  executed in any number of  counterparts,  each of which
shall be an original,  but all of which taken together shall  constitute one and
the same  agreement.  Delivery  of an  executed  counterpart  of this  Financing
Agreement or any of the other Loan  Documents  by facsimile or other  electronic
method of transmission shall have the same force and effect as the delivery of

                                       48
<PAGE>

an original  executed  counterpart  of this  Financing  Agreement or any of such
other Loan Documents.  Any party delivering an executed  counterpart of any such
agreement by facsimile or other  electronic  method of  transmission  shall also
deliver an  original  executed  counterpart,  but the failure to do so shall not
affect the validity, enforceability or binding effect of such agreement.

         IN WITNESS  WHEREOF,  the parties  hereto  have  caused this  Financing
Agreement to be executed by their proper and duly authorized  officers as of the
date set forth above.

<TABLE>
<CAPTION>

<S>                                                 <C>
RONSON CORPORATION                                   THE CIT GROUP/COMMERCIAL SERVICES,
                                                     INC., as agent for itself and for CIT FINANCIAL LTD.

By:      /s/ Louis V. Aronson II                     By:      /s/ Peter L. Austin
         -------------------------------------                -------------------------------------
Name:    Louis V. Aronson II                         Name:    Peter L. Austin
Title:   President and Chief Executive Officer       Title:   Vice President

RONSON AVIATION, INC.                                RONSON CONSUMER PRODUCTS CORPORATION:

By:      /s/ Louis V. Aronson II                     By:      /s/ Louis V. Aronson II
         -------------------------------------                -------------------------------------
Name:    Louis V. Aronson II                         Name:    Louis V. Aronson II
Title:   President and Chief Executive Officer       Title:   President and Chief Executive Officer

RONSON CORPORATION OF CANADA LTD                     CIT FINANCIAL LTD.

By:      /s/ Louis V. Aronson II                     By:      /s/ S. Grassa
         -------------------------------------                -------------------------------------
Name:    Louis V. Aronson II                         Name:    S. Grassa
Title:   President and Chief Executive Officer       Title:   Vice President

</TABLE>

                                       49
<PAGE>

                                    EXHIBIT A

                    FORM OF INITIAL TERM LOAN PROMISSORY NOTE

$195,000.00                                                      July ____, 2006
                                                      Philadelphia, Pennsylvania

         FOR VALUE RECEIVED, the undersigned,  RONSON CORPORATION,  a New Jersey
corporation, RONSON CONSUMER PRODUCTS CORPORATION, a New Jersey corporation, and
RONSON AVIATION, INC., a New Jersey corporation  (individually and collectively,
the "Company"),  hereby,  jointly and severally,  promise to pay to the order of
THE CIT  GROUP/COMMERCIAL  SERVICES,  INC. ("CIT") at its office located at 1211
Avenue of the Americas, 12th Floor, New York, New York 10036, in lawful money of
the United States of America and in immediately  available  funds, the principal
amount of One Hundred Ninety-Five Thousand and 00/100 Dollars ($195,000.00),  in
sixty (60) equal consecutive  monthly  principal  installments of $3,250.00 each
with the  first  such  installment  due and  payable  on  September  1, 2006 and
subsequent installments (including the final installment) due and payable on the
first day of each month thereafter  until this Note is paid in full,  subject to
the payment and acceleration  provisions set forth in the last paragraph of this
Note.

                  The Company further agrees to pay interest at said office,  in
like money,  on the unpaid  principal  amount owing  hereunder from time to time
from the date hereof on the dates and at the rates specified in Section 8 of the
Financing  Agreement  of even date  herewith  between  the  Company and CIT (the
"Financing  Agreement").  Capitalized terms used in this Note and defined in the
Financing Agreement shall have the meanings given to such terms in the Financing
Agreement unless otherwise specifically defined herein.

                  This Note is a Promissory  Note  referred to in the  Financing
Agreement,  evidences the Initial Term Loan made to the Company thereunder,  and
is subject to, and entitled to, all provisions and benefits  thereof,  including
optional and mandatory prepayment, in whole or in part, as provided therein.

         Notwithstanding any other provision of this Note to the contrary,  upon
the occurrence of any Event of Default specified in the Financing Agreement,  or
upon  termination  of the Financing  Agreement for any reason,  all amounts then
remaining  unpaid on this Note may  become,  or be  declared  to be, at the sole
election  of CIT,  immediately  due and  payable as  provided  in the  Financing
Agreement.

                                  RONSON CORPORATION

                                  By:
                                      -----------------------------------------
                                  Name:    Louis V. Aronson II
                                  Title:   President and Chief Executive Officer

                                  RONSON CONSUMER PRODUCTS
                                  CORPORATION

                                  By:
                                      -----------------------------------------
                                  Name:    Louis V. Aronson II
                                  Title:   President and Chief Executive Officer

                                  RONSON AVIATION, INC.

                                  By:
                                      -----------------------------------------
                                  Name:    Louis V. Aronson II
                                  Title:   President and Chief Executive Officer

                                       50
<PAGE>

                                    EXHIBIT B

              FORM OF INITIAL ADDITIONAL TERM LOAN PROMISSORY NOTE

$750,000.00                                                      July ____, 2006
                                                      Philadelphia, Pennsylvania

         FOR VALUE RECEIVED, the undersigned,  RONSON CORPORATION,  a New Jersey
corporation, RONSON CONSUMER PRODUCTS CORPORATION, a New Jersey corporation, and
RONSON AVIATION, INC., a New Jersey corporation  (individually and collectively,
the "Company"),  hereby,  jointly and severally,  promise to pay to the order of
THE CIT  GROUP/COMMERCIAL  SERVICES,  INC. ("CIT") at its office located at 1211
Avenue of the Americas, 12th Floor, New York, New York 10036, in lawful money of
the United States of America and in immediately  available  funds, the principal
amount of Seven  Hundred Fifty  Thousand and 00/100  Dollars  ($750,000.00),  in
sixty (60) equal consecutive  monthly principal  installments of $12,500.00 each
with the  first  such  installment  due and  payable  on  September  1, 2006 and
subsequent installments (including the final installment) due and payable on the
first day of each month thereafter  until this Note is paid in full,  subject to
the payment and acceleration  provisions set forth in the last paragraph of this
Note.

                  The Company further agrees to pay interest at said office,  in
like money,  on the unpaid  principal  amount owing  hereunder from time to time
from the date hereof on the dates and at the rates specified in Section 8 of the
Financing  Agreement  of even date  herewith  between  the  Company and CIT (the
"Financing  Agreement").  Capitalized terms used in this Note and defined in the
Financing Agreement shall have the meanings given to such terms in the Financing
Agreement unless otherwise specifically defined herein.

                  This Note is a Promissory  Note  referred to in the  Financing
Agreement,  evidences  the  Initial  Additional  Term Loan  made to the  Company
thereunder,  and is subject to, and  entitled  to, all  provisions  and benefits
thereof,  including optional and mandatory  prepayment,  in whole or in part, as
provided therein.

         Notwithstanding any other provision of this Note to the contrary,  upon
the occurrence of any Event of Default specified in the Financing Agreement,  or
upon  termination  of the Financing  Agreement for any reason,  all amounts then
remaining  unpaid on this Note may  become,  or be  declared  to be, at the sole
election  of CIT,  immediately  due and  payable as  provided  in the  Financing
Agreement.

                                  RONSON CORPORATION

                                  By:
                                      -----------------------------------------
                                  Name:    Louis V. Aronson II
                                  Title:   President and Chief Executive Officer

                                  RONSON CONSUMER PRODUCTS
                                  CORPORATION

                                  By:
                                      -----------------------------------------
                                  Name:    Louis V. Aronson II
                                  Title:   President and Chief Executive Officer

                                  RONSON AVIATION, INC.

                                  By:
                                      -----------------------------------------
                                  Name:    Louis V. Aronson II
                                  Title:   President and Chief Executive Officer

                                       51
<PAGE>

                                    EXHIBIT C

                             COMPLIANCE CERTIFICATE

                                              [Date]

The CIT Group/Commercial Services, Inc.

---------------------------

---------------------------

Chicago, IL  60603

         RE:      Financing   Agreement  dated  as  of  July  [___],  2006  (the
                  "Financing   Agreement")   among   The  CIT   Group/Commercial
                  Services,   Inc.  ("CIT")  and  Ronson   Corporation,   Ronson
                  Aviation,  Inc.,  Ronson  Consumer  Products  Corporation  and
                  Ronson  Corporation  of  Canada,   Inc.   (collectively,   the
                  "Companies")

Ladies and Gentlemen:

         Reference is made to the Financing  Agreement.  Capitalized  terms used
herein and not specifically  defined shall have the meanings given to such terms
in the Financing Agreement.

         Pursuant to Section  7.2(h) of the Financing  Agreement,  I enclose the
Companies'  financial  statements  for  the  month  ended  _______,  200__  (the
"Reporting Month") and the fiscal year-to-date  period ended _______,  200__. As
the ________ of the Funds  Administrator,  I hereby certify to CIT, on behalf of
the  Companies,  that:  (a) the  financial  statement(s)  fairly and  accurately
present  the  Companies'  financial  condition  at the  end  of  the  particular
accounting  periods  covered  by  such  financial  statements,  as  well  as the
Companies' operating results during such accounting periods, subject to year-end
audit  adjustments;  (b) during the Reporting Month, (i) to my knowledge,  there
has occurred no Default or Event of Default under the Financing  Agreement,  or,
if I have  knowledge  that any Default or Event of Default has  occurred  during
such  period,  a detailed  description  thereof  is set forth on the  Exhibit __
attached  hereto,  and (ii)  the  Companies  have not  received  any  notice  of
cancellation with respect to its property insurance policies; and (c) Exhibit __
attached  hereto sets forth detailed  calculations  showing  compliance with all
financial  covenants  contained in the Financing  Agreement,  for the periods of
measurement covered by or ending on the last day of the Reporting Month.

                                              Very truly yours,

                          [attach appropriate exhibits]

                                       52
<PAGE>

                    Schedule 1.1(a) - Permitted Encumbrances

1.       Liens  on  automobile(s)  held by JP  Morgan  Chase  NA  under  secured
         financing due June 30, 2009.
2.       Liens  on  automobile(s)  held  by  Ford  Motor  Credit  under  secured
         financing due March 15, 2009.
3.       Liens  on  automobile(s)  held  by  Ford  Motor  Credit  under  secured
         financing due December 9, 2008.
4.       Liens  on  automobile(s)  held  by  Ford  Motor  Credit  under  secured
         financing due July 12, 2008.
5.       Lien on RVSM Air Data Test set held by Bevenco under Finance Agreement,
         due June 30, 2011.

<PAGE>

                    Schedule 1.1(b) - Permitted Indebtedness
                    ---------------

<TABLE>
<CAPTION>

BORROWER and LENDER                                            TYPE                 SECURITY OR             FINAL
                                                                                   LEASED ASSEPT            DUE DATE
<S>                                                     <C>                        <C>                      <C>

A.       RONSON CORPORATION
         JP Morgan Chase NA                             Secured Term                    Auto                6/30/09
         (monthly payment to JP Morgan Chase NA is $1,685.99 and balance at June 30, 2006 is $55,009.94)

B.       RONSON CONSUMER PRODUCTS CORP.
         LIT-Nicholas Ridge                             Rental/TI                       None               02/01/11
                                                        Obligations
         (monthly payment to LIT-Nicholas Ridge is $4,818.33 and balance at June 30, 2006 is $233,833.67)

         Ford Motor Credit                              Secured term                    Auto               03/15/09
                (monthly payment to Ford Motor Credit is $650.00 and balance at June 30, 2006 is $21,173.27)
         Wells Fargo*                                   Equipment Lease       SB Forklifts & Racking        1/2008
         (monthly payment is $2,292.46 and balance at June 30, 2006 is $40,016)

         Pitney Bowes                                   Equipment Lease       Digital Postage Machine       12/2010
         (monthly payment is $330.00 and balance at June 30, 2006 is $16,726)

         NHMG Financial                                 Equipment Lease       Used 2002 Yale Forklift       7/2010
         (monthly payment is $306.00 and balance at June 30, 2006 is $12,879)

         Banc of America Leasing                        Equipment Lease       Coster Aerosol Line           11/2010
         (monthly payment is $15,997.73 and balance at June 30, 2006 is $620,196)

         Banc of America Leasing                        Equipment Lease       Alpha Checkweigher            11/2010
         (monthly payment is $540.32 and balance at June 30, 2006 is $23,020)

         Banc of America Leasing                        Equipment Lease       Kidde Firewall Fire           11/2010
                                                                              System
         (monthly payment is $461.50 and balance at June 30, 2006 is $19,303)

         Banc of America Leasing                        Equipment Lease       Dartonics Ink Jet             11/2010
         (monthly payment is $190.58 and balance at June 30, 2006 is $7,829)

         Banc of America Leasing                        Equipment Lease       Hansen Timing                 9/2010
         (monthly payment is $92.30 and balance at June 30, 2006 is $3,578)

         Banc of America Leasing                                              Rockford Midland              9/2009
         (monthly payment is $799.12 and balance at June 30, 2006 is $30,356)

         Banc of America Leasing                        Equipment Lease       M-F Case Packer               10/2011
         (monthly payment is $3,526.91 and balance at June 30, 2006 is $186,742)

         Banc of America Leasing                        Equipment Lease       Boiler                        10/2011

         (monthly payment is $1,339.20 and balance at June 30, 2006 is $70,908)

         Banc of America Leasing                        Equipment Lease       Hoppman Cap Feeder            8/2011
         (monthly payment is $443.75 and balance at June 30, 2006 is $22,890)

* Combined on one lease under the name of Ronson Corporation.

                                       53
<PAGE>

C.       RONSON AVIATION, INC.
         Ford Motor Credit                              Secured term                   Auto                 12/09/08
         (monthly payment to Ford Motor Credit is $194.57 and balance at June 30, 2006 is $5,158.90)

         Ford   Motor Credit                            Secured term                   Auto                 07/12/08
         (monthly payment to Ford Motor Credit is $317.83 and balance at June 30, 2006 is $7,143.06)

         Wells Fargo*                                   Equipment Lease            De-ice truck             1/2008
         (monthly payment is $1,115.39 and balance at June 30, 2006 is $19,178.04)

         Bevenco/US Bancorp.                            Secured term               RVSM Air Data          06/30/11
                                                                                       Test Set
         (monthly payment is $457.88 and balance at June 30, 2006 is $19,900)

         * Combined on one lease under the name of Ronson Corporation.

</TABLE>

D. Contribution  Agreement dated July 31, 2006 by and between Ronson Corporation
and Louis V. Aronson II, so long as and to the extent that Ronson  Corporation's
obligations to make payments thereunder are subordinate to the Obligations.

E. ISDA Agreement between Ronson Corporation and Bank of America.

F.  Contribution,  subrogation  and other  rights and  remedies of any  Domestic
Company  against any other Company or any  Collateral  arising by reason of such
Domestic  Company's  performance  or  satisfaction  of  its  joint  and  several
liability  under the Loan  Documents,  so long as and to the extent  that Ronson
Corporation's rights thereunder are subordinate to the Obligations.

                                       54
<PAGE>

                      Schedule 1.1(c) - Permitted Tax Liens
                      ---------------

1.  Certificate  of Debt entered May 11, 2006 in the Superior Court of the State
of New Jersey,  against  Ronson  Corporation,  with a stated  amount  (including
penalty,   interest  and  costs  of   collection)  of   $229,558.39,   of  which
approximately $123,517 is due as of the date hereof.

                                       55
<PAGE>

                  Schedule 1.1(d) - Description of Real Estate
                  ---------------

The  contiguous  plot of property  located at 3 Ronson  Road and 6 Ronson  Road,
Woodbridge,  New Jersey, known as Lot 1-D, Block 367 as shown on the Township of
Woodbridge tax map.

                                       56
<PAGE>

              Schedule 7.1(b) - Company and Collateral Information
              ---------------

Exact Company Name in State of Incorporation:
--------------------------------------------

         Ronson Corporation

State of Incorporation or Formation:
------------------------------------

         New Jersey

F.E.I.N.:
---------

         22-0743290

State Organizational No.:
-------------------------
         7693250000

Address of Chief Executive Office:
----------------------------------

         Corporate Park III, Campus Drive
         PO Box 6707
         Somerset, NJ  08875

Collateral Locations:
---------------------

         Corporate Park III, Campus Drive
         Somerset, NJ  08875

Exact Company Name in State of Incorporation:
--------------------------------------------

         Ronson Consumer Products Corporation

State of Incorporation or Formation:
------------------------------------

         New Jersey

F.E.I.N.:
---------

         22-2380407

State Organizational No.:
-------------------------
         0100153715

Address of Chief Executive Office:
----------------------------------

         Corporate Park III, Campus Drive
         PO Box 6707
         Somerset, NJ  08875

                                       57
<PAGE>

Collateral Locations:
---------------------

         3 Ronson Road, Woodbridge, NJ  07095
         6 Ronson Road, Woodbridge, NJ  07095
         178 Ridge Road, Dayton, NJ  08810

Exact Company Name in State of Incorporation:
--------------------------------------------
         Ronson Aviation, Inc.

State of Incorporation or Formation:
------------------------------------
         New Jersey

F.E.I.N.:
---------
         21-0729844

State Organizational No.:
-------------------------
         7693211000

Address of Chief Executive Office:
----------------------------------
         Corporate Park III, Campus Drive
         PO Box 6707
         Somerset, NJ 08875

Collateral Locations:
---------------------
         Trenton-Mercer Airport, Trenton, NJ 08628

Exact Company Name in State of Incorporation:
--------------------------------------------
         Ronson Corporation of Canada Ltd.

State of Incorporation or Formation:
------------------------------------
         Ontario, Canada

F.E.I.N.:
---------
         12177 8682 RC0001

State Organizational No.:
-------------------------
         629727

Address of Chief Executive Office:
----------------------------------
         Corporate Park III, Campus Drive
         P0 Box 6707
         Somerset, NJ 08875

Collateral Locations:
---------------------
         5810 Ambler Drive, Unit 12
         Mississauga, Ontario L4W4J5

                                       58
<PAGE>

                     Schedule 7.1(f) - Environmental Matters
                     ---------------

Groundwater contamination existing at the Prometcor, Inc. site, located at 35-65
Manufacturer's  Place,  Newark, New Jersey. The estimated liability for remedial
cost and expense associated with any remaining groundwater  contamination at the
Prometcor site was estimated at a lower limit of  approximately  $500,000 and at
an upper limit of approximately $1.1 million.

Contamination at the site of Trenton-Mercer Airport, Trenton, New Jersey. Ronson
Aviation,  Inc. removed underground fuel storage tanks during the period between
1999 and  2006,  as  required  by the New  Jersey  Department  of  Environmental
Protection.  Final testing of the soil has not been completed or accepted by the
NJDEP.

Contamination,  if any, in the soil from an  underground  storage  tank used for
heating oil at the site of Ronson Consumer Products Corporation,  6 Ronson Road,
Woodbridge, New Jersey. When the storage tank was removed a vent pipe was noted.
Currently an investigation as to the source of the vent pipe is underway.

                                       59
<PAGE>

                          Schedule 7.1(g) - Litigation
                          ---------------

         Steel  Partners  II,  L.P.,  et al v. Louis V.  Aronson  II,  Robert A.
Aronson, Erwin M. Ganz, I. Leo Motiuk, Gerard J. Quinnan, Justin P. Walder, Saul
H. Weisman,  Carl W. Dinger III and Ronson Corporation (March 25, 2003; Superior
Court of New Jersey, Chancery Division, Essex County).

         Steel  Partners  II, L.P. v. Louis V.  Aronson II,  Robert A.  Aronson,
Barbara L. Collins, Carl W. Dinger III, Paul H. Einhorn, Erwin M. Ganz, Daryl K.
Holcomb, I. Leo Motiuk, Gerard J. Quinnan, Justin P. Walder, and Saul H. Weisman
(April 14, 2005; United States District Court for the District of New Jersey).

         Juraj Kosco and Maria Kosco vs. Ronson Consumer  Products  Corporation,
Ronson Corporation,  Industrial Waste Management,  Inc., Cuno Incorporated,  XYZ
Corporations #1-10 (fictitious parties), John and/or Jane Does #1-10 (fictitious
individuals) (Middlesex County, Docket No. L-3508-03).

         Steven  Gregory  v.  Easton  Enterprise,  Inc.  (Superior  Court of New
Jersey, Camden County, Docket No. L-2911-06).

         Lenora Crichton v. Ronson Corporation of Canada Ltd. and Canada Safeway
Limited (The Queens Bench, Winnipeg Centre, File No. CL-02-01-27574).

                                       60
<PAGE>

                  Schedule 7.1(h) - Subsidiaries and Affiliates
                  ---------------

Ronson Consumer Products Corporation, a New Jersey corporation
Ronson Corporation of Canada Ltd., an Ontario corporation
Ronson Aviation, Inc., a New Jersey corporation
Ronson Hydraulic Units Corporation, a North Carolina corporation
Prometcor, Inc., a New Jersey corporation

                                       61
<PAGE>

                  Schedule 7.4(i) - Related Party Transactions
                  ---------------

1.  Transactions  described under clause (w) of Section 7.4(h) of this Financing
Agreement, which information is incorporated herein by reference.

                                       62
<PAGE>

                         Schedule 7.4(l) - Bank Accounts
                         ---------------

A. Current Bank Accounts with Bank of America/CIBC:
Name                                                       Account No.
----                                                       -----------

Ronson Corporation
     Operating Account                                     940706741*
     State Tax Payout Account                              940707039*
     401 (K) Contribution Account                          4225022219*
     Payroll Account                                       940706806*
     Special Account                                       0313-22295*

Ronson Consumer Products Corp.
     Operating Account                                     940706725*
     Payroll Account                                       940706733*
     Tax Payment Account                                   4225006078*
     COD Account                                           009458814189*
     Disbursement Account                                  0080212918*
     Cash Collateral (not needed)                          940706717++
     Lockbox address                                       PO Box 23155*
                                                           Newark, NJ 07189

Ronson Aviation, Inc.
     Operating Account                                     000241000203*
     Payroll Account                                       000261000373*
     Credit Card Payment Account                           004284032295++
     EFT Tax Transfer Account                              0042220009483*

Ronson Corporation of Canada Ltd.
     Operating Account                                     80-00816
     Lockbox address                                       PO Box 3527
                                                           Toronto, Ontario
                                                           Canada M5L1K1

*This  account  will be closed by the Company  following  the  Closing  Date and
reopened at another financial institution reasonably satisfactory to CIT.

++This account will be closed by the Company following the Closing Date.

B. Depository Accounts with Wachovia Bank:
Name:                                                         Account number:

Ronson Corporation (CIT Account)                              2000018598065
--------------------------------

Ronson Consumer Products Corporation (CIT Account)            2000017267135
--------------------------------------------------

Ronson Aviation, Inc. (CIT Account)                           2000017267148
-----------------------------------

                                       63

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}]]