AMENDMENT TO CREDIT AGREEMENT AND SECURITY AGREEMENT
Exhibit
10.1
AMENDMENT TO CREDIT
AGREEMENT AND SECURITY AGREEMENT
This
Amendment to Credit and Security Agreement (the “Amendment”) is
entered into as of this 29th day of July, 2010 by and among RCLC, Inc. (formerly
known as Ronson Corporation), a New Jersey corporation (“Parent”), RCPC
Liquidating Corp. (formerly known as Ronson Consumer Products Corporation), a
New Jersey corporation (“RCPC”), Ronson
Aviation, Inc., a New Jersey corporation (“RAI”) and RCC Inc.
(formerly known as Ronson Corporation of Canada Ltd.), an Ontario corporation
(“Ronson
Canada”) (RCPC and RAI are collectively and individually referred to as
the “Domestic
Borrower” or “Domestic Borrowers”;
the Domestic Borrower and Ronson Canada are collectively and individually
referred to as the “Borrower” or “Borrowers”, and the
Borrowers, together with Parent are collectively and individually referred to as
the “Obligors”)
and ▇▇▇▇▇ Fargo Bank, National Association (“Lender”), acting
through its ▇▇▇▇▇ Fargo Business Credit operating division.
RECITALS:
Borrowers
and Lender are parties to a certain Credit and Security Agreement dated as of
May 30, 2008 (as amended, modified, supplemented or restated from time to time,
the “Credit
Agreement”), relating to financing by Lender to
Borrowers. Capitalized terms used but not specifically defined herein
shall have the meanings provided for such terms in the Credit
Agreement.
Certain
Events of Default occurred under the Credit Agreement and, as a result thereof,
Lender and Borrowers entered into that certain Forbearance Agreement dated as of
March 29, 2009 (as amended modified, supplemented or restated from time to time,
the “Forbearance
Agreement”), whereby Lender agreed to forbear from exercising certain of
its rights and remedies available under the Loan Documents as a result of the
Existing Events of Default.
The
Forbearance Agreement expired pursuant to its terms on July 26, 2010, resulting
in a Termination Event (as such term is defined in the Forbearance Agreement)
thereunder.
On
February 2, 2010, Parent, RCPC and Ronson Canada consummated a transaction (the
“Zippo Sale”)
pursuant to which RCPC and Ronson Canada sold substantially all of their assets
to Zippo Manufacturing Company and Nosnor, Inc., pursuant to an Asset Purchase
Agreement dated as of October 5, 2010. The net proceeds of the Zippo
Sale were delivered to Lender in accordance with the terms of that certain
letter agreement by and among Lender and Obligors dated as of February 2, 2010
and applied by Lender in accordance with and subject to the Thirteenth Amendment
to Forbearance Agreement dated as of April 1, 2010.
Obligors
have requested that Lender amend certain terms and conditions of the Credit
Agreement notwithstanding the existence of the Existing Events of Default and
the occurrence of the Termination Event under the Forbearance
Agreement.
Lender
has considered Borrowers’ requests and, in an effort to continue working with
Borrowers, hereby agrees to amend the Credit Agreement on the terms and
conditions set forth below.
NOW,
THEREFORE, for and in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. Amendment to Credit and
Security Agreement. The following definition set forth in
section 1.1 of the Credit Agreement shall be amended and restated in its
entirety to read as follows:
“Accommodation
Overadvance Limit” means an amount up to $1,650,000; provided,
however, that Borrower acknowledges and agrees that if the full of amount of the
Accommodation Overadvance Limit is not drawn by 5:00 p.m., July 30, 2010, the
Accommodation Overadvance Limit shall automatically be reduced to
$1,500,000.
2. Funding of RAI Pending
Closing of the RAI Sale. Obligors acknowledge and agree that
as a result of the consummation of the Zippo Sale, RCPC and Ronson Canada shall
no longer be permitted to request Advances under the Credit Agreement and any
remaining assets of RCPC and/or Ronson Canada shall no longer be considered in
any borrowing base calculation.
3. Interest Rate on
Accommodation Overadvance. Obligors acknowledge and agree that
interest on the Accommodation Overadvance shall accrue at a rate equal to the
Prime Rate plus eight percent (8.00%) per annum.
4. Acknowledgement of Existing
Events of Default and Termination Event under Forbearance
Agreement. Obligors acknowledge and agree that (i) the
Existing Events of Default have occurred and are continuing and (ii) that the
Forbearance Agreement has expired pursuant to its terms, resulting in a
Termination Event thereunder, and that as a result of such Existing Events of
Default and the Termination Event, Lender has no obligation to make any further
Advances to RAI, including the Accommodation Overadvance contemplated by this
Amendment.
5. Conditions. Lender’s
agreement to amend the terms and conditions of the Credit Agreement on the terms
and conditions set forth herein is conditioned upon:
(a) execution
and delivery by the Obligors and Lender of this Agreement; and
(b) such
other matters as Lender may reasonably require.
6. Sums Secured;
Estoppel. The Obligors acknowledge and reaffirm that their
obligations to Lender as set forth in and evidenced by the Loan Documents are
due and owing without any defenses, set-offs, recoupments, claims or
counterclaims of any kind as of the date hereof. To the extent that
any defenses, set-offs, recoupments, claims or counterclaims may exist as of the
date hereof, the Obligors waive and release Lender from the same.
7. No Other Changes.
Except as explicitly amended by this Amendment, all of the terms and conditions
of the Credit Agreement shall remain in full force and effect.
8. References. All
references in the Credit Agreement to “this Agreement” shall be deemed to refer
to the Credit Agreement as amended hereby.
9. No Waiver. The
execution of this Amendment shall not be deemed to be a waiver of any Default or
Event of Default under the Credit Agreement, a waiver of any Termination Event
under the Forbearance Agreement or breach, default or event of default under any
Loan Documents or other document held by Lender, whether or not known to Lender
and whether or not existing on the date of this Amendment.
10. Waiver and Release of Claims
and Defenses. The Obligors hereby waive and release all claims
and demands of any nature whatsoever that they now have or may have against
Lender, whether arising under the Loan Documents or by any acts or omissions of
Lender, or any of its directors, officers, employees, affiliates, attorneys or
agents, or otherwise, and whether known or unknown, existing as of the date of
the execution of this Amendment, and further waive and release any and all
defenses of any nature
whatsoever
to the payment of the Obligations or the performance of their obligations under
Loan Documents.
11. Reaffirmation of Loan
Documents. The Obligors hereby agree with, reaffirm and
acknowledge their representations and warranties contained in the Loan
Documents. Furthermore, the Obligors represent that their
representations and warranties contained in the Loan Documents continue to be
true and in full force and effect. This agreement, reaffirmation and
acknowledgment is given to Lender by the Obligors without defenses, claims or
counterclaims of any kind. To the extent that any such defenses,
claims or counterclaims against Lender may exist, the Obligors waive and release
Lender from same.
12. Ratification and
Reaffirmation of Loan Documents. The Obligors ratify and
reaffirm all terms, covenants, conditions and agreements contained in the Loan
Documents.
13. No Preferential
Treatment. No Obligor has entered into this Amendment to
provide any preferential treatment to Lender or any other
creditor. No Obligor intends to file for protection or seek relief
under the United States Bankruptcy Code or any similar federal or state law
providing for the relief of debtors.
14. Legal
Representation. Each of the parties hereto acknowledge that
they have been represented by independent legal counsel in connection with the
execution of this Amendment, that they are fully aware of the terms and
conditions contained herein, and that they have entered into and executed the
within Amendment as a voluntary action and without coercion or duress of any
kind.
15. Partial Invalidity; No
Repudiation. If any of the provisions of this Amendment shall contravene
or be held invalid under the laws of any jurisdiction, this Amendment shall be
construed as if not containing such provisions and the rights, remedies,
warranties, representations, covenants, and provisions hereof shall be construed
and enforced accordingly in such jurisdiction and shall not in any manner affect
such provision in any other jurisdiction, or any other provisions of this
Amendment in any jurisdiction.
16. Binding
Effect. This Amendment is binding upon the parties hereto and
their respective heirs, administrators, executors, officers, directors,
representatives and agents.
17. Governing
Law. This Amendment shall be governed by the laws of the State
of New York.
18. WAIVER OF JURY
TRIAL. EACH OF THE PARTIES HERETO WAIVE THE RIGHT TO A TRIAL
BY JURY, AS TO ANY ACTION WHICH MAY ARISE AS A RESULT OF THE LOAN DOCUMENTS, THE
FORBEARANCE AGREEMENT, THIS AMENDMENT OR ANY DOCUMENT EXECUTED IN CONNECTION
HEREWITH.
19. Counterparts. This
Amendment and/or any documentation contemplated or required in connection
herewith may be executed in any number of counterparts, each of which shall be
deemed an original and all of which shall be considered one and the same
document. Delivery of an executed counterpart of a signature page of
this document by facsimile shall be effective as delivery of a manually executed
counterpart of this document.
[Signature
pages follow]
IN
WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, do
hereby execute this Amendment the date and year first above
written.
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RCLC,
INC. (f/k/a RONSON CORPORATION)
By: /s/ ▇▇▇▇
▇▇▇▇▇▇▇
Print
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Print
Title: Chief Restructuring Officer
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RCPC
LIQUIDATING CORP. (f/k/a/ RONSON
CONSUMER PRODUCTS CORPORATION) By: /s/ ▇▇▇▇
▇▇▇▇▇▇▇
Print
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Print
Title: Chief Restructuring Officer
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RONSON
AVIATION, INC.
By: /s/ ▇▇▇▇
▇▇▇▇▇▇▇
Print
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Print
Title: Chief Restructuring Officer
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RCC
INC. (f/k/a RONSON CORPORATION OF
CANADA LTD.) By: /s/ ▇▇▇▇
▇▇▇▇▇▇▇
Print
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Print
Title: Chief Restructuring Officer
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▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION
By:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, counsel to ▇▇▇▇▇ Fargo Bank,
National Association
▇▇▇▇▇▇▇
▇. ▇▇▇▇, counsel to ▇▇▇▇▇ Fargo Bank, National
Association
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