EXHIBIT 10(a)
--------------------------------------------------------------------------------
LOAN AND SECURITY AGREEMENT
--------------------------------------------------------------------------------
SUMMIT BANK
-to-
RONSON AVIATION, INC.
--------------------------------------------------------------------------------
Dated: August 28, 1997
--------------------------------------------------------------------------------
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT is entered into this 28th day of
August, 1997, between Ronson Aviation, Inc., a corporation of the State of New
Jersey, and Summit Bank, a New Jersey banking corporation, organized and
existing under the laws of the State of New Jersey:
SECTION 1
DEFINITIONS
1.1 The following terms as used in this Loan and Security Agreement shall
have the meanings hereinafter provided:
a. "Affiliate": Any --
i. entity that directly or indirectly owns, controls, or
holds with power to vote, ten (10%) percent or more of the outstanding voting
securities of the Borrower, other than an entity that holds such securities--
A. in a fiduciary or agency capacity without sole
discretionary power to vote such securities; or
B. solely to secure a debt, if such entity has not in
fact exercised such power to vote;
ii. corporation, ten (10%) percent or more of whose
outstanding voting securities are directly or indirectly owned, controlled, or
held with power to vote, by the Borrower, or by an entity that directly or
indirectly owns, controls, or holds with power to vote, ten (10%) percent or
more of the outstanding voting securities of the Borrower, other than an entity
that holds such securities--
A. in fiduciary or agency capacity without sole
discretionary power to vote such securities; or
B. solely to secure a debt, if such entity has not in
fact exercised such power to vote;
iii. person whose business is operated under a lease or
operating agreement by the Borrower, or any person substantially all of whose
property is operated under an operating agreement with the Borrower; or
iv. entity that operates the business or substantially all
of the property of the Borrower under a lease or operating agreement.
b. "Agreement": The contents hereof together with the contents of
any and all schedules and exhibits annexed hereto and made a part hereof and all
other writings submitted by the Borrower to the Lender pursuant hereto.
c. "Assignment of Rents and Leases": The Assignment of Rents and
Leases, in form and substance acceptable to the Lender.
d. "Borrower": Ronson Aviation, Inc., a corporation of the State
of New Jersey.
e. "Borrowing Certificate": The borrowing certificate in form and
substance acceptable to the Lender.
f. "Collateral": All -
i. inventory of the Borrower, whether now owned or hereafter
acquired, including, without limitation, raw materials, work in process,
finished goods, consigned inventory, and materials used or consumed in business
and other goods held for sale or lease or furnished or to be furnished under
contracts of service, excluding, however, aircraft which has been pledged as
collateral for obligations of the Borrower to lenders other than the Lender;
ii. accounts of the Borrower, whether now existing or
hereafter arising, including, without limitation, all accounts receivable and
contract rights and any rights to payment for goods sold or leased or for
services rendered which are not evidenced by an instrument or chattel paper,
whether or not such rights have been earned by performance;
iii. equipment of the Borrower, whether now owned or
hereafter acquired, including, without limitation, machinery, trade and
production equipment, furniture, furnishings, fixtures, and all other goods used
by the Borrower which do not constitute inventory or farm products, excluding,
however, aircraft which has been pledged as collateral for obligations of the
Borrower to lenders other than the Lender;
iv. instruments (including, without limitation, negotiable
instruments and non-negotiable instruments), investment property (including,
without limitation, certificated securities, uncertificated securities, security
entitlements, securities accounts, commodity contracts and commodity accounts),
chattel paper, general intangibles (including, without limitation, income tax
refunds, copyrights, licenses, rights, patents, patent rights, franchise rights,
distributorship rights, formulae, customer lists, goodwill, and trade secrets),
and trademarks, trademark rights, trade names and tradename rights to the extent
necessary to exercise the license granted to the Lender in Subparagraph 8.3
herein, and documents of title (including, without limitation, bills of lading,
dock warrants, dock receipts, and warehouse receipts), all of the Borrower,
whether now owned or existing or hereafter arising or acquired;
v. interests of the Borrower in goods or merchandise,
whether now owned or existing or hereafter arising or acquired, as to which an
account receivable has arisen; and
vi. as to all of the foregoing (i) through (v) inclusive,
cash proceeds, non-cash proceeds and products thereof, additions and accessions
thereto, replacements and substitutions therefor, and all related books,
records, journals, computer print-outs and data, of the Borrower.
g. "Controlled Group": As such term is defined in the Internal
Revenue Code of 1986, as amended.
h. "Corporate Guarantors": Collectively and individually, Ronson
Consumer Products Corporation and Ronson Corporation, the corporations
designated to sign the Corporate Guaranty Agreements.
i. "Corporate Guaranty Agreements": Collectively and
individually, the Corporate Guaranty Agreements in form and substance acceptable
to the Lender.
j. "Debt": The sum, as set forth on the financial statements of
the Borrower, of the Borrower's total liabilities, less debt subordinated to the
Obligations of the Borrower to the Lender by written agreement.
k. "Document List": The Document List annexed hereto as Exhibit A
and made a part hereof.
l. "Environmental Agreement": The Environmental Indemnity
Agreement in form and substance acceptable to the Lender.
m. "ERISA": The Employee Retirement Income Security Act of 1974.
n. "Event of Default": Any one of the occurrences described in
Section 7.
o. "Governmental Authority": Any nation or government, any
federal, state, city, town, municipality, county, local or other political
subdivision thereof or thereto and any department, commission, board, bureau,
instrumentality, agency or other Person exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
p. "Hazardous Substances": Any substances defined or designated
as hazardous or toxic wastes, hazardous or toxic materials, hazardous or toxic
substances, or similar terms, by any environmental statute, rule or regulation
of any governmental entity presently in effect and applicable to the Premises.
q. "Lender": Summit Bank, a New Jersey banking corporation,
organized and existing under the laws of the State of New Jersey, any Affiliate
or Subsidiary of Summit Bank and any subsequent holder, successor or assignee of
Summit Bank, unless the context requires otherwise.
r. "Lender's Floating Base Rate": The Floating Base Rate
announced from time to time by the Lender at its main office, from which
Floating Base Rate other borrowing rates may be determined (which is not
necessarily the lowest rate of interest charged by the Lender).
s. "Lender's Rights and Remedies": All of the rights and remedies
of the Lender described in Section 8.
t. "Letters of Credit": Standby letters of credit issued by the
Lender, for the account of the Borrower and to such beneficiaries specified by
the Borrower, all in accordance with Subsection 2.3.
u. "Liens": All mortgages, liens, judicial liens, encumbrances,
security interests, charges, pledges, hypothecations, assignments, conditional
sale or other title retention agreements, and the like, relating to any real or
personal property interest of the Borrower whether legal or equitable.
v. "Master Note": The promissory note in form and substance
acceptable to the Lender and any promissory notes in renewal thereof or
substitution or replacement therefor.
w. "Mortgage": Mortgage dated January 6, 1995 and recorded
January 12, 1995 in the Office of the Clerk of Middlesex County, New Jersey in
Mortgage Book 4850 at Page 211 and modified by a certain Mortgage Modification
Agreement, as further modified by a Second Mortgage Modification Agreement of
even date herewith, in form and substance acceptable to the Lender.
x. "Net Worth": The sum, as set forth on the financial statements
of the Borrower, of the Borrower's total equity, less intangible assets, plus
debt subordinated to the Obligations of the Borrower to the Lender pursuant to a
written agreement.
y. "Obligations": All loans, advances, indebtedness, notes,
liabilities, and amounts, liquidated or unliquidated, each of every kind, nature
and description, whether arising under this Agreement or otherwise, including,
without limitation, principal and interest, and whether secured or unsecured,
direct or indirect, absolute or contingent, due or to become due, now existing,
presently intended or contemplated, or hereafter contracted.
z. "PBGC": The Pension Benefit Guaranty Corporation.
aa. "Plan": Any plan subject to the minimum funding requirements
of Section 412 of the Internal Revenue Code of 1986, as amended.
bb. "Power of Attorney": The power of attorney in form and
substance acceptable to the Lender.
ab. "Premises": All of the lands, properties and appurtenances
subject to a certain lease dated May 14, 1975, as amended by a certain Amendment
of Lease dated February 2, 1977, between Borrower and the County of ▇▇▇▇▇▇,
including all renewals, extensions or modifications thereof whether now or in
the future, for a portion of the real property known as ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ County
Airport.
ac. "Qualified Account Receivable": An account receivable which
meets all of the following requirements from the time it comes into existence
until it is collected in full -
i. The account receivable is due and payable and the invoice
evidencing the account receivable is not outstanding more than sixty (60) days
from the date of the invoice. In the event more than fifty (50%) percent of the
accounts receivable from a single account debtor or group of affiliated account
debtors is more than sixty (60) days outstanding from the date of the invoice,
any and all accounts receivable due from such single account debtor or group of
affiliated account debtors shall be deemed unqualified;
ii. The account receivable from a single account debtor or
group of affiliated account debtors is not in excess of twenty (20%) percent of
total accounts receivable of the Borrower, unless credit insurance, acceptable
to the Lender, against such account receivables, has been assigned to the
Lender;
iii. The account receivable arose out of an enforceable
order or contract for the performance of services by the Borrower, which have
been fully and satisfactorily performed, or from the absolute sale of goods by
the Borrower in which the Borrower had the sole and complete ownership, all in
accordance with such order or contract, and the goods have been shipped or
delivered to the account debtor, evidence of which the Borrower has delivered or
will deliver to the Lender, if requested by the Lender, such as invoices and
shipping and delivery receipts. Without limiting this paragraph, the account
receivable must have arisen from transactions with third parties located in the
United States of America, or otherwise where secured by a letter of credit
acceptable to the Lender;
iv. The title of the Borrower to the account receivable is
absolute, the account receivable is not subject to any prior or subsequent Liens
except for that of the Lender and the account receivable does not arise out of
an order or contract which, by its terms, forbids or makes void or unenforceable
the Liens thereon of the Lender;
v. The Borrower has not received any note, trade acceptance,
draft or other instrument with respect to or in payment for the account
receivable nor any chattel paper with respect to the goods giving rise to the
account receivable, except such instruments or chattel paper of which the
Borrower has notified the Lender;
vi. The account receivable is not subject to any set off,
counterclaim, defense, allowance or adjustment other than discounts for prompt
payment shown on the invoice, or to dispute, objection or complaint by the
account debtor concerning his liability on the account receivable, and the
goods, the sale of which gave rise to the account receivable, have not been
returned, rejected, lost or damaged, and the amount shown on the Borrower's
books and on any invoice or statement delivered to the Lender is owing to the
Borrower, and no partial payment has been made thereon by anyone;
vii. The account receivable arose in the ordinary course of
business of the Borrower and no notice of bankruptcy, receivership, insolvency,
dissolution, termination of existence, credit impairment, or the like of the
account debtor, and no notice of death of the account debtor or any partner
thereof, has been received by the Borrower or the Lender;
viii. The account debtor obligated on the account receivable
is not a person, firm, or corporation which directly or indirectly, through one
or more intermediaries, controls, or is controlled by, or is under common
control with, the Borrower, including, without limitation, any Subsidiary or
Affiliate as to the Borrower and the Borrower as to any Subsidiary or Affiliate;
ix. The Lender has not notified the Borrower that the
account receivable or account debtor is unsatisfactory in the reasonable
discretion of the Lender due to lack of creditworthiness of the account debtor;
and
x. Any of the accounts receivable which arose out of
contract(s) with the United States of America, or its departments, agencies or
instrumentalities, of which the Borrower has notified the Lender and executed
any necessary writings in order that all money due or to become due under such
contracts shall be assigned to the Lender and proper notice of the assignment
given under the Federal Assignment of Claims Act.
ad. "Reportable Event": As such term is defined in 29 U.S.C.A.
ss.1343.
ae. "Revolving Loan": The loan described in Subsection 2.1(a).
af. "Subsidiary": Any corporation more than a majority (by number
of votes) of the common stock of which is at the time owned or controlled by the
Borrower or a Subsidiary of the Borrower.
ag. "Term Loan": The loan described in Subsection 2.2(a).
ah. "Term Note": The promissory note in form and substance
acceptable to the Lender and any promissory notes in renewal thereof or
substitution or replacement therefor.
1.2 Any accounting terms used in this Agreement which are not specifically
defined shall have the meanings customarily given thereto in accordance with
generally accepted accounting principles.
1.3 Any environmental terms used in this Agreement which are not
specifically defined shall have the meanings ascribed to such terms in N.J.S.A.
13:1k and/or N.J.S.A. 58:10-3.11b and/or regulations promulgated in relation
thereto.
1.4 Terms such as "accounts", "accounts receivable", "contract rights",
"letters of credit", "advises", "confirmations", "farm products", "inventory",
"equipment", "instruments", "chattel paper", "documents of title", "goods",
"general intangibles", "account debtors", "proceeds", "products", and the like,
shall, unless otherwise specifically defined herein, have the meanings
applicable to them for the purposes of Article 9 (Secured Transactions) of the
Uniform Commercial Code in force and effect in the State of New Jersey from time
to time.
SECTION 2
AMOUNTS AND TERMS OF LOANS
2.1 Terms of Revolving Loan. Subject to the terms and conditions of this
Agreement, and to the Borrower's observance and performance of, and compliance
with, all terms, conditions, warranties, representations and covenants of this
Agreement, and the timely payment of the Obligations of the Borrower to the
Lender:
a. Revolving Loan. The Lender shall lend and re-lend to the
Borrower amounts which shall not exceed in the aggregate of unpaid principal of
such amounts outstanding at any one time
(i) the lesser of:
(A) Four Hundred Thousand ($400,000.00) Dollars, or
(B) eighty (80%) percent of the Qualified Accounts
Receivable of the Borrower; less
(ii) the full face amount of issued and outstanding Letters
of Credit, provided, however, that at no time shall the aggregate face amount of
issued Letters of Credit exceed Fifty Thousand ($50,000.00) Dollars; less
(iii) In the event the Borrower fails to comply with
Subsection 6.12 a. iv., an amount equal to the past due rent due and owing to
the County of ▇▇▇▇▇▇.
b. Procedure for Advances. Amounts loaned or re-loaned to the
Borrower pursuant to the Revolving Loan shall be delivered to the Borrower by
credit to any general deposit account maintained by the Borrower with the Lender
or such other method as the Lender and the Borrower shall agree upon.
c. Interest. The outstanding principal amount of the Revolving
Loan shall bear interest at a rate of interest per annum equal to the Lender's
Floating Base Rate plus one and one-half (1 1/2%) percent, computed daily, with
each change in the Lender's Floating Base Rate, for the actual number of days
elapsed as if each full calendar year consisted of three hundred sixty (360)
days.
d. Method of Payment. The outstanding principal amount of the
Revolving Loan and all interest thereon shall be payable by the Borrower to the
Lender on demand made in accordance with Subsection 8.1(a) or after the
occurrence of an Event of Default, in immediately available funds, but if no
demand shall be made, then payment of principal shall occur in one (1) final
payment of all outstanding principal on August 31, 2000. The payment of accrued
interest shall occur monthly, in immediately available funds, on the first
business day of the Lender of each month beginning on the first business day of
the Lender in the month next succeeding the date of this Agreement. The Borrower
hereby authorizes the Lender to direct charge the Borrower's demand deposit
account on the first business day of the Lender of each month beginning on the
first business day of the Lender in the month next succeeding the date of this
Agreement for the payment of accrued interest.
e. Statement of Account. At least once each month the Lender
shall render and send to the Borrower a statement of account showing amounts
loaned, all other charges, expenses and items chargeable to the Borrower
pursuant to Subsections 6.13 and 6.14, payments made by the Borrower against the
Obligations arising pursuant to the Revolving Loan, proceeds collected and
applied to said Obligations, other appropriate debits and credits and the total
of the Obligations of the Borrower to the Lender as of the date of the statement
for loans pursuant to the Revolving Loan, and the statement of account shall be
conclusively presumed to be correct in all respects, except for specific
objections which the Borrower makes in writing within thirty (30) days from the
date upon which the statement of account is sent.
f. Master Note. The maximum amount of the Revolving Loan shall be
evidenced by the Master Note, and the balance due from time to time on the
Master Note shall be conclusively evidenced by the Lender's records of
disbursements and repayments, subject to Subsection 2.1(e).
g. Fees. The Borrower shall pay to the Lender an annual
collateral management fee in an amount equal to Two Thousand ($2,000.00)
Dollars, payable upon the execution of this Agreement and on the anniversary
date of each year thereafter during the term of this Agreement.
h. Prepayment. Should the Borrower terminate the Revolving Loan
or permanently reduce the maximum amount available under the Revolving Loan
prior to August 31, 2000 (the "Final Maturity Date"), the Borrower shall pay a
prepayment/termination premium in an amount equal to:
i. one and one-half (1 1/2%) percent of the maximum
principal amount prepaid or permanently reduced if such payment or reduction is
made before August 31, 1998; or
ii. three-quarters of one (3/4%) percent of the maximum
principal amount prepaid or permanently reduced if such payment or reduction is
made after August 31, 1998 and prior to August 31, 2000.
Having a zero balance under the Revolving Loan shall not be deemed a prepayment
or termination subject to the aforementioned prepayment/termination premium
unless and until such time as the Borrower terminates this Agreement and
satisfies all outstanding Obligations, and the Bank is released of any
obligation to make loans, advances or extensions of credit to the Borrower.
2.2 Terms of Term Loan. Subject to the terms and conditions of this
Agreement, and to the Borrower's observance and performance of, and compliance
with, all terms, conditions, warranties, representations, and covenants of this
Agreement, and the timely payment of all Obligations of the Borrower to the
Lender:
a. Term Loan. The Lender shall lend to the Borrower the principal
amount of Two Hundred Eighty Five Thousand ($285,000.00) Dollars.
b. Delivery of Proceeds. The principal amount of the Term Loan
shall be delivered to the Borrower by credit to any general deposit account
maintained by the Borrower with the Lender.
c. Interest. The outstanding principal amount of the Term Loan
shall bear interest at a rate per annum equal to the Lender's Floating Base Rate
plus one and one-half (1 1/2%) percent, computed daily, with each change in the
Lender's Floating Base Rate, for the actual number of days elapsed as if each
full calendar year consisted of three hundred sixty (360) days.
d. Method of Payment. The Borrower shall pay the principal amount
of the Term Loan, to the Lender by payment of twenty four (24) equal and
consecutive monthly installments, each in the sum of Four Thousand Seven Hundred
Fifty ($4,750.00) Dollars, plus accrued and unpaid interest, on the first day of
each month commencing October 1, 1997, and a final installment on September 30,
1999. If any payment of principal or interest under the Term Loan shall be due
and payable on a day other than a business day of the Lender, then such payment
shall be due and payable on the next succeeding business day of the Lender.
e. Fees. The Borrower shall pay to the Lender upon the execution
of this Agreement, a non-refundable fee in an amount equal to Two Thousand Eight
Hundred Fifty ($2,850.00) Dollars.
f. Prepayment. The Borrower may prepay, at any time, all or any
portion of the outstanding principal amount of the Term Loan, without penalty or
premium, provided, however, in the event the Borrower prepays the Term Loan from
the proceeds of financing from an alternative lender, then any such prepayment
prior to August 31, 1998 shall be accompanied by a prepayment premium in an
amount equal to four (4%) percent of the principal amount prepaid, and any such
prepayment after August 31, 1998 and prior to August 31, 1999 shall be
accompanied by a prepayment premium in an amount equal to three (3%) percent of
the principal amount prepaid.
2.3 Terms of Letters of Credit. Subject to the terms and conditions of this
Agreement, and to the Borrower's observance and performance of, and compliance
with, all terms, conditions, warranties, representations, and covenants of this
Agreement, and the timely payment of all Obligations of the Borrower to the
Lender:
(a) (i) Letters of Credit. Upon the request of the Borrower, the
Lender agrees to issue Letters of Credit from time to time prior to the Final
Maturity Date in the aggregate stated amount of up to Fifty Thousand
($50,000.00) Dollars on any business day from the date of execution of this
Agreement through the Final Maturity Date, in such form as may be approved from
time to time by the Lender; provided, however, that the Lender's agreement to
issue Letters of Credit shall terminate immediately upon termination of the
Revolving Loan. Letters of Credit shall be for periods of not more than one
hundred eighty (180) days. No Letter of Credit shall have an expiration date
later than thirty (30) days prior to the Final Maturity Date.
(b) Limitations on Obligation to Issue or Create Letters of
Credit. The Lender shall have no obligation to issue Letters of Credit at any
time if:
(i) a Default or an Event of Default has occurred;
(ii) any order, judgment or decree of any court, arbitrator
or Governmental Authority shall purport by its terms to enjoin, restrict or
restrain the Lender in any respect relating to the issuance of a Letter of
Credit;
(iii) any law, rule, regulation, policy, guideline or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over the Lender shall prohibit or direct the Lender
in any respect relating to the issuance of the Letter of Credit, or shall impose
upon the Lender with respect to any Letter of Credit any restrictions, any
reserve or capital requirement or any loss, cost or expense not reimbursed by
the Borrower to the Lender; or
(iv) after giving effect to the issuance of the requested
Letter of Credit:
(1) the aggregate Letters of Credit, plus any related
commissions, fees, costs or other expenses, would exceed Fifty Thousand
($50,000.00) Dollars;
(2) the aggregate Letters of Credit, plus any related
commissions, fees, costs or other expenses, plus the aggregate outstanding
principal amount of the Revolving Loan, would exceed Four Hundred Thousand
($400,000.00) Dollars; or
(3) the aggregate Letters of Credit, plus any related
commissions, fees, costs or other expenses, plus the aggregate outstanding
principal amount of the Revolving Loan, would exceed eighty (80%) percent of the
Qualified Accounts Receivable of the Borrower.
(c) Procedures for Issuance of Letters of Credit. The Borrower
may from time to time request that the Lender issue a Letter of Credit by
delivering to the Lender at its address set forth herein, an application in
writing and in form and substance reasonably acceptable to the Lender, and such
other certificates, documents and other papers and information relating thereto
as the Lender shall request, no later than 12:01 P.M. (Eastern time) on the
third Business Day prior to the date of the proposed issuance of the Letter of
Credit. Each such application for issuance of Letters of Credit shall be
irrevocable and shall specify, without limitation, (1) the stated amount of such
Letter of Credit, (2) the date of the issuance of such Letter of Credit, (3) the
date on which such Letter of Credit is to expire, (4) the beneficiary of such
Letter of Credit, and (5) the documents required to accompany any drafts drawn
under such Letter of Credit. At the time such a request is made, the Borrower
shall provide the Lender with a copy of the form of such Letter of Credit. Any
Letter of Credit issued by the Lender will provide that either sight drafts or
time drafts payable up to one hundred twenty (120) days after sight will be
honored.
(d) Extensions or Amendment. No Letter of Credit shall be
extended or amended unless the requirements of this Subsection 2.4 are met as
though a new Letter of Credit were being requested and issued.
(e) Payment of Reimbursement Obligations. The Borrower agrees to
pay to the Lender, by 2:00 P.M. (Eastern time) on the date on which any drawing
under any Letter of Credit is honored or paid, the full amount paid by the
Lender pursuant to a drawing under any Letter of Credit and all costs, charges
and expenses arising from or relating to such drawing (the amount paid by the
Lender pursuant to such drawing and all costs, charges and expenses are
collectively and individually referred to as "Reimbursement Obligations"),
without deduction, offset for any claim, set-off, recoupment, defense or other
right which the Borrower may have at any time against the Lender or any other
Person. The Borrower hereby authorizes the Lender to charge the Borrower's
operating account or Revolving Loan for payment of Reimbursement Obligations on
the date of such drawing.
(f) Fees and Charges.
(i) The Borrower shall pay the Lender a commission fee for
issuing each Letter of Credit in an amount equal to one and one-half (1.50%)
percent per annum, plus all other normal and customary costs and expenses
incurred or charged by the Lender in issuing, effecting payment under, amending
or otherwise administering any Letter of Credit.
(ii) The Borrower hereby authorizes the Lender to charge the
Borrower's operating account or Revolving Loan for the payment of the commission
fees and for all other normal and customary costs and expenses incurred or
charged by the Lender in issuing, creating, effecting payment under, amending or
otherwise administering any Letter of Credit immediately when due. All
commission fees, costs and expenses due hereunder shall be non-refundable and
shall be payable:
(1) as to commission fees on the last Business Day of
each month, for each month or portion thereof in which Letters of Credit are
issued or created and outstanding; and
(2) all other normal and customary costs and expenses
incurred or charged by the Lender in issuing, creating, effecting payment under,
amending or otherwise administering any Letter of Credit, shall be due and
payable immediately upon such costs or expenses being incurred or charged by the
Lender.
(g) Payment of Drafts. Delivery to the Lender or its
correspondents of any documents purporting to comply with the requirements of
any Letter of Credit shall be sufficient evidence of the validity, genuineness,
and sufficiency thereof and of the good faith and proper performance of the
shippers, drawers and users of any Letter of Credit, their agents and assignees,
and the Lender and its correspondents may rely and act thereon without liability
or responsibility with respect thereto or with respect to the correctness or
condition of any shipment or merchandise to which the same may relate. The
Lender may (but shall not be required to) accept or pay overdraft or irregular
drafts or drafts with irregular documents attached or with respect to which
property has been substituted or time limits have been extended, and no such
acceptance or payment shall impair any rights of the Lender under this
Agreement. In case of any variation between the documents called for by any
Letter of Credit and the documents accepted by the Lender or its correspondents,
the Borrower and the Lender shall be conclusively deemed to have waived any
right to object to such variation with respect to any action of the Lender or
its correspondents relating to such documents and to have ratified and approved
such action as having been taken on the direction of the Borrower. The Lender
shall not be liable for any delay in giving, or failing to give, notice of the
arrival of any goods or any other notice, or for any error, neglect or default
of any of its correspondents or any shipper, carrier, bailee or insurer; nor
shall the Lender be responsible for the non-fulfillment of any requirement of
any Letter of Credit with drafts that bear appropriate reference to any Letter
of Credit or that the amount of any draft be noted on the reverse of any Letter
of Credit or that the Letter of Credit be surrendered or taken up or that
documents be forwarded apart from any drafts, and the Lender or its
correspondents may, if it sees fit, waive any such requirements, provided that
the Lender may be liable for any losses for which there has been a final
judicial determination that such losses resulted from the Lender's gross
negligence or willful misconduct.
(h) Lender's Actions. Any Letter of Credit may, in the discretion
of the Lender or its correspondents, be interpreted by them in accordance with
the Uniform Customs and Practice for Documentary Credits of the International
Chamber of Commerce, as adopted or amended from time to time, or any other
rules, regulations and customs prevailing at the place where any Letter of
Credit is available or the drafts are drawn or negotiated. The Lender and its
correspondents may accept and act upon the name, signature, or act of any Person
purporting to be the executor, administrator, receiver, trustee in bankruptcy,
or other legal representative of any Person designated in any Letter of Credit
in the place of such designated Person. The Lender or its correspondents may
honor drafts under a Letter of Credit relative to shipments in excess of the
quantity called for in any Letter of Credit, provided, that the Reimbursement
Obligation of the Borrower for payments made or obligations incurred on such
drafts shall be limited to the amount of the Letter of Credit. Unless otherwise
specified in any Letter of Credit, the Lender and its correspondents may accept
as "bills of lading" any documents acknowledging receipt by the carrier for
transportation.
(i) Letter of Credit Indemnity; Exoneration.
(i) The Borrower will indemnify the Lender and its
correspondents and defend and hold them harmless from and against any and all
losses, costs, charges, damages, expenses (including reasonable counsel fees and
disbursements), claims, demands, suits and liabilities whatsoever which the
Lender or its correspondents may incur or be charged with by reason or as a
consequence, direct or indirect, of the issuance of any Letter of Credit, the
payment or acceptance of any draft, the refusal or failure to pay or accept any
draft as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or Governmental Authority, or
any action or inaction in connection with any Letter of Credit, drafts or
documents or goods and merchandise, or any action or inaction in reliance upon
the provisions hereof, provided that the Lender may be liable for any losses for
which there has been a final judicial determination that such losses resulted
from the Lender's gross negligence or willful misconduct. Without limitation by
reason of the foregoing, the Borrower further agrees that in case of issue by
the Lender, at the request of the Borrower, of an agreement to indemnify a
steamship or other carrier from loss sustained by reason of its compliance with
a request by the Lender that such carrier deliver goods and merchandise relating
to any drafts without surrender of a duly indorsed ▇▇▇▇ of lading or similar
document, the Borrower will indemnify and hold the Lender and its correspondents
harmless from any and all claims which may be made against the Lender by reason
of the Lender having given such indemnity agreement. The Borrower also agrees
that, upon receipt of the ▇▇▇▇ of lading or similar document, the Borrower will
obtain a written cancellation of such indemnity agreement from the agents of the
carrier.
(ii) The Borrower assumes all risks of the acts and
omissions of, or misuse of such Letters of Credit by, the respective
beneficiaries or holders of the Letters of Credit. In furtherance and not in
limitation of the foregoing, the Lender shall not be responsible for:
(1) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for, issuance of or drawing under the Letter of Credit,
even if it should in fact prove to be in any respect invalid, insufficient,
inaccurate or forged;
(2) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a Letter of Credit
or the rights or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason;
(3) failure of the beneficiary of the Letter of Credit
to comply duly with conditions required in order to draw upon such Letter of
Credit;
(4) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise;
(5) errors in interpretation of technical terms;
(6) any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under any Letter of Credit
or of the proceeds thereof;
(7) the misapplication by the beneficiary of a Letter
of Credit of the proceeds of any drawing under such Letter of Credit; and
(8) any consequences arising from causes beyond control
of the Lender including, without limitation, any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto government or
Governmental Authority.
(j) Reimbursement Obligations Absolute. The Reimbursement
Obligations of the Borrower to the Lender shall be absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement, under all circumstances whatsoever, including, without limitation,
the following circumstances:
(i) any lack of validity or enforceability of this
Agreement, any other Loan Document, or any Letter of Credit;
(ii) any amendment or waiver of or consent to departure from
this Agreement, or any other Loan Document, or any Letter of Credit;
(iii) the existence of any claim, setoff, recoupment,
defense or other right which the Borrower may have at any time against the
Lender, its correspondents, any beneficiary, any transferee or holder of any
Letter of Credit (or any Person for whom any such beneficiary or any such
transferee may be acting) or any other Person, whether in connection with this
Agreement, any of the Letters of Credit or any unrelated transaction;
(iv) any draft, certificate or any other document presented
under any of the Letters of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect, or any statement therein being untrue or inaccurate
in any respect whatsoever;
(v) payment by the Lender under any of the Letters of Credit
against the presentation of a draft or certificate which does not comply with
the terms of such Letters of Credit; or
(vi) any other circumstances or happening whatsoever,
whether or not similar to any of the foregoing.
SECTION 3
SECURITY INTEREST
3.1 In consideration of the Lender's granting to the Borrower the Revolving
Loan and the Term Loan, in accordance with the terms and conditions of this
Agreement, the Borrower, to secure payment and performance of all of the
Obligations of the Borrower to the Lender, hereby grants to the Lender a
security interest in the Collateral, with the exception of specific aircraft
subject to purchase money security liens, which security interest shall remain
in full force and effect until all of the Obligations of the Borrower to the
Lender are fully paid and satisfied.
3.2 The Borrower acknowledges and agrees that the Obligations of the
Borrower to the Lender are also secured by various security interests previously
granted or to be granted in the future by the Borrower to the Lender in certain
aircraft.
SECTION 4
CONDITIONS PRECEDENT
4.1 The Lender's agreement to lend or re-lend amounts to the Borrower
pursuant to the Revolving Loan and the Term Loan is conditioned upon, where
applicable, proper execution by the appropriate party and prior delivery by the
Borrower to the Lender of the documents set forth on the Document List in form
and substance acceptable to the Lender.
SECTION 5
REPRESENTATIONS AND WARRANTIES BY BORROWER
As a material inducement to the Lender to lend and re-lend the
Revolving Loan to the Borrower, to grant the Term Loan to the Borrower, and to
enter into this Agreement, the Borrower represents and warrants to the Lender
that:
5.1 Incorporation, Good Standing and Due Qualification. The Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New Jersey, maintains its principal place of business in the
State of New Jersey, and there are no jurisdictions in which the character of
the properties owned or the business transacted by the Borrower makes
qualification as a foreign corporation necessary.
5.2 Corporate Power and Authority. The Borrower has the corporate power to
execute, deliver, and perform this Agreement and to borrow hereunder and has
taken all necessary corporate action to authorize (i) the borrowing hereunder on
the terms and conditions of this Agreement, and (ii) the execution, delivery and
performance of this Agreement.
5.3 Operation of Business. The Borrower possesses, in full force and
effect, all franchises, patents, licenses, trademarks, trademark rights, trade
names, trade name rights, fictitious name authorizations or certificates and
copyrights to conduct its business as now conducted, without any conflict with
the franchises, patents, licenses, trademarks, trademark rights, trade names,
trade name rights, fictitious name authorizations or certificates and copyrights
of others.
5.4 Subsidiaries and Affiliates. The Borrower has no Subsidiaries or
Affiliates, except for those listed on Schedule 5.4 annexed hereto and made a
part hereof.
5.5 Nature of Business. The Borrower is engaged in the business of operator
of air charter services, aircraft maintenance services and aircraft sales and
business relating directly thereto.
5.6 Financial Condition; Solvency.
a. The Borrower has furnished to the Lender its reviewed
financial statements for the year ended December 31, 1996 and management
prepared interim statements for the period ended March 31, 1997. Such financial
statements constitute the representation by management of the Borrower that the
information contained in the statements is complete and correct in all material
respects. Since the date of the balance sheet referred to above, there has been
no material adverse change in the financial condition of the Borrower not
reflected in the financial statements as of that date, and since such date the
business of the Borrower has not been materially adversely affected by any
occurrence, whether or not insured against.
b. The Borrower's assets, at a fair valuation, exceed the
Borrower's liabilities (including, without limitation, contingent liabilities),
the Borrower is not currently in default in connection with any loans, advances,
extensions of credit, contracts, obligations or other agreements between the
Borrower or the Corporate Guarantors and third parties other than with (i)
professionals in connection with services provided to or for the benefit of the
Borrower or the Corporate Guarantors as to which the professionals and the
Borrower or the Corporate Guarantors, as the case may be, have mutually agreed
upon terms for payment for such obligations, (ii) vendors which shall not be
more than ninety (90) days past due, or (iii) trade creditors in connection with
obligations not in excess of Five Thousand ($5,000.00) Dollars which shall not
be more than ninety (90) days past due unless being contested in good faith, and
the Borrower has capital and assets sufficient to carry on its business.
5.7 Taxes. All tax returns of the Borrower which are due have been duly
filed and are correct and all taxes and other governmental charges upon the
Borrower which are due have been paid.
5.8 Litigation. There are no outstanding judgments, actions, proceedings,
claims or investigations pending or threatened before any court or governmental
body which, if adversely determined, may materially adversely affect the
business, operations or affairs of the Borrower, except as set forth on Schedule
5.8 annexed hereto and made a part hereof.
5.9 Ownership and Liens. The Borrower has good and marketable title to all
of its properties and assets, including, without limitation, the Collateral,
subject to no Liens except for permitted exceptions described in Subsection 6.7.
The security interest granted in Subsection 3.1 and the Mortgage constitute
valid Liens in the Collateral and the Premises, respectively, subject to no
equal or prior Liens except for permitted exceptions described in Subsection
6.7.
5.10 Approvals. No consent or approval of any person, landlord, or
mortgagee, no waiver of any lien or right of distraint or other similar right,
and no consent, license, approval, or authorization of or registration,
qualification, designation, declaration or filing (except any recordations
required in connection with the perfection of the security interest granted in
Subsection 3.1, the Mortgage and the Assignment of Rents and Leases) with any
Governmental Authority on the part of the Borrower is required in connection
with the execution, delivery, and performance of this Agreement or the
consummation of any other transactions contemplated hereby.
5.11 Other Agreements and Restrictions. There is no term of any contract,
bond, note, indenture, or other agreement or of any charter or other corporate
restriction or of any judgment, decree, order, statute, rule or regulation which
materially adversely limits the business, operations, or affairs, as presently
conducted, of the Borrower or its assets, and the Borrower is not now in
violation of any such term; and the execution, delivery and performance of, and
compliance with, this Agreement will not (with or without the giving of notice
of lapse of time, or both) result in any violations of, or be in conflict with,
or constitute a default under, any such term, or result in the creation of any
Liens upon any of the assets of the Borrower, except for the Liens created
pursuant to this Agreement. The operations of the Borrower comply with all laws,
statutes, rules, regulations, ordinances, and the like, applicable to them.
5.12 Name Change, Mergers. Within the last six (6) years, the Borrower has
not changed its name, been the surviving corporation of a merger or
consolidation, or acquired all or substantially all of the assets of any person
or entity.
5.13 Place of Business. The only principal place of business and other
places of business of the Borrower and other locations of the Borrower's
inventory are as set forth on Schedule 5.13 annexed hereto and made a part
hereof.
5.14 Location of Collateral and Books and Records. All of the Collateral
(except as required in the normal course of the Borrower's business), and the
records of the Borrower relating to the Collateral, and the other books,
records, journals, orders, receipts, and correspondence of the Borrower, are
located at only the principal place of business and other places of business of
the Borrower set forth in Subsection 5.13, except as to the corporate minute
book and related records which may be maintained at the offices of counsel to
the Borrower.
5.15 Reportable Events. No Reportable Event has occurred with respect to
any Plan maintained for employees of: (a) the Borrower; (b) any Subsidiary or
Affiliate of the Borrower; or (c) any member of a Controlled Group of which the
Borrower is a part.
5.16 Compliance With Laws. The Borrower is in compliance in all material
respects with any and all federal laws and regulations applicable to it
including, without limitation, those established by the Bureau of Alcohol,
Tobacco and Fire Arms, ERISA, the Environmental Protection Agency, the Federal
Occupational Safety and Health Agency, and with Federal Reserve Board
Regulations G, T, U and X.
5.17 Full Disclosure. The representations and warranties of the Borrower
set forth in this Agreement are true and correct in all respects.
5.18 No Event of Default. The Borrower has reviewed this Agreement and
represents that no Event of Default exists and the Borrower is not in default
under any other documents, instruments, writings or agreements to which it is a
party.
5.19 Enforceability of Agreement. This Agreement has been duly executed and
delivered and constitutes the valid and legally binding obligation of the
Borrower, enforceable in accordance with its terms, subject to applicable
Federal and State Bankruptcy and insolvency laws affecting generally the rights
of creditors.
SECTION 6
COVENANTS BY BORROWER
As a material inducement to the Lender to lend and re-lend the
Revolving Loan to the Borrower, to grant the Term Loan to the Borrower, and to
enter into this Agreement, the Borrower covenants and agrees with the Lender
that:
6.1 Maintain Corporate Existence. The Borrower shall preserve and keep in
full force and effect its corporate existence and all franchises, rights, and
privileges necessary for the proper conduct of its business, including, without
limitation, all necessary franchises, patents, licenses, trademarks, trademark
rights, trade name rights, fictitious name authorizations, or certificates and
copyrights without any conflict with such franchises, patents, licenses,
trademarks, trademark rights, trade name rights, fictitious name authorizations
or certificates and copyrights of others.
6.2 Delivery of Corporate Documents. The Borrower shall promptly deliver to
the Lender copies of any amendments or modifications to its certificate of
incorporation and by-laws, certified with respect to the certificate of
incorporation by the Secretary of State of the state of incorporation, and, with
respect to the by-laws, by the secretary of the Borrower.
6.3 Compliance with Laws. The Borrower shall comply in all material
respects with all laws, ordinances, rules and regulations, now or hereafter in
effect, applicable to it of any federal, state or local government or any
instrumentality or agency thereof.
6.4 Payment of Taxes. The Borrower shall pay and discharge, as they become
due, all taxes, assessments, debts, claims and other governmental or
non-governmental charges lawfully imposed upon it or incurred by it or its
properties and assets, except taxes, assessments, debts, claims and charges
contested in good faith in appropriate proceedings, and provide the Lender, if
requested, evidence of said taxes, assessments, debts, claims, and charges, and
of payment thereof.
6.5 Maintenance of Properties and Assets. The Borrower shall maintain,
preserve and keep all its properties and assets in good repair, working order
and condition, and make, or cause to be made, all necessary or appropriate
repairs, renewals, replacements, substitutions, additions, betterments, and
improvements thereto, so that efficiency of all such properties and assets shall
at all times be properly preserved and maintained.
6.6 Insurance. The Borrower shall maintain, with reputable insurance
companies, such insurance on its properties and assets, including, without
limitation, the Collateral and the Premises, against such casualties and in such
amounts as is customarily maintained by similar businesses. All insurance
policies shall name the Lender as a loss payee, as to casualty insurance
policies, and as an additional insured on all policies. All such policies of
insurance shall provide for at least ten (10) days advance notice in writing to
the Lender of any cancellation or modification thereof. If the Borrower fails to
pay the premiums on any such insurance, the Lender shall have the right (but
shall be under no duty) to pay such premiums for the Borrower's account. The
Borrower shall repay to the Lender any sums which the Lender shall have so paid,
together with interest thereon at the rate payable by the Borrower, at the time
of payment by the Lender. The Borrower shall deliver to the Lender, upon its
request, a detailed list of insurance then in effect, stating the names of the
insurance companies, the amounts and rates of the insurance, dates of expiration
thereof, and the properties and risks covered thereby; and within fifteen (15)
days after notice from the Lender, obtain such additional insurance as the
Lender may reasonably request.
6.7 Permitted Encumbrances. The Borrower shall not directly or indirectly
permit to exist any Liens with respect to the Collateral for more than five (5)
days from the date the Borrower or the Bank first receives notice or information
relating to any such Liens (and the Bank shall provide prompt notice to the
Borrower of any such notice or information received by the Bank), other than the
following:
a. Liens for taxes not yet due, or unless and until
foreclosure or other similar proceedings shall have been commenced, being
contested in good faith in appropriate proceedings;
b. Liens in favor of the Lender whether such Liens arise
pursuant to this Agreement or otherwise;
c. Purchase money security interests upon aircraft in
amounts not in excess of the original purchase price of said aircraft plus cost
of standard enhancements; and
d. Liens and encumbrances, if any, set forth on Schedule 6.7
annexed hereto and made a part hereof.
6.8 Litigation. The Borrower shall promptly notify the Lender (a) of any
litigation, actions, proceedings, claims or investigations pending or threatened
against the Borrower, wherein claimant seeks to recover in excess of Twenty Five
Thousand ($25,000.00) Dollars and of the entry of any judgment in excess of
Twenty Five Thousand ($25,000.00) Dollars against the Borrower or the entry of
any Liens, other than Liens permitted by Subsection 6.7, against any of the
Collateral; (b) upon the receipt of any information, notice or claim, or upon
learning of any investigation, as to any alleged use, storage, treatment or
handling, except as expressly permitted in this Agreement, or any discharge,
spill, emission or disposal of, any Hazardous Substances by or on the Premises,
except as expressly permitted under applicable law; and (c) upon learning of any
circumstances or transactions that would require compliance with any federal,
state or local environmental statutes or regulations.
6.9 Location of Collateral and Books and Records. The Borrower shall keep
the Collateral (except as required in the normal course of the Borrower's
business), its records relating to the Collateral, and its other books, records,
journals, orders, receipts and correspondence at only those locations of the
Borrower set forth in Subsection 5.13, unless notice is given to the Lender in
advance of, and the Lender consents, which consent shall not be unreasonably
withheld or delayed, in writing to, removal of the Collateral, the records
relating to the Collateral, and the other books, records, journals, orders,
receipts, and correspondence, to another location.
6.10 Nature of Business. The Borrower shall not engage in any business
other than operator of air charter services, aircraft maintenance services and
aircraft sales and business related thereto.
6.11 Change of Principal Place of Business, Etc. The Borrower shall
promptly notify the Lender of any change of location of its principal place of
business or other places of business, of the addition of any new place of
business or of the elimination of any existing place of business.
6.12 Financial Reporting Requirements.
a. The Borrower shall deliver to the Lender the following:
i. Within ten (10) days after the end of each calendar month
(commencing with the month in which this Agreement is executed and continuing
until all of the Obligations of the Borrower to the Lender are satisfied) a
Borrowing Certificate, provided, however, that the Lender may, in its sole
discretion, at any time require that the Borrower comply with the Lender's full
dominion reporting system, a lockbox and blocked account;
ii. Within ten (10) days after the end of each calendar
month (commencing with the month in which this Agreement is executed and
continuing until all of the Obligations of the Borrower to the Lender are
satisfied) an aging report, setting forth, in such form as the Lender shall
reasonably require, the amount or amounts due and owing on, and aging of, the
accounts receivable and the accounts payable and an inventory designation of the
Borrower according to the books and records of the Borrower as of the close of
such preceding calendar month;
iii. Within ten (10) days after the end of each calendar
month (commencing with the month in which this Agreement is executed and
continuing until all of the Obligations of the Borrower to the Lender are
satisfied) a reconciliation report setting forth, in such form as the Lender
shall reasonably require, a summary of all collections, payments and adjustments
made or received by the Borrower with respect to its accounts receivable during
such preceding calendar month;
iv. Within ten (10) days after the end of each calendar
month (commencing with the month in which this Agreement is executed and
continuing until all of the Obligations of the Borrower to the Lender are
satisfied), proof of payment of the rent due to the County of ▇▇▇▇▇▇ pursuant to
a certain Lease dated May 14, 1975, as amended by a certain Amendment of Lease
dated February 2, 1977, between Borrower and the County of ▇▇▇▇▇▇;
v. Within sixty (60) days after the end of each quarterly
fiscal period of the Borrower (commencing with the quarterly period in which
this Agreement is executed and continuing until all of the Obligations of the
Borrower to the Lender are satisfied), a balance sheet of the Borrower as at the
end of such period and a statement of income thereof for the period from the
beginning of the current fiscal year to the end of such quarterly fiscal period,
all in reasonable detail and certified as complete and correct, to the best of
his knowledge, subject to year-end adjustments, by the principal financial
officer of the Borrower;
vi. Within one hundred twenty (120) days after the end of
each fiscal year of the Borrower (commencing with the fiscal year in which this
Agreement is executed and continuing until all of the Obligations of the
Borrower to the Lender are satisfied), a balance sheet of the Borrower as at the
end of such year and statements of income, stockholders' equity and cash flow
thereof for such year, all in reasonable detail and reviewed by independent
certified public accountants, acceptable to the Lender, and which shall also be
certified by the principal financial officer of the Borrower to be complete and
correct, and a review report shall include a statement of their examination
(which shall include a review of the relevant provisions of this Agreement) and
stating whether their examination has disclosed the existence of any condition
or event which constitutes (or would after notice or lapse of time, or both,
constitute) an Event of Default, and if so, specifying the nature and period of
existence thereof;
vii. Such additional financial statements or information of
the Borrower as the Lender shall reasonably require.
b. Any statement, report, compilation or other document or
writing which is the result of professional accounting services provided by the
Borrower's accountant shall be accompanied by a written communication, in form
and substance satisfactory to the Lender, signed by the Borrower and their
accountant, stating, among other things, that (i) the accountant acknowledges
that the Lender intends to rely on all such statements, reports, compilations
and other documents or writings and (ii) the Borrower has knowledge of the
Lender's reliance or intended reliance on such statements, reports, compilations
and other documents or writings.
6.13 Fees and Expenses in Protecting Rights. If at any time or times or
from time to time the Lender employs counsel or any other professionals or
consultants for advice or other representation:
a. with respect to the Collateral, the Obligations of the
Borrower to the Lender, this Agreement, or any document, instrument, writing or
Agreement related thereto, in the Lender's reasonable discretion;
b. to represent the Lender in any litigation, contest,
dispute, suit or proceeding or to commence, defend or intervene or to take any
other action in or with respect to any litigation, contest, dispute, suit or
proceeding (whether instituted by the Lender, Borrower or any other person) in
any way or respect relating to the Collateral, the Obligations of the Borrower
to the Lender, this Agreement or any document, instrument, writing or agreement
related thereto;
c. to protect, collect, sell, liquidate or otherwise dispose
of the Collateral;
d. to attempt to or to enforce the Lender's liens and
security interests in the Premises or in the Collateral; and/or
e. in otherwise protecting, enforcing or exercising its
interests, Rights or Remedies created by, connected with or provided in this
Agreement, or performance pursuant to this Agreement;
then, the reasonable attorneys' fees, costs and expenses arising from such
services, and all other reasonable expenses, costs, charges and other fees of
the Lender in any way or respect arising in connection with or relating to any
of the events described in this Subsection shall be added to the amount of the
Obligations of the Borrower to the Lender, and shall be payable on demand. The
Borrower hereby authorizes the Lender to charge the Borrower's Revolving Loan
for payment of any and all fees and expenses due under this Subsection 6.13. Any
amounts due hereunder not paid on demand shall bear interest from the date of
demand at the default rate of interest set forth in the Note. Any of the amounts
payable hereunder by the Borrower may be paid by the Lender, and if and when so
paid, shall be deemed to be advances under the Revolving Loan.
6.14 Fees and Expenses Incident to Preparation, Execution and Delivery of
Agreement. The Borrower shall pay on demand all reasonable legal fees, recording
expenses and other reasonable and necessary disbursements of the Lender incident
to the preparation, execution and delivery of this Agreement.
6.15 Financial Records in Accordance with GAAP. The Borrower shall, at all
times and in accordance with generally accepted accounting principles,
consistently applied, keep complete and accurate books and records concerning
its business, affairs and operations and concerning its properties and assets,
including, without limitation, the Collateral.
6.16 Legends, Etc. on Books and Records and Collateral. The Borrower shall
promptly make, stamp or record such entries or legends on the Borrower's
internal books and records or on any of the Collateral as the Lender shall
request from time to time to indicate and disclose that the Lender has a
security interest in such Collateral.
6.17 Inspection or Examination of Properties and Assets. The Borrower shall
from time to time permit the Lender to inspect or examine the properties and
assets of the Borrower, including, without limitation, the Collateral, and
further to examine, check, audit, make copies of or extracts from any of the
Borrower's books, records, journals, receipts, orders, correspondence or other
data relating to the Collateral, and to independently verify the orders and
accounts receivable of Borrower. So long as there are no Events of Default the
Lender shall perform such inspections and examinations no more than once per
calendar quarter.
6.18 Other Reporting Requirements. The Borrower, to the extent applicable,
shall furnish to the Lender:
a. as soon as possible and in any event within thirty (30)
days after the Borrower or a duly appointed administrator of a Defined Benefit
Plan knows or has reason to know that any Reportable Event has occurred with
respect to any Defined Benefit Plan, a statement of the chief financial officer
of the Borrower setting forth details as to such Reportable Event and the action
which the Borrower proposes to take with respect thereto, together with a copy
of the notice of such Reportable Event given to the PBGC or a statement that
said notice will be filed with the annual report to the United States Department
of Labor with respect to such Defined Benefit Plan if required under applicable
regulations;
b. promptly after the filing thereof with the United States
Department of Labor, the Internal Revenue Service or the PBGC, copies of each
annual and other report with respect to each Defined Benefit Plan;
c. promptly after receipt thereof, a copy of any notice the
Borrower or any other member of a Controlled Group may receive from the United
States Department of Labor, the Internal Revenue Service or the PBGC with
respect to any Defined Benefit Plan; and
d. promptly after the sending of, making available or
financial statements which the Borrower shall send or make available to all of
its stockholders, and any registration statements and any reports which the
Borrower shall file with the Securities and Exchange Commission.
e. filing of the same, copies of any reports, proxy
statements and
6.19 Use of Loan Proceeds. The Borrower shall use loans and advances made
pursuant to this Agreement solely to refinance existing obligations and for
corporate working capital purposes.
6.20 Further Assurances. The Borrower shall, as the Lender may request and
require, procure and deliver to the Lender or execute any mortgage, security
agreement, financing statement or other writing necessary to evidence, preserve,
protect or enforce the Lender's rights and interests to or in the Collateral and
the Premises or in any other collateral agreed to by the parties.
6.21 Qualified Account Receivable. The Borrower shall not knowingly submit
or represent to the Bank any Account Receivable as a Qualified Account
Receivable, which does not meet every requirement in every respect of a
Qualified Account Receivable, and shall notify the Bank promptly upon learning
of such disqualification, in writing, when any Account Receivable against which
a loan or advance was, or may be, made pursuant to Subsection 2.1 ceases to meet
any of those requirements.
6.22 Change in Financial Condition. The Borrower shall immediately notify
the Lender of any material loss or damage to, or material diminution in, or any
occurrence which would materially adversely affect, the value of any Collateral.
In the event that the Lender, in its sole discretion, shall determine that there
has been any such material loss, damage or diminution in value, the Borrower
shall, whenever the Lender so requests, pay to the Lender, within such period as
the Lender shall specify, such amount as the Lender, in its sole discretion,
shall have determined represents such material loss, damage or diminution in
value (any such payment, however, not to affect the Lender's security interest
in the Collateral).
6.23 Additional Collateral.
a. The Borrower shall deliver to the Lender (i) promptly at
the Lender's request, all instruments and chattel paper (including all executed
copies thereof, except such executed copies retained by the obligors thereunder)
representing proceeds of Collateral, and (ii) promptly at the Lender's request,
all invoices, original bills of lading, documents of title, original contracts,
and any other writings relating thereto, and other writings or evidence of
performance of contracts or evidence of shipment or delivery of the merchandise
sold or services rendered in connection therewith; and the Borrower shall
deliver to the Lender, promptly at the Lender's request, from time to time,
additional copies of any or all of such papers or writings, and such other
information with respect to any of the said Collateral and such schedules of
accounts receivable and other writings, as the Lender may in its sole discretion
deem to be necessary or effectual to evidence any loan made pursuant to this
Agreement or to evidence, enforce or perfect the Lender's security interest in
the Collateral, to facilitate collection of the Collateral, or to carry into
effect the provisions and intent of this Agreement, all at the sole expense of
the Borrower.
b. The Lender may from time to time in the Lender's sole
discretion hold and treat any deposits or other sums at any time credited by or
due from the Lender to the Borrower and any securities or other property of the
Borrower in possession of the Lender, whether for safekeeping or otherwise, as
collateral security for and apply or set off the same against any of the
Obligations of the Borrower to the Lender. Without limiting the generality of
the foregoing, if at any time the amount of the loans or advances by the Lender
as allowed by this Agreement shall be exceeded, the Borrower shall pay to the
Lender, in immediately available funds, the amount of such excess if the Lender
so requests, or the Lender may charge such amount against any deposit account of
the Borrower with the Lender.
6.24 Accounts Relating to Contracts With the United States of America. If
any of the accounts, chattel paper, general intangibles or instruments
constituting Collateral arise out of contracts with the United States or any of
its departments, agencies or instrumentalities, the Borrower shall notify the
Lender and execute any necessary writings in order that all money due or to
become due under such contracts shall be assigned to the Lender and proper
notice of the assignment given under the Federal Assignment of Claims Act.
6.25 Prohibited Transactions. Without the prior written consent of the
Lender, which consent will not be unreasonably withheld, the Borrower shall not:
a. Create, incur or assume any liability for borrowed money,
except liabilities heretofore or hereinafter incurred by the Borrower to the
Lender, except for the creation of purchase money security interests in
aircraft.
b. Assume, guarantee, endorse or otherwise become liable, in
connection with the Obligations of any person, firm or corporation except (i)
liabilities of the Borrower resulting from product warranties made by the
Borrower in the ordinary course of its business, (ii) liabilities of the
Borrower resulting from its endorsement of items or instruments for deposit or
collection in the ordinary course of its business, and (iii) guaranties executed
by Borrower in favor of Lender.
c. Sell, lease, abandon, or otherwise dispose of, all or any
substantial part of the properties or assets of the Borrower with the exception
of aircraft.
d. Purchase, lease, or otherwise acquire, the properties or
assets, or any interest therein, of any person, firm or corporation, except
purchases, leases or other acquisitions of inventory and equipment made by the
Borrower in the ordinary course of its business in bona fide, arm's length
transactions.
e. Consolidate with, merge into, or participate in any joint
venture with, any person, firm or corporation, or permit any person, firm or
corporation, to consolidate with, merge into, or participate in, any joint
venture with the Borrower.
f. Create or acquire the obligations, securities or stock
of, or make loans, advances or capital contributions to, any person, firm or
corporation, except upon prior written notice to the Lender, provided, however,
that the Borrower may, without such prior written notice, purchase or acquire
any of the following:
i. Marketable direct obligations of the United States of
America;
ii. (Commercial paper issued by corporations conducting
substantially all of their business in the United States of America, maturing
within one hundred eighty (180) days from the date of the original issue
thereof, and rated "prime" by the National Credit Office;
iii. Bonds of any state, county, or municipality of the
United States of America, (1) which mature within two (2) years from the date of
acquisition thereof, and (2) which are not in default as to principal or
interest, and (3) which are rated Aa, or better, by ▇▇▇▇▇'▇ Investors Service,
and (4) the interest of which is exempt from federal income tax; and
iv. Customer's notes, chattel paper, or the like received as
non-cash proceeds of the sale of the inventory of the Borrower in the ordinary
course of its business, subject to the provisions of Subsection 6.15.
g. Alter its existing capital stock structure by issuance of
new shares of existing classes of stock, by creation of new classes of stock, or
otherwise, so as to cause a loss of control of the Borrower by the Guarantors.
h. Permit or cause any change in the ownership of its
presently issued and outstanding stock which change would result in a loss of
control of the Borrower by the Guarantors.
i. Declare or pay any dividend, in cash or otherwise, on any
shares of stock of the Borrower, or order, or make, a redemption or other
acquisition of any stock of any of the Guarantors.
j. Make loans or advances to any of its officers, directors
or stockholders, or to any other person, firm or entity, with the exception of
travel or other advances which at any time shall not exceed ten thousand
($10,000.00) dollars.
k. Permit or cause any change in the person of ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇ as President of the Borrower, except upon sixty (60) days prior
notice to the Lender, unless such change is outside the control of the Borrower
and the Lender determines the new President to be acceptable.
6.26 Information Relating to Operations of Borrower. Upon written request,
the Borrower shall provide to the Lender the following information pertaining to
all operations conducted in or on the Premises:
a. Copies of all permits obtained from any federal, state or
local agency;
b. Material safety data sheets for all chemicals in use at,
manufactured at, imported to, or stored at the Premises;
c. Copies of all materials filed with the Federal
Occupational Safety and Health Agency under OSHA Hazard Communication Standard
and all materials filed with the New Jersey Department of Health, the New Jersey
Department of Environmental Protection, or any other federal, state or local
agency or entity;
d. Maps, diagrams and site plans showing the location of all
storage areas and storage tanks for Hazardous Substances and the location of
processes using any of them, including details as to the amounts stored or used;
e. A description of said operations and of their processes;
f. Any other information which the Lender may reasonably
request.
6.27 Notification of Event of Default. The Borrower shall immediately
notify the Lender of the occurrence of an Event of Default and of the nature and
period of existence thereof.
6.28 Financial Covenants. The Borrower shall:
a. Maintain a minimum net profit after taxes and management
fees of Fifty Thousand ($50,000.00) Dollars, measured on an annual basis; and
b. Maintain a maximum ratio of Debt to Net Worth of not more
than 2.00 to 1, measured on a quarterly basis.
6.29 Compliance With Agreement. The Borrower shall observe, perform and
comply with, and shall continue, until all Obligations of the Borrower to the
Lender pursuant to this Agreement are fully paid and satisfied, to observe,
perform and comply with, all of the Borrower's covenants made in this Agreement.
6.30 Termination of Lease. The Borrower shall promptly notify the Lender
upon receipt of any notice claiming to terminate or claiming to attempt to
terminate a certain lease dated May 14, 1975, as amended by a certain Amendment
of Lease dated February 2, 1977, between Borrower and the County of ▇▇▇▇▇▇,
including all renewals, extensions or modifications thereof whether now or in
the future(collectively and individually, the "Lease"), for a portion of the
real property known as ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ County Airport (the "Airport Property").
The Borrower shall promptly supply to the Lender a copy of any and all such
notices received by the Borrower in connection with said termination.
6.31 Encumbrance of Airport Property. The Borrower shall not create, incur,
assume, allow or permit, nor shall any Corporate Guarantor hereunder create,
incur, assume, allow or permit, any Liens of any nature upon or with respect to
the Borrower's interests in the Airport Property under the Lease, except as have
been listed on Schedule 6.7 annexed hereto and made a part hereof.
SECTION 7
EVENTS OF DEFAULT
There shall be an Event of Default by the Borrower under this
Agreement upon the occurrence of any one of the following:
7.1 The Borrower's failure to pay, when due, on demand or at maturity
(whether as stated or by acceleration), as the case may be, any payment of
principal, interest or other charges due and owing to the Lender pursuant to any
Obligations of the Borrower to the Lender, including, without limitation, those
Obligations arising pursuant to this Agreement.
7.2 A material breach by the Borrower or the Guarantors of any covenant
contained in this Agreement or the Corporate Guaranty Agreements including,
without limitation, those covenants contained in Section 6. Provided that no
material adverse effect will be suffered by the Bank or the Collateral (to be
determined in the Bank's reasonable discretion), the Borrower shall be permitted
to cure certain Events of Default as follows: for a breach of any covenant
contained in subsections 6.12(a)(ii), 6.12(a)(iii), 6.13, or 6.14, the Borrower
shall be permitted a cure period of fifteen (15) days from the occurrence of the
event of default; for a breach of any covenant contained in Subsections 6.1,
6.2, 6.3, 6.4 (except that no cure period will be permitted for the payment of
any pension obligations of the Borrower or the Corporate Guarantors including,
without limitation, obligations due to the PBGC, the U.S. Department of Labor or
a Plan); 6.5, 6.8(a), 6.12(a)(iv), or 6.12(a)(v) (only as to delivery of
documents relating to the Borrower and not as to the delivery of documents
relating to the Corporate Guarantors or to any Affiliate), the Borrower shall be
permitted a cure period of thirty (30) days from the occurrence of the Event of
Default.
7.3 If any warranty or representation contained in this Agreement,
including, without limitation, the warranties and representations contained in
Section 5, shall be incorrect in any material respect, or if any financial
statement given by the Borrower or the Guarantors to the Lender shall be
incorrect in any material respect.
7.4 Upon dissolution, termination of existence, insolvency, business
failure, appointment of a trustee, receiver or custodian of all or any part of
the properties or assets of the Borrower or the Guarantors; upon an assignment
for the benefit of creditors by, the calling of a meeting of creditors of, or
the commencement of any proceeding under any bankruptcy or insolvency laws of
any state or of the United States by the Borrower or the Guarantors, or the
commencement of any proceeding under any bankruptcy or insolvency laws of any
state or of the United States against the Borrower or the Guarantors which
proceeding against the Borrower or the Corporate Guarantors is not discharged or
dismissed within sixty (60) days of commencement of such proceeding.
7.5 The occurrence of any event of default on the part of the Borrower or
the Guarantors in connection with any loans, advances or other extensions of
credit by the Lender to the Borrower or the Guarantors other than those loans
made pursuant to this Agreement.
7.6 The occurrence of any event of default occurring hereafter on the part
of the Borrower or the Corporate Guarantors in connection with any loans,
advances, extensions of credit, contracts, obligation or other agreement between
the Borrower or the Corporate Guarantors and third parties including, without
limitation, obligations due to the PBGC, the United States Department of Labor
or a Plan, but other than obligations due to (i) professionals in connection
with services provided to or for the benefit of the Borrower or the Corporate
Guarantors as to which the professionals and the Borrower or the Corporate
Guarantors, as the case may be, have mutually agreed upon terms for payment of
such obligations, (ii) vendors which shall not be more than ninety (90) days
past due, or (iii) trade creditors in connection with obligations not in excess
of Five Thousand and 00/100 ($5,000.00) Dollars which shall not be more than
ninety (90) days past due unless being contested in good faith.
7.7 If any warranty or representation whether past, contemporaneous or
future made in writing by the Borrower or the Guarantors to the Lender, other
than the warranties or representations set forth in this Agreement, shall be
incorrect in any material respect.
SECTION 8
LENDER'S RIGHTS AND REMEDIES
8.1 Exclusive of the occurrence of an Event of Default, the Lender may:
a. Whenever the Lender deems itself insecure by reason of a
material adverse change in the financial condition of the Borrower or the
Guarantors, or of a material adverse change in the value or condition of the
Collateral or the Premises, terminate its agreement to make loans or advances to
the Borrower pursuant to this Agreement, declare all of the Obligations of the
Borrower to the Lender to be due and payable, and demand payment of all of the
Obligations of the Borrower to the Lender;
b. Call at the Borrower's place of business during the
regular business hours of the Borrower, and at reasonable intervals to be
determined by the Lender and, without hindrance or delay, inspect, audit, check
and make extracts or copies from the Borrower's books, records, journals,
orders, receipts, correspondence, and other data, and inspect the Collateral and
the Premises;
c. Endorse the name of the Borrower upon any and all checks,
drafts, money orders and other instruments for the payment of monies which are
payable to the Borrower and constitute proceeds of the Collateral;
d. Receive and have access to printouts and all other
information respecting financial records of the Borrower maintained by external
computer service companies; and
e. Communicate, in the name of a certified public accountant
or public accountant, or in a fictitious name or names, with customers and
account debtors of the Borrower to independently verify orders and accounts
receivable.
8.2 Upon the occurrence of an Event of Default the Lender shall have the
following rights and remedies to be exercised within the sole discretion of the
Lender without further demand, presentation or notice, of any kind:
a. The Lender shall have all of those rights and remedies
provided in this Agreement, in the Uniform Commercial Code and other applicable
law in force and effect in New Jersey from time to time;
b. The Lender's agreement to make any further loans pursuant
to this Agreement, or otherwise, shall cease, and all of the Obligations of the
Borrower to the Lender shall immediately become due and payable;
c. In protecting, exercising or enforcing its interests,
rights or remedies under this Agreement, receive, open and dispose of mail
addressed to the Borrower, provided that the Lender shall use its best efforts
to return without delay to the Borrower all mail not related to the Collateral,
the Premises or to any of the Obligations, and in connection therewith, give
such notice to any office or officials of the United States Postal Service, or
any successor thereof, to effect such changes of address as the Lender may deem
necessary so that all mail addressed to the Borrower may be delivered directly
to the Lender;
d. Require the Borrower to assemble the Collateral and make
it available at the principal place of business or other places of business of
the Borrower to allow the Lender to take possession or dispose of the
Collateral;
e. Take possession of and sell or otherwise dispose of any
or all of the Collateral at public or private sale, and if notice of such sale
or of other action by the Lender is required by applicable law, the Borrower
agrees that ten (10) days notice to the Borrower shall be sufficient, which the
Lender and the Borrower herewith agree to be commercially reasonable;
f. Subrogate to all of the Borrower's interests, rights and
remedies in respect to the Collateral, including the right to stop delivery, and
(upon notice from the Borrower that the account debtor has returned, rejected,
revoked acceptance of or failed to return the goods or that the goods have been
reconsigned or diverted) the right to take possession of and to sell or dispose
of the goods;
g. Execute in the name of the Borrower any schedules,
assignments, instruments, documents and statements which the Borrower is
obligated to give the Lender;
h. Sign financing statements in the name of the Borrower, or
file financing statements without the Borrower's signature, in any relevant
state to perfect or maintain the Lender's security interest in any or all of the
Collateral; and
i. Receive from all or any accountants and auditors employed
by the Borrower at any time during the term of this Agreement copies of any of
the Borrower's financial statements, trial balances or other accounting records
of any sort in their possession, together with any other information concerning
the financial status or business operations of the Borrower.
j. Without limitation of the Lender's rights under this
Agreement, the Lender shall have the right, but not the obligation, to exercise
any of its rights set forth in the Environmental Agreement at any time.
8.3 The Borrower hereby grants to the Lender an irrevocable license (or
sub-license as the case may be) to use all of the Borrower's trademarks and
trade names, with all rights, privileges and benefits flowing therefrom but none
of the obligations, to be exercised by the Lender after the occurrence of an
Event of Default and solely for the purpose of liquidating the Collateral.
SECTION 9
BORROWER'S RIGHTS AND REMEDIES
9.1 Subject to Subsection 6.25(c), the Borrower shall have the right to
sell its inventory and collect its accounts receivable, at its own expense, in
the ordinary course of its business, until an Event of Default has occurred.
9.2 The Borrower shall have all of the rights and remedies provided in this
Agreement and by the Uniform Commercial Code and other applicable law in force
in New Jersey from time to time.
SECTION 10
MISCELLANEOUS PROVISIONS
10.1 Obligations and Liabilities of Lender. The Lender shall not be deemed
to have assumed any liability or responsibility to the Borrower or any third
person for the correctness, validity or genuineness of any instruments or
documents that may be released or endorsed to the Borrower by the Lender (which
shall automatically be deemed to be without recourse to the Lender in any
event), or for the existence, character, quantity, quality, condition, value or
delivery of any goods purporting to be represented by any such documents; and
the Lender, by accepting such security interest in the Collateral, or by
releasing any Collateral to the Borrower, shall not be deemed to have assumed
any obligation or liability to any supplier or account debtor or to any other
third party, and the Borrower agrees to indemnify and defend the Lender and hold
it harmless in respect to any claim or proceeding arising out of any matter
referred to in this Subsection 10.1.
10.2 Waiver of Notices. Notice of default and presentment, demand, protest
and notice of dishonor as to any provision of this Agreement or any other
agreement or instrument is hereby waived by the Borrower, except as may be
otherwise specifically provided in this Agreement.
10.3 Reference to Parties. "Lender" and "Borrower" as used in this
Agreement shall include the successors, representatives, and assigns of those
parties, provided, however, that the Borrower shall not assign or delegate any
of its rights, remedies, warranties, representations or covenants arising under
this Agreement without the prior written consent of the Lender, and any
purported assignment or delegation without such consent shall be void.
10.4 Governing Law; Consent to Jurisdiction.
a. This Agreement is to be executed and delivered within the
State of New Jersey, is to be principally performed within the State of New
Jersey, and the Borrower and the Lender elect that the laws of the State of New
Jersey shall govern the construction of this Agreement and the rights, remedies,
warranties, representations, covenants, and provisions hereof without giving
effect to the conflict of laws rules of the State of New Jersey.
b. Any legal action or proceeding with respect to this
Agreement or any other document, instrument, writing or agreement related
hereto, may be brought in the courts of the State of New Jersey or of the United
States for the District of New Jersey, and, by execution and delivery of this
Agreement, the Borrower hereby irrevocably accepts for itself in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. The Borrower further irrevocably consents to the service of process out
of any of the aforementioned courts and in any action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
the Borrower at its address for notices contained in Subsection 10.9 of this
Agreement, such service to become effective thirty (30) days after such mailing.
Nothing contained herein shall affect the right of the Lender to service of
process in any other manner permitted by law or to commence any legal
proceedings or otherwise proceed against the Borrower in any jurisdiction.
c. The Borrower hereby waives any rights it may have to
transfer or change the venue of any litigation brought against it by the Lender
which is in any way related to this Agreement or any other document, instrument,
writing or agreement related hereto.
d. The provisions of this Subsection 10.4 shall survive the
repayment of the Obligations of the Borrower to the Lender and the termination
of this Agreement.
10.5 Severability. If any of the provisions of this Agreement shall
contravene or be held invalid under the laws of any jurisdiction, this Agreement
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 Agreement in any jurisdiction.
10.6 Rights and Remedies, Etc. The Events of Default, rights, remedies,
warranties, representations, covenants, and provisions set forth in this
Agreement, or as may be provided by applicable law, shall be cumulative and not
alternative or exclusive, and the Lender's Rights and Remedies may be exercised
by the Lender at such time or times, in such order of preference, as the Lender
in its sole discretion may determine.
10.7 Entire Agreement, No Waiver, Etc. This Agreement embodies the entire
agreement and understanding between the Borrower and the Lender and supersedes
all prior agreements and understandings relating to the subject matter hereof.
All warranties, representations and covenants imposed or made herein shall
survive the execution and delivery of this Agreement. No delay or omission of
the Lender in exercising or enforcing any of the Lender's Rights and Remedies
hereunder shall constitute a waiver thereof; and no waiver by the Lender of any
Event of Default should operate as a waiver of any other Event of Default. No
term or provision hereof shall be waived, altered or modified except with the
prior written consent of the Lender, which consent makes explicit reference to
this Agreement. Except as provided in the preceding sentence, no other agreement
or transaction, of whatsoever nature, entered into between the Lender and the
Borrower at any time (whether before, during or after the effective date or
terms of this Agreement), shall be construed in any particular as a waiver,
modification or limitation of any of the Lender's Rights and Remedies under this
Agreement nor shall anything in this Agreement be construed as a waiver,
modification or limitation of any of the Lender's Rights and Remedies under this
Agreement nor shall anything in this Agreement be construed as a waiver,
modification or limitation of any of the Lender's Rights and Remedies, not only
under the provisions of this Agreement, but also of any such other agreement or
transaction.
10.8 Reference to Days. Any and all references to "days" in this Agreement
shall mean "calendar days" except as otherwise specifically provided by law.
10.9 Notices.
a. All notices, requests, and other communications pursuant
to this Agreement, other than notices or requests by the Borrower for advances
under the Revolving Loan shall be in writing, delivered by hand, certified mail
return receipt requested, overnight delivery service, or telecopier addressed to
the Lender at ▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ "Attention: ▇▇▇
▇▇▇▇▇▇▇", or to the Borrower at its principal place of business as described in
Subsection 5.13 of this Agreement, "Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇, President",
or at such other address as either may give notice to the other as herein
provided.
b. All notices or requests by the Borrower for advances
under the Revolving Loan may be made by telephonic instructions but shall
nevertheless be made in writing, delivered as set forth above, and addressed to
the Lender as follows: Summit Bank, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attn:
Asset Based Lending, telephone number ▇▇▇-▇▇▇-▇▇▇▇, telecopier number
▇▇▇-▇▇▇-▇▇▇▇, or at such other address or telephone or telecopier number as the
Lender may give notice to the Borrower as herein provided;
c. Any notice, request or communication hereunder addressed
as aforesaid shall be deemed to have been given (i) in the case of delivery by
mail, three (3) days after its deposit in the mails, postage prepaid, or (ii) in
the case of delivery by overnight delivery service, when deposited with a
reputable overnight delivery service, postage prepaid or (iii) in the case of
delivery by hand, when delivered or (iv) in the case of delivery by telecopier,
when transmitted and receipt confirmed by the sender obtaining a printed
confirmation that the entire document has been properly transmitted to
recipient; provided, however, that notice of a change of address, as hereinabove
provided, shall be deemed to have been given only when actually received by the
party to which it is addressed.
10.10 Ambiguity Between Agreements. In the event of ambiguity or
inconsistency between this Agreement and any agreement, document or instrument
made pursuant hereto, then the terms of this Loan and Security Agreement will
govern.
10.11 Counterparts. This Agreement may be executed in counterparts, each of
which, when taken together, shall be deemed to be one and the same instrument.
10.12 Headings. Section headings herein are included for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.
10.13 WAIVER OF JURY TRIAL.
a. THE LENDER AND THE BORROWER HEREBY ACKNOWLEDGE THAT
DISPUTES ARISING UNDER THIS AGREEMENT OR OTHERWISE RELATING TO THE OBLIGATIONS
OF THE BORROWER TO THE LENDER ARE LIKELY TO BE COMPLEX AND THEY DESIRE TO
STREAMLINE AND MINIMIZE THE COST OF RESOLVING SUCH DISPUTES. THEREFORE, THE
LENDER AND THE BORROWER IRREVOCABLY WAIVE, AND COVENANT THAT THEY WILL NOT
ASSERT (AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO A TRIAL BY JURY IN
ANY ACTION, COUNTERCLAIM, DISPUTE OR PROCEEDING BASED UPON, OR RELATED TO THE
SUBJECT MATTER OF THIS AGREEMENT OR OTHERWISE RELATING TO THE OBLIGATIONS OF THE
BORROWER TO THE LENDER. WITHOUT LIMITING THE FOREGOING, THIS WAIVER AND COVENANT
APPLIES:
b. TO ALL CLAIMS AGAINST ALL PARTIES TO SUCH DISPUTES,
ACTIONS AND PROCEEDINGS INCLUDING THOSE INVOLVING THE LENDER, THE BORROWER OR
ANY OF THEIR RESPECTIVE PARENTS, SUBSIDIARIES, AFFILIATES OR RELATED ENTITIES,
OR ANY OFFICER, DIRECTOR, SHAREHOLDER, MEMBER, ATTORNEY OR PARTNER OF ANY OF
THEM;
c. IRRESPECTIVE OF WHETHER SUCH DISPUTE, ACTION OR
PROCEEDING ARISES UNDER THIS AGREEMENT OR ANY OTHER AGREEMENT, NOTE, PAPER,
INSTRUMENT OR DOCUMENT HERETOFORE OR HEREAFTER EXECUTED RELATING TO ANY OF THE
OBLIGATIONS OF THE BORROWER TO THE LENDER;
d. IRRESPECTIVE OF WHETHER SUCH DISPUTE, ACTION OR
PROCEEDING ARISES IN CONNECTION WITH OR IS BASED UPON INTENTIONAL OR
UNINTENTIONAL CONDUCT, FRAUD, IMPROPER ACTION OR FAILURE TO ACT, OR ANY OTHER
CIRCUMSTANCES.
e. THIS WAIVER IS KNOWINGLY, AND VOLUNTARILY MADE BY THE
BORROWER AND THE LENDER, AND THE BORROWER AND THE LENDER ACKNOWLEDGE THAT
NEITHER OF THEM, NOR ANY PERSON ACTING ON BEHALF OF EITHER OF THEM, HAS MADE ANY
REPRESENTATIONS TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY
OR NULLIFY ITS EFFECT. THE BORROWER AND THE LENDER FURTHER ACKNOWLEDGE THAT THEY
HAVE BEEN REPRESENTED (OR HAVE HAD THE OPPORTUNITY TO BE REPRESENTED) IN
CONNECTION WITH THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER
BY INDEPENDENT LEGAL COUNSEL, SELECTED OF THEIR OWN FREE WILL, AND THAT THEY
HAVE HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL. THE BORROWER AND
THE LENDER FURTHER ACKNOWLEDGE THAT THEY HAVE READ, AND UNDERSTAND THE MEANING
AND RAMIFICATIONS OF, THIS WAIVER.
f. THE BORROWER AND THE LENDER ACKNOWLEDGE THAT THEY HAVE
BEEN INFORMED BY EACH OTHER THAT THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT
UPON WHICH EACH HAS RELIED IN ENTERING INTO THIS AGREEMENT, AND THAT THIS WAIVER
PARAGRAPH SHALL BE DEEMED ENFORCEABLE INDEPENDENTLY OF ALL OTHER PROVISIONS OF
THIS AGREEMENT. EITHER PARTY MAY FILE AN ORIGINAL COUNTERPART OF THIS SECTION AS
WRITTEN EVIDENCE OF THE CONSENT BY EITHER OF THEM TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY. THE
g. PROVISIONS OF THIS SUBSECTION SHALL SURVIVE THE REPAYMENT
OF THE OBLIGATIONS OF THE BORROWER TO THE LENDER AND THE TERMINATION OF THIS
AGREEMENT.
Executed at Plainsboro, New Jersey, on the date first written above.
WITNESS: RONSON AVIATION, INC.
/s/ By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------- -------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President - Finance
and Chief Financial Officer
SUMMIT BANK
/s/ By: /s/▇▇▇ ▇▇▇▇▇▇▇
--------------------- --------------
▇▇▇ ▇▇▇▇▇▇▇,
Vice President
Exhibit List
A. Document List
Schedule List
5.4 Subsidiaries and Affiliates
5.8 Litigation
5.13 Places of Business
6.7 Permitted Encumbrances
SCHEDULE 5.4
SUBSIDIARIES AND AFFILIATES
Subsidiaries
None
Affiliates
Parent Corporation: Ronson Corporation
Sister Corporations: Ronson Consumer Products Corporation
Ronson Corporation of Canada, Ltd.
Prometcor, Inc.
Ronson Hydraulic Units Corporation
ArCee International Corporation
Arcan, Inc.
Cherry Creek, Inc.
SCHEDULE 5.8
LITIGATION
1. ▇▇▇▇▇ vs. Ronson Aviation, Inc.
Division on Civil Rights Charge No. 1EL11AB-39867-A
SCHEDULE 5.13
PLACES OF BUSINESS
1. Ronson Aviation, Inc.
Trenton-▇▇▇▇▇▇ Airport
▇▇▇▇▇ Township, NJ
2. AvPac, subsidiary of ▇▇▇▇▇▇ Aviation
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇
SCHEDULE 6.7
PERMITTED ENCUMBRANCES
1. Lien in favor of:
Copelco Capital
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Covering seven (7) personal computers with monitors, three (3)
printers, and "Total FBO" software package. The acquisition of the
equipment and the filing of the lien are in process.
The Borrower shall keep its properties and assets free and clear of
liens (except for liens existing as of the date hereof including purchase money
security interests on specific aircraft) and refrain from selling or offering to
sell or otherwise transferring its properties and assets or any interest
therein, except such sales or other transfers of inventory made by the Borrower
in the ordinary course of its business in commercially reasonable and bona fide
arm's length transactions; provided, however, that so long as no Event of
Default has occurred and is continuing, the Borrower may sell or otherwise
dispose of aircraft in commercially reasonable and bona-fide transactions and
use the proceeds from such sale or other disposition for working capital
purposes, provided further that any purchase money or other financing granted by
the Lender and specifically related to such aircraft has been fully paid and
satisfied, and the Lender has agreed that, in the event of any such permitted
sale or disposition, any lien or security interest held by the Lender shall be
released or discharged, at the sole cost and expense of the Borrower.
EXHIBIT 10(b)
MASTER NOTE
$400,000.00 Plainsboro, New Jersey
August 28, 1997
In consideration of such loans as Summit Bank (the "Lender") from time
to time may elect to make hereon to or for the benefit of or at the request of
Ronson Aviation, Inc. (the "Borrower"), the Borrower promises to pay to the
order of the Lender, at its office located at ▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ or at such other place or places as the Lender may designate, in
immediately available funds, the sum of Four Hundred Thousand ($400,000.00)
Dollars or, if a different dollar amount, then the outstanding amount of all
loans made hereunder, without defalcation or discount, for value received, with
interest thereon from the date hereof at the rate set forth below, all in lawful
money of the United States, on demand made in accordance with a certain Loan and
Security Agreement of even date herewith by and between the Borrower and the
Lender (the "Loan Agreement") or, if no demand has been made, then on June 30,
2000. The unpaid balance of each loan shall bear interest from the date hereof
at the rate(s) set forth in the Loan Agreement. Notwithstanding any other
limitations contained in this Master Note (the "Note"), the Lender does not
intend to charge and the undersigned shall not be required to pay any interest
or other fees or charges in excess of the maximum permitted by applicable law.
Any payments in excess of such maximum shall be refunded to the undersigned or
credited against principal.
The unpaid principal balance hereon at any time shall not exceed Four
Hundred Thousand ($400,000.00) Dollars and shall be equal to the aggregate
amount of all loans then made less the aggregate amount of all payments then
made thereon. The holder hereof is authorized to set forth in writing from time
to time on the reverse hereof the date and amount of each loan and any payment
of principal and the principal balance then unpaid hereon.
This Note is secured by, among other things, a security interest in the
Collateral, as described in the Loan Agreement, which the Borrower and every
other person liable hereon as endorser or guarantor has pledged or deposited
with the Lender. The Collateral is also pledged as security for all of the
Obligations, as defined in the Loan Agreement, of the Borrower to the Lender.
The Lender shall take reasonable care in custody and preservation of
any Collateral held by it hereunder to the extent required by law, but, if the
Collateral so held consists in whole or in part of instruments or chattel paper,
it shall not be a breach of reasonable care if the Lender does not take
necessary steps to preserve rights against prior parties, nor shall it
constitute a breach of reasonable care if the Lender fails to undertake to
collect the principal of or interest or other increment on any instrument or
investment security, or fails to present any investment security for conversion
or other change, unless, after written notice to the Lender from the Borrower or
from any other party liable hereon in any capacity whose property is held as
collateral hereunder that such interest, other increment or principal is due, or
that such investment security has been called for conversion or other change,
the Lender fails to use reasonable diligence to undertake collection of such
interest, increment or principal, or fails to make presentation for conversion
or other change, or fails to enable the Borrower or such other party to do so.
The Lender may make additional loans in the future to Borrower and may
advance sums in the future on behalf of the Borrower or to protect the security
of the Collateral or lien thereof, at any time before the satisfaction of this
Note and the Loan Agreement, and all such sums shall be evidenced by this Note,
and shall be secured by the Lender's security interest in the Collateral. The
Lender is not responsible in any way for the refusal by its employees to make a
loan or to honor a request for a loan.
This Note is the Master Note referred to in the Loan Agreement, which
contains provisions for the acceleration of the maturity hereof upon the
happening of certain events, for optional and mandatory prepayment of the
principal hereof prior to the maturity hereof and for the amendment or waiver of
certain provisions of the Loan Agreement, all upon the terms and conditions
therein specified. In the event of any ambiguity or inconsistency between the
terms of this Note and the Loan Agreement, then the terms of the Loan Agreement
shall govern.
In the event that any payment shall not be received by Lender within
TEN (10) days of the due date, Borrower shall, to the extent permitted by law,
pay Lender a late charge of five (5%) percent of the overdue payment (but in no
event to be less than Twenty Five ($25.00) Dollars nor more than Two Thousand
Five Hundred ($2,500.00) Dollars). Any such late charge assessed is immediately
due and payable.
The Lender may, without notice to or consent of any party liable for
the payment hereof as maker, endorser or guarantor, and without impairing or in
any way affecting the liability of such person to the Lender (1) extend or
otherwise alter, but not accelerate except as provided in the Loan Agreement,
the time for payment of this Note, (2) alter any other term of this Note by
agreement with the maker hereof, (3) release, or settle or compromise with any
other party liable for the payment hereof, (4) release, or substitute for or
fail to protect any interest in any collateral held by the Lender as security
for the payment of any sum owing to the Lender by any party hereto, and (5)
accept a check or other order that is marked paid in full or with similar
language as a payment under this Note.
No delay or omission on the part of the Lender in exercising any right
hereunder shall operate as a waiver of such right or of any other right under
this Note.
If this Note is referred to an attorney (whether or not a salaried
employee of the Lender) for collection, each party jointly and severally liable
for the payment hereof as maker, endorser or guarantor shall pay, on demand, all
reasonable and necessary expenses or expenditures, including, without
limitation, reasonable attorneys fees and expenses, incurred by the Lender in
protecting, enforcing or exercising its interests, rights or remedies created
by, connected with or provided in this Note and the Loan Agreement, or
performance pursuant to this Note and the Loan Agreement. Attorney's fees may be
collectible from the Collateral to the extent permitted under the Bankruptcy Act
or other law.
If, at the time when this Note is paid in full, any party liable
thereon as maker, endorser or guarantor is liable to the Lender for the payment
of any other debt or liability, the Lender may retain as security for the
payment of such other debts and liabilities the Collateral held by it as
security for the payment of this Note, with all the rights and remedies herein
and otherwise conferred upon the Lender as a secured party by law,
notwithstanding the surrender by the Lender of this Note upon payment hereof.
Upon the occurrence of an Event of Default under the Loan Agreement,
the principal sum or so much of the principal remaining unpaid with all interest
accrued thereon, shall, at the option of the Lender and without notice, become
due and payable immediately, and interest on the principal sum shall thereafter
be computed at the rate of two (2%) percent per year above the highest rate
otherwise payable under this Note. Payment of the foregoing may be enforced and
recovered at any time by one or more of the remedies provided to Lender in this
Note or in the Loan Agreement, with it being specifically understood and agreed
that the default provisions as set forth in the Loan Agreement shall govern in
the event of any conflict in such provisions in the aforesaid instruments.
Any failure by Lender to insist upon strict performance by Borrower of
any of the terms and provisions of this Note or of the Loan Agreement shall not
be deemed to be a waiver of any of the terms or provisions thereof, and Lender
shall have the right thereafter to insist upon strict performance by the
Borrower of any and all of them.
Presentment, demand of payment, notice of dishonor or nonpayment,
protest, notice of protest on this Note, and the giving of notice of default or
other notice to any party liable on this Note are hereby waived by the Borrower.
It is expressly agreed that the maturity of this Note, or any payment hereunder,
may be extended or modified from time to time, but not accelerated except as
provided in the Loan Agreement, without in any way affecting the liability of
the Borrower.
For the purposes of this Note, wherever the term "Lender" shall be used
it shall refer to any affiliate or subsidiary of Lender and to any subsequent
holder, successor or assignee hereof unless the context requires otherwise.
The words "Borrower" and "Lender" include singular and plural,
individual or corporation, and the respective heirs, executors, administrators,
successors and assigns of Borrowers or Lender, as the case may be. The use of
any gender applies to all genders. If more than one party is named as Borrower,
the obligation hereunder of each such party is joint and several.
This Note is to be executed and delivered within the State of New
Jersey and the Borrower elects that the laws of the State of New Jersey shall
govern the construction of this Note and the rights, remedies, warranties,
representations, covenants, and provisions hereof.
IN WITNESS WHEREOF, the undersigned have caused this Note to be
executed the day and year aforesaid.
WITNESS: Ronson Aviation, Inc.
/s/ By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------- --------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President - Finance
and Chief Financial Officer
EXHIBIT 10(c)
TERM NOTE
$285,000.00 Plainsboro, New Jersey
August 28, 1997
FOR VALUE RECEIVED, Ronson Aviation, Inc. with a principal place of
business at Trenton-▇▇▇▇▇▇ County Airport, ▇▇▇▇▇ Township, New Jersey 08628-1393
(the "Borrower"), promises to pay to the order of Summit Bank (the "Lender"), at
its office located at ▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, or at such other
place or places as the Lender may designate, in immediately available funds, the
sum of Two Hundred Eighty Five Thousand ($285,000.00) Dollars, without
defalcation or discount, for value received, with interest thereon from the date
hereof at the rate(s) set forth in a certain Loan and Security Agreement of even
date herewith by and between the Borrower and the Lender (the "Loan Agreement"),
all in lawful money of the United States, as follows: twenty four (24) equal and
consecutive monthly installments of principal, each in the sum of Four Thousand
Seven Hundred Fifty ($4,750.00) Dollars, together with accrued and unpaid
interest, commencing October 1, 1997, and continuing on the first day of each
and every month thereafter until September 30, 1999, at which time a final
installment of all outstanding principal, together with any and all accrued and
unpaid interest thereon and any other sums due under this Term Note (the
"Note"), shall be immediately due and payable.
This Note is secured by, among other things, a security interest in the
Collateral, as described in the Loan Agreement, which the Borrower and every
other person liable hereon as endorser or guarantor has pledged or deposited
with the Lender. The Collateral is also pledged as security for all of the
Obligations, as defined in the Loan Agreement, of the Borrower to the Lender.
The Lender shall take reasonable care in custody and preservation of
any Collateral held by it hereunder to the extent required by law, but, if the
Collateral so held consists in whole or in part of instruments or chattel paper,
it shall not be a breach of reasonable care if the Lender does not take
necessary steps to preserve rights against prior parties, nor shall it
constitute a breach of reasonable care if the Lender fails to undertake to
collect the principal of or interest or other increment on any instrument or
investment security, or fails to present any investment security for conversion
or other change, unless, after written notice to the Lender from the Borrower or
from any other party liable hereon in any capacity whose property is held as
collateral hereunder that such interest, other increment or principal is due, or
that such investment security has been called for conversion or other change,
the Lender fails to use reasonable diligence to undertake collection of such
interest, increment or principal, or fails to make presentation for conversion
or other change, or fails to enable the Borrower or such other party to do so.
The Lender may make additional loans in the future to Borrower and may
advance sums in the future on behalf of the Borrower or to protect the security
of the Collateral or lien thereof, at any time before the satisfaction of this
Note and the Loan Agreement, and all such sums shall be evidenced by this Note,
and shall be secured by the Lender's security interest in the Collateral. The
Lender is not responsible in any way for the refusal by its employees to make a
loan or to honor a request for a loan.
This Note is the Term Note referred to in the Loan Agreement, which
contains provisions for the acceleration of the maturity hereof upon the
happening of certain events, for optional and mandatory prepayment of the
principal hereof prior to the maturity hereof and for the amendment or waiver of
certain provisions of the Loan Agreement, all upon the terms and conditions
therein specified. In the event of any ambiguity or inconsistency between the
terms of this Note and the Loan Agreement, then the terms of the Loan Agreement
shall govern.
The Lender may, without notice to or consent of any party liable for
the payment hereof as maker, endorser or guarantor, and without impairing or in
any way affecting the liability of such person to the Lender (1) extend or
otherwise alter, but not accelerate except as provided in the Loan Agreement,
the time for payment of this Note, (2) alter any other term of this Note by
agreement with the maker hereof, (3) release, or settle or compromise with any
other party liable for the payment hereof, (4) release, or substitute for or
fail to protect any interest in any collateral held by the Lender as security
for the payment of any sum owing to the Lender by any party hereto, and (5)
accept a check or other order that is marked paid in full or with similar
language as a payment under this Note.
No delay or omission on the part of the Lender in exercising any right
hereunder shall operate as a waiver of such right or of any other right under
this Note.
If this Note is referred to an attorney (whether or not a salaried
employee of the Lender) for collection, each party jointly and severally liable
for the payment hereof as maker, endorser or guarantor shall pay, on demand, all
reasonable and necessary expenses or expenditures, including, without
limitation, reasonable attorneys fees and expenses, incurred by the Lender in
protecting, enforcing or exercising its interests, rights or remedies created
by, connected with or provided in this Note and the Loan Agreement, or
performance pursuant to this Note and the Loan Agreement. Attorney's fees may be
collectible from the Collateral to the extent permitted under the Bankruptcy
Code or other law.
If, at the time when this Note is paid in full, any party liable
thereon as maker, endorser or guarantor is liable to the Lender for the payment
of any other debt or liability, the Lender may retain as security for the
payment of such other debts and liabilities the Collateral held by it as
security for the payment of this Note, with all the rights and remedies herein
and otherwise conferred upon the Lender as a secured party by law,
notwithstanding the surrender by the Lender of this Note upon payment hereof.
Upon the occurrence of an Event of Default under the Loan Agreement,
the principal sum or so much of the principal remaining unpaid with all interest
accrued thereon, shall, at the option of the Lender and without notice, become
due and payable immediately, and interest on the principal sum shall thereafter
be computed at the rate of two (2%) percent per year above the highest rate
otherwise payable under this Note. Payment of the foregoing may be enforced and
recovered at any time by one or more of the remedies provided to Lender in this
Note or in the Loan Agreement, with it being specifically understood and agreed
that the default provisions as set forth in the Loan Agreement shall govern in
the event of any conflict in such provisions in the aforesaid instruments.
In the event that any payment shall not be received by Lender within
TEN (10) days of the due date, Borrower shall, to the extent permitted by law,
pay Lender a late charge of five (5%) percent of the overdue payment (but in no
event to be less than Twenty Five ($25.00) Dollars nor more than Two Thousand
Five Hundred ($2,500.00) Dollars). Any such late charge assessed is immediately
due and payable.
Any failure by Lender to insist upon strict performance by Borrowers of
any of the terms and provisions of this Note or of the Loan Agreement shall not
be deemed to be a waiver of any of the terms or provisions thereof, and Lender
shall have the right thereafter to insist upon strict performance by the
Borrower of any and all of them.
Presentment, demand of payment, notice of dishonor or nonpayment,
protest, notice of protest on this Note, and the giving of notice of default or
other notice to any party liable on this Note are hereby waived by the Borrower.
It is expressly agreed that the maturity of this Note, or any payment hereunder,
may be extended or modified from time to time, but not accelerated except as
provided in the Loan Agreement, without in any way affecting the liability of
the Borrower.
For the purposes of this Note, wherever the term "Lender" shall be used
it shall refer to any affiliate or subsidiary of Lender and to any subsequent
holder, successor or assignee hereof unless the context requires otherwise.
The words "Borrower" and "Lender" include singular and plural,
individual or corporation, and the respective heirs, executors, administrators,
successors and assigns of Borrowers or Lender, as the case may be. The use of
any gender applies to all genders. If more than one party is named as Borrower,
the obligation hereunder of each such party is joint and several.
This Note is to be executed and delivered within the State of New
Jersey and the Borrower elects that the laws of the State of New Jersey shall
govern the construction of this Note and the rights, remedies, warranties,
representations, covenants, and provisions hereof.
IN WITNESS WHEREOF, the undersigned have caused this Note to be
executed the day and year aforesaid.
WITNESS: Ronson Aviation, Inc.
/s/ By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------- -------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President - Finance
and Chief Financial Officer
EXHIBIT 10(d)
CORPORATE GUARANTY AGREEMENT AND SECURITY AGREEMENT
THIS CORPORATE GUARANTY AGREEMENT AND SECURITY AGREEMENT (the "Guaranty
Agreement") dated August 28, 1997, by Ronson Consumer Products Corporation, a
New Jersey corporation with offices located at ▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the "Guarantor"), to Summit Bank, a New Jersey banking
corporation with offices located at ▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ (the
"Lender").
WHEREAS, Ronson Aviation, Inc., a New Jersey corporation (the
"Borrower") and the Lender are about to enter into a certain Loan and Security
Agreement relating to financing by the Lender to the Borrower (the "Loan
Agreement"), as evidenced by a Master Note and a Term Note (collectively
referred to as the "Note") (the Loan Agreement, the Note, and all other
documents, instruments, writings and agreements delivered pursuant thereto are
collectively and individually referred to as the "Loan Documents"); and
WHEREAS, to induce the Lender to provide funds for working capital
purposes in accordance with the terms of the Loan Documents, the Borrower has
offered that the Guarantor will execute and deliver this Guaranty Agreement to
the Lender; and
WHEREAS, the Guarantor will derive benefit from the Loan Documents due
to the interrelationship of the Borrower and the Guarantor, more particularly as
a result of business and profits to be generated for the Guarantor as a result
of the business operations of the Borrower, and of loans or advances made or to
be made by the Borrower to the Guarantor.
NOW, THEREFORE, in order to induce the Lender to grant the loans,
advances and extensions of credit to the Borrower in accordance with the terms
of the Loan Documents, and in consideration thereof and of other good and
valuable consideration, the Guarantor agrees as follows:
SECTION 1. GUARANTY. The Guarantor hereby absolutely and unconditionally
guarantees to the Lender, and its successors, endorsees and assigns, the full
and prompt payment, when due, of all loans, advances, extensions of credit,
indebtedness, notes, liabilities and amounts, liquidated or unliquidated, each
of every kind, nature and description, whether arising under the Loan Documents
or otherwise, including, without limitation, principal and interest, and whether
secured or unsecured, direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter contracted, all of the Borrower to the
Lender (hereinafter being collectively referred to as the "Obligations"), and
agrees to pay any and all expenses including, without limitation, reasonable
legal fees, which may be incurred by the Lender in enforcing any rights or
remedies in connection with, and in collecting, any or all of the Obligations.
SECTION 2. OBLIGATIONS PAID IN ACCORDANCE WITH TERMS THEREOF. The Guarantor
guarantees that the Obligations will be paid strictly in accordance with their
terms, regardless of any law, regulation or decree now or hereafter in effect in
any jurisdiction which might in any manner effect any of such terms or the
Lender's rights with respect thereto, or which might cause or permit to be
invoked any alteration in the time, amount or manner of payment by the Borrower
of any of the Obligations.
SECTION 3. ENFORCEMENT OF GUARANTY. The Lender may, in its sole discretion,
proceed to exercise any right or remedy which the Lender may have under this
Guaranty Agreement or by law (such rights and remedies being cumulative and not
alternative or exclusive) without pursuing or exhausting any right or remedy
which the Lender may have against the Borrower, or any other person or entity,
or which the Lender may have with respect to any collateral for any or all of
the Obligations of the Borrower or any other guaranty of the Obligations,
including, without limitation, without joining the Borrower as a party in any
action brought to enforce the provisions hereof; and the Lender may proceed to
exercise any right or remedy which it may have under this Guaranty Agreement
without regard to any actions or omissions of the Borrower or any other person.
SECTION 4. GUARANTY ABSOLUTE. The obligations of the Guarantor hereunder shall
be absolute and unconditional and shall continue to remain in full force and
effect irrespective of the validity, legality or enforceability of the Loan
Documents, or any other agreements, notes or documents pursuant to which the
Obligations arise, or the value or condition of any collateral for any or all of
the Obligations, or of any other guaranty of the Obligations, or any other
circumstance which might otherwise constitute a legal or equitable discharge of
a surety or guarantor; and this Guaranty Agreement and the obligations of the
Guarantor hereunder shall be irrevocable.
SECTION 5. GUARANTY NOT AFFECTED. Without limiting the generality of Section 4,
the Guarantor hereby consents and agrees that, at any time, and from time to
time, without affecting the legality or enforceability of this Guaranty
Agreement and without discharging the obligation of the Guarantor hereunder:
(a) the time, manner, place or terms of payment of all or any
of the Obligations may be settled, released (by operation of law or otherwise),
compounded, compromised, collected, liquidated, extended (one or more times) or
modified;
(b) any or all of any collateral for any or all of the
Obligations may be exchanged, released, surrendered, or otherwise disposed of;
(c) any action may be taken under or in respect of the Loan
Documents or any other agreements, notes or documents pursuant to which the
Obligations arise, in the exercise of any remedy, power or privilege therein
contained or otherwise with respect thereto, or such remedy, power or privilege
may be waived, omitted or not enforced;
(d) the time for the Borrower's performance of or compliance
with any term, covenant or agreement on its part to be performed or observed
under the Loan Documents or any other agreements, notes or documents, pursuant
to which the Obligations arise, may be renewed or extended (one or more times),
or such performance or compliance waived, or failure in or departure from such
performance or compliance consented to;
(e) the Loan Documents or any other agreements, notes or
documents pursuant to which the Obligations arise, or any term of any thereof,
may be amended or modified in any respect (including, without limitation, with
respect to interest rates); and
(f) the liability of the Borrower to pay any and all of the
Obligations may be settled or compromised, and payment of any and all of such
Obligations may be subordinated to the prior payment of any other debts of, or
claims against, the Borrower;
all in such manner and upon such terms as the Lender may deem proper, without
notice to or further assent from the Guarantor, and all without affecting this
Guaranty Agreement or the obligations of the Guarantor hereunder, which shall
continue in full force and effect until the Obligations and all obligations of
the Guarantor hereunder shall have been fully paid and performed.
SECTION 6. WAIVER.
(a) The Guarantor hereby waives all defenses based upon
suretyship or impairment of collateral (including, without limitation, any
actions or defenses identified generally or specifically under Article 3 of the
Uniform Commercial Code), notice of acceptance of this Guaranty Agreement,
presentment, demand, protest, notice of dishonor, notice of the occurrence of an
Event of Default hereunder or under the Loan Documents, and any and all other
notices of any kind whatsoever, with respect to the Obligations, and promptness
in making any claim or demand hereunder; but no act or omission of any kind in
the premises shall in any way affect or impair this Guaranty Agreement.
Furthermore, the release of any other guaranty or the Lender's failure to obtain
any other guaranty shall not affect the obligations of the Guarantor hereunder.
(b) The Guarantor shall not be released or discharged, either
in whole or in part, by the Lender's (i) failure or delay to obtain or maintain
perfection or recordation of the interest in any property, including, but not
limited to the collateral defined herein or in the Loan Agreement, which secures
the Obligations, (ii) release of any property, including, but not limited to the
collateral defined herein or in the Loan Agreement, which secures the
Obligations, without substitution of property or collateral of equal value,
(iii) failure to perform a duty to preserve the value of property or collateral
owed, under Article 9 of the Uniform Commercial Code or other law, to a debtor
or surety or other person primarily or secondarily liable, (iv) failure to
comply with applicable law in disposing of any property, including, but not
limited to the collateral defined herein or in the Loan Agreement, which secures
the Obligations, or (v) failure or delay to otherwise protect or realize upon
any property, including, but not limited to the collateral defined herein or in
the Loan Agreement, which secures the Obligations.
SECTION 7. REINSTATEMENT. This Guaranty Agreement shall continue to be effective
or be reinstated, as the case may be, if at any time, prepayment, payment, or
other value received by the Lender, from any source, or any part thereof, of any
of the Obligations is rescinded or must otherwise be restored or returned by the
Lender upon or by reason of:
(a) any judgment, decree, or order of any court or
administrative body having competent jurisdiction;
(b) any settlement or compromise of any such claim;
(c) the insolvency or bankruptcy of the Borrower; or
(d) otherwise, all as though such payment had not been made,
notwithstanding any termination hereof or the cancellation of the Loan Documents
or any note or other agreement evidencing any of the Obligations.
SECTION 8. SUBROGATION. Until the Obligations shall have been fully paid and
satisfied, the Guarantor agrees that:
(a) any right of subrogation which the Guarantor has or
hereafter acquires against the Borrower or against any collateral or security
granted by the Borrower to the Lender;
(b) any right of contribution the Guarantor has or hereafter
acquires against the Borrower or any other guarantor of the Obligations;
(c) any right to enforce any remedy which the Guarantor has or
hereafter acquires against the Borrower; or
(d) any benefit of, and any right to participate in, any
security now or hereafter held by the Lender;
shall be junior and subordinate to the rights and remedies of the Lender.
Subject to the terms and conditions of the Loan Agreement, the Lender may use,
sell or dispose of any item of collateral or security it sees fit without regard
to any subrogation rights of the Guarantor, and any such disposal or sale shall
be free and clear of any rights of subrogation or other claims of the Guarantor.
If the Guarantor shall receive any payments or other property on account of
subrogation, contribution or similar rights of the Guarantor, at any time prior
to full payment and satisfaction of the Obligations, such amount or property
shall be held in trust for, and shall immediately be paid over or delivered to
the Lender (together with any necessary endorsements), to be credited and
applied against (or, at the option of the Lender, held as additional collateral
for) the Obligations. Notwithstanding anything herein to the contrary, as long
as there has not occurred an Event of Default, the Guarantor may make loans and
receive repayments of existing or future loans to the Borrower.
SECTION 9. SECURITY INTEREST. In consideration of the Lender's granting to the
Borrower the Loans in accordance with the terms and conditions of the Loan
Agreement, the Guarantor, to secure payment and performance of all of the
Obligations of the Borrower to the Lender and all obligations of the Guarantor
to the Lender, hereby grants to the Lender a security interest in the
Collateral, as such term is hereinafter defined, which security interest shall
remain in full force and effect until all of the Obligations of the Borrower to
the Lender and the obligations of the Guarantor to the Lender are fully paid and
satisfied.
SECTION 10. COLLATERAL. The term Collateral, as used in this Guaranty Agreement
and which is subject to the security interest granted in Section 9 hereof, shall
mean and consist of (1) a lien on certain real property of the Guarantor which
property is also known as ▇-▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, and (2) all--
(a) inventory of the Guarantor, whether now owned or hereafter
acquired, including, without limitation, raw materials, work in process,
finished goods, consigned inventory, and materials used or consumed in business
and other goods held for sale or lease or furnished or to be furnished under
contracts of service;
(b) accounts of the Guarantor, whether now existing or
hereafter arising, including, without limitation, all accounts receivable and
contract rights and any rights to payment for goods sold or leased or for
services rendered which are not evidenced by an instrument or chattel paper,
whether or not such rights have been earned by performance;
(c) equipment of the Guarantor, whether now owned or hereafter
acquired, including, without limitation, machinery, trade and production
equipment, furniture, furnishings, fixtures, and all other goods used by the
Guarantor which do not constitute inventory or farm products;
(d) instruments (including, without limitation, negotiable
instruments and non-negotiable instruments), investment property (including,
without limitation, certificated securities, uncertificated securities, security
entitlements, securities accounts, commodity contracts and commodity accounts),
chattel paper, general intangibles (including, without limitation, income tax
refunds, copyrights, licenses, rights, patents, patent rights, franchise rights,
distributorship rights, formulae, customer lists, goodwill, and trade secrets),
and trademarks, trademark rights, trade names and tradename rights to the extent
necessary to exercise the license granted to the Lender in Subsection 14(c)
herein, and documents of title (including, without limitation, bills of lading,
dock warrants, dock receipts, and warehouse receipts), all of the Guarantor,
whether now owned or existing or hereafter arising or acquired;
(e) interests of the Guarantor in goods or merchandise,
whether now owned or existing or hereafter arising or acquired, as to which an
account receivable has arisen; and
(f) as to all of the foregoing (a) through (e) inclusive, cash
proceeds, non-cash proceeds and products thereof, additions and accessions
thereto, replacements and substitutions therefor, and all related books,
records, journals, computer print-outs and data, of the Guarantor.
SECTION 11. WARRANTIES AND REPRESENTATIONS. As a material inducement to the
Lender to grant the loans, advances and extensions of credit to the Borrower in
accordance with the terms of the Loan Documents and to enter into the Loan
Documents, the Guarantor hereby warrants and represents to the Lender as
follows:
(a) The Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the State of New Jersey.
(b) The Guarantor has the corporate power to execute, deliver
and perform this Guaranty Agreement and has taken all necessary corporate action
to authorize the execution, delivery and performance of this Guaranty Agreement.
(c) The Guarantor has read and reviewed the Loan Agreement.
(d) The execution, delivery and the performance of and
compliance with this Guaranty Agreement on the part of the Guarantor will not
(with or without the giving of notice or lapse of time, or both) result in any
violation of, or be in conflict with, or constitute a default under, the terms
of any contract, note, indenture, or other agreement to which the Guarantor is a
party, or of any judgment, decree, order, statute, rule, or regulation to which
the Guarantor is subject.
(e) The Guarantor has furnished to the Lender a balance sheet
and statement of income of the Guarantor for its fiscal year ended December 31,
1996, together with the report of independent certified public accountants,
together with an interim balance sheet and statement of income prepared as of
March 31, 1997 by the principal financial officer of the Guarantor. Such
financial statements are complete and correct in all material respects, have
been prepared in accordance with generally accepted accounting principles,
consistently applied, and fairly present the condition and results of operations
of the Guarantor for the periods involved. Since the dates of the balance sheets
referred to above, there has been no material and adverse change in the
financial condition of the Guarantor not reflected in the financial statements
as of that date, and since such date the business of the Guarantor has not been
materially and adversely affected by any occurrence, whether or not insured
against.
(f) Except as previously disclosed to the Lender, there are no
outstanding judgments, actions, proceedings, claims or investigations pending or
threatened before any court or governmental body which may materially and
adversely affect the financial condition, business, operations or affairs of the
Guarantor.
(g) No consent or approval of any person, landlord or
mortgagee, no waiver of any lien or right of distraint or similar right, and no
consent, license, approval or authorization of or registration, qualification,
designation, declaration or filing with any governmental authority on the part
of the Guarantor, is required in connection with the execution, delivery and
performance of this Guaranty Agreement.
(h) There is no term of any contract, bond, note, indenture,
or other agreement or of any charter or other corporate restriction or of any
judgment, decree, order, statute, rule or regulation which materially and
adversely limits the business, operations or affairs, as presently conducted, of
the Guarantor or its assets, and the Guarantor is not now in violation of any
such term; and the execution, delivery, and the performance of this Guaranty
Agreement will not (with or without the giving of notice of lapse of time, or
both) result in any violation of or be in conflict with or constitute a default
under any such term. The business, affairs, and operations of the Guarantor
comply with all foreign and domestic laws applicable to them.
(i) This Guaranty Agreement has been duly executed and
delivered and constitutes the valid and legally binding obligation of the
Guarantor, enforceable in accordance with its terms.
SECTION 12. COVENANTS. As a material inducement to the Lender to grant the
loans, advances and extensions of credit to the Borrower in accordance with the
terms of the Loan Documents and to enter into the Loan Documents, the Guarantor
covenants and agrees with the Lender that:
(a) The Guarantor shall do, or cause to be done, all things
necessary to preserve and keep in full force and effect its corporate existence
and all franchises, licenses, permits, rights and privileges necessary for the
proper conduct of its business.
(b) The Guarantor shall comply with all laws, ordinances,
rules and regulations, now or hereafter in effect, applicable to it of any
federal, state, local or foreign government or any instrumentality or agency
thereof.
(c) (i) The Guarantor will deliver, or cause to be delivered,
to the Lender the following:
(1) Within ninety (90) days after the end of
each fiscal year of the Guarantor, (A) a balance sheet and a statement of
income, all of the Guarantor, the Borrower and any affiliated companies prepared
on a consolidated and consolidating basis, as of the end of such year, all in
reasonable detail and certified (on an audited basis) by independent certified
public accountants acceptable to the Bank, and (B) a schedule of capital
expenditures of the Borrower, as of the end of such year, which shall be
certified by the principal finance officer of the Guarantor to be materially
complete and correct, which certificates shall include a statement of their
examinations (which shall include a review of the relevant provisions of the
Loan Agreement) and stating whether their examinations have disclosed the
existence of any condition or event which constitutes (or would after notice or
lapse of time, or both, constitute) an Event of Default, and if so, specifying
the nature and period of existence thereof;
(2) Such additional financial statements or
information of the Guarantor as the Lender shall reasonably require.
(ii) Any statement, report, compilation or other document
or writing which is the result of professional accounting services provided by
the Guarantor's accountant shall be accompanied by a written communication, in
form and substance satisfactory to the Lender, signed by the Guarantor and their
accountant, stating, among other things, that (i) the accountant acknowledges
that the Lender intends to rely on all such statements, reports, compilations
and other documents or writings and (ii) the Guarantor has knowledge of the
Lender's reliance or intended reliance on such statements, reports, compilations
and other documents or writings.
(d) The Guarantor shall pay and discharge, as they become due,
all taxes, assessments, debts, claims and other governmental or non-governmental
charges lawfully imposed upon it or incurred by it or its properties and assets,
except taxes, assessments, debts, claims, and charges contested in good faith in
appropriate proceedings.
(e) The Guarantor shall promptly notify the Lender of any
litigation, actions, proceedings, claims, or investigations pending or
threatened against the Guarantor which may materially and adversely affect the
financial condition, business, affairs, or operations of the Guarantor.
(f) The Guarantor shall maintain, with responsible insurance
companies, such insurance on its properties and assets, against such casualties
and in such amounts as is customarily maintained by similar businesses.
(g) The Guarantor shall keep its properties and assets free
and clear of liens (except for liens existing as of the date hereof) and refrain
from selling or offering to sell or otherwise transferring its properties and
assets or any interest therein, except such sales or other transfers of
inventory made by the Guarantor in the ordinary course of its business in
commercially reasonable and bona fide arm's length transactions.
(h) Without the prior written consent of the Lender, the
Guarantor will not sell, assign, lease or otherwise dispose of all or a
substantial part of its assets, except for fair consideration.
(i) The Guarantor shall keep its properties and assets in good
repair, working order and condition, and make, or cause to be made, all
necessary or appropriate repairs, renewals, replacements, substitutions,
additions, betterments, and improvements thereto so that the efficiency of such
properties and assets shall at all times be properly preserved and maintained.
(j) The Guarantor shall observe, perform, and comply with and
shall continue to observe, perform, and comply with, all of the Guarantor's
covenants made herein until the Obligations are fully paid and satisfied.
SECTION 13. EVENTS OF DEFAULT. There shall be an Event of Default by the
Guarantor under this Guaranty Agreement upon the occurrence of any one or more
of the following:
(a) The occurrence of an Event of Default under the Loan
Documents after the expiration of any applicable grace periods therein;
(b) A breach by the Guarantor of any covenant contained in
this Guaranty Agreement including, without limitation, those covenants contained
in Section 12. Provided that no material adverse effect will be suffered by the
Bank or the Collateral (to be determined in the Bank's reasonable discretion),
the Guarantors shall be permitted to cure certain Events of Default as follows:
for a breach of any covenant contained in Subsections 12(a), 12(b), 12(d),
12(e), 12(i), 12(c)(i)(1)(only as to delivery of documents relating to the
Guarantor or any affiliated companies), the Guarantor shall be permitted a cure
period of thirty (30) days from the occurrence of the Event of Default;
(c) If any warranty or representation contained in this
Guaranty Agreement, including, without limitation, the warranties and
representations contained in Section 11 of this Guaranty Agreement, shall be
incorrect in any material respect, or if any certificate, report, financial
statement or instrument given by the Borrowers or the Guarantor to the Lender
shall be incorrect in any material respect;
(d) The occurrence of any event of default on the part of the
Guarantor in connection with any loans, advances or other extensions of credit
by the Lender to the Guarantor.
(e) If any warranty or representation whether past,
contemporaneous or future made in writing by the Guarantor to the Lender, other
than the warranties or representations set forth in this Guaranty Agreement,
shall be incorrect in any material respect.
SECTION 14. LENDER'S RIGHTS AND REMEDIES
(a) Exclusive of the occurrence of an Event of Default, the
Lender may:
(i) Call at the Guarantor's place of business during
the regular business hours of the Guarantor, and at reasonable intervals to be
determined by the Lender and, without hindrance or delay, inspect, audit, check
and make extracts or copies from the Guarantor's books, records, journals,
orders, receipts, correspondence, and other data, and inspect the Collateral;
(ii) Endorse the name of the Guarantor upon any and
all checks, drafts, money orders and other instruments for the payment of monies
which are payable to the Guarantor and constitute proceeds of the Collateral;
(iii) Receive and have access to printouts and all
other information respecting financial records of the Guarantor maintained by
external computer service companies;
(iv) Communicate, in the name of a certified public
accountant or public accountant, or in a fictitious name or names, with
customers and account debtors of the Guarantor to independently verify orders
and accounts receivable; and
(v) Sign financing statements in the name of the
Guarantor, or file financing statements without the Guarantor's signature, in
any relevant state to perfect or maintain the Lender's security interest in any
or all of the Collateral.
(b) Upon the occurrence of an Event of Default the Lender
shall have the following rights and remedies to be exercised within the sole
discretion of the Lender without further demand, presentation or notice, of any
kind:
(i) The Lender shall have all of those rights and
remedies provided in this Guaranty Agreement, in the Uniform Commercial Code and
other applicable law in force and effect in the State of New Jersey;
(ii) In protecting, exercising or enforcing its
interests, rights or remedies under this Guaranty Agreement, receive, open and
dispose of mail addressed to the Guarantor, provided that the Lender shall
return to the Guarantor all mail not related to the Collateral or to any of the
Obligations, and in connection therewith, give such notice to any office or
officials of the United States Postal Service, or any successor thereof, to
effect such changes of address as the Lender may deem necessary so that all mail
addressed to the Guarantor may be delivered directly to the Lender provided that
the Lender shall promptly return to the Guarantor all mail not related to the
Collateral, as such term is defined in a certain Loan and Security Agreement of
even date herewith between the Borrower and the Lender (the "Loan Agreement) or
to any of the Obligations, as such term is defined in the Loan Agreement;
(iii) Require the Guarantor to assemble the
Collateral and make it available at the principal place of business of the
Guarantor to allow the Lender to take possession or dispose of the Collateral;
(iv) Take possession of and sell or otherwise dispose
of any or all of the Collateral at public or private sale, and if notice of such
sale or of other action by the Lender is required by applicable law, the
Guarantor agrees that ten (10) days notice to the Guarantor shall be sufficient,
which the Lender and the Guarantor herewith agree to be commercially reasonable;
(v) Subrogate to all of the Guarantor's interests,
rights and remedies in respect to the Collateral, including the right to stop
delivery, and (upon notice from the Guarantor that the account debtor has
returned, rejected, revoked acceptance of or failed to return the goods or that
the goods have been reconsigned or diverted) the right to take possession of and
to sell or dispose of the goods;
(vi) Execute in the name of the Guarantor any
schedules, assignments, instruments, documents and statements which the
Guarantor is obligated to give the Lender;
(vii) Sign financing statements in the name of the
Guarantor, or file financing statements without the Guarantor's signature, in
any relevant state to perfect or maintain the Lender's security interest in any
or all of the Collateral; and
(viii) Receive from all or any accountants and
auditors employed by the Guarantor at any time during the term of this Guaranty
Agreement copies of any of the Guarantor's financial statements, trial balances
or other accounting records of any sort in their possession, together with any
other information concerning the financial status or business operations of the
Guarantor.
(c) The Guarantor hereby grants to the Lender an irrevocable
license (or sub-license as the case may be) to use all of the Guarantor's
trademarks and trade names, with all rights, privileges and benefits flowing
therefrom but none of the obligations, to be exercised by the Lender after the
occurrence of an Event of Default and solely for the purpose of liquidating the
Collateral;
SECTION 15. TRANSFER OF BENEFIT. This Guaranty Agreement shall be binding upon
the Guarantor, its successors and assigns, and shall inure to the benefit of,
and be enforceable by, the Lender, its successors and assigns.
SECTION 16. NO WAIVER; AMENDMENTS, ETC. No failure or delay on the part of the
Lender in exercising any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy preclude any other right, power or remedy hereunder. No
amendment, modification, termination, or waiver of any provision of this
Guaranty Agreement, nor consent to any departure by the Guarantor therefrom,
shall in any event be effective unless the same shall be in writing making
explicit reference to this Guaranty Agreement, and shall be effective only in
the specific instance and for the specific purpose for which given. No notice
to, or demand on, the Guarantor in any case shall entitle the Guarantor to any
other or further notice or demand in similar or other circumstances.
SECTION 17. NOTICES. All notices, requests and other communications pursuant to
this Guaranty Agreement shall be in writing, either by letter (delivered by hand
or sent certified mail, return receipt requested) or telegram addressed to the
Lender at its place of business first indicated above or to the Guarantor (as
the case may be) at its place of business first indicated above, or at such
other address as either may give notice to the other as herein provided. Any
notice, request or communication hereunder shall be deemed to have been given
three (3) days after deposit in the mails, postage prepaid, or in the case of
hand delivery, when delivered, or in the case of telegraphic notice, when
delivered to the telegraph company, addressed as aforesaid, provided, however,
that notice of a change of address, as hereinabove provided, shall be deemed to
have been given only when actually received by the party to which it is
addressed.
SECTION 18. SEVERABILITY. If any of the provisions of this Guaranty Agreement
shall contravene or be held invalid under the laws of any jurisdiction, this
Guaranty Agreement 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 in this Guaranty Agreement in any jurisdiction.
SECTION 19. GOVERNING LAW;CONSENT TO JURISDICTION.
(a) This Guaranty Agreement is to be executed and delivered
within the State of New Jersey, is to be principally performed within the State
of New Jersey, and the Guarantor acknowledges and agrees that the laws of the
State of New Jersey shall govern the construction of this Guaranty Agreement and
the rights, remedies, warranties, representations, covenants, and provisions
hereof without giving effect to the conflict of laws rules of the State of New
Jersey.
(b) Any legal action or proceeding with respect to this
Guaranty Agreement or any other document, instrument, writing or agreement
related hereto, may be brought in the courts of the State of New Jersey or of
the United States for the District of New Jersey, and, by execution and delivery
of this Guaranty Agreement, the Guarantor hereby irrevocably accepts for itself
in respect of its property, generally and unconditionally, the jurisdiction of
the aforesaid courts. The Guarantor further irrevocably consents to the service
of process out of any of the aforementioned courts and in any action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the Guarantor at its address set forth above, such service
to become effective thirty (30) days after such mailing. Nothing contained
herein shall affect the right of the Lender to service of process in any other
manner permitted by law or to commence any legal proceedings or otherwise
proceed against the Guarantor in any jurisdiction.
(c) The Guarantor hereby waives any rights it may have to
transfer or change the venue of any litigation brought against it by the Lender
which is in any way related to this Guaranty Agreement or any other document,
instrument, writing or agreement related hereto.
(d) The provisions of this Section shall survive the repayment
of the Obligations of the Guarantor to the Lender and the termination of this
Guaranty Agreement.
SECTION 20. HEADINGS. Section headings in this Guaranty Agreement are included
herein for convenience of reference only and shall not constitute a part hereof
for any other purpose.
SECTION 21. CONSENT TO AGREEMENT. The Guarantor in all respects consents to the
terms and provisions of the Loan Documents.
SECTION 22. LENDER. For the purposes of this Guaranty Agreement, wherever the
term "Lender" shall be used it shall refer to any affiliate or subsidiary of
Lender and to any subsequent holder, successor or assignee hereof unless the
context requires otherwise.
SECTION 23. GENDER AND NUMBER. In all references herein to any parties, persons,
entities or corporations, the use of any particular gender or the plural or
singular number is intended to include the appropriate gender or number as the
text of this Guaranty Agreement may require.
SECTION 24. MERGER. This writing is intended by the Lender and the Guarantor as
a final expression of this agreement of guaranty and is intended also as a
complete and exclusive statement of the terms of the agreement by the Guarantor.
No course of prior dealings between the Lender and the Guarantor, no usage of
the trade, and no parol or extrinsic evidence of any nature, shall be used or be
relevant to supplement or explain or modify any term used in this agreement of
guaranty.
SECTION 25. INDEMNIFICATION. The Guarantor hereby agrees to indemnify the Lender
against loss, cost or expense by reason of the assertion by the Guarantor of any
defense to its obligations hereunder based upon any action or inaction of the
Borrower.
SECTION 26. WAIVER OF TRIAL BY JURY.
(a) THE GUARANTOR HEREBY ACKNOWLEDGES THAT DISPUTES ARISING
UNDER THIS GUARANTY AGREEMENT OR OTHERWISE RELATING TO THE OBLIGATIONS OF THE
GUARANTOR HEREUNDER ARE LIKELY TO BE COMPLEX AND IT DESIRES TO STREAMLINE AND
MINIMIZE THE COST OF RESOLVING SUCH DISPUTES. THEREFORE, THE GUARANTOR
IRREVOCABLY WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (AS PLAINTIFF,
DEFENDANT OR OTHERWISE), ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION,
COUNTERCLAIM, DISPUTE OR PROCEEDING BASED UPON, OR RELATED TO THE SUBJECT MATTER
OF THIS GUARANTY AGREEMENT OR OTHERWISE RELATING TO THE OBLIGATIONS OF THE
GUARANTOR HEREUNDER. WITHOUT LIMITING THE FOREGOING, THIS WAIVER AND COVENANT
APPLIES:
(i) TO ALL CLAIMS AGAINST ALL PARTIES TO SUCH
DISPUTES, ACTIONS AND PROCEEDINGS INCLUDING THOSE INVOLVING THE LENDER, THE
GUARANTOR OR ANY OF THEIR RESPECTIVE PARENTS, SUBSIDIARIES, AFFILIATES OR
RELATED ENTITIES, OR ANY OFFICER, DIRECTOR, SHAREHOLDER, MEMBER, ATTORNEY OR
PARTNER OF ANY OF THEM;
(ii) IRRESPECTIVE OF WHETHER SUCH DISPUTE, ACTION OR
PROCEEDING ARISES UNDER THIS GUARANTY AGREEMENT OR ANY OTHER AGREEMENT, NOTE,
PAPER, INSTRUMENT OR DOCUMENT HERETOFORE OR HEREAFTER EXECUTED RELATING TO ANY
OF THE OBLIGATIONS OF THE GUARANTOR HEREUNDER;
(iii) IRRESPECTIVE OF WHETHER SUCH DISPUTE, ACTION OR
PROCEEDING ARISES IN CONNECTION WITH OR IS BASED UPON INTENTIONAL OR
UNINTENTIONAL CONDUCT, FRAUD, IMPROPER ACTION OR FAILURE TO ACT, OR ANY OTHER
CIRCUMSTANCES.
(b) THIS WAIVER IS KNOWINGLY AND VOLUNTARILY MADE BY THE
GUARANTOR, AND THE GUARANTOR ACKNOWLEDGES THAT NEITHER THE LENDER, NOR ANY
PERSON ACTING ON BEHALF OF THE LENDER, HAS MADE ANY REPRESENTATIONS TO INDUCE
THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. THE
GUARANTOR FURTHER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED (OR HAS HAD THE
OPPORTUNITY TO BE REPRESENTED) IN CONNECTION WITH THE SIGNING OF THIS GUARANTY
AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL,
SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS
THIS WAIVER WITH COUNSEL. THE GUARANTOR FURTHER ACKNOWLEDGES THAT IT HAS READ,
AND UNDERSTANDS THE MEANING AND RAMIFICATIONS OF, THIS WAIVER.
(c) THE GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY
THE LENDER THAT THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH THE
LENDER HAS RELIED IN ENTERING INTO THE LOAN DOCUMENTS, AND THAT THIS WAIVER
PARAGRAPH SHALL BE DEEMED ENFORCEABLE INDEPENDENTLY OF ALL OTHER PROVISIONS OF
THIS GUARANTY AGREEMENT. THE LENDER MAY FILE AN ORIGINAL COUNTERPART OF THIS
SECTION AS WRITTEN EVIDENCE OF THE CONSENT BY THE GUARANTOR TO THE WAIVER OF ITS
RIGHT TO TRIAL BY JURY. THE PROVISIONS OF THIS SUBSECTION SHALL SURVIVE THE
REPAYMENT OF THE OBLIGATIONS OF THE BORROWER TO THE LENDER AND THE TERMINATION
OF THIS GUARANTY AGREEMENT.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty Agreement
the day and year first above written.
WITNESS: RONSON CONSUMER PRODUCTS CORPORATION
/s/ BY: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------ -------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President - Finance and
Chief Financial Officer
EXHIBIT 10(e)
CORPORATE GUARANTY AGREEMENT
THIS CORPORATE GUARANTY AGREEMENT (the "Guaranty Agreement"), is made
this 28th day of August, 1997, by Ronson Corporation, a corporation of the State
of New Jersey with offices located at Corporate Park III, Campus Drive, P.O. Box
6707, Somerset, New Jersey 08875-6707 (the "Guarantor"), to Summit Bank, a New
Jersey banking corporation with offices located at ▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (the "Lender");
W I T N E S S E T H:
WHEREAS, Ronson Aviation, Inc., a New Jersey corporation (the
"Borrower"), and the Lender are about to enter into a certain Loan and Security
Agreement relating to financing by the Lender to the Borrower (the "Loan
Agreement"), as evidenced by a certain Master Note of even date herewith, in the
maximum principal sum of Four Hundred Thousand ($400,000.00) Dollars and Term
Note of even date herewith, in the original principal sum of Two Hundred Eighty
Five Thousand ($285,000.00) Dollars, (collectively referred to as the "Note")
(the Loan Agreement, the Note, and all other writings, documents, and agreements
delivered pursuant thereto, are collectively and individually referred to as the
"Loan Documents"); and
WHEREAS, to induce the Lender to grant the loans, advances and
extensions of credit to the Borrower in accordance with the terms of the Loan
Documents, the Borrower has offered that the Guarantor will execute and deliver
this Guaranty Agreement to the Lender; and
WHEREAS, the Guarantor will derive benefit from the Loan Documents due
to the interrelationship of the Borrower and the Guarantor, more particularly as
a result of business and profits to be generated for the Guarantor as a result
of the business operations of the Borrower, and of loans or advances made or to
be made by the Borrower to the Guarantor.
NOW, THEREFORE, in order to induce the Lender to grant the loans,
advances and extensions of credit to the Borrower in accordance with the terms
of the Loan Documents, and in consideration thereof and of other good and
valuable consideration, the Guarantor agrees as follows:
SECTION 1. GUARANTY. The Guarantor hereby absolutely and unconditionally
guarantees to the Lender, and its successors, endorsees and assigns, the full
and prompt payment, when due, of all loans, advances, extensions of credit,
indebtedness, notes, liabilities and amounts, liquidated or unliquidated, each
of every kind, nature and description, whether arising under the Loan Documents
or otherwise, including, without limitation, principal and interest, and whether
secured or unsecured, direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter contracted, all of the Borrower to the
Lender (hereinafter being collectively referred to as the "Obligations"), and
agrees to pay any and all expenses including, without limitation, reasonable
legal fees, which may be incurred by the Lender in enforcing any rights or
remedies in connection with, and in collecting, any or all of the Obligations.
SECTION 2. OBLIGATIONS PAID IN ACCORDANCE WITH TERMS THEREOF. The Guarantor
guarantees that the Obligations will be paid strictly in accordance with their
terms, regardless of any law, regulation or decree now or hereafter in effect in
any jurisdiction which might in any manner effect any of such terms or the
Lender's rights with respect thereto, or which might cause or permit to be
invoked any alteration in the time, amount or manner of payment by the Borrower
of any of the Obligations.
SECTION 3. ENFORCEMENT OF GUARANTY. The Lender may, in its sole discretion,
proceed to exercise any right or remedy which the Lender may have under this
Guaranty Agreement or by law (such rights and remedies being cumulative and not
alternative or exclusive) without pursuing or exhausting any right or remedy
which the Lender may have against the Borrower, or any other person or entity,
or which the Lender may have with respect to any collateral for any or all of
the Obligations of the Borrower or any other guaranty of the Obligations,
including, without limitation, without joining the Borrower as a party in any
action brought to enforce the provisions hereof; and the Lender may proceed to
exercise any right or remedy which it may have under this Guaranty Agreement
without regard to any actions or omissions of the Borrower or any other person.
SECTION 4. GUARANTY ABSOLUTE. The obligations of the Guarantor hereunder shall
be absolute and unconditional and shall continue to remain in full force and
effect irrespective of the validity, legality or enforceability of the Loan
Documents, or any other agreements, notes or documents pursuant to which the
Obligations arise, or the value or condition of any collateral for any or all of
the Obligations, or of any other guaranty of the Obligations, or any other
circumstance which might otherwise constitute a legal or equitable discharge of
a surety or guarantor; and this Guaranty Agreement and the obligations of the
Guarantor hereunder shall be irrevocable.
SECTION 5. GUARANTY NOT AFFECTED. Without limiting the generality of Section 4,
the Guarantor hereby consents and agrees that, at any time, and from time to
time, without affecting the legality or enforceability of this Guaranty
Agreement and without discharging the obligation of the Guarantor hereunder:
(a) the time, manner, place or terms of payment of all or any
of the Obligations may be settled, released (by operation of law or otherwise),
compounded, compromised, collected, liquidated, extended (one or more times) or
modified;
(b) any or all of any collateral for any or all of the
Obligations may be exchanged, released, surrendered, or otherwise disposed of;
(c) any action may be taken under or in respect of the Loan
Documents or any other agreements, notes or documents pursuant to which the
Obligations arise, in the exercise of any remedy, power or privilege therein
contained or otherwise with respect thereto, or such remedy, power or privilege
may be waived, omitted or not enforced;
(d) the time for the Borrower's performance of or compliance
with any term, covenant or agreement on its part to be performed or observed
under the Loan Documents or any other agreements, notes or documents, pursuant
to which the Obligations arise, may be renewed or extended (one or more times),
or such performance or compliance waived, or failure in or departure from such
performance or compliance consented to;
(e) the Loan Documents or any other agreements, notes or
documents pursuant to which the Obligations arise, or any term of any thereof,
may be amended or modified in any respect (including, without limitation, with
respect to interest rates); and
(f) the liability of the Borrower to pay any and all of the
Obligations may be settled or compromised, and payment of any and all of such
Obligations may be subordinated to the prior payment of any other debts of, or
claims against, the Borrower;
all in such manner and upon such terms as the Lender may deem proper, without
notice to or further assent from the Guarantor, and all without affecting this
Guaranty Agreement or the obligations of the Guarantor hereunder, which shall
continue in full force and effect until the Obligations and all obligations of
the Guarantor hereunder shall have been fully paid and performed.
SECTION 6. WAIVER.
(a) The Guarantor hereby waives all defenses based upon
suretyship or impairment of collateral (including, without limitation, any
actions or defenses identified generally or specifically under Article 3 of the
Uniform Commercial Code), notice of acceptance of this Guaranty Agreement,
presentment, demand, protest, notice of dishonor, notice of the occurrence of an
Event of Default hereunder or under the Loan Documents, and any and all other
notices of any kind whatsoever, with respect to the Obligations, and promptness
in making any claim or demand hereunder; but no act or omission of any kind in
the premises shall in any way affect or impair this Guaranty Agreement.
Furthermore, the release of any other guaranty or the Lender's failure to obtain
any other guaranty shall not affect the obligations of the Guarantor hereunder.
(b) The Guarantor shall not be released or discharged, either
in whole or in part, by the Lender's (i) failure or delay to obtain or maintain
perfection or recordation of the interest in any property, including, but not
limited to the Collateral, as such term is defined in the Loan Agreement, which
secures the Obligations, (ii) release of any property, including, but not
limited to the Collateral, which secures the Obligations, without substitution
of property or collateral of equal value, (iii) failure to perform a duty to
preserve the value of property or collateral owed, under Article 9 of the
Uniform Commercial Code or other law, to a debtor or surety or other person
primarily or secondarily liable, (iv) failure to comply with applicable law in
disposing of any property, including, but not limited to the Collateral, which
secures the Obligations, or (v) failure or delay to otherwise protect or realize
upon any property, including, but not limited to the Collateral, which secures
the Obligations.
SECTION 7. REINSTATEMENT. This Guaranty Agreement shall continue to be effective
or be reinstated, as the case may be, if at any time, prepayment, payment, or
other value received by the Lender, from any source, or any part thereof, of any
of the Obligations is rescinded or must otherwise be restored or returned by the
Lender upon or by reason of:
(a) any judgment, decree, or order of any court or
administrative body having competent jurisdiction;
(b) any settlement or compromise of any such claim;
(c) the insolvency or bankruptcy of the Borrower; or
(d) otherwise, all as though such payment had not been made,
notwithstanding any termination hereof or the cancellation of the Loan Documents
or any note or other agreement evidencing any of the Obligations.
SECTION 8. SUBROGATION. Until the Obligations shall have been fully paid and
satisfied, the Guarantor agrees that:
(a) any right of subrogation which the Guarantor has or
hereafter acquires against the Borrower or against any collateral or security
granted by the Borrower to the Lender;
(b) any right of contribution the Guarantor has or hereafter
acquires against the Borrower or any other guarantor of the Obligations;
(c) any right to enforce any remedy which the Guarantor has or
hereafter acquires against the Borrower; or
(d) any benefit of, and any right to participate in, any
security now or hereafter held by the Lender;
shall be junior and subordinate to the rights and remedies of the Lender.
Subject to the terms and conditions of the Loan Agreement, the Lender may use,
sell or dispose of any item of collateral or security it sees fit without regard
to any subrogation rights of the Guarantor, and any such disposal or sale shall
be free and clear of any rights of subrogation or other claims of the Guarantor.
If the Guarantor shall receive any payments or other property on account of
subrogation, contribution or similar rights of the Guarantor, at any time prior
to full payment and satisfaction of the Obligations, such amount or property
shall be held in trust for, and shall immediately be paid over or delivered to
the Lender (together with any necessary endorsements), to be credited and
applied against (or, at the option of the Lender, held as additional collateral
for) the Obligations. Notwithstanding anything herein to the contrary, so long
as there has not occurred an Event of Default, the Guarantor may make loans and
receive repayments of existing or future loans to the Borrower.
SECTION 9. WARRANTIES AND REPRESENTATIONS. As a material inducement to the
Lender to grant the loans, advances and extensions of credit to the Borrower in
accordance with the terms of the Loan Documents and to enter into the Loan
Documents, the Guarantor hereby warrants and represents to the Lender as
follows:
(a) The Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the State of New Jersey.
(b) The Guarantor has the corporate power to execute, deliver
and perform this Guaranty Agreement and has taken all necessary corporate action
to authorize the execution, delivery and performance of this Guaranty Agreement.
(c) The Guarantor has read and reviewed the Loan Agreement;
the representations and warranties of the Borrower contained therein are correct
and complete.
(d) The execution, delivery and the performance of and
compliance with this Guaranty Agreement on the part of the Guarantor will not
(with or without the giving of notice or lapse of time, or both) result in any
violation of, or be in conflict with, or constitute a default under, the terms
of any contract, note, indenture, or other agreement to which the Guarantor is a
party, or of any judgment, decree, order, statute, rule, or regulation to which
the Guarantor is subject.
(e) The Guarantor has furnished to the Lender a balance sheet
and statement of income of the Guarantor for its fiscal year ended December 31,
1996, prepared and certified by independent certified public accountants,
together with an interim balance sheet and statement of income prepared as of
March 31, 1997 by the principal financial officer of the Guarantor. Such
financial statements are complete and correct in all material respects, have
been prepared in accordance with generally accepted accounting principles,
consistently applied, and fairly present the condition and results of operations
of the Guarantor for the periods involved. Since the dates of the balance sheets
referred to above, there has been no material and adverse change in the
financial condition of the Guarantor not reflected in the financial statements
as of that date, and since such date the business of the Guarantor has not been
materially and adversely affected by any occurrence, whether or not insured
against.
(f) Except as the Lender has been previously notified in
writing by the Guarantor, there are no outstanding judgments, actions,
proceedings, claims or investigations pending or threatened before any court or
governmental body which may materially and adversely affect the financial
condition, business, operations or affairs of the Guarantor.
(g) No consent or approval of any person, landlord or
mortgagee, no waiver of any lien or right of distraint or similar right, and no
consent, license, approval or authorization of or registration, qualification,
designation, declaration or filing with any governmental authority on the part
of the Guarantor, is required in connection with the execution, delivery and
performance of this Guaranty Agreement.
(h) There is no term of any contract, bond, note, indenture,
or other agreement or of any charter or other corporate restriction or of any
judgment, decree, order, statute, rule or regulation which materially and
adversely limits the business, operations or affairs, as presently conducted, of
the Guarantor or its assets, and the Guarantor is not now in violation of any
such term; and the execution, delivery, and the performance of this Guaranty
Agreement will not (with or without the giving of notice of lapse of time, or
both) result in any violation of or be in conflict with or constitute a default
under any such term. The business, affairs, and operations of the Guarantor
comply with all foreign and domestic laws applicable to them.
(i) This Guaranty Agreement has been duly executed and
delivered and constitutes the valid and legally binding obligation of the
Guarantor, enforceable in accordance with its terms.
SECTION 10. COVENANTS. As a material inducement to the Lender to grant the
loans, advances and extensions of credit to the Borrower in accordance with the
terms of the Loan Documents and to enter into the Loan Documents, the Guarantor
covenants and agrees with the Lender that:
(a) The Guarantor shall do, or cause to be done, all things
necessary to preserve and keep in full force and effect its corporate existence
and all franchises, licenses, permits, rights and privileges necessary for the
proper conduct of its business.
(b) The Guarantor shall comply with all laws, ordinances,
rules and regulations, now or hereafter in effect, applicable to it of any
federal, state, local or foreign government or any instrumentality or agency
thereof.
(c) (i) The Guarantor will deliver, or cause to be delivered,
to the Lender the following:
(1) Within One hundred twenty (120) days
after the end of each fiscal year of the Guarantor (commencing with the fiscal
year in which this Agreement is executed and continuing until all of the
Obligations of the Borrower to the Lender are fully paid and satisfied), a
balance sheet of the Guarantor as at the end of such year and the related
statements of income, retained earnings and cash flows thereof for such year,
all in reasonable detail and prepared in accordance with generally accepted
accounting principles, consistently applied, and audited by independent
certified public accountants, acceptable to the Lender, with their audit report,
without qualification, and accompanying comment, which shall also be certified
by the principal financial officer of the Guarantor to be complete and correct,
and a statement of his examination (which shall include a review of the relevant
provisions of this Agreement) and stating whether his examination has disclosed
the existence of any condition or event which constitutes (or would after notice
or lapse of time, or both, constitute) an Event of Default, and if so,
specifying the nature and period of existence thereof;
(2) Such additional financial statements or
information of the Guarantor as the Lender shall reasonably require.
(ii) Any statement, report, compilation or other document
or writing which is the result of professional accounting services provided by
the Guarantor's accountant shall be accompanied by a written communication, in
form and substance satisfactory to the Lender, signed by the Guarantor and their
accountant, stating, among other things, that (i) the accountant acknowledges
that the Lender intends to rely on all such statements, reports, compilations
and other documents or writings and (ii) the Guarantor has knowledge of the
Lender's reliance or intended reliance on such statements, reports, compilations
and other documents or writings.
(d) The Guarantor shall pay and discharge, as they become due,
all taxes, assessments, debts, claims and other governmental or non-governmental
charges lawfully imposed upon it or incurred by it or its properties and assets,
except taxes, assessments, debts, claims, and charges contested in good faith in
appropriate proceedings.
(e) The Guarantor shall promptly notify the Lender of any
litigation, actions, proceedings, claims, or investigations pending or
threatened against the Guarantor which may materially and adversely affect the
financial condition, business, affairs, or operations of the Guarantor.
(f) The Guarantor shall maintain, with responsible insurance
companies, such insurance on its properties and assets, against such casualties
and in such amounts as is customarily maintained by similar businesses.
(g) The Guarantor shall keep its properties and assets free
and clear of liens (except for liens existing as of the date hereof) and refrain
from selling or offering to sell or otherwise transferring its properties and
assets or any interest therein, except such sales or other transfers of
inventory made by the Guarantor in the ordinary course of its business in
commercially reasonable and bona fide arm's length transactions.
(h) Without the prior written consent of the Lender, the
Guarantor will not sell, assign, lease or otherwise dispose of all or a
substantial part of its assets, except for fair consideration.
(i) The Guarantor shall keep its properties and assets in good
repair, working order and condition, and make, or cause to be made, all
necessary or appropriate repairs, renewals, replacements, substitutions,
additions, betterments, and improvements thereto so that the efficiency of such
properties and assets shall at all times be properly preserved and maintained.
(j) The Guarantor shall observe, perform, and comply with and
shall continue to observe, perform, and comply with, all of the Guarantor's
covenants made herein until the Obligations are fully paid and satisfied.
SECTION 11. TRANSFER OF BENEFIT. This Guaranty Agreement shall be binding upon
the Guarantor, its successors and assigns, and shall inure to the benefit of,
and be enforceable by, the Lender, its successors and assigns.
SECTION 12. NO WAIVER; AMENDMENTS, ETC. No failure or delay on the part of the
Lender in exercising any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy preclude any other right, power or remedy hereunder. No
amendment, modification, termination, or waiver of any provision of this
Guaranty Agreement, nor consent to any departure by the Guarantor therefrom,
shall in any event be effective unless the same shall be in writing making
explicit reference to this Guaranty Agreement, and shall be effective only in
the specific instance and for the specific purpose for which given. No notice
to, or demand on, the Guarantor in any case shall entitle the Guarantor to any
other or further notice or demand in similar or other circumstances.
SECTION 13. NOTICES. All notices, requests and other communications pursuant to
this Guaranty Agreement shall be in writing, either by letter (delivered by hand
or sent certified mail, return receipt requested) or telegram addressed to the
Lender at its place of business first indicated above or to the Guarantor (as
the case may be) at its place of business first indicated above, or at such
other address as either may give notice to the other as herein provided. Any
notice, request or communication hereunder shall be deemed to have been given
three (3) days after deposit in the mails, postage prepaid, or in the case of
hand delivery, when delivered, or in the case of telegraphic notice, when
delivered to the telegraph company, addressed as aforesaid, provided, however,
that notice of a change of address, as hereinabove provided, shall be deemed to
have been given only when actually received by the party to which it is
addressed.
SECTION 14. SEVERABILITY. If any of the provisions of this Guaranty Agreement
shall contravene or be held invalid under the laws of any jurisdiction, this
Guaranty Agreement 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 in this Guaranty Agreement in any jurisdiction.
SECTION 15. GOVERNING LAW;CONSENT TO JURISDICTION.
(a) This Guaranty Agreement is to be executed and delivered
within the State of New Jersey, is to be principally performed within the State
of New Jersey, and the Guarantor acknowledges and agrees that the laws of the
State of New Jersey shall govern the construction of this Guaranty Agreement and
the rights, remedies, warranties, representations, covenants, and provisions
hereof without giving effect to the conflict of laws rules of the State of New
Jersey.
(b) Any legal action or proceeding with respect to this
Guaranty Agreement or any other document, instrument, writing or agreement
related hereto, may be brought in the courts of the State of New Jersey or of
the United States for the District of New Jersey, and, by execution and delivery
of this Guaranty Agreement, the Guarantor hereby irrevocably accepts for itself
in respect of its property, generally and unconditionally, the jurisdiction of
the aforesaid courts. The Guarantor further irrevocably consents to the service
of process out of any of the aforementioned courts and in any action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the Guarantor at its address set forth above, such service
to become effective thirty (30) days after such mailing. Nothing contained
herein shall affect the right of the Lender to service of process in any other
manner permitted by law or to commence any legal proceedings or otherwise
proceed against the Guarantor in any jurisdiction.
(c) The Guarantor hereby waives any rights it may have to
transfer or change the venue of any litigation brought against it by the Lender
which is in any way related to this Guaranty Agreement or any other document,
instrument, writing or agreement related hereto.
(d) The provisions of this Section 15 shall survive the
repayment of the Obligations of the Borrower to the Lender and the termination
of this Guaranty Agreement.
SECTION 16. HEADINGS. Section headings in this Guaranty Agreement are included
herein for convenience of reference only and shall not constitute a part hereof
for any other purpose.
SECTION 17. CONSENT TO AGREEMENT. The Guarantor in all respects consents to the
terms and provisions of the Loan Documents.
SECTION 18. GENDER AND NUMBER. In all references herein to any parties, persons,
entities or corporations, the use of any particular gender or the plural or
singular number is intended to include the appropriate gender or number as the
text of this Guaranty Agreement may require.
SECTION 19. MERGER. This writing is intended by the Lender and the Guarantor as
a final expression of this agreement of guaranty and is intended also as a
complete and exclusive statement of the terms of the agreement by the Guarantor.
No course of prior dealings between the Lender and the Guarantor, no usage of
the trade, and no parol or extrinsic evidence of any nature, shall be used or be
relevant to supplement or explain or modify any term used in this agreement of
guaranty.
SECTION 20. INDEMNIFICATION. The Guarantor hereby agrees to indemnify the Lender
against loss, cost or expense by reason of the assertion by the Guarantor of any
defense to its obligations hereunder based upon any action or inaction of the
Borrower.
SECTION 21. LENDER. For the purposes of this Guaranty Agreement, wherever the
term "Lender" shall be used it shall refer to any affiliate or subsidiary of
Lender and to any subsequent holder, successor or assignee hereof unless the
context requires otherwise.
SECTION 22. WAIVER OF TRIAL BY JURY.
(a) THE GUARANTOR HEREBY ACKNOWLEDGES THAT DISPUTES ARISING
UNDER THIS GUARANTY AGREEMENT OR OTHERWISE RELATING TO THE OBLIGATIONS OF THE
GUARANTOR HEREUNDER ARE LIKELY TO BE COMPLEX AND IT DESIRES TO STREAMLINE AND
MINIMIZE THE COST OF RESOLVING SUCH DISPUTES. THEREFORE, THE GUARANTOR
IRREVOCABLY WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (AS PLAINTIFF,
DEFENDANT OR OTHERWISE), ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION,
COUNTERCLAIM, DISPUTE OR PROCEEDING BASED UPON, OR RELATED TO THE SUBJECT MATTER
OF THIS GUARANTY AGREEMENT OR OTHERWISE RELATING TO THE OBLIGATIONS OF THE
GUARANTOR HEREUNDER. WITHOUT LIMITING THE FOREGOING, THIS WAIVER AND COVENANT
APPLIES:
(i) TO ALL CLAIMS AGAINST ALL PARTIES TO SUCH
DISPUTES, ACTIONS AND PROCEEDINGS INCLUDING THOSE INVOLVING THE LENDER, THE
GUARANTOR OR ANY OF THEIR RESPECTIVE PARENTS, SUBSIDIARIES, AFFILIATES OR
RELATED ENTITIES, OR ANY OFFICER, DIRECTOR, SHAREHOLDER, MEMBER, ATTORNEY OR
PARTNER OF ANY OF THEM;
(ii) IRRESPECTIVE OF WHETHER SUCH DISPUTE, ACTION OR
PROCEEDING ARISES UNDER THIS GUARANTY AGREEMENT OR ANY OTHER AGREEMENT, NOTE,
PAPER, INSTRUMENT OR DOCUMENT HERETOFORE OR HEREAFTER EXECUTED RELATING TO ANY
OF THE OBLIGATIONS OF THE GUARANTOR HEREUNDER;
(iii) IRRESPECTIVE OF WHETHER SUCH DISPUTE, ACTION OR
PROCEEDING ARISES IN CONNECTION WITH OR IS BASED UPON INTENTIONAL OR
UNINTENTIONAL CONDUCT, FRAUD, IMPROPER ACTION OR FAILURE TO ACT, OR ANY OTHER
CIRCUMSTANCES.
(b) THIS WAIVER IS KNOWINGLY AND VOLUNTARILY MADE BY THE
GUARANTOR, AND THE GUARANTOR ACKNOWLEDGES THAT NEITHER THE LENDER, NOR ANY
PERSON ACTING ON BEHALF OF THE LENDER, HAS MADE ANY REPRESENTATIONS TO INDUCE
THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. THE
GUARANTOR FURTHER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED (OR HAS HAD THE
OPPORTUNITY TO BE REPRESENTED) IN CONNECTION WITH THE SIGNING OF THIS GUARANTY
AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL,
SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS
THIS WAIVER WITH COUNSEL. THE GUARANTOR FURTHER ACKNOWLEDGES THAT IT HAS READ,
AND UNDERSTANDS THE MEANING AND RAMIFICATIONS OF, THIS WAIVER.
(c) THE GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY
THE LENDER THAT THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH THE
LENDER HAS RELIED IN ENTERING INTO THE LOAN DOCUMENTS, AND THAT THIS WAIVER
PARAGRAPH SHALL BE DEEMED ENFORCEABLE INDEPENDENTLY OF ALL OTHER PROVISIONS OF
THIS GUARANTY AGREEMENT. THE LENDER MAY FILE AN ORIGINAL COUNTERPART OF THIS
SECTION AS WRITTEN EVIDENCE OF THE CONSENT BY THE GUARANTOR TO THE WAIVER OF ITS
RIGHT TO TRIAL BY JURY. THE PROVISIONS OF THIS SUBSECTION SHALL SURVIVE THE
REPAYMENT OF THE OBLIGATIONS OF THE BORROWER TO THE LENDER AND THE TERMINATION
OF THIS GUARANTY AGREEMENT.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty Agreement
the day and year first above written.
WITNESS: RONSON CORPORATION
/s/ By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------- -------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President - Finance
and Chief Financial Officer
EXHIBIT 10(f)
SECOND MORTGAGE MODIFICATION AGREEMENT
This Second Mortgage Modification Agreement (the "Second Modification")
is made as of the 28th day of August, 1997 between RONSON CONSUMER PRODUCTS
CORPORATION, a New Jersey corporation having its principal place of business
located at Corporate Park III, Campus Drive, P.O. Box 6707, Somerset, New Jersey
08875-6707 (the "Mortgagor") and SUMMIT BANK, successor-by-merger to United
Jersey Bank, with an office located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
(the "Mortgagee"), to modify the terms of a certain Mortgage dated January 6,
1995 and recorded January 12, 1995 in the Office of the Clerk of Middlesex
County, New Jersey in Mortgage Book 4850 at Page 211 and modified by a certain
Mortgage Modification Agreement, (collectively and individually referred to as
the "Mortgage") (all capitalized terms used, but not specifically defined,
herein shall have the meaning provided for such terms in the Mortgage).
WHEREAS, the Mortgage was given to secure all obligations of the
Mortgagor to the Mortgagee, including, without limitation, the obligations
evidenced by a certain Master Note dated January 6, 1995, as amended, in the
original principal amount of Two Million Five Hundred Thousand ($2,500,000.00)
Dollars (the "Master Note"); and
WHEREAS, the lien of the Mortgage encumbers the property commonly known
and designated as ▇▇▇ ▇-▇, ▇▇▇▇▇ ▇▇▇, on the Tax Map of the Township of
Woodbridge, Middlesex County, New Jersey as more particularly described on
Schedule A annexed to the Mortgage (the "Property"); and
WHEREAS, the lien of the Mortgage is second in priority; and
WHEREAS, the Mortgagee and Ronson Aviation, Inc., a New Jersey
corporation ("Aviation"), are about to enter into a Loan and Security Agreement
to provide certain credit facilities to Aviation (the "Aviation Loan
Agreement"); and
WHEREAS, to induce the Mortgagee to enter into the Aviation Loan
Agreement and the transactions described therein, Aviation has offered and the
Mortgagor has agreed to guaranty the payment and performance of Aviation's
Obligations, as such term is defined in the Aviation Loan Agreement, to the
Mortgagee, pursuant to a certain Corporate Guaranty Agreement and Security
Agreement of even date herewith (the "Guaranty"); and
WHEREAS, Aviation has further offered and the Mortgagor has further
agreed to secure its obligations under the Guaranty by the Lien evidenced by the
Mortgage; and
NOW, THEREFORE, in consideration of the foregoing, and of other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Mortgagor and the Mortgagee to modify the terms and conditions
of the Mortgage as follows:
1. The Mortgagor acknowledges that its obligations to the Mortgagee
secured by the Mortgage 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, the Mortgagor waives and releases the Mortgagee from the same.
2. As of the date of this Second Modification, the obligations secured
by the Mortgage shall include, in addition to the obligations described in the
Mortgage, without limitation, all of obligations of the Mortgagor to the
Mortgagee pursuant to the Guaranty.
3. The Mortgagor hereby agrees to and does indemnify and hold the
Mortgagee and each of its directors, officers, employees, affiliates, attorneys
and agents harmless from and against any and all liabilities which may be
imposed on, incurred by or asserted against the same in any manner relating to
or arising out of the Mortgage or any act, event or transaction related to,
attendant to or preceding the execution of this Second Modification, other than
those resulting from the Bank's gross negligence or willful misconduct.
4. The Mortgagor hereby agrees with, reaffirms and acknowledges the
representations and warranties contained in the Mortgage. Furthermore, the
Mortgagor represents that the representations and warranties contained in the
Mortgage continue to be true and in full force and effect as of the date of this
Second Modification. This agreement, reaffirmation and acknowledgment is given
to the Mortgagee by the Mortgagor without defenses, claims or counterclaims of
any kind. To the extent that any such defenses, claims or counterclaims against
the Mortgagee may exist, the Mortgagor waives and releases the Mortgagee from
the same.
5. The Mortgagor ratifies and reaffirms all terms, covenants,
conditions and agreements contained in the Mortgage.
6. All other terms and conditions of the Mortgage, and any and all
exhibits and schedules annexed thereto and all other writings submitted by the
Mortgagor to the Mortgagee pursuant thereto, shall remain unchanged and in full
force and effect.
7. This modification shall not constitute a waiver or modification of
any of the Mortgagee's rights and remedies or of any of the terms, conditions,
warranties, representations, or covenants contained in the Mortgage, except as
specifically set forth above, and the Mortgagee hereby reserves all of its
rights and remedies pursuant to the Mortgage and applicable law.
8. Subject to any applicable grace and/or cure periods under the
Mortgage, the failure of the Mortgagor to satisfy any of the terms and
conditions of this Second Modification shall constitute an Event of Default
under the Mortgage.
9. This Second Modification may be executed in counterparts, each of
which, when taken together, shall be deemed to be one and the same instrument.
By execution of this Second Modification on the date shown above, the
undersigned signify their consent to its terms.
Mortgagor acknowledges receipt of a certified copy of this Second
Modification.
IN WITNESS WHEREOF, the Mortgagor(s) have hereunto set their hands and
seals, the day and year first above mentioned.
Witness: RONSON CONSUMER PRODUCTS
CORPORATION
/s/ By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------- -------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President - Finance
and Chief Financial Officer
SUMMIT BANK
/s/ By: /s/▇▇▇ ▇▇▇▇▇▇▇
-------------------- --------------
▇▇▇ ▇▇▇▇▇▇▇,
Vice President
EXHIBIT 10(g)
July 8, 1997
▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President
and Chief Financial Officer
Ronson Consumer Products Corporation
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Summit Bank to Ronson Consumer Products
Corporation
Dear ▇▇. ▇▇▇▇▇▇▇:
Reference is made to a certain Loan and Security Agreement dated January
6, 1995, as amended by certain Letter Amendments dated August 22, 1995,
December 1, 1995, March 20, 1996, May 20, 1996, August 22, 1996,
September 10, 1996 and December 12, 1996 and by a certain Amendment to
Loan and Security Agreement dated March 6, 1997 (collectively and
individually referred to as the "Loan Agreement"), all by and between
Ronson Consumer Products Corporation, a New Jersey corporation (the
"Borrower") and Summit Bank, successsor-by-merger to United Jersey Bank
(the "Bank"). All capitalized terms used, but not specifically defined,
herein shall have the meaning provided for such terms in the Loan
Agreement.
In order to provide the Borrower with a continuing source of working
capital, the Borrower has requested that the Bank approve a temporary
overadvance in the maximum principal amount of Four Hundred Thousand
($400,000.00) Dollars. The Bank has agreed to provide the temporary
overadvance requested by the Borrower, subject to the terms and
conditions of this letter. The Bank and the Borrower agree as follows:
1. As of the date of this letter, Subsections 1.1(j) and (k) of the Loan
Agreement are amended in their entirety to read as follows:
"(j) "Corporate Guarantor" or "Corporate Guarantors":
Collectively and individually, Ronson Corporation, a New Jersey
corporation, and Ronson Aviation, a New Jersey corporation, the
corporations designated to execute the Corporate Guaranty Agreements."
"(k) "Corporate Guaranty Agreement" or "Corporate Guaranty
Agreements": Collectively and individually, the Corporate Guaranty
Agreements executed by the Corporate Guarantors and delivered to the
Bank."
2. As of the date of this letter, Subsection 1.1 of the Loan Agreement
is amended by the addition of the following sub-paragraph (as) to read
in its entirety as follows:
"(as) "Overadvance": The temporary overadvance provided by the
Bank to the Borrower, as more fully described in Subsection
2.1(k)."
3. As of the date of this letter, Subsection 2.1(a) of the Loan
Agreement is amended in its entirety to read as follows:
"(a) The Bank shall lend and re-lend to the Borrower amounts
which shall not exceed in the aggregate of unpaid principal of
such amounts outstanding at any one time the lesser of (i) Two
Million Five Hundred Thousand ($2,500,000.00) Dollars, or (ii)
the sum of --
(A) eighty (80%) percent of the Qualified Accounts Receivable
of the Borrower, less the aggregate sum of all debit memos,
plus
(B) the lesser of (i) fifty (50%) percent of the lower of the
net cost to the Borrower or the market value of the Qualified
Inventory, or (ii) One Million Two Hundred Fifty Thousand
($1,250,000.00) Dollars, plus
(C) the Overadvance, less
(D) a reserve in an amount equal to the full face amount of
all issued and outstanding Letters of Credit, less
(E) a reserve in an amount equal to the aggregate face amount
of all outstanding Acceptances."
4. As of the date of this letter, Subsection 2.1 of the Loan Agreement
is amended by the addition of the following sub-paragraph 2.1(k) to read
in its entirety as follows:
"(k) (i) Provided no Event of Default has occurred, the Bank
has agreed to make the Overadvance available to the Borrower
in an amount not to exceed Four Hundred Thousand ($400,000.00)
Dollars. The maximum principal amount of the Overadvance,
which shall be granted to the Borrower effective as of the
effective date of the July 8, 1997 letter agreement, shall be
reduced monthly in accordance with the following schedule:
(A) Commencing October 1, 1997 and continuing on the first
day of each and every month thereafter through and
including March 1, 1998, in an amount equal to Fourteen
Thousand Five Hundred Eighty-Three and 33/100
($14,583.33) Dollars per month; and
(B) Commencing April 1, 1998 and continuing on the first
day of each and every month thereafter through and
including June 1, 1999, in an amount equal to Twenty
Thousand Eight Hundred Thirty-Three and 33/100
($20,833.33) Dollars per month; and
(C) On June 2, 1999 and thereafter, the Overadvance shall
be fully amortized and shall no longer be available to
the Borrower under this Agreement."
5. As of the date of this letter, Subsection 6.35(a)(iii) of the Loan
Agreement is amended in its entirety to read as follows:
"(iii) an aggregate amount not to exceed One Million Five
Hundred Ninety-Nine Thousand ($1,599,000.00) Dollars for the
period January 1, 1997 through and including December 31,
1997; and"
6. As of the date of this letter, Subsection 6.35(c) of the Loan
Agreement is amended by the addition of this subparagraph (iii) to read
in its entirety as follows:
"(iii) Aggregate amounts not to exceed Three Hundred
Twenty-Six Thousand ($326,000.00) Dollars during the 1997
fiscal year of the Borrower, provided that, within ten (10)
days of each cash transfer on account of pension liabilities,
Ronson Corporation provides to the Bank proof, in form and
substance acceptable to the Bank, that each cash transfer was
used to reduce pension liabilities."
7. As of the date of this letter, Subsection 6.35 of the Loan Agreement
is amended by the addition of the following sub-paragraph (e) to read in
its entirety as follows:
"(e) For miscellaneous expenses, including, without
limitation, disbursements to or for the benefit of Aviation,
in an amount not to exceed Two Hundred Twenty Five Thousand
($225,000.00) Dollars during the 1997 fiscal year of the
Borrower."
8. As of the date of this letter, Subsection 6.36 of the Loan Agreement
is amended in its entirety to read as follows:
"6.36 (a) Upon the sale of either (i) real property owned by
Ronson Metals, now known as Prometcor, or (ii) the capital
stock of Ronson Aviation, Ronson Corporation shall use the
cash proceeds of such sale, to the extent cash proceeds of the
sale exceed the normal and reasonable costs of such sale, to
repay the Borrower intercompany loans made by the Borrower to
the Corporate Guarantors, Ronson Metals, now known as
Prometcor, or any Affiliated Companies, and the Borrower
agrees that a failure of Ronson Corporation to do so shall
constitute an additional Event of Default under this
Agreement. To the extent that Ronson Corporation retains any
excess cash proceeds of such sale after full satisfaction of
intercompany loans, the amount of such excess cash proceeds
shall reduce the cash transfers of the Borrower to Ronson
Corporation permitted under Subsection 6.35.
(b) Notwithstanding Subsection 6.36(a), the Lender and
the Borrower agree that in the event the real property owned
by Ronson Metals, now known as Prometcor, is sold during the
calendar year 1997, up to One Hundred Thousand ($100,000.00)
Dollars of any such excess cash proceeds may be retained by
Ronson Corporation for use in accordance with Subsection
6.37(c)."
9. As of the date of this letter, Subsection 6.37 of the Loan Agreement
is amended by the addition of the following sub-paragraph (c) to read
in its entirety to read as follows:
"(c) The maximum cash advances to or for the benefit of Ronson
Metals, now known as Prometcor, for the calendar year 1997
shall not exceed (a) One Million Two Hundred Sixty Thousand
($1,260,000.00) Dollars in the event the real property
described in this Subsection 6.37 is sold during the 1997
calendar year or (b) One Million Three Hundred Sixty Thousand
($1,360,000.00) Dollars in the event the real property
described in this Subsection 6.37 is not sold during the 1997
calendar year."
10. The Borrower shall pay to the Bank, upon execution of this letter
agreement, a non-refundable overadvance facility fee in an amount equal
to Seven Hundred Fifty ($750.00) Dollars.
11. The Borrower acknowledges and agrees that the Obligations are due
and owing without any defenses, set-offs, recoupments, claims or
counterclaims of any kind as of the date hereof. To the extent any
defenses, set-offs, recoupments, claims or counterclaims may exist, the
Borrower waives and releases the Bank from the same.
12. The Borrower shall pay on demand all reasonable legal fees,
recording expenses and other reasonable and necessary disbursements of
the Bank incident to the preparation, execution and delivery of this
letter, and any related documents, instruments, writings or agreements.
13. The Borrower hereby agrees to and does indemnify and hold the Bank
and each of its directors, officers, employees, affiliates, attorney and
agents harmless from and against any and all liabilities which may be
imposed on, incurred by or asserted against the same in any manner
relating to or arising out of the Loan Agreement, or any act, event or
transaction related to, attendant to or preceding the execution of this
letter, other than those resulting from the Bank's gross negligence or
willful misconduct.
14. The Borrower hereby agrees with, reaffirms and acknowledges the
representations and warranties contained in the Loan Agreement.
Furthermore, the Borrower represents that the representations and
warranties contained in the Loan Agreement continue to be true and in
full force and effect. This agreement, reaffirmation and acknowledgment
is given to the Bank by the Borrower without any defenses, claims or
counterclaims of any kind. To the extent that any defenses, claims or
counterclaims against the Bank may exist, the Borrower waives and
releases the Bank from the same.
15. The Borrower ratifies and reaffirms all terms, covenants, conditions
and agreements contained in the Loan Agreement.
16. All other terms and conditions of the Loan Agreement, and any and
all exhibits and schedules annexed thereto and all other writings
submitted by the Borrower to the Bank pursuant thereto, shall remain
unchanged and in full force and effect.
17. This letter shall not constitute a waiver or modification of any of
the Bank's rights and remedies or of any of the terms, conditions,
warranties, representations or covenants contained in the Loan
Agreement, except as specifically set forth above, and the Bank hereby
reserves all of its rights and remedies pursuant to the Loan Agreement
and applicable law.
18. Subject to any applicable notice and/or grace periods under the Loan
Agreement, the failure of the Borrower to satisfy any of the terms and
conditions of this letter shall constitute an Event of Default under the
Loan Agreement.
19. This letter may be executed in any number of counterparts, each of
which, when taken together, shall be deemed one and the same instrument.
Kindly indicate the agreement of the Borrower with the terms and
conditions of this letter by countersigning in the space provided on
page 6 below, and returning a countersigned copy of this letter to the
undersigned. This letter shall become null and void unless a
countersigned copy is returned within fourteen (14) days from the date
hereof.
Very truly yours,
SUMMIT BANK
By: /s/▇▇▇ ▇▇▇▇▇▇▇
--------------
▇▇▇ ▇▇▇▇▇▇▇, Vice President
Accepted and agreed this 8th day of July, 1997.
RONSON CONSUMER PRODUCTS CORPORATION
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President and Chief Financial Officer