LETTER AGREEMENT

October 18, 2006

Ronald M. Popeil
RMP Family Trust
Ronco Inventions, LLC
Popeil Inventions, Inc.
RP Productions, Inc.
1672 Waynecrest Drive
Beverly Hills, CA 90210

Ladies and Gentlemen:

Ronco Corporation, a Delaware corporation (“Ronco”) and Ronco Marketing
Corporation, a Delaware corporation and wholly owned subsidiary of Ronco (“RMC”
and together with Ronco, the “Company”), are, substantially concurrently
herewith, entering into a Security and Purchase Agreement (the “Laurus Loan
Agreement”) with Laurus Master Fund, Ltd., a Cayman Islands company (“Laurus”),
pursuant to which Laurus will make certain advances to the Company (the “Laurus
Loan”). A condition to the closing of the Laurus Loan is that each of Ronald M.
Popeil (“Popeil”), the RMP Family Trust, an Illinois irrevocable trust, Gina
Wallman and Martin Lescht as co-Trustees (“RMP”), Ronco Inventions, LLC, a
California limited liability company (“Ronco Inventions”), Popeil Inventions,
Inc., a Nevada corporation (“Popeil Inventions”) and RP Productions, Inc., a
Nevada corporation (“RP,” and collectively with Popeil, RMP, Ronco Inventions,
Popeil Inventions and RP, the “Lenders”) enter into the Subordination Agreement
in substantially the form attached hereto as Exhibit A with Laurus Master Fund,
Ltd. (the “Laurus Subordination Agreement”), and the Limited Subordination
Agreement in substantially the form attached hereto as Exhibit B with Sanders
Morris Harris Inc., a Texas corporation (“SMH”), individually and on behalf of
the “lenders” (as defined in the Letter Loan Agreement dated June 9, 2006, among
Ronco, SMH and these “lenders”)(the “SMH Limited Subordination Agreement”).

 
  In connection with the Company’s purchase of the Ronco business, RMC issued
promissory notes in the aggregate original principal amount of $16.3 million to
Ronco Inventions and Popeil Inventions. Pursuant and subject to the terms of the
Asset Purchase Agreement dated December 10, 2004 among RMC and the Lenders, as
amended or supplemented (the “Asset Purchase Agreement”), the principal amount
of these promissory notes was to be adjusted following the closing of the
Company’s purchase of the Ronco business.
 

Subject to the terms of this Letter Agreement (this “Agreement”), the Company
and each of the Lenders hereby agree as follows:

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1.  Effectiveness. The Company and the Lenders agree that this Agreement shall
only become effective upon the closing of the Laurus Loan (the “Laurus
Closing”), in which case it shall be deemed effective immediately prior to the
“Closing Date” (as defined in the Laurus Loan Agreement) of the Laurus Loan. The
Company and the Lenders further agree that the provisions hereof shall supersede
and replace any contrary provisions of the Asset Purchase Agreement, the Notes
(as defined herein) and any other document or agreement entered into among them
in connection therewith. Other than as set forth in this Agreement, none of the
Lenders shall be deemed to have waived, amended, modified or changed any
provision of the Asset Purchase Agreement, or its respective rights thereunder,
the Notes or any other document or agreement entered into in connection with the
Asset Purchase Agreement, as a result of its acceptance of any of the payments
called for hereunder, including, but not limited to, such Lender’s right to
dispute the amounts paid in accordance with the provisions of Section 1.7(D) of
the Asset Purchase Agreement.

2. Laurus Subordination Agreement and SMH Limited Subordination Agreement. Each
of the Lenders agrees to enter into the Laurus Subordination Agreement and the
SMH Limited Subordination Agreement as of the date hereof. Notwithstanding the
foregoing, the Laurus Subordination Agreement and the SMH Limited Subordination
Agreement shall have no force or effect until immediately prior to the Closing
Date. If any of the Company, Laurus or the Lenders elect to deliver their
respective signature pages to this Agreement, the Laurus Subordination Agreement
or the SMH Limited Subordination Agreement to counsel for the Company to be held
in escrow pending the Laurus Closing, it is expressly agreed that any of them
may withdraw their respective signature pages from escrow at any time prior to
the Laurus Closing for any reason in which event this Agreement will be of no
force or effect.

3. Turkey Fryer.

(a) The Company hereby agrees and confirms that it has no rights or interest
whatsoever in or to, or any right to acquire, the Turkey Fryer (as defined in
the New Product Development Agreement dated June 30, 2005 by and between Ronald
M. Popeil and RMC (the “New Product Development Agreement”)) and agrees that is
not entitled to any compensation or other consideration in respect of the Turkey
Fryer or its confirmation and agreement as expressed in this Paragraph 3(a). For
the avoidance of doubt, the parties agree that, as used in this Paragraph 3, the
term “Turkey Fryer” shall include the turkey fryer product developed by Ronald
M. Popeil and Alan L. Backus as previously shown to the Company and/or its
representatives, in all of its variations and versions, and together with any
pertinent intellectual property and related accessories or products, and any
similar or derivative products, intellectual property and/or accessories
heretofore or hereafter developed, created or conceived by or under the
direction of Ronald M. Popeil and/or Alan L. Backus. In addition, Lenders
confirm that the Company has no obligation to acquire the Turkey Fryer and no
liability to any of Lenders in connection with the Turkey Fryer.

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Lenders further confirm that, to their knowledge, no Event of Default (as
defined in the New Product Development Agreement) has occurred under the New
Product Development Agreement during the Pre-Agreement Period (as hereafter
defined) excluding matters that might be construed to constitute an Event of
Default, the resolution of which is addressed by this Agreement. The Company
confirms that, to its knowledge, no matters that in its judgment constitute an
Event of Default by the Company have occurred under the New Product Development
Agreement excluding matters that might be construed to constitute an Event of
Default, the resolution of which is addressed by this Agreement.

(b) RMC hereby grants Ronald M. Popeil a world-wide, perpetual, transferable
royalty-free license to use his name and likeness on the packaging of the Turkey
Fryer, on the Turkey Fryer itself and in connection with the manufacturing,
marketing and sale of the Turkey Fryer.

4. Consulting Fee. Subject to the terms of the Consulting Agreement dated June
30, 2005 between RMC and Popeil (the “Consulting Agreement”), RMC agrees that
the Compensation (as defined in the Consulting Agreement) received by Popeil
pursuant to Section 2(a)(i) of the Consulting Agreement shall be increased, so
that RMC shall pay to Popeil, commencing on the date hereof, an additional
$3,000 per week (the “Additional Payments”) until all obligations of Ronco
and/or RMC under the Notes (as hereafter defined) have been paid in full. This
obligation to make the Additional Payments shall continue until the Notes have
been paid in full even if the term of the Consulting Agreement has expired
before such time. Lenders confirm that, to their knowledge, no default has
occurred under the Consulting Agreement during the Pre-Agreement Period (as
hereafter defined) excluding matters that might be construed to constitute a
default, the resolution of which is addressed by this Agreement. The Company
confirms that, to its knowledge, no matters that in its judgment constitute a
default by the Company have occurred under the Consulting Agreement excluding
matters that might be construed to constitute a default, the resolution of which
is addressed by this Agreement.
 
5. Final Combined NCOAV.

(a) Pursuant to the terms of the Asset Purchase Agreement, the Company and the
Lenders agree that the final Combined NCOAV (as defined in the Asset Purchase
Agreement) is $13,158,180. RMC and the Lenders each waive any Objections (as
defined in the Asset Purchase Agreement) under Section 1.6(D) and Section 1.6(E)
of the Asset Purchase Agreement to the final Combined NCOAV or the related
Adjusted Determination (as defined in the Asset Purchase Agreement). Lenders
confirm that, to their knowledge, no default has occurred under the Asset
Purchase Agreement during the Pre-Agreement Period (as hereafter defined)
excluding matters that might be construed to constitute a default, the
resolution of which is addressed by this Agreement. The Company confirms that,
to its knowledge, no matters that in its judgment constitute a default by the
Company have occurred under the Asset Purchase Agreement excluding matters that
might be construed to constitute a default, the resolution of which is addressed
by this Agreement.

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(b) RMC and the Lenders further agree that the principal amount of the Purchase
Money Promissory Note issued to Popeil Inventions on June 30, 2005 (the “Popeil
Inventions Note”) shall be adjusted pursuant to Section 1.6 of the Asset
Purchase Agreement, so that the Adjusted Principal Amount (as defined in the
Popeil Inventions Note) shall be $12,558,180 as of the Closing (as defined in
the Asset Purchase Agreement). RMC and the Lenders further acknowledge and agree
that the amount outstanding under the Popeil Inventions Note as of the date
hereof may be greater or less than the Adjusted Principal Amount, reflecting
accrued interest since the Closing Date and other amounts becoming due since
such date, as well as payments made by RMC under the Popeil Inventions Note
since the Closing Date. Lenders confirm that, to their knowledge, no Event of
Default (as defined in the Popeil Inventions Note) has occurred under the Popeil
Inventions Note during the Pre-Agreement Period (as hereafter defined) excluding
matters that might be construed to constitute an Event of Default, the
resolution of which is addressed by this Agreement. The Company confirms that,
to its knowledge, no matters that in its judgment constitute an Event of Default
by the Company have occurred under the Popeil Inventions Note excluding matters
that might be construed to constitute an Event of Default, the resolution of
which is addressed by this Agreement.  

(c) RMC and the Lenders further agree that the principal amount of the Purchase
Money Promissory Note issued to Ronco Inventions on June 30, 2005 (the “Ronco
Inventions Note”) shall be adjusted pursuant to Section 1.6 of the Asset
Purchase Agreement, so that the Adjusted Principal Amount (as defined in the
Ronco Inventions Note) shall be $600,000 as of the Closing (as defined in the
Asset Purchase Agreement). RMC and the Lenders further acknowledge and agree
that the amount outstanding under the Ronco Inventions Note as of the date
hereof may be greater or less than the Adjusted Principal Amount, reflecting
accrued interest since the Closing Date and other amounts becoming due since
such date, as well as payments made by RMC under the Ronco Inventions Note since
the Closing Date. Lenders confirm that, to their knowledge, no Event of Default
(as defined in the Ronco Inventions Note) has occurred under the Ronco
Inventions Note during the Pre-Agreement Period (as hereafter defined) excluding
matters that might be construed to constitute an Event of Default, the
resolution of which is addressed by this Agreement. The Company confirms that,
to its knowledge, no matters that in its judgment constitute an Event of Default
by the Company have occurred under the Ronco Inventions Note excluding matters
that might be construed to constitute an Event of Default, the resolution of
which is addressed by this Agreement.

6. Amendments to Asset Purchase Agreement.

(a) RMC and the Lenders agree that Section 1.7(A) of the Asset Purchase
Agreement shall be amended and restated in its entirety to read as follows (with
such Section 1.7(A) as so amended replacing the corresponding excerpted Section
attached as Exhibit A to each of the Notes):

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“(A) For so long as any amounts remain outstanding under the Notes, Purchaser
shall make per unit quality control payments ("QC Payments") earned by Sellers
for each product as set forth below in this Section 1.7, regardless of whether
or how such products are ultimately distributed (e.g., whether through retail
sales, distribution of product samples, direct sales and/or web site sales,
among other distribution methods). The QC Payments shall be made to the Sellers'
Designee, who shall distribute such payments on a pro rata basis as set forth on
Schedule 1.5(A) to the applicable Sellers for application to amounts outstanding
under the Notes in accordance with such Notes. The Sellers will earn the QC
Payments set forth on the QC Payment Schedule each time a unit of one of the
products listed on the QC Payment Schedule below is manufactured. For purposes
of determining the QC Payments earned pursuant to this Section 1.7, a product
will be deemed to be manufactured no later than five (5) business days after
such product is made available for Purchaser or any of Purchaser's Affiliates or
designees to take immediate possession. Purchaser will make all QC Payments
hereunder on a monthly basis in arrears on or before the twenty-fifth (25th) day
of each calendar month as such QC Payments are earned for the preceding calendar
month. All QC Payments shall be non-refundable. None of the Sellers shall be
deemed to have waived, amended, modified or changed any provision of this
Agreement, or its respective rights hereunder, the Notes or any other document
or agreement entered into in connection with this Agreement, as a result of its
acceptance of any of the payments called for in this Section 1.7(A), including,
but not limited to, such Seller's right to dispute the amounts paid under this
Section 1.7(A) in accordance with the provisions of Section 1.7(D).”

(b) Section 1.7(B) of the Asset Purchase Agreement is hereby amended in its
entirety to read as follows (with such Section 1.7(B) as so amended replacing
the corresponding excerpted Section attached as Exhibit A to each of the Notes):

“(B) Purchaser shall provide the Sellers’ Designee, as representative for the
Sellers, with a monthly report detailing the number of each of the products
listed below that are manufactured (as such term is used above) during the
immediately preceding month. Each such report shall be accompanied by all
relevant supporting documentation, including, without limitation, the purchase
orders and shipping documents relating to the products manufactured for the
applicable month. Each such report shall be delivered to the Sellers’ Designee
not later than concurrently with the payment to be delivered to the Sellers’
Designee pursuant to Section 1.7(A) above for the month to which the report
pertains.”

(c) Section 1.7(D) of the Asset Purchase Agreement is hereby amended in its
entirety to read as follows (with such Section 1.7(D) as so amended replacing
the corresponding excerpted Section attached as Exhibit A to each of the Notes):

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“(D) Purchaser’s records that relate to the subject matter of this Section 1.7
may be examined from time to time by any Seller or its representatives, as many
times as Seller elects in its discretion, during reasonable business hours.
Sellers shall give Purchaser not less than seven (7) days’ prior notice of each
request, or substantially related requests, to examine Purchaser’s records
pursuant hereto. Purchaser will provide reasonable cooperation and assistance to
Sellers in connection with any such examination as reasonable requested by
Sellers. Sellers shall also be permitted to contact Purchaser’s manufacturers
directly for the sole purpose of verifying Purchaser’s QC Payment obligations,
and Purchaser shall, upon request of any Seller, authorize and direct its
manufacturers to provide information to Sellers as they may reasonable request
for purposes of such verification. Sellers shall provide Purchaser with timely
written notification of any such direct communications with any such
manufacturers of Purchaser. Seller shall retain any information that it learns
as a result of such examination of Purchaser in confidence and shall not
disclose such information to any third parties (except Seller’s representatives
whom Seller shall inform of this confidentiality obligation) or use such
information for any purpose except for the purpose of verifying Purchaser’s QC
Payment obligations and in connection with the arbitral or judicial resolution
of any issue arising between Sellers and Purchaser. Seller shall be liable for
any breach of this provision by its representatives. If any such examination
reveals that Purchaser owes Sellers additional QC Payments, Purchaser shall: (a)
immediately pay the Sellers’ Designee for distribution to Sellers on a pro rata
basis such delinquent amounts, which payments shall be applied by the applicable
Sellers against outstanding amounts owed to such Sellers under their respective
Notes in accordance with such Notes; and (b) pay to the Sellers’ Designee for
distribution to Sellers interest on the overdue amounts calculated at a rate
equal to the lesser of 10% per annum or the maximum rate allowed by applicable
Legal Rules, which payments shall also be applied against outstanding amounts
owed to such Sellers under such Notes in accordance therewith. Notwithstanding
anything herein to the contrary, (i) if the actual aggregate amount of QC
Payments made by Purchaser to Sellers for any monthly period are less than
ninety percent (90%) of those amounts owed for the period, Purchaser shall pay
to the Sellers’ Designee, upon demand therefor, for distribution to Sellers on a
pro rata basis an amount equal to the out-of-pocket costs of the relevant
examination incurred by Sellers. Notwithstanding the foregoing, Purchaser shall
have the right to dispute the results of Sellers’ examination pursuant to the
procedures set forth in Section 11.10.”

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(d)  Sections 6.10(B), (C), (D) and (E) of the Asset Purchase Agreement are
hereby respectively amended in their entirety to read as follows:

“(B) R. Popeil (or his permitted designee) shall be entitled to receive as an
appearance fee an amount equal to 50% of the Gross Profits (as defined in this
Section 6.10(B)) from sales (“Promoted Sales”) of any products promoted by R.
Popeil (or such permitted designee) through personal appearances made pursuant
to this Section 6.10 where such sales occur within sixty (60) days after R.
Popeil’s (or his permitted designee’s) personal appearance, including, without
limitation, with respect to such products promoted on the QVC Shopping Network,
from direct sales of such products on the QVC Shopping Network and from sales of
such products on QVC’s website and/or through QVC retail stores; provided, that
sales of products promoted by a spokesperson or spokespersons other than R.
Popeil or his permitted designees, which sales occur during the time that such
spokesperson or spokespersons are “on the air,” shall not, to the extent that
such sales result in an obligation of the QVC Shopping Network or Purchaser to
pay such spokesperson or spokespersons other than R. Popeil or his designees a
unit sales commission or payment (and such commission or payment is paid), be
counted as sales for which R. Popeil or his designees is entitled to receive
fees pursuant to this Section 6.10. As used herein, “Gross Profits” means gross
sales less landed cost of goods sold less, if applicable, direct costs
associated with personal appearances (including transportation and lodging costs
and any costs of food or other products used in such appearances, all of which
shall be reimbursed to R. Popeil or his permitted designees upon request
therefor, but excluding any amounts paid to R. Popeil as an appearance fee, all
of which shall be reimbursed to R. Popeil or his permitted designees upon
request therefor, but excluding any amounts paid to R. Popeil as an appearance
fee pursuant to this Section 6.10(B)) less any commissions payable to
Coordinated Strategic Alliances in connection with the applicable personal
appearance. For the avoidance of doubt, it is agreed and understood that (i)
Gross Profits shall not be reduced by or otherwise reflect any allocation of
overhead or general or administrative expenses of any kind and (ii) R. Popeil’s
entitlement to Gross Profits pursuant to this Section 6.10(B) is independent of
his right (or that of his designees or transferees) to receive revenues or
profits from the sale of products promoted by R. Popeil or any of his designees
or transferees other than on behalf of or at the request of Purchaser or RIM
(whether with respect to products that Purchaser has declined to acquire
pursuant to the Product Development Agreement, products the rights to which have
been acquired by R. Popeil pursuant to the Product Development Agreement upon an
event of default under the Notes, or otherwise). For the purpose of
clarification, nothing herein shall obligate the Company to make payments of
Gross Profits to R. Popeil or his permitted designee based on Promoted Sales
made during the personal appearances of Ronda Pierson on the QVC Shopping
Network prior to the date of this Agreement.

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(C) In addition to the above-described appearance fee, R. Popeil shall be
entitled to receive the remaining 50% of the Gross Profits from Promoted Sales
until such payments (i.e., the payments pursuant to this Section 6.10(C)) total
$400,000 in the aggregate (such amount, the “Estimated Interest Differential”).
Thereafter, Purchaser or RIM, as applicable, shall be entitled to receive the
remaining 50% of Gross Profits (i.e., the other 50% of Gross Profits not payable
to R. Popeil pursuant to Section 6.10(B) above) from Promoted Sales.

(D) Purchaser, or RIM, as applicable, shall make all payments to R. Popeil or
his designee(s), as applicable, due pursuant to this Section 6.10 not later than
the fifteenth (15th) calendar day following Purchaser’s or RIM’s receipt of
payment for the applicable products from Promoted Sales. Each such payment shall
be accompanied by a detailed statement setting forth Purchaser’s or RIM’s
calculation of the applicable Gross Profits and the payment due to R. Popeil or
his designee(s). Purchaser or RIM, as applicable, shall prepare and maintain for
a period of at least three (3) years after the due date for the payment to which
the records relate accurate, complete and reasonably detailed records in order
to substantiate the amounts payable under this Section 6.10.

(E) Purchaser’s records that relate to the subject matter of this Section 6.10
may be examined from time to time in Los Angeles, California, on at least seven
(7) days’ prior notice and during normal business hours by R. Popeil or his
representatives. If any such examination reveals that Purchaser owes R. Popeil
or his designee(s) additional amounts under this Section 6.10, Purchaser shall
(a) immediately pay R. Popeil or his designee(s) such delinquent amounts; and
(b) pay to R. Popeil or his designee(s) interest on the overdue amounts
calculated at a rate equal to the lesser of 10% per annum or the maximum rate
allowed by applicable Legal Rules. Notwithstanding anything herein to the
contrary, if the actual aggregate amounts paid by Purchaser or RIM to R. Popeil
or his designee(s) over any period of three consecutive months (without
duplication) are less than ninety percent (90%) of those amounts owed for such
period, Purchaser shall pay to R. Popeil, upon demand therefor, an amount equal
to the actual and documented costs incurred by R. Popeil or his designee(s) in
connection with such examination. Notwithstanding the foregoing, Purchaser shall
have the right to dispute the results of the examination by R. Popeil or his
representatives pursuant to the procedures set forth in Section 11.10.”

(e) RMC and the Lenders agree that Sections 4.11 and 7.3 (H) of the Asset
Purchase Agreement shall be deleted.

(f) RMC and the Lenders agree that QC Payments made by RMC in respect of
products manufactured for marketing and sale through retail distribution
channels since June 30, 2005, shall be applied to amounts outstanding under the
Ronco Inventions Note and the Popeil Inventions Note.

(g) Section 11.10 of the Asset Purchase Agreement shall be amended in its
entirety to read as follows:

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“11.10. Dispute Resolution. Any dispute arising out of or relating to this
Agreement, or any Exhibit or Schedule hereto or any other agreement, instrument
or certificate delivered pursuant to this Agreement, or the breach, termination
or validity hereof or thereof, including any dispute based in whole or in part
on tort or other non-contractual principles of law, or relating to or arising
out of the transactions contemplated by this Agreement or any other agreement,
instrument or certificate delivered pursuant to this Agreement, shall be
resolved in the following manner:
 
(A)  Any Party may give written notice to the other Parties of any dispute which
has arisen. Any other Party may give notice within five (5) Business Days of
receipt of the first notice of any additional dispute(s), all to the end that
the Parties may be reasonably aware of the matters in dispute.
 
(B)  All disputes shall be fully and finally resolved by binding arbitration
conducted in Los Angeles, California. The arbitration shall be administered by
Judicial Arbitration and Mediation Services (“JAMS”) in its Los Angeles County
office. The arbitrator shall be a retired superior court judge of the State of
California affiliated with JAMS and shall be selected as follows. The parties
will request that JAMS provide a list of available arbitrators satisfying the
requirements of the immediately preceding sentence. Each side to the dispute
will confidentially rank in descending order of desirability (from most
desirable to least desirable) each person on such list. The person on such list
with the highest composite ranking by both sides will be selected as the
arbitrator. The arbitration hearing on the merits of the dispute will be
conducted within 45 days of the selection of the arbitrator, and the ruling of
the arbitrator on the dispute shall be rendered within 30 days thereafter,
unless good cause is shown as to why such ruling must be delayed beyond such
time (in which case the ruling shall be rendered as soon as practicable
following the selection of the arbitrator). Any action brought to enforce the
provisions of this Section 11.10 shall be brought in the Los Angeles County
Superior Court. Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. The arbitrator shall not have
any power to alter, amend, modify or change any of the terms of this Agreement
nor to grant any remedy which is either prohibited by the terms of this
Agreement or not available in a court of law. Costs and reasonable attorneys’
fees shall be awarded to the defendant in any arbitration pursuant hereto, in
any action brought to enforce the provisions of this Section 11.10, and in any
other arbitral or judicial action to which the Sellers and Purchaser are parties
that arises out of or relates to this Agreement, or any Exhibit or Schedule
hereto or any other agreement, instrument or certificate delivered pursuant to
this Agreement, unless the plaintiff is the prevailing party in such
arbitration, enforcement action or other proceeding. If the prevailing party in
such arbitration, enforcement action or other proceeding is the plaintiff, each
Party shall bear its own costs and attorneys’ fees. Nothing in this Section
11.10 shall preclude either party from bringing a court action seeking an order
for or with respect to a writ of attachment, constructive trust or other
provisional remedy or an equitable remedy such as injunctive relief, specific
performance or any other equitable remedy that may be applicable under the
circumstances.
 
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(C)  The dispute resolution proceedings contemplated by this provision shall be
as confidential and private as permitted by law. To that end, the Parties shall
not disclose the existence, content or results of any claims hereunder or
proceedings conducted in accordance with this provision, and materials submitted
in connection with such proceedings shall not be admissible in any other
proceeding; provided, however, that this confidentiality provision shall not
prevent a petition to vacate or enforce an arbitral award, shall not prevent the
Purchaser from filing this document with the Securities and Exchange Commission
if in the good faith judgment of Purchaser’s counsel such document is required
to be filed, and shall not bar disclosures required by law. The Parties agree
that any decision or award resulting from proceedings in accordance with this
dispute resolution provision shall have no preclusive effect in any other matter
involving third parties.”
 
(h) The Company’s statement of unpaid QC Payments due to the Lenders pursuant to
the Asset Purchase Agreement (and giving effect to the amendments herein) for
the period of June 30, 2005 through July 31, 2006 is $1,427,301.40 as set forth
on Exhibit C hereto, and $1,250,000.00 of such unpaid amount shall be paid by
RMC in immediately available funds to the Lenders on the Closing Date. RMC shall
pay an additional amount of $400,000.00 to the Lenders within thirty (30) days
of the Closing Date, which amount reflects the parties’ current good faith
estimate of the remaining unpaid QC Payment obligations owed to the Lenders for
the period from June 30, 2005 through the Closing Date (i.e., after giving
effect to the $1,250,000 to be paid to the Lenders on the Closing Date). The
full amount of the unpaid QC Payments due to the Lenders for the period from
June 30, 2005 through the Closing Date (the “Pre-Agreement Period”) shall be
subject to confirmation by the parties based on the relevant documentation.
Notwithstanding the foregoing, unless the Lenders have otherwise agreed in
writing, RMC shall make the $400,000 payment described above regardless of
whether the actual amount of the unpaid QC Payments for the Pre-Agreement Period
has then been confirmed and agreed by the parties, it being understood and
agreed that if the actual aggregate amount due for such period is (x) less than
$1,650,000, then the amount of the overpayment for such period shall be retained
by the Lenders and applied to any QC Payment obligations of the Company arising
after the Pre-Agreement Period or (y) greater than $1,650,000, then the amount
of the underpayment for such period shall be paid to the Lenders not later than
three (3) days after the amount of such underpayment has been agreed to by the
parties or determined pursuant to the dispute resolution procedures set forth in
the Asset Purchase Agreement.

7. Effect of Default/Acceleration of Indebtedness. The Company and the Lenders
agree that if an “Event of Default” (as defined in the Popeil Inventions Note or
the Ronco Inventions Note, which are together referred to as the “Notes”) should
occur under the Notes, the applicable Lender shall be permitted to accelerate
and immediately declare as due and payable all amounts due to such Lender under
the applicable Note in accordance with the provisions thereof. Notwithstanding
such declaration, the Lender shall only be permitted to take action to collect
such amounts if so permitted by the Laurus Subordination Agreement and the SMH
Limited Subordination Agreement.

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8. Personal Appearances on Direct Response Television. Section 6.10 of the Asset
Purchase Agreement requires the Company to make certain payments to Popeil or
his permitted designee if Popeil or his permitted designee makes certain
personal appearances on direct response television, including the QVC Shopping
Network. The Company’s statement of amounts owing to Popeil at present is
$79,091.56 (the “Estimated Outstanding QVC Amounts”), which amount shall be
subject to verification by Popeil pursuant to the Asset Purchase Agreement. For
purposes of verifying the amount due, the Parties shall apply the methodology
for computing Promoted Sales, as set forth in Section 6.10(B) of the Asset
Purchase Agreement as amended by this Agreement. The Company shall pay Popeil
the Estimated Outstanding QVC Amounts within thirty (30) days of the date hereof
regardless of whether the parties have confirmed and agree that such amount is
the amount owed to Popeil pursuant to the Asset Purchase Agreement, it being
understood and agreed that if the actual amount due to Popeil is (x) less than
the Estimated Outstanding QVC Amounts, Popeil shall, within three (3) business
days following the final determination of (or agreement by the parties
regarding) the actual amount due to Popeil, refund to the Company the amount by
which the Estimated Outstanding QVC Amounts exceeds the actual amount due to
Popeil or (y) greater than the Estimated Outstanding QVC Amounts, then the
Company shall, within three (3) business days following the final determination
of (or agreement by the parties regarding) the actual amount due to Popeil, pay
Popeil the amount by which the actual amount due to Popeil exceeds the Estimated
Outstanding QVC Amounts.

9. O’Melveny & Myers Fees and Expenses.  Within thirty (30) days after the
Laurus Closing, the Company shall reimburse Lenders the amount of $44,703.50,
which Lenders paid to O’Melveny & Myers for services rendered to Lenders through
July 31, 2006 with respect to the Laurus Subordination Agreement. The Company
shall also reimburse Lenders, within thirty (30) days after receipt of the
invoice, for any additional amounts paid for reasonable legal fees related to
the Laurus Subordination Agreement and SMH Limited Subordination Agreement
incurred after such date.

10. Warrant. Within thirty (30) days after the date hereof, the Company shall
issue Lenders a warrant to purchase 200,000 shares of Company’s common stock.
Such warrant shall have a term of five (5) years and an exercise price, payable
in cash, equal to the average bid price for the Company’s common stock, as
quoted on the OTC Bulletin Board, for the 30 trading days immediately prior to
the Laurus Closing. The warrant shall also contain such other terms as the
Company, in its reasonable discretion, shall determine are reasonable and
customary. The Lenders agree to provide customary investment representations in
connection with the issuance of the warrant. The Company shall use its
commercially reasonable efforts to include the shares underlying such warrant in
its registration statement that has already been filed with the Securities and
Exchange Commission (“SEC”) and to use its commercially reasonable efforts to
cause such registration statement to be declared effective as soon as possible.
If the Company is unable to include the shares underlying the warrant in such
existing registration statement, the Company shall include such shares in the
next registration statement it files with the SEC, the terms of which permit the
Company to include shares of the Lender. The Company shall also use its
commercially reasonable efforts to qualify the shares of common stock underlying
the warrant for sale in the State of California.

11

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11. Name Change of Certain Lender Entities. The Company is not allowed to use
the legal name of “Ronco Corporation” in California because of the existence of
an entity named “Ronco Inc.” previously registered in California that is owned
or controlled by one or more of the Lenders. Ronco currently conducts business
under the name of “Fi-Tek VII” in California. Fi-Tek VII (the predecessor to
Ronco) desires to amend its qualification to do business in the State of
California to reflect the name Ronco Corporation.  Lenders agree to promptly
change the name of “Ronco Inc.” to a name that does not conflict with the name
“Ronco Corporation.”

12. Potential Reimbursement of Certain Payments. Following the June 30, 2005
closing of the Asset Purchase Agreement, the Company mistakenly paid many bills
on behalf of Lenders and the predecessor entities without the authority of the
Lenders to do so. Popeil will review these disbursements on a case by case
basis, at his convenience, and determine what amounts, if any, he will reimburse
the Company. The determination of these reimbursement amounts will be made
solely on the basis of Popeil’s good faith business judgment. The reimbursement,
if any, may be made as a reduction, at maturity, of any amounts owing under the
Popeil Inventions Note or the Ronco Inventions Note.

13. Purchase Orders and Shipping Documents. Within fourteen (14) days after the
Laurus Closing, the Company shall provide Lenders with copies of purchase orders
and shipping documents with respect to all products manufactured by the Company
between June 30, 2005 and July 31, 2006.

14. Certain Limitations on Use of “No Default” Representations. In the event
litigation is brought by or on behalf of the Company, any investor in the
Company, any creditor of the Company other than Laurus, or by SMH, against
Lenders, the representations made by Lenders in Paragraphs 3(a), 4, 5(a), 5(b)
and 5(c) hereof to the effect that, to their knowledge they are not aware of any
defaults or Events of Default by the Company under certain agreements, would be
inoperative and in all events would not bar, estop or be evidence against any
defense, offset or counterclaim brought or alleged by the Lenders in such
proceeding of any nature.  

15. No Present Intention to Initiate Legal Action. The Company has no present
intention of any kind to initiate any litigation, arbitration or other
proceedings whatsoever against or involving the Lenders or any of them. 

16. Filing of Agreement and SMH Limited Subordination Agreement with SEC.
Promptly following the Laurus Closing, the Company shall file this Agreement and
the SMH Limited Subordination Agreement with the Securities and Exchange
Commission as “material contracts.”

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17. Miscellaneous.
 
(a) Waiver and Amendment.  Neither this Agreement nor any term hereof may be
amended, waived, discharged or terminated other than by a written instrument
referencing this Agreement and signed by each of the parties hereto. No waiver,
forbearance or failure by any party of its right to enforce any provision of
this Agreement shall constitute a waiver or estoppel of such party's right to
enforce any other provision of this Agreement or a continuing waiver by such
party of compliance with any provision.
 
(b) Headings. The headings herein are for convenience only, do not constitute a
part of this Agreement, and shall not be deemed to limit or affect any of the
provisions hereof.
 
(c) Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be original, but all of which together shall
constitute one and the same instrument.
 
(d) Interpretation.  Nothing in this Agreement shall be interpreted or construed
as creating, expressly or by implication, a partnership, joint venture, agency
relationship or employment relationship between the parties or any of their
respective officers, directors, agents, employees or representatives.
 
(e) Successors and Assigns.  This Agreement shall not be assigned or assignable
by any party without the prior written consent of the other parties, which
consent shall not be unreasonably withheld. This Agreement shall inure to the
benefit of, and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties.
 
(f) Governing Law.  This Agreement shall be governed by and construed in
accordance with the internal laws of the State of California, without regard to
principles of conflict of laws.
 
(g) Entire Understanding.  This Agreement, including the exhibits attached
hereto and the documents referred to herein, constitute the full and entire
understanding and agreement among the parties with regard to the subjects hereof
and thereof. No party shall be liable or bound to any other party in any manner
with regard to the subjects hereof or thereof by any warranties, representations
or covenants except as specifically set forth herein or therein.

(h) Authority. Each party has full authority for the execution and delivery and
performance of the Agreement.
 
(i) Representation by Counsel. Each party represents and agrees with the other,
that it has been represented by independent counsel of its own choosing, that it
has had the full right and opportunity to consult with such counsel that it
availed itself of this right and opportunity, that such party or its authorized
officers have carefully read and fully understand this Agreement in its entirety
that each is fully aware of the contents thereof and its meaning, intent and
legal effect, and that such party or its authorized officer is competent to
execute this Agreement and has executed this Agreement free from coercion,
duress or undue influence.
 
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(j)  Telecopy Execution and Delivery.  A facsimile, telecopy or other
reproduction of this Agreement may be executed by one or more parties hereto and
delivered by such party by facsimile or any similar electronic transmission
device pursuant to which the signature of or on behalf of such party can be
seen. Such execution and delivery shall be considered valid, binding and
effective for all purposes. At the request of any party hereto, all parties
hereto agree to execute and deliver an original of this Agreement as well as any
facsimile, telecopy or other reproduction hereof.
 
(k)  Dispute Resolution.  Any dispute arising out of or relating to this
Agreement, or any Exhibit hereto or any other agreement or certificate delivered
pursuant to this Agreement, or the breach, termination or validity hereof or
thereof, including any dispute based in whole or in part on tort or other
non-contractual principles of law, or relating to or arising out of the
transactions contemplated by this Agreement or any other agreement, instrument
or certificate delivered pursuant to this Agreement, shall be resolved in the
following manner:

(i) Any party may give written notice to the other parties of any dispute which
has arisen. Any other party may give notice within five (5) business days of
receipt of the first notice of any additional dispute(s), all to the end that
the parties may be reasonably aware of the matters in dispute.

(ii) All disputes shall be fully and finally resolved by binding arbitration
conducted in Los Angeles, California. The arbitration shall be administered by
Judicial Arbitration and Mediation Services ("JAMS") in its Los Angeles County
office. The arbitrator shall be a retired superior court judge of the State of
California affiliated with JAMS and shall be selected as follows. The parties
will request that JAMS provide a list of available arbitrators satisfying the
requirements of the immediately preceding sentence. Each side to the dispute
will confidentially rank in descending order of desirability (from most
desirable to least desirable) each person on such list. The person on such list
with the highest composite ranking by both sides will be selected as the
arbitrator. The arbitration hearing on the merits of the dispute will be
conducted within 45 days of the selection of the arbitrator, and the ruling of
the arbitrator on the dispute shall be rendered within 30 days thereafter,
unless good cause is shown as to why such ruling must be delayed beyond such
time (in which case the ruling shall be rendered as soon as practicable
following the selection of the arbitrator). Any action brought to enforce the
provisions of this Paragraph 17(k) shall be brought in the Los Angeles County
Superior Court. Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. The arbitrator shall not have
any power to alter, amend, modify or change any of the terms of this Agreement
nor to grant any remedy which is either prohibited by the terms of this
Agreement or not available in a court of law. Costs and reasonable attorneys’
fees shall be awarded to the defendant in any arbitration pursuant hereto, in
any action brought to enforce the provisions of this Section 17(k), and in any
other arbitral or judicial action to which the Sellers and Purchaser are parties
that arises out of or relates to this Agreement, or any Exhibit or Schedule
hereto or any other agreement, instrument or certificate delivered pursuant to
this Agreement, unless the plaintiff is the prevailing party in such
arbitration, enforcement action or other proceeding. If the prevailing party in
such arbitration, enforcement action or other proceeding is the plaintiff, each
Party shall bear its own costs and attorneys’ fees. Nothing in this Paragraph
17(k) shall preclude either party from bringing a court action seeking an order
for or with respect to a writ of attachment, constructive trust or other
provisional remedy or an equitable remedy such as injunctive relief, specific
performance or any other equitable remedy that may be applicable under the
circumstances.

14

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(iii) The dispute resolution proceedings contemplated by this provision shall be
as confidential and private as permitted by law. To that end, the parties shall
not disclose the existence, content or results of any claims hereunder or
proceedings conducted in accordance with this provision, and materials submitted
in connection with such proceedings shall not be admissible in any other
proceeding; provided, however, that this confidentiality provision shall not
prevent a petition to vacate or enforce an arbitral award, shall not prevent the
Company from filing this document with the Securities and Exchange Commission if
in the good faith judgment of the Company’s counsel such document is required to
be filed, and shall not bar disclosures required by law. The parties agree that
any decision or award resulting from proceedings in accordance with this dispute
resolution provision shall have no preclusive effect in any other matter
involving third parties.
 
(l)  Specific Performance.  Each of the parties hereto acknowledges and agrees
that the other parties hereto would be damaged irreparably in the event any of
the covenants or agreements provided in this Agreement is not performed in
accordance with its specific terms or otherwise is breached. Accordingly, each
of the parties agrees that the other parties shall be entitled to an injunction
or injunctions to prevent breaches of such covenant or agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction over the parties and the matter.

(m)  Notices. All notices, requests, demands and other communications under this
Agreement shall be in writing addressed to the respective parties at the
addresses stated below or to such other changed addresses the parties may have
fixed by notice as provided herein and shall be deemed to have been delivered
upon receipt:
 
 
(i)
If to Ronco or RMC:
       
Ronco Corporation or Ronco Marketing Corporation (as applicable)
   
61 Moreland Road
   
Simi Valley, CA 93065-1662
   
Attention: President and Chief Executive Officer
   
Facsimile: (805) 433-1033

 
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(ii)
 
If to the Lenders:
   
Ronald M. Popeil
   
1672 Waynecrest Drive
   
Beverly Hills, CA 90210
   
Facsimile: (310) 273-4483

(n) Severability. In the event that any provision or any part of any provision
of this Agreement shall be void or unenforceable for any reason whatsoever, then
such provision shall be stricken and of no force and effect and the parties to
this Agreement shall use their respective best efforts to replace such stricken
provision with a comparable valid provision that best achieves the overall
intentions of the parties with respect to this Agreement. The remaining
provisions of this Agreement shall continue in full force and effect, and to the
extent required, shall be modified to preserve their validity.

 

(The remainder of this page is left intentionally blank.)

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Very truly yours,

RONCO CORPORATION
a Delaware corporation

/s/ Paul Kabashima                                                           
Paul M. Kabashima
Interim President and Interim Chief Executive Officer

RONCO MARKETING CORPORATION
a Delaware corporation

/s/ Paul Kabashima                                                         
Paul M. Kabashima
President and Chief Executive Officer
 

[Signatures Continued on Next Page]
 

 
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ACKNOWLEDGED AND AGREED BY:

RONCO INVENTIONS, LLC
a California limited liability company
 
By: /s/ Gina Wallman                               
 
Name: Gina Wallman                               
 
Title: Corporate Secretary                      

POPEL INVENTIONS, INC.
a Nevada corporation
 
By: /s/ Gina Wallman                              
 
Name: Gina Wallman                              
 
Title: Corporate Secretary                     

RP PRODUCTIONS, INC.
a Nevada corporation
 
By: /s/ Gina Wallman                            
 
Name: Gina Wallman                            
 
Title: Corporate Secretary                    

RMP FAMILY TRUST
an Illinois irrevocable Trust
 
By: /s/ Gina Wallman                            
 
Name: Gina Wallman                            
 
Title: Co-Trustee                                   

RONALD M. POPEIL
an individual

 
/s/ Ronald M. Popeil                              
 
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EXHIBIT A

LAURUS SUBORDINATION AGREEMENT
 
 
 
 

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SUBORDINATION AGREEMENT

This Subordination Agreement (this “Agreement”) is entered into as of the ____
day of October, 2006, by and among Ronald M. Popeil (“Popeil”), the RMP Family
Trust, an Illinois irrevocable trust (“RMP”), Ronco Inventions, LLC, a
California limited liability company (“Ronco Inventions”), Popeil Inventions,
Inc., a Nevada corporation (“Popeil Inventions”) and RP Productions, Inc., a
Nevada corporation (“RP,”” and, collectively with Popeil, RMP, Ronco Inventions
and Popeil Inventions, the “Subordinated Lenders” and each, a “Subordinated
Lender”), and Laurus Master Fund, Ltd. (the “Senior Lender”). Unless otherwise
defined herein, capitalized terms used herein shall have the meaning provided
such terms in the Security Agreement referred to below.

BACKGROUND

WHEREAS, it is a condition to the Senior Lender’s making an investment in RONCO
Corporation, a Delaware corporation and certain of its subsidiaries pursuant to,
and in accordance with, (i) that certain Security and Purchase Agreement dated
as of the date hereof by and between the Ronco Corporation certain of its
subsidiaries and Laurus (as amended, modified or supplemented from time to time
in accordance with this Agreement, the "Security Agreement") and (ii) the
Ancillary Agreements referred to in the Security Agreement that the Subordinated
Lenders enter into this Agreement.

WHEREAS, the Subordinated Lenders have made or will make loans to the Company.

NOW, THEREFORE, each Subordinated Lender and the Senior Lender agree as follows:

TERMS

1. All Obligations of any Company and/or any of its Subsidiaries to the Senior
Lender under the Security Agreement whether direct or indirect, absolute or
contingent or now or hereafter existing, or due or to become due are referred to
as “Senior Liabilities”. Any and all loans made by the Subordinated Lenders to
any Company and/or any of its Subsidiaries, together with all other obligations
(whether monetary or otherwise) of any Company and/or any of its Subsidiaries to
any Subordinated Lender (in each case, including any interest, fees or penalties
related thereto), including but not limited to the agreements described on
Exhibit A hereto, howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent or now or hereafter existing, or due or to
become due are referred to as “Junior Liabilities”. It is expressly understood
and agreed that the term “Senior Liabilities”, as used in this Agreement, shall
include, without limitation, any and all interest, fees and penalties accruing
on any of the Senior Liabilities after the commencement of any proceedings
referred to in paragraph 4 of this Agreement, notwithstanding any provision or
rule of law which might restrict the rights of the Senior Lender, as against any
Company, its Subsidiaries or anyone else, to collect such interest, fees or
penalties, as the case may be. It is further expressly understood and agreed
that the term “Junior Liabilities”, as used in this Agreement, shall not include
any obligation on the part of Ronco Corporation, a Delaware corporation
(“Ronco”) or Ronco Marketing Corporation, a Delaware corporation (“RMC”) to
acquire the Turkey Fryer (as defined in the New Product Development Agreement
dated June 30, 2005 by and between Ronald M. Popeil and RMC (the “Turkey
Fryer”)).

 
 

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2. Except as expressly otherwise provided in this Agreement or as the Senior
Lender may otherwise expressly consent in writing, the payment of the Junior
Liabilities shall be postponed and subordinated in right of payment and priority
to the payment in full of all Senior Liabilities. Furthermore, and except as
expressly otherwise provided in this Agreement or as the Senior Lender may
otherwise expressly consent in writing, whether directly or indirectly, no
payments or other distributions whatsoever in respect of any Junior Liabilities
shall be made (whether at stated maturity, by acceleration or otherwise), nor
shall any property or assets of any Company or any of its Subsidiaries be
applied to the purchase or other acquisition or retirement of any Junior
Liability until such time as the Senior Liabilities have been indefeasibly paid
in full. Notwithstanding anything to the contrary contained in this Paragraph 2
or elsewhere in this Agreement, any Company and its Subsidiaries may make
payment for regularly scheduled principal, interest or other obligations, as the
case may be, to the Subordinated Lenders with respect to the Junior Liabilities,
so long as (i) no Event of Default (as defined in the Security Agreement or any
Ancillary Agreement) has occurred and is continuing at the time of any such
payment and (ii) the amount of such regularly scheduled principal payments and
the rate of interest, in each case, with respect to the Junior Liabilities is
not increased from that in effect on the date hereof.

3. Each Subordinated Lender hereby subordinates all claims, security interests,
and any other rights or remedies of any kind or nature whatsoever it may have
against, or with respect to, any of the assets of any Company and/or any of its
Subsidiaries (the “Subordinated Lender Liens”), to the security interests
granted by any Company and/or any of its Subsidiaries to the Senior Lender in
respect of the Senior Liabilities. The Senior Lender shall not owe any duty to
any Subordinated Lender as a result of or in connection with any Subordinated
Lender Liens, including without limitation any marshalling of assets or
protection of the rights or interests of any Subordinated Lender. The Senior
Lender shall have the exclusive right to manage, perform and enforce the
underlying terms of the Security Agreement, the Ancillary Agreements and each
other document, instrument and agreement executed from time to time in
connection therewith (collectively, the “Security Agreements”) relating to the
assets of any Company and its Subsidiaries and to exercise and enforce its
rights according to its discretion. Each Subordinated Lender waives all rights
to affect the method or challenge the appropriateness of any action taken by the
Senior Lender in connection with the Senior Lender’s enforcement of its rights
under the Security Agreements. Only the Senior Lender shall have the right to
restrict or permit, approve or disapprove the sale, transfer or other
disposition of the assets of any Company or any of its Subsidiaries. As between
the Senior Lender and each Subordinated Lender, the terms of this Agreement
shall govern even if all or part of the Senior Lender’s liens are avoided,
disallowed, set aside or otherwise invalidated. Notwithstanding the foregoing,
it is expressly understood and agreed that this Paragraph 3 shall not apply to
Ronald M. Popeil’s use of his name and likeness on the packaging of the Turkey
Fryer, on the Turkey Fryer itself and in the direct marketing of the Turkey
Fryer. Senior Lender specifically acknowledges that neither Company nor any of
its Subsidiaries shall have any interest in the Turkey Fryer.

 
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4. In the event of any dissolution, winding up, liquidation, readjustment,
reorganization or other similar proceedings relating to any Company and/or any
of its Subsidiaries or to its creditors, as such, or to its property (whether
voluntary or involuntary, partial or complete, and whether in bankruptcy,
insolvency or receivership, or upon an assignment for the benefit of creditors,
or any other marshalling of the assets and liabilities of any Company and/or any
of its Subsidiaries, or any sale of all or substantially all of the assets of
any Company and/or any of its Subsidiaries, or otherwise), the Senior
Liabilities shall first be paid in full before any Subordinated Lender shall be
entitled to receive and to retain any payment, distribution, other rights or
benefits in respect of any Junior Liability. In order to enable the Senior
Lender to enforce its rights hereunder in any such action or proceeding, the
Senior Lender is hereby irrevocably authorized and empowered in its discretion
as attorney in fact for each Subordinated Lender to make and present for and on
behalf of such Subordinated Lender such proofs of claims against any Company
and/or its Subsidiaries as Laurus may deem expedient or proper and to vote such
proofs of claims in any such proceeding and to receive and collect any and all
dividends or other payments or disbursements made thereon in whatever form the
same may be paid or issued and to apply same on account of any the Senior
Liabilities. In the event, prior to indefeasible payment in full of the Senior
Liabilities, any Subordinated Lender shall receive any payment in respect of the
Junior Liabilities and/or in connection with the enforcement of such
Subordinated Lender’s rights and remedies against any Company and/or any of its
Subsidiaries, whether arising in connection with the Junior Liabilities or
otherwise, then such Subordinated Lender shall forthwith deliver, or cause to be
delivered, the same to the Senior Lender in precisely the form held by such
Subordinated Lender (except for any necessary endorsement) and until so
delivered the same shall be held in trust by such Subordinated Lender as the
property of the Senior Lender.

5. Each Subordinated Lender will mark its/his books and records so as to clearly
indicate that its/his respective Junior Liabilities are subordinated in
accordance with the terms of this Agreement. Each Subordinated Lender will
execute such further documents or instruments and take such further action as
the Senior Lender may reasonably request from time to time to carry out the
intent of this Agreement.

6. Each Subordinated Lender hereby waives all diligence in collection or
protection of or realization upon the Senior Liabilities or any security for the
Senior Liabilities.

 
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7. Until such time as the Senior Liabilities have been indefeasibly paid in
full, no Subordinated Lender will without the prior written consent of the
Senior Lender: (a) attempt to enforce or collect any Junior Liability or any
rights in respect of any Junior Liability or any other rights or remedies of any
kind or nature whatsoever against any Company and/or any of its Subsidiaries
whether in respect of the Junior Liabilities or otherwise; unless, in each case
(i) an event of default shall have occurred and be continuing under any one or
more agreements between and among such Subordinated Lender, any Company and/or
any of its Subsidiaries which would entitle such Subordinated Lender to take
such action (a “Subordinated Lender Default”), (ii) such Subordinated Lender
shall have provided Senior Lender written notice of the occurrence of such
Subordinated Lender Default, (iii) such Subordinated Lender shall have provided
Senior Lender at least thirty (30) days prior written notice of its intention to
take any such action and (iv) a period of at least one hundred and eighty (180)
days shall have elapsed after the occurrence of the breach or non-performance
giving rise to the Subordinated Lender Default; or (b) commence, or join with
any other creditor in commencing, any bankruptcy, reorganization or insolvency
proceedings with respect to any Company and/or any of its Subsidiaries.
Notwithstanding the foregoing, it is expressly understood and agreed that this
Paragraph 7 shall not apply to Ronald M. Popeil’s use of his name and likeness
on the packaging of the Turkey Fryer, on the Turkey Fryer itself and in the
direct marketing of the Turkey Fryer. For the purpose of clarification, and
notwithstanding any contrary provision herein, if any Company and/or any of its
Subsidiaries fails to fully and timely perform any of its obligations to any one
or more Subordinate Lenders, such Subordinate Lender(s) shall be permitted,
without delay, to notify such Company and/or its Subsidiaries of such failure to
perform and, after any applicable cure periods, to notify such Company and/or
its Subsidiaries of the occurrence of any event of default arising by virtue of
such non-performance.

8. The Senior Lender may, from time to time, at its sole discretion and without
notice to any Subordinated Lender, take any or all of the following actions: (a)
retain or obtain a security interest in any property to secure any of the Senior
Liabilities; (b) retain or obtain the primary or secondary obligation of any
other obligor or obligors with respect to any of the Senior Liabilities; (c)
extend or renew for one or more periods (whether or not longer than the original
period), alter, increase or exchange any of the Senior Liabilities, or release
or compromise any obligation of any nature of any obligor with respect to any of
the Senior Liabilities; and (d) release its security interest in, or surrender,
release or permit any substitution or exchange for, all or any part of any
property securing any of the Senior Liabilities, or extend or renew for one or
more periods (whether or not longer than the original period) or release,
compromise, alter or exchange any obligations of any nature of any obligor with
respect to any such property. Notwithstanding the foregoing, it is expressly
understood and agreed that this Paragraph 8 shall not apply to Ronald M.
Popeil’s use of his name and likeness on the packaging of the Turkey Fryer, on
the Turkey Fryer itself and in the direct marketing of the Turkey Fryer.

 
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9. The Senior Lender may, from time to time, whether before or after any
discontinuance of this Agreement, without notice to any Subordinated Lender,
assign or transfer any or all of the Senior Liabilities or any interest in the
Senior Liabilities; and, notwithstanding any such assignment or transfer or any
subsequent assignment or transfer of the Senior Liabilities, such Senior
Liabilities shall be and remain Senior Liabilities for the purposes of this
Agreement, and every immediate and successive assignee or transferee of any of
the Senior Liabilities or of any interest in the Senior Liabilities shall, to
the extent of the interest of such assignee or transferee in the Senior
Liabilities, be entitled to the benefits of this Agreement to the same extent as
if such assignee or transferee were the Senior Lender, as applicable; provided,
however, that, unless the Senior Lender shall otherwise consent in writing, the
Senior Lender shall have an unimpaired right, prior and superior to that of any
such assignee or transferee, to enforce this Agreement, for the benefit of the
Senior Lender, as to those of the Senior Liabilities which the Senior Lender has
not assigned or transferred.

10. The Senior Lender shall not be prejudiced in its rights under this Agreement
by any act or failure to act of any Subordinated Lender, or any noncompliance of
any Subordinated Lender with any agreement or obligation, regardless of any
knowledge thereof which the Senior Lender may have or with which the Senior
Lender may be charged; and no action of the Senior Lender permitted under this
Agreement shall in any way affect or impair the rights of the Senior Lender and
the obligations of any Subordinated Lender under this Agreement.

11. No delay on the part of the Senior Lender in the exercise of any right or
remedy shall operate as a waiver of such right or remedy, and no single or
partial exercise by the Senior Lender of any right or remedy shall preclude
other or further exercise of such right or remedy or the exercise of any other
right or remedy; nor shall any modification or waiver of any of the provisions
of this Agreement be binding upon the Senior Lender except as expressly set
forth in a writing duly signed and delivered on behalf of the Senior Lender. For
the purposes of this Agreement, Senior Liabilities shall have the meaning set
forth in Section 1 above, notwithstanding any right or power of any Subordinated
Lender or anyone else to assert any claim or defense as to the invalidity or
unenforceability of any such obligation, and no such claim or defense shall
affect or impair the agreements and obligations of any Subordinated Lender under
this Agreement.

12. This Agreement shall continue in full force and effect after the filing of
any petition (“Petition”) by or against any Company and/or any of its
Subsidiaries under the United States Bankruptcy Code (the “Code”) and all
converted or succeeding cases in respect thereof. All references herein to any
Company and/or Subsidiary shall be deemed to apply to any Company and such
Subsidiary as debtor-in-possession and to a trustee for any Company and/or such
Subsidiary. If any Company or any of its Subsidiaries shall become subject to a
proceeding under the Code, and if the Senior Lender shall desire to permit the
use of cash collateral or to provide post-Petition financing from the Senior
Lender to any Company or any such Subsidiary under the Code, each Subordinated
Lender agrees as follows: (1) adequate notice to such Subordinated Lender shall
be deemed to have been provided for such consent or post-Petition financing if
such Subordinated Lender receives notice thereof three (3) business days (or
such shorter notice as is given to the Senior Lender) prior to the earlier of
(a) any hearing on a request to approve such post-petition financing or (b) the
date of entry of an order approving same and (2) no objection will be raised by
any Subordinated Lender to any such use of cash collateral or such post-Petition
financing from the Senior Lender.

 
-5-

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13. This Agreement shall be binding upon each Subordinated Lender and upon the
heirs, legal representatives, successors and assigns of each Subordinated Lender
and the successors and assigns of any Subordinated Lender.

14. This Agreement shall be construed in accordance with and governed by the
laws of New York without regard to conflict of laws provisions. Wherever
possible each provision of this Agreement shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under such law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.

[signature page follows]
 
 
-6-

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IN WITNESS WHEREOF, this Agreement has been made and delivered this __ day of
October, 2006.

 
RONCO INVENTIONS, LLC,
a California limited liability company

By: ________________________________
Name: ______________________________
Title: _______________________________

POPEIL INVENTIONS, INC.
a Nevada corporation

By: ________________________________
Name: ______________________________
Title: _______________________________
    

RP PRODUCTIONS, INC.
a Nevada corporation

By: ________________________________
Name: ______________________________
Title: _______________________________

 
-7-

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RMP FAMILY TRUST, an Illinois irrevocable trust

 
By: ________________________________
Name: ______________________________
Title: _______________________________

____________________________________
RONALD M. POPEIL 

LAURUS MASTER FUND, LTD.

By: _______________________________ 
Name:
Title:

 

Acknowledged and Agreed to by:

RONCO CORPORATION

By:________________________
Name: Paul Kabashima
Title: Interim President and Interim Chief Executive Officer

RONCO MARKETING CORP.

By:________________________
Name: Paul Kabashima
Title: Interim President and Interim Chief Executive Officer

 
-8-

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EXHIBIT A

 
·
Asset Purchase Agreement dated December 10, 2004 among Ronco Marketing
Corporation, Ronco Inventions, LLC, Popeil Inventions, Inc., RP Productions,
Inc., RMP Family Trust and Ronald M. Popeil;

 
·
Addendum to APA dated December 10, 2004 among Ronco Marketing Corporation,
Ronald M. Popeil, Ronco Inventions, LLC and Popeil Inventions, Inc;

 
·
Amendment and Agreement dated June 16, 2005 among Ronco Marketing Corporation,
Ronco Inventions, LLC, Popeil Inventions, Inc., RP Productions, Inc., RMP Family
Trust, Ronald M. Popeil, Adams, Swartz & Landau LLP and Brian R. Adams;

 
·
Assignment and Assumption Agreement dated June 28, 2005 between Ronco Inc. and
Ronco Marketing Corporation;

 
·
Second Amendment and Agreement dated June 29, 2005 among Ronco Marketing
Corporation, Ronco Inventions, LLC, Popeil Inventions, Inc., RP Productions,
Inc., RMP Family Trust, Ronald M. Popeil, Adams, Swartz & Landau LLP and Brian
R. Adams;

 
·
Promissory Note dated June 30, 2005 between Ronco Marketing Corporation and
Popeil Inventions, Inc;

 
·
Promissory Note dated June 30, 2005 between Ronco Marketing Corporation and
Ronco Inventions, LLC;

 
·
Consulting and Advisory Services Agreement dated June 30, 2005 between Ronco
Marketing Corporation and Ronald M. Popeil;

 
·
Amendment No. 1 to Consulting and Advisory Services Agreement between Ronco
Marketing Corporation and Ronald M. Popeil;

 
·
Trademark Co-Existence Agreement dated June 30, 2005 between Ronco Marketing
Corporation and Ronald M. Popeil;

 
·
New Product Development Agreement dated June 30, 2005 by and among Ronald M.
Popeil, Alan L. Backus and Ronco Marketing Corporation;

 
·
Transition Services Agreement dated June 30, 2005 among Ronco Inventions, LLC,
Popeil Inventions, Inc., RP Productions, Inc. and Ronco Marketing Corporation;

 
·
Assignment and Assumption Agreement dated June 30, 2005 among Ronco Inventions,
LLC, Popeil Inventions, Inc., RP Productions, Inc., Ronald M. Popeil and Ronco
Marketing Corporation.

 
 
 
-9-

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EXHIBIT B

SMH LIMITED SUBORDINATION AGREEMENT
 
 
 
 

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LIMITED SUBORDINATION AGREEMENT

Limited Subordination Agreement (this “Agreement”) dated October __, 2006, among
RONCO CORPORATION, a Delaware corporation, and RONCO MARKETING CORPORATION, a
California corporation (together, “Borrower”); RONCO INVENTIONS, LLC, a
California limited liability company, POPEIL INVENTIONS, INC., a Nevada
corporation, RP PRODUCTIONS, INC., a Nevada corporation, RMP FAMILY TRUST, an
Illinois irrevocable trust, and RONALD M. POPEIL, a resident of California
(individually and collectively, if more than one, “Subordinate Lender”); and
SANDERS MORRIS HARRIS INC., a Texas corporation (“SMH”), individually and on
behalf of the Lenders (as defined in the Letter Loan Agreement dated June 9,
2006, among the Borrower, SMH, and the Lenders) (“Lender”).

RECITALS

A. Borrower is now or may in the future become indebted to Subordinate Lender
(any and all existing and future indebtedness of Borrower to Subordinate Lender,
the “Subordinate Debt”).

B. Lender is a party to an Intercreditor and Subordination Agreement of even
date herewith (the “Laurus-SMH Subordination Agreement”) with Laurus Master
Fund, Ltd., a Cayman Islands company (“Senior Lender”), pursuant to which Lender
has agreed to subordinate the Priority Debt (as hereinafter defined) to the
Senior Liabilities (as defined in the Laurus-SMH Subordination Agreement) as
provided in Laurus-SMH Subordination Agreement.

C. Subordinate Lender is a party to a Subordination Agreement of even date
herewith (the “Laurus-Popeil Subordination Agreement”) with the Senior Lender,
pursuant to which the Subordinate Lender has agreed to subordinate the
Subordinate Debt to the Senior Liabilities (as defined in the Laurus-SMH
Subordination Agreement) as provided in the Laurus-Popeil Subordination
Agreement.

D. To induce Lender to grant financial assistance to Borrower by way of new
credit or advances or otherwise Borrower and Subordinate Lender hereby agree to
certain terms of subordination as set forth herein.

E. Subordinate Lender has a direct financial interest in Borrower and will be
benefited by Lender’s granting such financial assistance to Borrower.

F. The parties have entered into this Agreement in order to set forth the terms
of the subordination required by Lender.

AGREEMENTS

1. Limited Subordination. The Subordinate Debt is and shall be subordinated and
junior in right of payment to all existing and future indebtedness of Borrower
to Lender, including, without limitation, principal, interest accrued and to
accrue thereon, and costs and attorneys’ fees associated therewith (the
“Priority Debt”), to the extent that Borrower receives and disburses the
proceeds of Policy No. 81 070 567 issued by the John Hancock Life Insurance
Company on the life of Ronald M. Popeil and any supplementary contracts issued
in connection therewith (the “Policy”), but only to the extent of such proceeds.
Such agreed subordination shall be without prejudice to Lender’s right to assert
that any and all obligations of Borrower on the Subordinate Debt are also
subordinate to the Priority Debt pursuant to applicable law and without
prejudice to Subordinate Lender’s right to challenge such assertion.

 
 

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

 
 
2. Payments to Subordinate Lender. So long as Borrower is not in default under
any of the documents evidencing, securing, or otherwise governing the Priority
Debt (collectively, the “Loan Documents”), nothing herein shall prohibit
Subordinate Lender from receiving and accepting payments on the Subordinate
Debt. However, in the event of a default by Borrower under any of the Loan
Documents, including, without limitation, any breach of the various financial
covenants set forth therein, Borrower shall not make any payment upon any
portion of the Subordinate Debt with the proceeds of the Policy.

3. Turnover of Payments. In the event of a default by Borrower under the Loan
Documents and following notice of such default to Subordinate Lender, Lender
shall have the right to compel Subordinate Lender to turnover to Lender any
payments made to Subordinate Lender following notice of such default by or on
behalf of Borrower on the Subordinate Debt with the proceeds of the Policy until
the Priority Debt has been paid in full. Borrower agrees to provide notice to
Subordinate Lender when any payment to Subordinate Lender represents proceeds
from the Policy. Provision of such notice is not a condition to Lender’s right
to compel turnover of funds required to be turned over to it pursuant to this
Paragraph 3.

4. Insolvency or Liquidation Proceedings. In connection with any insolvency or
liquidation proceedings relating to Borrower or the Priority Debt, this
Agreement shall remain in full force and effect and Lender. The parties hereto
shall not file any proofs of claim, objections, pleadings, or other papers, or
take any other actions, that are or would be inconsistent with the system of
priorities set forth in this Agreement.

5. Laurus Subordination Agreement.  This Agreement is intended to set forth
limited subordination rights as between Lender and Subordinate Lender with
respect to the Priority Debt and the Subordinate Debt and is subject to the
subordination of both the Priority Debt and the Subordinate Debt to the Senior
Liabilities as defined and set forth in each of the Laurus-SMH Subordination
Agreement and the Laurus-Popeil Subordination Agreement.

6. Continuing Agreement. This Agreement shall in all respects be a continuing
agreement, and this Agreement and the agreements and obligations of the parties
hereto shall remain in full force and effect until the Priority Debt has been
paid in full.

7 Assignment. This Agreement shall extend to and bind the respective heirs,
personal representatives, successors and assigns of the parties hereto, and the
covenants of Borrower and Subordinate Lender set forth herein respecting
subordination shall extend to, include, and be enforceable by any transferee or
endorsee to whom Lender may transfer all or any portion of the Priority Debt.

8 Governing Law. This Agreement shall be governed by the laws of the State of
Texas, without regard to that state’s choice of law rules, and Borrower and
Subordinate Lender consent to the jurisdiction of the courts of the State of
Texas.

9. Lender Discretion. Nothing in this Agreement shall be construed as requiring
Lender to grant any financial assistance to Borrower or as limiting or
precluding Lender from the exercise of Lender’s independent judgment and
discretion in connection with Lender’s financial arrangements with Borrower.

 
2

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10. WAIVER OF JURY TRIAL THE PARTIES HERETO HEREBY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM, WHETHER IN CONTRACT, TORT, OR OTHERWISE, RELATING DIRECTLY OR
INDIRECTLY TO THIS AGREEMENT, OR TO ANY ACTS OR OMISSIONS OF LENDER IN
CONNECTION THEREWITH.

11. No Rights to Turkey Fryer. Lender acknowledges that it has no interest in
the “Turkey Fryer,” as defined in the New Product Development Agreement dated
June 30, 2005 by and between Ronald M. Popeil and Ronco Marketing Corporation, a
Delaware corporation (“RMC”).

12. No Present Intention to Initiate Legal Action. Lender has no present
intention of any kind to initiate any litigation, arbitration, or other
proceedings whatsoever against or involving Subordinate Lender or any of them.

13. Arbitration; Attorneys’ Fees. Lender agrees that it will, and it will cause
SMH’s subsidiaries, affiliates, directors, officers, shareholders and employees
to, arbitrate any dispute or controversy of any kind or nature that it or any of
them has or may have with or involving any Subordinate Lender that relates to
this Agreement or to the transactions contemplated hereby, solely and
exclusively in the manner prescribed by Section 11.10 of the Asset Purchase
Agreement dated December 10, 2004, as amended or supplemented, among RMC and
Subordinate Lender, it being understood and agreed that, with respect to any
such dispute, Lender shall be bound by and observe the terms of such Section
11.10. Without limiting the foregoing, Lender agrees that the defendant in any
such dispute shall be awarded costs and attorneys’ fees as provided by such
Section 11.10, unless the plaintiff is the prevailing party in such dispute. If
the prevailing party in such dispute is the plaintiff, each party shall bear its
own costs and attorneys’ fees.

In Witness Whereof, the parties have executed this Agreement as of the day and
year first above written.

[Signatures on Next Page]

 
3

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BORROWER
RONCO CORPORATION,
a Delaware corporation
 
 
By   ____________________________________
_________________________________
Its ____________________________
 
 
RONCO MARKETING CORPORATION,
A Delaware corporation
 
By   ____________________________________
_________________________________
Its ____________________________

 
LENDER:
 
SANDERS MORRIS HARRIS INC,
a Texas corporation, individually and on behalf
of the Lenders
 
By   ____________________________________
_________________________________
Its ____________________________
SUBORDINATE LENDER:
 
RONCO INVENTIONS, LLC,
a California limited liability company
 
By   ____________________________________
_________________________________
Its ____________________________
 
 
RONCO INVENTIONS, INC.
a Nevada corporation
 
By   ____________________________________
_________________________________
Its ____________________________
 

RP PRODUCTIONS, INC.
a Nevada corporation,
 
By   ____________________________________
_________________________________
Its ____________________________
 

RMP FAMILY TRUST, an Illinois irrevocable trust
 
By   ____________________________________
_________________________________
Its ____________________________
 
 
____________________________________
RONALD M. POPEIL

 
 
4

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EXHIBIT C

CALCULATION OF RETAIL AND INTERNATIONAL QC PAYMENTS
JUNE 30, 2005 - JULY 31, 2006

Month
   
QC Amount Earned
 
July, 2005
 
$
236,024.00
 
August, 2005
   
490,582.00
 
September, 2005
   
556,800.25
 
Oct. 1 -16, 2005
   
313,238.00
 
Oct. 17 - 31,2005
   
247,865.00
 
November, 2005
   
48,312.00
 
December, 2005
   
111,213.00
 
January, 2006
   
126,840.00
 
February, 2006
   
55,040.00
 
March, 2006
   
59,652.00
 
April, 2006
   
109,350.50
 
May, 2006
   
9,280.00
 
June, 2006
   
125,874.00
 
July, 2006
   
173,618.50
 
Total QC Payments Earned 7/1/2005 - 7/31/2006
 
$
2,663,689.25
           
Less Payments Made By Ronco:
8/24/2005
   
261,296.00
 
9/12/2005
   
455,459.00
 
9/15/2005
   
0.00
 
10/20/2005
   
150,000.00
 
10/28/2005
   
150,000.00
 
11/4/2005
   
197,000.00
 
11/15/2005
   
22,632.85
 
Total QC Payments made by Ronco 7/1/2005 - 7/31/2006
 
$
1,236,387.85
           
QC Payments Owing through 7/31/2006
 
$
1,427,301.40
 

 
 

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