**THIS
      NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD,
      OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
      REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF
      COUNSEL SATISFACTORY TO BORROWER THAT SUCH REGISTRATION IS NOT
      REQUIRED.**





**SUBORDINATED
      PROMISSORY NOTE**





**$1,500,000.00**
            **June
                9, 2006**





FOR
      VALUE
      RECEIVED, the undersigned, RONCO CORPORATION, a Delaware corporation, and any
      successor corporation under the Loan Agreement (as hereinafter defined)
      (“Borrower”), promises to pay to the order of SANDERS MORRIS HARRIS INC., a
      Texas corporation, at its office at 600 Travis Street, Suite 3100, Houston,
      Harris County, Texas 77002, or at such other place as the holder of this Note
      (“Lender”) may from time to time designate in writing, the sum of One Million
      Five Hundred Thousand Dollars ($1,500,000.00), or
      such
      lesser amount as shall equal the outstanding principal amount hereof, with
      interest on the unpaid principal balance from the date of disbursement by Lender
      until paid at the rates set forth below.





Interest
      accruing on this Note will be calculated on the basis of the actual number
      of
      days elapsed for any whole or partial month in which interest is being
      calculated and on the basis of a 360-day year.





This
      Note
      is one of a duly authorized issue of Notes of Borrower (which term includes
      any
      successor corporation under the Loan Agreement hereinafter referred to) in
      the
      aggregate principal amount of up to $6,000,000.00, issued pursuant to a Letter
      Loan Agreement dated as of June 9, 2006 (the “Loan Agree-ment”), among the
      undersigned and the Lenders identified on Schedule 1 thereto. The terms of
      this
      Note include those stated in the Loan Agreement. Reference is hereby made to
      the
      Loan Agreement and all supple-ments thereto for a statement of the respective
      rights, limitations of rights, duties and immunities thereunder of Borrower
      and
      Lender and of the terms upon which the Notes are, and are to be, and
      delivered.





**1.**  **Interest
      Rate** .




The
      per
      annum interest rate hereunder (the “Note Rate”) shall be 4.77%, being the
      short-term “applicable federal rate” for May 2006. Unpaid interest shall be
      compounded annually. Interest shall be payable on the first and second
      anniversary of this Note and at maturity.





**2.**  **Maturity** .




Any
      and
      all remaining unpaid principal of and interest on this Note shall be due and
      payable in full on June 9, 2009 (the “Maturity Date”); provided, however that
      the principal amount of this Note and all accrued and unpaid interest thereon
      shall be due and payable contemporaneous with the closing of any refinancing
      of
      the Credit Agreement (as hereinafter defined).





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**3.**  **Application
      of Payments** .




So
      long
      as no Event of Default (as used in this Note, the term “Event of Default” have
      the meanings given to those terms in the Loan Agreement) exists, payments under
      this Note and the Security Documents (as defined below) shall be applied:
      (a) first, to the payment of accrued interest; (b) second, at the option of
      Lender, to the payment of any expenses owing under this Note; and (c) third,
      to
      the reduction of the principal amount of this Note. After the occurrence and
      during the continuance of an Event of Default, Lender may apply such payments
      to
      the obligations secured by the Security Instrument in such manner as it may
      elect in its sole discretion.





**4.**  **Prepayment** .





Borrower
      may prepay, without premium or penalty, its obligation under this Note in whole
      or in part from time to time upon giving Lender at least five days prior written
      notice of its intention to prepay the Note specifying the amount of such
      prepayment.





**5.**  **Subordination** .
      No
      payment (whether principal, interest, or other) on account of this Note shall
      be
      made if prior to the time of such payment Lender has received written notice
      from Wells Fargo, National Association or
      Laurus Master Fund, Ltd., as the case may be, (each, the “Senior Lender”) that a
      default has occurred under the credit agreement (the “Credit Agreement”) between
      Borrower and such Senior Lender and such event of default shall not have been
      cured or waived or shall not have ceased to exist. The foregoing provision
      is
      not intended to and shall not impair as between the Borrower, its creditors
      other than the Senior Lender, and the holder of this Note, the obligation of
      Borrower, which shall be absolute and unconditional, to pay to the holder of
      this Note the principal of and interest on this Note, as and when the same
      shall
      become due and payable in accordance with the terms hereof, or to affect the
      relative rights of the holder of this Note and creditors of Borrower other
      than
      the Senior Lender, nor shall anything herein prevent the holder of this Note
      from exercising all remedies otherwise permitted by applicable law upon default,
      subject to the rights, under this Section 5, of the Senior Lender in respect
      of
      any required notice of the exercise of any such remedy or cash, property, or
      securities of Borrower received upon exercise of such remedy. The holder of
      this
      Note by acceptance hereof shall be deemed to acknowledge and agree that the
      subordination provisions of this Section 5 are, and are intended to be, an
      inducement and a consideration to the Senior Lender to enter into the Credit
      Agreement with Borrower. Notwithstanding the foregoing, in the event Lender
      shall receive payments in contravention of the terms and conditions of this
      Note
      then (a) all amounts so received shall be deemed to be held in trust for the
      benefit of the Senior Lender; and (b) all such amounts shall be, at the written
      request of Senior Lender, either paid directly to Senior Lender or to
      Borrower.





**6.**  **Security** .




This
      Note
      is secured by a security agreement and an assignment of life insurance policy
      (the “Security Instruments”) of even date herewith executed by Borrower,
      encumbering the property described in the Security Instruments. The Security
      Instruments and any and all other documents securing this Note are collectively
      referred to as the “Security Documents.”


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**7.**  **Conversion** **.**





(a)  After
      the
      later to occur of (i) seventy-five (75) days after the Initial Closing (as
      defined in the Loan Agreement) or (ii) the end of the Pricing Period (as defined
      below), Lender is entitled, at Lender’s option, at any time and from time to
      time prior to the Maturity Date (except that, in the case Borrower defaults
      on
      the payment of this Note on the Maturity Date, such right to convert shall
      terminate at the close of business on the date the Note is paid in full) and
      prior to payment of this Note, to convert all or a portion of the outstanding
      principal amount of and all accrued and unpaid interest under this Note into
      that number of shares of the Borrower’s common stock, $0.00001 par value (the
“Common Stock”) as is determined by dividing such principal amount and accrued
      and unpaid interest by the Conversion Price, determined as hereinafter provided,
      in effect at the time of conversion. The price at which shares of Common Stock
      shall be delivered upon conversion of this Note (the “Conversion Price”) shall
      be the greater of (i) the Current Market Price (as hereinafter defined) or
      (ii)
      $1.00, subject to adjustment, as hereinafter provided, for a
      stock
      split, stock dividend or other similar event and for merger, consolidation,
      exchange of shares, recapitalization, reorganization or other similar
      event .





(b)  In
      order
      to exercise the conversion privilege, the holder of this Note shall surrender
      the Note, duly endorsed or assigned to Borrower or in blank, at the principal
      executive office of Borrower, accompanied by written notice to Borrower at
      such
      office that the holder elects to convert this Note or, if less than the entire
      principal amount hereof is to be converted, the portion thereof to be converted.





(c)  This
      Note
      shall be deemed to have been converted immediately prior to the close of
      business on the day of surrender of this Note, duly endorsed or assigned to
      Borrower or in blank, for conversion in accordance with the foregoing
      provisions, and at such time the rights of the holder of this Note as a holder
      shall cease, and the person or persons entitled to receive the shares of Common
      Stock issuable upon conversion shall be treated for all purposes as the record
      holder or holders of such shares of Common Stock at such time. As promptly
      as
      practicable on or after the conversion date, Borrower shall issue and shall
      deliver to the holder of this Note, or its designated assigns, a certificate
      or
      certificates for the number of full shares of Common Stock issuable upon
      conversion (bearing such legends as are required by the Loan Agreement and
      applicable state and federal securities laws in the opinion of counsel to the
      Borrower). No payment or adjustment is to be made on conversion for interest
      accrued hereon after the date of conversion or for dividends on the Common
      Stock
      issued on conversion. In the case of this Note that is converted in part only,
      promptly following such conversion Borrower shall execute and Borrower shall
      deliver to the holder hereof, at the expense of Borrower, a new Note or Notes
      of
      authorized denominations in aggregate principal amount equal to the unconverted
      portion of the principal amount of this Note.





(d)  If,
      prior
      to the conversion of this Note, (i) the number of outstanding shares of Common
      Stock is increased by a stock split, stock dividend, or other similar event,
      the
      Conversion Price shall be proportionately reduced, (ii) the number of
      outstanding shares of Common Stock is decreased by a combination or
      reclassification of shares, or other similar


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event,
      the Conversion Price shall be proportionately increased, (iii) (A) there shall
      be any merger, consolidation, exchange of shares, recapitalization,
      reorganization, or other similar event, as a result of which shares of Common
      Stock shall be changed into the same or a different number of shares of the
      same
      or another class or classes of stock or securities of the Borrower or another
      entity or (B) there occurs a sale of all or substantially all of the Borrower’s
      assets that is not deemed to be a liquidation, dissolution or winding up of
      the
      Borrower, then the holder of this Note shall have the right to receive upon
      conversion of this Note, upon the basis and upon the terms and conditions
      specified herein and in lieu of the shares of Common Stock immediately
      theretofore issuable upon conversion, such stock, securities, and/or other
      assets which the holder of this Note would have been entitled to receive in
      such
      transaction had this Note, together with all unpaid and accrued interest
      thereon, been converted immediately prior to such transaction, and in any such
      case appropriate provisions shall be made with respect to the rights and
      interests of the holder of this Note to the end that the provisions hereof
      (including, without limitation, provisions for the adjustment of the Conversion
      Price) shall thereafter be applicable, as nearly as may be practicable in
      relation to any securities thereafter deliverable upon the exercise
      hereof.





(e)  No
      fractional shares shall be issued upon conversion of this Note. In lieu of
      the
      Borrower issuing any fractional shares to Lender upon the conversion of this
      Note, the Borrower shall pay to Lender an amount equal to the product obtained
      by multiplying the Conversion Price by the fraction of a share not issued
      pursuant to the previous sentence. Upon conversion of this Note in full and
      the
      payment of any amounts specified in this **Section 7(e)** ,
      the
      Borrower shall be forever released from all its obligations and liabilities
      under this Note.





(f)  “Current
      Market Price” means at any date the average of the closing price of the Common
      Stock on all securities exchanges (including the Nasdaq Stock Market) on which
      it may at the time be listed, or, if there if there have been no sales on any
      such exchange on any day, or, if on any day such security is not so listed,
      the
      average of the representative bid and asked prices quoted on the Nasdaq Stock
      Market as of 4:00 p.m., New York time, or if on any day such security is not
      quoted in the Nasdaq Stock Market, the average of the highest bid and lowest
      ask
      prices on such day in the domestic over-the-counter market as reported by the
      OTC Bulletin Board, Pink Sheets LLC, or any similar successor organization,
      in
      each case for the 40 consecutive trading days (the “Pricing Period”) commencing
      on the earlier of the first trading day immediately following the effective
      date
      (the “Effective Date”) of (i) Borrower’s Registration Statement on Form S-1
      (File No. 333-127056) originally filed with the Securities and Exchange
      Commission (the “SEC”) on Form SB-2 on July 29, 2005 (the “Original Registration
      Statement”) or (ii) such other registration statement as may be filed by the
      Borrower with the SEC covering shares of Common Stock issuable upon conversion
      of the Borrower’s Series A Convertible Preferred Stock (the “Contingent
      Registration Statement” and together with the Original Registration Statement,
      the “Current Registration Statement”). Lender agrees that it will not, without
      the prior written consent of Borrower, sell, offer, contract or grant any option
      to sell (including without limitation any short sale), transfer, or otherwise
      dispose of any shares of Common Stock of Borrower, options, or warrants to
      acquire shares of Common Stock, or securities exchangeable or exercisable for
      or
      convertible into shares of Common Stock owned by Lender during the Pricing
      Period.





(g)  Borrower
      shall pay all documentary, stamp, transfer or other transactional taxes
      attributable to the issuance or delivery of shares of Common Stock of Borrower
      or other securities or property upon conversion of any Notes: provided, however,
      that Borrower shall not be required to pay any taxes which may be payable in
      respect of any transfer involved in the issuance or delivery of any certificate
      for such shares or securities in the name other than that of the holder of
      this
      Note in respect of which such shares are being issued.


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(h)  Borrower
      shall reserve at all times so long as this Note remains outstanding, free from
      preemptive rights, out of its treasury stock or its authorized but unissued
      shares of Common Stock, or both, solely for the purpose of effecting the
      conversion of this Note, sufficient shares of Common Stock to provide for the
      conversion of this Note.





(i)  If
      any
      shares of Common Stock or other securities to be reserved for the purpose of
      conversion of this Note require registration with or approval of any
      governmental authority under any Federal or state law before such shares or
      other securities may be validly issued or delivered upon conversion, then
      Borrower and the holders of this Note will in good faith and as expeditiously
      as
      possible endeavor to secure such registration or approval, as the case may
      be.





(j)  All
      shares of Common Stock or other securities which may be issued upon conversion
      of this Note will upon issuance by Borrower be duly and validly issued, fully
      paid and nonassessable and free from all taxes, liens and charges with respect
      to the issuance thereof and Borrower shall take no action which will cause
      a
      contrary result.





(k)
      Borrower shall use its commercially reasonable efforts to register the shares
      issuable upon conversion of this Note on the Current Registration Statement;
      provided, however, that if the Borrower’s counsel determines in good faith that
      the shares issuable upon conversion of this Note cannot be registered on such
      Current Registration Statement then ** the
      Borrower agrees to use its commercially reasonable efforts to file an additional
      Registration Statement on Form S-1 (the “Additional Registration Statement”) or
      such other appropriate form for the general registration of the resale of the
      shares issuable upon conversion of this Note within 60 days following the
      Effective Date. The Borrower agrees to use commercially reasonable efforts
      to
      cause the Additional Registration Statement to be declared effective within
      90
      days of the date of filing of such Additional Registration Statement. Sections
      4, 5, 6, 8, 9, 10, 11 and 12(a), 12(b), 12(e), 12(g) (the “Incorporated
      Sections”) of that certain Registration Rights Agreement dated as of June 30,
      2005 between the Borrower and the parties set forth on the signature page and
      Exhibit A to such agreement (the “Existing Registration Rights Agreement”) are
      incorporated herein by reference and made a part of this Note. Terms used in
      the
      Incorporated Sections not otherwise defined in this Note shall have the meaning
      assigned to them under Section 1 of the Existing Registration Rights Agreement.
      The term Registrable Securities in the Incorporated Sections shall be deemed
      to
      include the shares issuable upon conversion of this Note. Nothing contained
      herein shall be construed to incorporate by reference any other section of
      the
      Existing Registration Rights Agreement except those specifically set forth
      herein.




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**8.**  **Default;
      Remedies** .




Upon
      the
      occurrence of an Event of Default, and without notice or demand, all amounts
      owed under this Note, including all accrued but unpaid interest, shall
      thereafter bear interest at the rate of 5% per annum above the Note Rate (the
      “Default Rate”) until all Events of Default are cured. Failure to exercise any
      option granted to Lender hereunder shall not waive the right to exercise the
      same in the event of any subsequent Event of Default. Interest at the Default
      Rate shall commence to accrue upon the occurrence of any Event of Default,
      including the failure to pay this Note at maturity.





**9.**  **Attorneys’
      Fees** .




The
      Borrower agrees to pay all costs of collection incurred in enforcing this Note,
      including attorneys' fees and costs at both trial and appellate levels and
      in
      any bankruptcy action. In the event any legal proceedings are instituted in
      connection with, or for the enforcement of this Note, the Lender shall be
      entitled to recover its costs of suit, including attorneys' fees and costs,
      at
      both trial and appellate levels and in any bankruptcy action .





**10.**  **Miscellaneous**





Every
      person or entity at any time liable for the payment of the indebtedness
      evidenced hereby waives presentment for payment, demand, and notice of
      nonpayment of this Note. Every such person or entity further hereby consents
      to
      any extension of the time of payment hereof, the release of all or any part
      of
      the security herefor or the release of any party liable for the payment of
      the
      indebtedness evidenced hereby at any time and from time to time at the request
      of anyone now or hereafter liable therefor. Any such extension or release may
      be
      made without notice to any of such persons or entities and without discharging
      their liability.





The
      entity that signs this Note is liable for the full repayment of the entire
      indebtedness evidenced hereby and the full performance of each and every
      obligation contained in the Security Documents.





The
      headings to the various sections have been inserted for convenience of reference
      only and do not define, limit, modify, or expand the express provisions of
      this
      Note.





Any
      provision of this Note may be amended, waived or modified upon the written
      consent of the Borrower and the Lender.





Time
      is
      of the essence under this Note and in the performance of every term, covenant,
      and obligation contained herein.





This
      Note
      is made with reference to and is to be construed in accordance with the laws
      of
      the state of Texas, without regard to its conflict of law
      principles.





If
      this
      Note or any of the Security Documents are lost, stolen, mutilated or destroyed
      and Lender delivers to Borrower an indemnification agreement in a form
      reasonably satisfactory to Borrower reasonably indemnifying Borrower against
      any
      loss or liability resulting therefrom, Borrower will execute and deliver to
      Lender a replacement thereof in form and content identical to the original
      document which will have the effect of the original for all
      purposes.


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**11.**  **Transfer
      of this Note or Securities Issuable on Conversion
      Hereof** **.**





With
      respect to any offer, sale or other disposition of this Note or securities
      into
      which such Note may be converted, Lender will give written notice to the
      Borrower prior thereto, describing briefly the manner thereof, together with
      a
      written opinion of Lender’s counsel, or other evidence reasonably satisfactory
      to the Borrower, to the effect that such offer, sale, or other distribution
      may
      be effected without registration or qualification under any applicable federal
      or state law then in effect. Upon receiving such written notice and reasonably
      satisfactory opinion or other evidence, the Borrower, as promptly as
      practicable, shall notify Lender that Lender may sell or otherwise dispose
      of
      this Note or such securities, all in accordance with the terms of the notice
      delivered to the Borrower. If a determination has been made pursuant to this
      Section 11 that the opinion of counsel for Lender, or other evidence, is
      not reasonably satisfactory to the Borrower, the Borrower shall so notify Lender
      promptly after such determination has been made. Each Note thus transferred
      and
      each certificate representing the securities thus transferred shall bear a
      legend as to the applicable restrictions on transferability in order to ensure
      compliance with the Securities Act of 1933, as amended (the “Act”), unless in
      the opinion of counsel for the Borrower such legend is not required in order
      to
      ensure compliance with the Act. The Borrower may issue stop transfer
      instructions to its transfer agent in connection with such restrictions. Subject
      to the foregoing, transfers of this Note shall be registered upon registration
      books maintained for such purpose by or on behalf of the Borrower as provided
      in
      the Loan Agreement. Prior to presentation of this Note for registration of
      transfer, the Borrower shall treat the registered holder hereof as the owner
      and
      holder of this Note for the purpose of receiving all payments of principal
      and
      interest hereon and for all other purposes whatsoever, whether or not this
      Note
      shall be overdue and the Borrower shall not be affected by notice to the
      contrary. Notwithstanding the foregoing, this Section 11 shall not apply to
      securities into which this Note may be converted following the registration
      of
      such securities pursuant to Section 7(k) of this Agreement. Notwithstanding
      the
      foregoing, this Note may not be transferred prior to the completion of the
      Rights Offering (as defined in the Loan Agreement and the registration rights
      granted pursuant to Section 7(k) of this Note may not be
      transferred.





**12.**  **Notices.**





All
      notices, requests, demands, consents, instructions, or other communications
      required or permitted hereunder shall in writing and faxed, mailed, or delivered
      to each party at the respective addresses of the parties as set forth in the
      Loan Agreement, or at such other address or facsimile number as the Borrower
      shall have furnished to Lender in writing. All such notices and communications
      will be deemed effectively given the earlier of (a) when received,
      (b) when delivered personally, (c) one business day after being
      delivered by facsimile (with receipt of appropriate confirmation), (d) one
      business day after being deposited with an overnight courier service of
      recognized standing or (e) four days after being deposited in the U.S.
      mail, first class with postage prepaid.





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**13.**  **Pari
      Passu Notes** **.**





Lender
      acknowledges and agrees that the payment of all or any portion of the
      outstanding principal amount of this Note and all interest hereon shall be *pari
      passu* in
      right
      of payment and in all other respects to the other Notes issued pursuant to
      the
      Loan Agreement or pursuant to the terms of such Notes. In the event Lender
      receives payments in excess of its pro rata share of the Borrower’s payments to
      the Lenders of all of the Notes, then Lender shall hold in trust all such excess
      payments for the benefit of the holders of the other Notes and shall pay such
      amounts held in trust to such other holders upon demand by such
      holders.





**14.**  **Consent
      to Jurisdiction** .





Borrower
      irrevocably submits to the jurisdiction of any state or federal court sitting
      in
      Houston, Texas, over any suit, action, or proceeding arising out of or relating
      to this Note or the loan evidenced hereby. Borrower irrevocably waives, to
      the
      fullest extent permitted by law, any objection that Borrower may now or
      hereafter have to the laying of venue of any such suit, action, or proceeding
      brought in any such court and any claim that any such suit, action, or
      proceeding brought in any such court has been brought in an inconvenient forum.
      Borrower further consents and agrees to service of any summons, complaint or
      other legal process in any such suit, action or proceeding by registered or
      certified U.S. mail, postage prepaid, to Borrower at the address for notices
      set
      forth following its signature, and consents and agrees that such service shall
      constitute in every respect valid and effective service (but nothing herein
      shall affect the validity or effectiveness of process served in any other manner
      permitted by law).





**15.**  **WAIVER
      OF JURY TRIAL** **.**





**LENDER
      AND BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS
      THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
      OR
      ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THE LOAN, THIS NOTE OR ANY OTHER
      LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
      ORAL OR WRITTEN), OR ACTIONS OF LENDER OR BORROWER. THIS PROVISION IS A MATERIAL
      INDUCEMENT FOR LENDER TO MAKE THE LOAN TO BORROWER.**





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DATED
      as
      of the day and year first above written.





RONCO
                CORPORATION, a Delaware corporationBy:/s/Paul
                KabashimaName:
                Paul KabashimaTitle:
                Chief Operating Officer





Address:





21344
      Superior Street


Chatsworth,
      California 91311





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