**LETTER
      LOAN AGREEMENT**





June
      9,
      2006








The
      Lenders Identified on


Schedule
      1


c/o
      Sanders Morris Harris Inc.


600
      Travis Street, Suite 3100


Houston,
      Texas 77002





Ladies
      and Gentlemen:





The
      undersigned, **RONCO
      CORPORATION,** a
      Delaware corporation **(“Borrower”)** ,
      has
      requested that Sanders Morris Harris Inc., a Texas corporation, individually
      and
      as administrative agent (the “ **Lead
      Lender** ”),
      and
      the persons and entities listed on the schedule of lenders attached hereto
      as **Schedule 1** (each,
      together with the Lead Lender, a “ **Lender** **”** and, **** collectively,
      the **“** **Lenders** **”** )
      lend to
      Borrower the net sum of up to $3,000,000.00. Subject to the terms of this Loan
      Agreement (this “ **Agreement** **”** ),
      Borrower and each of the Lenders hereby agree as follows:





1.  Loan .





(a)  At
      the
      Initial Closing (as defined below), on the terms and subject to the conditions
      set forth in this Agreement, the Lead Lender agrees to lend to Borrower the
      sum
      of $1,500,000.00 (the “ **Initial
      Loan** **”** )
      for
      working capital and other general corporate purposes as set forth on **Schedule
      2** hereto.
      The Initial Loan shall be evidenced by a subordinated promissory note in
      substantially the form attached hereto as **Exhibit
      A** (the
“ **Initial
      Note** ”).





(b)  At
      the
      Second Closing (as defined below), on the terms and subject to the conditions
      set forth in this Agreement, the Lead Lender agrees to lend to Borrower the
      additional sum of $1,500,000.00 (the “ **Second
      Loan** **”** )
      for
      working capital and other general corporate purposes as set forth on **Schedule
      2** hereto.
      The Second Loan shall be evidenced by a subordinated promissory note in
      substantially the form attached hereto as **Exhibit
      B** (the
“ **Second
      Note** ”).





(c)  At
      the
      Third Closing (as defined below), on the terms and subject to the conditions
      set
      forth in this Agreement, each Rights Lender (as defined below) severally agrees
      to purchase a subordinated promissory note in substantially the form attached
      hereto as **Exhibit C** (each, a
“ **Subsequent**  **Note** ”
and,
      collectively with the Initial Note and the Second Note, the “ **Notes** ”
or
      a
“ **Note** ”)
      in the
      principal amount set forth opposite the Rights Lender’s name on **Schedule 1** hereto
      (the “ **Multiple
      Lender Loan** ,”
and
      collectively with the Initial Loan and the Second Loan, the **“** **Loans** ”).
      The
      aggregate principal amount of the Subsequent Notes sold at the Third Closing
      shall not exceed $3,000,000.00 **** (the
      “ **Aggregate
      Subsequent Loan Amount** ”) **.** Principal
      and interest on the Notes shall be due and payable in the manner and at the
      times set forth in the Notes.








(d)  Each
      Loan
      shall be made at a closing (each of which is referred to in this Agreement
      as a
“ **Closing** ”).
      The
      Initial Loan shall be made at an initial Closing to be held as of the date
      of
      this Agreement (the “ **Initial**  **Closing** ”).





(e)  The
      Second Loan shall be made at a second Closing by the Lead Lender (the
“ **Second
      Closing** ”).
      The
      Second Closing shall take place at such date, time, and place as shall be agreed
      by the Borrower and the Lead Lender following the fulfillment or waiver of
      the
      conditions precedent set forth in Section 2(a)(ii) of this
      Agreement.





(f)  The
      Multiple Lender Loan shall be made at a third Closing (the “ **Third
      Closing** ”)
      by
      such persons or entities that indicate their intent to participate in the Rights
      Offering (as defined below) (the “ **Rights
      Lenders** ”).
      The
      Third Closing shall take place at such date, time, and place as determined
      by
      the Borrower in its sole discretion; provided, however, that the Third Closing
      shall occur no later than seventy-five (75) days after the Initial Closing.
      The
      Rights Lenders shall, upon execution and delivery of the relevant signature
      pages, become parties to, and be bound by, this Agreement, without the need
      for
      an amendment to this Agreement except to add such person’s or entity’s name to **Schedule
      1** ,
      and
      shall have the rights and obligations of a Lender hereunder as of the date
      of
      the Third Closing. Immediately prior to the Third Closing, **Schedule
      1** will be
      amended to list the Rights Lenders participating in the Third Closing hereunder
      and the principal amount of the Note being purchased by such Rights Lender
      hereunder. At the applicable Closing, the Borrower will deliver to each Lender
      the respective Note to be purchased by such Lender, against receipt by the
      Borrower of the corresponding purchase price set forth on **Schedule
      1** hereto.





(g)  Notwithstanding
      the foregoing, in the event that the aggregate principal amount of the Notes
      purchased at the Initial Closing, the Second Closing and the Third Closing
      exceeds $3,000,000.00 (the “ **Excess** ”),
      then
      Borrower and the Lead Lender agree that Borrower shall prepay its obligations
      under the Initial Note and the Second Note to the extent of the Excess. The
      Lead
      Lender waives all notice provisions in the Initial Note and the Second Note
      with
      respect to the prepayment of the Excess.





2.  Conditions
      Precedent .





(a)  To
      Obligations of the Lenders





(i)  The
      obligation of the Lead Lender to make the Initial Loan to Borrower at the
      Initial Closing is subject to the conditions precedent, unless waived in writing
      by the Lead Lender, that:





(A)  the
      Lead
      Lender shall have received duly executed copies of this Agreement, the Initial
      Note, the Security Agreement in substantially the form attached hereto as **Exhibit
      D** (the
“ **Security
      Agreement** **”),** and
      the
      Assignment of Life Insurance Policy in substantially the form attached hereto
      as **Exhibit
      E** (the
“ **Insurance
      Assignment** ”)
      (all
      such documents and any other security documents relating to the Loans and any
      modifications thereof, are hereinafter collectively referred to as the
“ **Loan
      Documents** **”** );





-2-


(B)  all
      representations and warranties (as modified by the disclosures on the Schedule
      of Exceptions) made by Borrower to the Lead Lender under this Agreement and
      the
      other Loan Documents, if applicable, are true and correct in all material
      respects as of the date of the Initial Closing;





(C)  all
      documents and proceedings shall be reasonably satisfactory to legal counsel
      for
      the Lead Lender;





(D)  no
      condition or event exists which constitutes an Event of Default (as hereinafter
      defined) or which, with the lapse of time and/or giving of notice, would
      constitute an Event of Default; and





(E)  no
      material adverse change in the financial condition of Borrower since the
      effective date of the most recent financial statements furnished to the Lead
      Lender by Borrower shall have occurred and be continuing.


(ii)  The
      Lead
      Lender’s obligation to make the Second Loan at the Second Closing shall be
      further subject to the conditions precedent (other than Section 2(a)(ii)(G),
      which closing shall occur simultaneously with the Second Closing), unless waived
      in writing by the Lead Lender, that:





(A)  all
      representations and warranties (as modified by the disclosures on the Schedule
      of Exceptions) made by Borrower to Lead Lender under this Agreement and the
      other Loan Documents, if applicable, are true and correct in all material
      respects as of the date of the Second Closing;





(B)  all
      documents and proceedings shall be reasonably satisfactory to legal counsel
      for
      the Lead Lender;





(C)  no
      condition or event exists which constitutes an Event of Default (as hereinafter
      defined) or which, with the lapse of time and/or giving of notice, would
      constitute an Event of Default;





(D)  the
      Lead
      Lender shall have received duly executed copies of the Second Note;





(E)  no
      material adverse change in the financial condition of Borrower since the
      effective date of the most recent financial statements furnished to Lead Lender
      by Borrower shall have occurred and be continuing;





(F)  To
      the
      extent permissible under applicable federal and state securities laws, Borrower
      shall have sent by regular first class mail (the “ **Mailing** ”)
      to all
      holders of Borrower’s Series A Convertible Preferred Stock, at such holder’s
      address as is shown in the Borrower’s records at the time of such Mailing, an
      offer to participate as a Rights Lender in the




-3-


Third
      Closing to the extent of their Pro Rata Share (as defined below) (the
“ **Rights
      Offering** ”).
      For
      purposes of this Agreement, “ **Pro
      Rata Share** ”
means
      (x) the Aggregate Subsequent Loan Amount multiplied by (y) a fraction,
      (i) the numerator of which shall be the number of shares of Series A Convertible
      Preferred Stock held by such Rights Lender on the date hereof and (ii) the
      denominator of which shall be the total number of outstanding shares of Series
      A
      Convertible Preferred Stock as of the date hereof. Borrower agrees that a Rights
      Lender shall have no more than thirty days from the date of the Mailing to
      indicate that such Rights Lender intends to participate in the Rights Offering;





(G)  Borrower
      shall close simultaneously with the Second Closing on a credit agreement (the
      “ **Senior
      Credit Agreement** ”)
      for a
      facility of not less than $15 million between Borrower and Wells Fargo Bank,
      National Association on terms substantially equivalent to those contained in
      the
      commitment letter dated May 20, 2006, or Borrower shall have closed on a Senior
      Credit Agreement for a facility of not less than $15 million with Laurus Master
      Fund, Ltd.; and





(H)  Wells
      Fargo Bank, National Association or Laurus Master Fund, Ltd. shall have received
      a subordination/consent agreement from Ronco Inventions, LLC, Popeil Inventions,
      Inc., RP Productions, Inc., RMP Family Trust, and Ronald M. Popeil.





(b)  To
      Obligations of Borrower .





The
      Borrower’s obligation to sell and issue the Notes at each Closing is subject to
      the fulfillment on or before such Closing of the following conditions, unless
      waived in writing by the Borrower:





(i)  Borrower
      shall have received duly executed copies of this Agreement from each of the
      Lenders participating in such Closing;





(ii)   all
      representations and warranties made by Lenders to Borrower under this Agreement
      and the other Loan Documents, if applicable, in such Closing are true and
      correct in all material respects;





(iii)  all
      documents and proceedings shall be reasonably satisfactory to legal counsel
      for
      the Borrower;





(iv)  the
      Borrower shall be satisfied that the offer and sale of the Notes and the shares
      issuable upon conversion of the Notes (the “ **Conversion
      Shares** ”)
      shall
      be qualified or exempt from registration or qualification under all applicable
      federal and state securities laws (including receipt by the Borrower of all
      necessary blue sky law permits and qualifications required by any state, if
      any); and





(v)  Borrower
      shall have received the purchase price for the applicable Note as set forth
      on **Schedule
      1** hereto.





-4-


3.  Representations
      and Warranties of Borrower .
      A
      Schedule of Exceptions (each, a “ **Schedule
      of Exceptions** ”)
      shall
      be delivered to the applicable Lenders participating in each Closing. Except
      as
      set forth on the Schedule of Exceptions delivered to the Lender at the
      applicable Closing, the Borrower hereby represents and warrants to such Lenders
      as of the date of such Closing:





(a)  Borrower
      is a corporation duly organized validly existing and in good standing under
      the
      laws of the State of Delaware and has all requisite authority to conduct its
      business in each jurisdiction in which its business is conducted, except for
      where the failure to have such requisite authority would not result in a
      material adverse effect on the Borrower’s financial condition or business as now
      conducted (a “ **Material
      Adverse Effect** ”).





(b)  The
      execution, delivery, and performance of this Agreement and the other Loan
      Documents have been duly authorized by all necessary action by Borrower and
      are
      the legal, valid, and binding obligations of Borrower, enforceable in accordance
      with their respective terms, except (i) as limited by bankruptcy, insolvency,
      or
      other laws of general application relating to the enforcement of creditors’
rights, (ii) as limited by rules of law governing specific performance,
      injunctive relief or other equitable remedies and by general principles of
      equity and (iii) to the extent the indemnification provisions contained in
      the Loan Documents may further be limited by applicable laws and principles
      of
      public policy.





(c)  The
      Borrower has delivered to the Lead Lender its consolidated balance sheet as
      of
      June 30, 2005 and the related consolidated statements of operations and cash
      flows for the one day June 30, 2005 (Date of Acquisition) and stockholders'
      equity for the period October 15, 2004 (Date of Inception) to June 30, 2005
      and
      its unaudited consolidated balance sheet at March 31, 2006, its unaudited
      Consolidated and Combined Statements of Operations for the three and nine months
      ended March 31, 2006, its unaudited Consolidated Statement of Stockholders'
      Equity for the nine months ended March 31, 2006 and its unaudited Consolidated
      and Combined Statements of Cash Flows for the nine months ended March 31,
      2006 (the
“ **Financial
      Statements** ”).
      Each
      Financial Statement is true and correct in all material respects, fairly
      presents in all material respects the financial condition of Borrower as of
      the
      date(s) and during the period(s) indicated therein, and has been pre-pared
      in
      accordance with generally accepted accounting principles, consistently applied
      throughout the period indicated, except as disclosed therein. Except as set
      forth on the Schedule of Exceptions, as of the date of this Agreement, there
      are
      no obligations, liabilities, or indebtedness (including contingent and indirect
      liabilities) which are material to Borrower, and not reflected in such Financial
      Statements; and no material adverse changes have occurred in the financial
      condition or business of Borrower since the date of the most recent Financial
      Statements.





(d)  Neither
      the execution and delivery of this Agree-ment and the other Loan Documents,
      nor
      the consummation of any of the transactions herein or therein contemplated,
      nor
      compliance with the terms and provisions hereof or thereof, will (i) contravene
      or conflict with any provision of law, statute, or regulation to which Borrower
      is subject or any judgment, license, order, or permit applicable to Borrower
      that would




-5-


result
      in
      a Material Adverse Effect, (ii) contravene or conflict with any provision of
      any
      indenture, mortgage, deed of trust, or other instrument to which Borrower may
      be
      subject that would result in a Material Adverse Effect, or (iii) require the
      consent, approval, authorization, or order of any court, governmental authority,
      or, to Borrower’s knowledge, third party in connection with the execution and
      delivery by Borrower of this Agreement or the transactions contemplated herein
      or therein, which have not previously been obtained and which failure to obtain
      would result in a Material Adverse Effect.





(e)  Except
      as
      set forth on Schedule of Exceptions, no litigation, investigation, or
      governmental proceeding is pending or, to the Borrower’s knowledge, threatened
      against or affecting Borrower that would have a Material Adverse Effect.





(f)  The
      Borrower has good and marketable title to its properties and assets, and has
      good title to all its leasehold interests, in each case subject to no material
      mortgage, pledge, lien, lease, encumbrance or charge, other than (i) liens
      for current taxes not yet due and payable, (ii) liens imposed by law and
      incurred in the ordinary course of business for obligations not past due,
      (iii) liens in respect of pledges or deposits under workers’ compensation
      laws or similar legislation, and (iv) liens, encumbrances and defects in title
      which do not in any case materially detract from the value of the property
      subject thereto or have a Material Adverse Effect, and which have not arisen
      otherwise than in the ordinary course of business.





(g)  The
      principal office, chief executive office, and principal place of business of
      Borrower are in Chatsworth, California; provided, however, that the Borrower
      intends to move its principal office, chief executive office, and principal
      place of business to Simi Valley, California.





(h)  All
      tax
      reports and returns required by any law or regulation to be filed have been
      filed and all taxes required to be paid by Borrower have in fact been paid,
      except (i) where the failure to do so would not have a Material Adverse Effect
      or (ii) the taxes are being contested in good faith by appropriate proceedings
      for which adequate reserves have been established.





(i)  To
      the
      Borrower’s knowledge, no written certificate or written statement herewith or
      heretofore delivered by Borrower to Lender in connection herewith, or in
      connection with any transaction contemplated hereby, contains any untrue
      statement of a material fact or fails to state any materi-al fact necessary
      to
      keep the statements contained therein from being misleading.


(j)  To
      Borrower’s knowledge, Borrower and its subsidiaries are in compliance with all
      laws, ordinances, governmental rules, or regulations the conduct of Borrower’s
      and its subsidiaries’ business, the ownership of its assets, and otherwise,
      except for where the failure to so comply would not have a Material Adverse
      Effect. To Borrower’s knowledge, no event of default exists under any material
      agreement, contract, or understanding to which Borrower or any subsidiary is
      a
      party, which violation or event of default would have a Material Adverse
      Effect.





-6-


(k)  To
      Borrower’s knowledge, no event of default under this Agreement or default under
      the other Loan Documents to which Borrower is a party has occurred and to
      Borrower’s knowledge, the Borrower is not in default with respect to any writ,
      injunction, decree, or demand of any court or any government authority which
      would have a Material Adverse Effect.




4.  Representations
      and Warranties of Lender. Each
      Lender, severally and not jointly, represents and warrants to Borrower upon
      the
      acquisition of a Note as follows:




(a)  Binding
      Obligation .
      Such
      Lender has full legal capacity, power, and authority to execute and deliver
      this
      Agreement and to perform its obligations hereunder. Each of this Agreement
      and
      the Note issued to such Lender is a valid and binding obligation of the Lender,
      enforceable in accordance with its terms, except as limited by bankruptcy,
      insolvency or other laws of general application relating to or affecting the
      enforcement of creditors’ rights generally and general principles of
      equity.




(b)  Securities
      Law Compliance .
      Such
      Lender has been advised that the Note and the underlying securities have not
      been registered under the Securities Act of 1933, as amended (the “ **Securities
      Act** ”),
      or
      any state securities laws and, therefore, cannot be resold unless it is
      registered under the Securities Act and applicable state securities laws or
      unless an exemption from such registration requirements is available. Such
      Lender is aware that, Borrower is under no obligation to effect any such
      registration with respect to the Note or to file for or comply with any
      exemption from registration. Such Lender has not been formed solely for the
      purpose of making this investment and is purchasing the Note to be acquired
      by
      such Lender hereunder for its own account for investment, not as a nominee
      or
      agent, and not with a view to, or for resale in connection with, the
      distribution thereof. Such Lender has such knowledge and experience in financial
      and business matters that such Lender is capable of evaluating the merits and
      risks of such investment, is able to incur a complete loss of such investment
      and is able to bear the economic risk of such investment for an indefinite
      period of time. Such Lender is an accredited investor as such term is defined
      in
      Rule 501 of Regulation D promulgated under the Securities
      Act.





(c)  Access
      to Information .
      Such
      Lender acknowledges that Borrower has given such Lender access to the corporate
      records and accounts of the Borrower, has made its officers and representatives
      available for interview by such Lender, and has furnished such Lender with
      all
      documents and other information required for such Lender to make an informed
      decision with respect to the purchase of the Note.





5.  Affirmative
      Covenants .
      Until
      payment in full of the Note and all other obligations and liabilities of
      Borrower under this Agreement, Borrower agrees and covenants that (unless the
      Lead Lender shall otherwise consent in writing):





(a)  Richard
      F. Allen, subject to his ability to serve, is and shall continue to (i) serve
      as
      Chief Executive Officer of the Borrower and report to the Board of Directors
      and
      (ii) serve as a member of the Board of Directors of the Borrower (subject to
      the
      approval of the Borrower’s stockholders at any annual or other stockholder
      meeting where directors are to be elected).




-7-


(b)  Subject
      to (i) the earlier resignations of Gregg Mockenhaupt and A. Emerson Martin
      from
      the Borrower’s Board of Directors, (ii) his ability to serve, and (iii) the
      approval of the Borrower’s stockholders at any annual or special meeting of the
      Borrower’s stockholders where directors are to be elected, the Board of
      Directors of Borrower shall appoint John Reiland as a member of the Board of
      Directors of the Borrower and, if Mr. Reiland meets the independence and other
      applicable requirements of, the Sarbanes-Oxley Act of 2002, the rules of the
      Nasdaq Stock Market, and the rules and regulations adopted by the Securities
      and
      Exchange Commission (the “ **SEC** ”),
      the
      Board of Directors of Borrower shall appoint Mr. Reiland as a member of the
      Audit Committee of the Board of Directors of the Borrower (the “ **Audit
      Committee** ”).
      In
      such capacities, Mr. Reiland shall have access
      to
      all financial and related records of Borrower and be provided an office and
      customary senior management support in Borrower’s executive
      offic e.
      Upon
      payment in full of the Note and all other obligations and liabilities of
      Borrower under this Agreement, then the Board of Directors of Borrower may
      at
      such time request that Mr. Reiland resign from Borrower’s Board of Directors,
      and within five (5) days following such request, Mr. Reiland shall resign from
      Borrower’s Board of Directors.





(c)  Borrower
      will use the proceeds of the Loan for working capital and other general
      corporate purposes but only as set forth on **Schedule
      2** hereto.





(d)  Borrower
      shall use reasonable commercial efforts to conduct its business in an orderly
      and efficient manner consistent with good business practices and in accordance
      with all valid regulations, laws, and orders of any governmental authority
      the
      violation of which would have a Material Adverse Effect and will act in
      accordance with customary industry standards in maintaining and operating its
      assets, properties, and investments.





(e)  Borrower
      shall maintain complete and accurate books and records of its transactions
      in
      accordance with general-ly accepted accounting principles, and will give Lead
      Lender, following reasonable advance notice, access during business hours to
      all
      books, records and documents of Borrower and permit Lead Lender to make and
      take
      away copies thereof. Notwithstanding any provision of this Agreement to the
      contrary, Borrower shall not be required to disclose, permit the inspection,
      examination, copying or making extracts of, or discuss, any document,
      information or other matter that (i) constitutes non-financial trade secrets
      or
      non-financial proprietary information, or (ii) the disclosure of which to the
      Lead Lender, or its designated representative, is then prohibited by (A) law
      or
      (B) an agreement binding on Borrower that was not entered into by Borrower
      for
      the primary purpose of concealing information from the Lead Lender.





(f)  Borrower
      shall furnish to Lead Lender and each Significant Lender, immediately upon
      becoming aware of the existence of any condition or event consti-tuting an
      Event
      of Default or event which, with the lapse of time and/or giving of notice,
      would
      constitute an Event of Default, written notice specifying the nature and period
      of existence thereof and any action which Borrower is taking or proposes to
      take
      with respect thereto. For purposes of this **Section
      5(f)** , **** “ **Significant
      Lender** ”
means
      a
      Lender that has a Significant Investment. For purposes of this **Section
      5(f)** , **** “ **Significant
      Investment** ”
means
      the sum of the principal amount of the Note held by such Lender and the
      aggregate purchase price of the shares of the Company’s Series A Convertible
      Preferred Stock held by such Lender equals at least $1,000,000.





-8-


(g)  Borrower
      shall maintain or cause to be maintained insurance from responsible and
      reputable companies in such amounts and covering such risks as is reasonably
      acceptable to Lead Lender, is prudent and is usually carried by companies
      engaged in business similar to that of Borrower including, without limitation,
      insurance, comprehensive liability insurance, fire and extended insurance,
      with
      Borrower named as a co-loss payee; Borrower shall furnish Lead Lender, on
      request, with certified copies of insurance policies or other appropriate
      evidence of compliance with the foregoing covenant.





(h)  Borrower
      shall promptly notify the Lead Lender of the filing of any Current Report on
      Form 8-K with the SEC that reports (i) any material adverse change in its
      financial condition or business, (ii) any default under any material agreement,
      contract, or other instrument to which Borrower is a party or by which any
      of
      its properties are bound, or any acceleration of any maturity of any
      indebtedness owing by Borrower, (iii) any material adverse claim against or
      affecting Borrower or any of its subsidiaries or any of their properties, and
      (iv) any litigation or any claim or controversy which might become the
      subject of litigation, against Borrower or affecting any of Borrower’s property,
      if such litigation or potential liti-gation might, in the event of an
      unfavorable outcome, have, in the Lead Lender’s reasonable judgment, a Material
      Adverse Effect.





(i)  Borrower
      shall maintain and preserve its existence under the laws of the State of
      Delaware and Borrower shall preserve and maintain all licenses, privileges,
      franchises, certificates and the like necessary for the operation of its and
      its
      subsidiaries business the loss of which would have a Material Adverse
      Effect.





(j)  Borrower
      agrees to furnish to Lead Lender within such time period as the Lead Lender
      may
      reasonably request such additional information and statements, lists of assets
      and liabilities, tax returns, publicly available financial statements, reporting
      statements or any other reports with respect to Borrower’s financial condition,
      business operations, and properties as the Lead Lender may reasonably request
      from time to time. Notwithstanding any provision of this Agreement to the
      contrary, Borrower shall not be required to disclose, permit the inspection,
      examination, copying or making extracts of, or discuss, any document,
      information or other matter that (i) constitutes non-financial trade secrets
      or
      non-financial proprietary information, or (ii) the disclosure of which to the
      Lead Lender, or its designated representative, is then prohibited by (A) law
      or
      (B) an agreement binding on Borrower that was not entered into by Borrower
      for
      the primary purpose of concealing information from the Lead Lender.




(k)  Borrower
      shall, at the request of the Lead Lender, (i) execute, acknowledge, deliver,
      or
      record such further reasonable instruments and do such further reasonable acts
      deemed necessary, desirable, or proper by the Lead Lender to carry out the
      purposes of the Loan Documents or to protect the liens or security interests
      under the Loan Documents against the rights or interests of third persons,
      and
      (ii) do such further reasonable acts deemed necessary, desirable, or proper
      by
      the Lead Lender to comply with the requirements of any agency having
      jurisdiction over the Lead Lender.





-9-


(l)  Borrower
      agrees to reimburse the Lead Lender for all reasonable costs and expenses of
      the
      Lead Lender, including reasonable attorney’s fees, incurred in connection with
      the making of the Loan, the preparation, execution, delivery, and performance
      of
      this Agreement and the other agreements referred to herein and any subsequent
      amendments thereto or waivers thereof, and the charges for recording fees and
      legal fees in connection with the Loan transaction, whether or not the Loan
      transaction contemplated hereunder or under any other Loan Documents is closed;
      and further Borrower’s obligations hereunder shall survive the delivery of the
      Loan Documents, the closing of the Loan transaction contemplated hereunder,
      and
      the release or termination of the Loan Documents, or any other event
      whatsoever.





6.  Negative
      Covenants .
      Until
      payment in full of the Notes and all other obligations and liabilities of
      Borrower hereunder, and the performance of all covenants and agreements of
      Borrower hereunder, Borrower covenants that (unless the Lead Lender shall
      otherwise consent in writing) Borrower shall not:




(a)  endorse,
      guarantee, or otherwise become liable for the obligations of any person, firm,
      or corporation except for endorsements of negotiable instruments by Borrower
      in
      the ordinary course of business;




(b)  mortgage,
      assign, encumber, incur, assume, or grant a security interest in or lien upon
      any of the assets of Borrower (collectively, a “ **Lien** ”),
      except for Permitted Liens. For purposes of this Section 6, “ **Permitted
      Liens** ”
means
      (i) Liens for taxes not yet delinquent or Liens for taxes being contested in
      good faith and by appropriate proceedings for which adequate reserves have
      been
      established; (ii) Liens in respect of property or assets imposed by law which
      were incurred in the ordinary course of business, such as carriers’,
      warehousemen’s, materialmen’s and mechanics’ Liens and other similar Liens
      arising in the ordinary course of business which are not delinquent or remain
      payable without penalty or which are being contested in good faith and by
      appropriate proceedings; (iii) Liens incurred or deposits made in the ordinary
      course of business in connection with workers’ compensation, unemployment
      insurance and other types of social security, and mechanic’s Liens, carrier’s
      Liens, and other Liens to secure the performance of tenders, statutory
      obligations, contract bids, government contracts, performance and return of
      money bonds, and other similar obligations, incurred in the ordinary course
      of
      business, whether pursuant to statutory requirements, common law or consensual
      arrangements; (iv) Liens in favor of Lenders; (v) Liens upon any equipment
      acquired or held by Borrower or any of its subsidiaries to secure the purchase
      price of such equipment or indebtedness incurred solely for the purpose of
      financing the acquisition of such equipment, so long as such Lien extends only
      to the equipment financed, and any accessions, replacements, substitutions,
      and
      proceeds (including insurance proceeds) thereof or thereto; (vi) Liens arising
      from judgments, decrees, or attachments in circumstances not constituting an
      Event of Default under Section 6 of this Agreement; (vii) Liens in favor of
      customs and revenue authorities arising as a matter of l




-10-


aw
      to
      secure payments of customs duties in connection with the importation of goods,
      (viii) Liens which constitute rights of setoff of a customary nature or
      banker’s liens, whether arising by law or by contract; (ix) Liens on
      insurance proceeds in favor of insurance companies granted solely as security
      for financed premiums; (x) leases or subleases and licenses or sublicenses
      granted in the ordinary course of Borrower’s business; and (xi) Liens in favor
      of Wells Fargo Bank, National Association or Laurus Master Fund,
      Ltd.





(c)  liquidate,
      dissolve, or merge or consolidate with, or acquire all or substantially all
      of
      the assets of, any other company, firm, or association; or make any other
      substantial change in Borrower’s capitalization; or engage in any business,
      other than the businesses currently engaged in by Borrower and any business
      substantially similar or related thereto;





(d)  sell
      any
      of its assets, except (i) in the ordinary course of business; (ii) the sale
      or
      other disposition of assets no longer used or useful in the conduct of its
      business; (iii) the sale, lease, assignment, or other transfer of a subsidiary’s
      assets to the Borrower; or (iv) the sale of Borrower’s assets to any other
      person, firm, or corporation with the agreement that such assets shall be leased
      back to Borrower, unless replaced with assets of equal value;





(e)  make
      any
      material change in the nature of Borrower’s business as carried on as of the
      date of this Agreement; or





(f)  transfer,
      assign, or encumber Borrower’s rights or obligations under any Loan Documents or
      the proceeds of the Loan without the prior written consent of the Lead Lender,
      except for Permitted Liens.





7.  Default .
      An
“Event of Default” shall exist if any one or more of the following events
      (herein collectively called “ **Events
      of Default** ”)
      shall
      occur:





(a)  Borrower
      shall fail to pay when due any principal of, or interest on, the Notes or any
      other fee or payment, due hereunder or under any of the Loan Documents and
      such
      payment shall not have been made within ten days of Borrower’s receipt of
      written notice to Borrower of such failure to pay from the applicable Lenders
      or
      the Lead Lender on behalf of all the Lenders;





(b)  any
      representation or warranty made in any of the Loan Documents shall prove to
      be
      untrue or inaccurate in any material respect as of the date on which such
      representation or warranty is made;





(c)  material
      default shall occur in the performance of any of the covenants or agreements
      of
      Borrower contained herein in any of the other Loan Documents and such default
      (other than a monetary default) shall continue for a period of 30 days after
      the
      affected Lender or the Lead Lender on behalf of any affected Lender sends
      Borrower notice thereof;





-11-


(d)  Borrower
      shall (i) apply for or consent to the appointment of a receiver, custodian,
      trustee, intervenor, or liquidator of it or of all or a substantial part of
      its
      assets, (ii) voluntarily become the subject of a bankruptcy, reorganization,
      or
      insolvency proceeding or be insolvent or admit in writing that it is unable
      to
      pay its debts as they become due, (iii) make a general assignment for the
      benefit of creditors, (iv) in connection with any voluntary bankruptcy or
      insolvency, file a petition or answer seeking reorganization or an arrangement
      with creditors or to take advantage of any bankruptcy or insolvency laws, (v)
      in
      connection with any involuntary bankruptcy or insolvency proceedings, file
      an answer admitting the material allegations of, or consent to, or default
      in
      answering, a petition filed against it in any bankruptcy, reorganization or
      insolvency proceeding, (vi) become the subject of an order for relief under
      any bankruptcy, reorganization or insolvency pro-ceeding, and such order shall
      continue unstayed and in effect for a period of 60 days, or (vii) fail to
      pay any money judgment against it before the expiration of 60 days after such
      judgment becomes final and no longer subject to appeal;


(e)  an
      order,
      judgment, or decree shall be entered by any court of competent jurisdiction
      or
      other competent authority approving a petition appointing a receiver, custodian,
      trustee, intervenor, or liquidator of Borrower or of all or substantially all
      of
      its assets, and such order, judgment or decree shall continue unstayed and
      in
      effect for a period of 60 days; or a complaint or petition shall be filed
      against Borrower seeking or instituting a bankruptcy, insolvency,
      reorganization, rehabilitation, or receivership proceeding of Borrower, and
      such
      petition or complaint shall not have been dismissed within 60 days;





(f)  an
      event
      of default shall have occurred with respect to the payment of any material
      indebtedness of the Borrower, including without limitation the indebtedness
      evidenced by the Senior Credit Agreement, or in the performance of any of its
      material obligations, including without limitation any of its material
      obligations under the Senior Credit Agreement or any of the agreements between
      the Company and Ronald M. Popeil and any such event of default shall continue
      for more than any applicable period of grace;





(g)  the
      Lead
      Lender shall not have received completed and executed consents to release of
      medical records of Ronald M. Popeil relating to the Life Insurance Policy
      referred to in the Insurance Agreement within 45 days following the date of
      the
      Initial Closing;




(h)  the
      Lead
      Lender shall not have received a subordination/consent agreement from Ronco
      Inventions, LLC, Popeil Inventions, Inc., RP Productions, Inc., RMP Family
      Trust, and Ronald M. Popeil subordinating payment of Borrower’s indebtedness to
      them to the Loans within 45 days following the Initial Closing; and





(i)  the
      Third
      Closing shall not have occurred within 75 days following the Initial Closing.





-12-


8.  Remedies
      Upon Event of Default .
      If an
      Event of Default shall have occurred and be continuing, then Required Lenders
      (as defined below), or the Lead Lender at the direction of Required Lenders,
      may
      (a) declare the principal of, and all interest then accrued on, the Notes and
      any other liabilities of Borrower owed to Lenders to be forthwith due and
      payable, whereupon the same shall forthwith become due and payable without
      notice, presentment, demand, protest, notice of intention to accelerate, or
      other notice of any kind, all of which Borrower hereby expressly waives,
      anything contained herein or in the Note to the contrary notwithstanding, or
      (b) without notice of default or demand, pursue and enforce any of Lenders’
rights and remedies under the Loan Documents or otherwise provided under or
      pursuant to any applicable law or agreement. “ **Required
      Lenders** ”
means
      (a) the Lead Lender and (b) Lenders whose aggregate principal balance of Notes
      exceeds 66-2/3% of the aggregate principal amount of all Notes.





9.  Collateral .
      Repayment of the Notes shall be secured by a collateral assignment of the Life
      Insurance Policy issued by John Hancock Life Insurance Company on the life
      of
      Ronald M. Popeil, as set forth in that certain Insurance Assignment of even
      date
      herewith.





10.  Miscellaneous .





(a)  No
      Waiver .
      No
      failure to exercise, and no delay on the part of a Lender in exercising any
      right hereunder shall operate as a waiver thereof, nor shall any single or
      partial exercise of any right hereunder preclude any other or further exercise
      thereof or the exercise of any other right. The rights of a Lender hereunder
      and
      under the other Loan Documents shall be in addition to all other rights provided
      by law. No notice or demand given in any case shall constitute a waiver of
      the
      right to take other action in the same, similar or other instances without
      such
      notice or demand.


(b)  Notices .
      All
      notices or other communications required or permitted under any of the Loan
      Documents must be given in writing and must be personally delivered, sent by
      facsimile transmission or mailed by prepaid certified or registered mail, return
      receipt requested, to the party to whom such notice or communication is directed
      at the address of such party as follows:




(i)
              Borrower:
              Ronco
                  Corporation21344
                  Superior StreetChatsworth,
                  California 91311Attention:
                  Chief Financial OfficerTelecopy
                  No.: ________________(ii)
              Lead
                  Lender:
              Sanders
                  Morris Harris Inc.600
                  Travis Street, Suite 3100Houston,
                  Texas 77002Attn:
                  Bruce R. McMakenTelecopy
                  No.: 713-250-4294(iii)
              All
                  other Lenders:
              To
                  the address set forth opposite their name on Schedule
                  1.
  -13-


All
      notices and communications hereunder will be deemed effectively given the
      earlier of (i) when received, (ii) when delivered personally,
      (iii) one business day after being delivered by facsimile (with receipt of
      appropriate confirmation), (iv) one business day after being deposited with
      an overnight courier service of recognized standing, or (v) four days after
      being deposited in the U.S. mail, first class with postage prepaid.





(c)  Knowledge .
      For
      purposes of this Agreement, “Borrower’s knowledge” refers to the knowledge,
      information, and belief of Borrower’s Chief Executive Officer, President, or
      Chief Financial Officer after making inquiry of their respective direct reports
      or other appropriate officers or employees of Borrower reasonably likely to
      have
      knowledge of the matter to which such reference relates.





(d)  Governing
      Law .
      This
      Agreement and the other Loan Documents are being executed and delivered, and
      are
      intended to be performed, in the State of Texas, and the substantive laws of
      Texas shall govern the validity, construction, enforcement and interpretation
      of
      this Agreement and all other Loan Documents, except to the extent: (i) otherwise
      specified therein; or (ii) federal laws governing maximum interest rates
      shall provide for rates of interest higher than those permitted under the laws
      of the State of Texas.





(e)  Invalid
      Provisions .
      If any
      provision of this Agreement is held to be illegal, invalid or unenforceable
      under present or future laws effective during the term of this Agreement, such
      provision shall be fully severable and this Agreement shall be construed and
      enforced as if such illegal, invalid or unenforceable provision had never
      comprised a part of this Agreement, and the remaining provisions of this
      Agreement shall remain in full force and effect and shall not be affected by
      the
      illegal, invalid or unenforceable provision or by its severance from this
      Agreement.





(f)  Entirety
      and Amendments .
      The
      Loan Documents embody the entire agreement between the parties and supersede
      all
      prior agreements and understandings, if any, relating to the subject matter
      hereof and thereof, and no waiver, consent, release, modification, or amendment
      of or supplement to this Agreement or the other Loan Documents shall be valid
      or
      effective against any party hereto unless the same is in writing and signed
      by
      (i) if such party is Borrower, by Borrower, (ii) if such party is \the Lead
      Lender, by such party, and (iii) if such party is a Lender, by such Lender
      or by
      the Lead Lender on behalf of Lenders with the written consent of Required
      Lenders. Notwithstanding the foregoing or anything to the contrary herein,
      the
      Lead Lender shall not, without the prior consent of each individual Lender,
      execute and deliver on behalf of such Lender any waiver or amendment which
      would: (A) waive any of the conditions specified in Section 2(a)(ii), (B)
      increase the maximum amount which such Lender is committed hereunder to lend,
      (C) reduce any fees payable to such Lender hereunder, or the principal of,
      or
      interest on, such Lender’s Note, (D) extend the maturity date or postpone any
      date fixed for any payment of any such fees, principal or interest on such
      Lender’s Note, (E) amend the definition herein of Required Lenders (F) release
      Borrower from its obligation to pay such Lender’s Note, or (G) amend this
      Section 10(f). Notwithstanding the foregoing, Rights Lenders purchasing Notes
      in
      the Third Closing may become parties to this Agreement in accordance with
      Section 1(f) without any amendment of this Agreement pursuant to this
      paragraph or any consent or approval of the Lead Lender.





-14-


(g)  Headings .
      Paragraph and section headings are for convenience of reference only and shall
      in no way affect the interpretation of this Agreement.





(h)  Construction
      and Conflicts .
      The
      provisions of this Agreement shall be in addition to those of the Notes and
      the
      other Loan Documents. Nothing herein contained shall prevent the Required
      Lenders from enforcing the Notes and the Loan Documents in accordance with
      their
      respective terms. To the extent of any conflict or contradiction between the
      terms of this Agreement and the terms of such Lender’s Note or the other Loan
      Documents or any other document executed in connection herewith, the terms
      of
      this Agreement shall control.





(i)  Financial
      Terms .
      As used
      in this Agreement, all financial and accounting terms not otherwise defined
      herein shall be defined and calculated in accordance with generally accepted
      accounting principles consistently applied.





(j)  Expenses
      of Lender .
      Borrower will, on demand, reimburse the Lead Lender for all of its reasonable
      expenses except as otherwise provided herein, including the reasonable fees
      and
      expenses of legal counsel for the Lead Lender, incurred by Lead Lender in
      connection with the preparation, administration, amendment, modification, or
      enforcement of this Agreement, the Note, and the Loan Documents and the
      collection or the attempted collection of the Note.





11.  Confidentiality .
      Each
      Lender acknowledges that the information received by them pursuant to this
      Agreement is confidential and for its use only, and it will not use such
      confidential information in violation of the Securities Act or the Securities
      Exchange Act of 1934, as amended, or reproduce, disclose, or disseminate such
      information to any other person (other than its employees or agents having
      a
      need to know the contents of such information, and its attorneys), except in
      connection with the exercise of rights under this Agreement, unless Borrower
      has
      made such information available to the public generally.





12.  Right
      to Assign .
      A
      Lender may assign the Note issued to such Lender under the terms of this
      Agreement pursuant to the terms of Section 11 of the Note, provided that prior
      to such assignment the assignee agrees in writing to be bound by the terms
      and
      conditions of this Agreement and the other Loan Documents. In case of such
      assignment, Borrower shall accord full recognition thereto and hereby agrees
      that all rights and remedies of such Lender in connection with the Note so
      assigned shall be enforceable against Borrower by the assignee thereof. Other
      than as set forth in the preceding sentence, Lender shall have no right to
      assign all or any portion of its rights, interests, or obligations under this
      Agreement without the prior written consent of the Borrower. Borrower shall
      have
      no right to assign all or any portion of its rights, interests, or obligations
      under this Agreement without the prior written consent of the Lead Lender.
      Notwithstanding the foregoing, the Notes may only be assigned pursuant to this
      Section 12 following the Third Closing and such Notes may not be assigned to
      a
      competitor of Borrower without the prior written consent of
      Borrower.





-15-


13.  Counterparts .
      This
      Agreement may be executed in any number of counterparts and by different parties
      hereto on separate counterparts and each such counterpart shall be deemed to
      be
      an original, but all such counterparts shall together constitute but one and
      the
      same Agreement.





14.  **NO
      ORAL AGREEMENTS** **.
      THIS WRITTEN LOAN AGREEMENT AND THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
      BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
      CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
      UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.**





If
      a
      Lender agrees to the foregoing, such Lender should execute this Agreement in
      the
      space indicated below.





**BORROWER**





**RONCO
      CORPORATION**








By: /s/
      Richard F. Allen,
      Sr.


Name:  
      Richard F. Allen, Sr.


Title:    
      President and Chief Executive Officer








ACCEPTED:





**LENDER**








**SANDERS
      MORRIS HARRIS INC.**





By:_ /s/
      Ben T.
      Morris





Name:
      Ben
      T. Morris





Title:
      Chief Executive Officer








____________________________________





____________________________________


List
      of Loan Documents





1. Letter
      Loan Agreement


2. Promissory
          Note(s)


3. Security
      Agreement


4. Insurance
      Assignment




-16-





SCHEDULE
      1





Lenders





Name
                and Address
            LoanSanders
                Morris Harris Inc.
            $1,500,000
                in the Initial Closing600
                Travis, Suite 3100
            $1,500,000
                in the Second ClosingHouston,
                Texas 77002













-17-


SCHEDULE
      2


Use
      of
      Proceeds





[Please
      provide schedule]











-18-