Document:

AMENDMENT
      NO. 1 

    TO
      

    LETTER
      LOAN AGREEMENT 

     

    This Amendment
      No. 1 to Letter Loan Agreement
      (the
“Amendment”)
      is
      made effective as of October 18, 2006 (the “Amendment
      Date”)
      and is
      entered into by and among Ronco Corporation, a Delaware corporation (the
“Borrower”),
      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 to the
      Agreement (as defined below) as Schedule 1
      (each,
      together with the Lead Lender, a “Lender”
      and, collectively,
      the“Lenders”).
      

     

    Capitalized
      terms used in this Amendment that are not otherwise defined herein shall have
      the meanings set forth in the Agreement (as defined below).

     

    Whereas,
      the
      Borrower and the Lenders are parties to that certain Letter Loan Agreement
      dated
      June 9, 2006 (the “Agreement”)
      pursuant to which the Borrower and the Lenders have certain rights and
      obligations;

     

    Whereas, the
      Borrower intends to enter into a Senior Credit Agreement with Laurus Master
      Fund, Ltd (the “Laurus
      Loan”);

     

    Whereas, a
      condition to closing on the Laurus Loan is that the Lead Lender loan an
      additional $1,500,000 to Borrower (the “Lead
      Lender Loan”);

     

    Whereas, certain
      provisions of the Agreement require amendment to facilitate the Lead Lender
      Loan; 

     

    Whereas,
      as
      of the
      date of this Amendment only the Lead Lender and the Borrower were parties to
      the
      Agreement; and

     

    Whereas,
      the
      Agreement may be amended by the Lead Lender and the Borrower. 

     

    Now,
      Therefore,
      in
      consideration of the mutual covenants and obligations set forth herein, and
      for
      other good and valuable consideration, the receipt and sufficiency of which
      is
      hereby acknowledged, the Borrower and the Lenders hereby agree as
      follows:

     

    
      	1.          
               	
              Amendment
                of the Agreement.

            

    

     

    The
      parties hereby agree to amend the terms of the Agreement as of the Amendment
      Date as provided below.

     

    1.1  Amendment
      of Section 1(a).
      The
      form of Initial Note attached to the Agreement as Exhibit A is hereby amended
      and restated in its entirety to read as set forth in Exhibit
      A
      hereto.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.2  Amendment
      of Section 1(b).
      The
      form of Second Note attached to the Agreement as Exhibit B is hereby amended
      and
      restated in its entirety to read as set forth in Exhibit
      B
      hereto.

     

    1.3  Amendment
      of Section 1(c).
      The form
      of Subsequent Note attached to the Agreement as Exhibit C is hereby amended
      and
      restated in its entirety to read as set forth in Exhibit
      C
      hereto.

     

    1.4  Amendment
      of Section 1(f).
      Section
      1(f) is hereby amended and restated in its entirety to read as
      follows:

     

    “(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 forty-five days after the date of the Mailing (as
      defined below). 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.
      Notwithstanding the foregoing, the Borrower and the Lead Lender agree that
      participation by a Rights Lender in the Rights Offering is contingent upon
      such
      Rights Lender agreeing to be bound as a “Subordinated Lender” pursuant to that
      certain Intercreditor and Subordination Agreement between the Lead Lender,
      individually and as agent for the Lenders and Laurus Master Fund, Ltd.”

     

    1.5  Amendment
      of Section 1(g).
      Section
      1(g) is hereby amended and restated in its entirety to read as
      follows:

     

    “(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
      “Rights
      Offering Payment”).
      The
      Lead Lender waives all notice provisions in the Initial Note and the Second
      Note
      with respect to the Rights Offering Payment. 

     

    1.6  Addition
      of Section 1(h).
      The
      Agreement is hereby amended to add Section 1(h) which reads in its entirety
      as
      follows:

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    “(h)
      The
      Lead Lender agrees that it shall invest the Rights Offering Payment in the
      Borrower no later than 30 business days after the date of the Third Closing
      (the
“New
      Investment”);
      provided however that the Borrower and the Lead Lender agree that the New
      Investment shall (i) be in any form mutually acceptable to the Borrower and
      the
      Lead Lender and (ii) in the event that the New Investment is in the form of
      a
      loan by the Lead Lender to the Borrower then such loan shall not mature prior
      to
      the loan made by Laurus Master Fund, Ltd. to the Borrower pursuant to the Senior
      Credit Agreement.”

     

    1.7  Amendment
      of Section 2(a)(ii)(C).
      Section
      2(a)(ii)(C) is hereby amended and restated in its entirety to read as
      follows:

     

    “(C)
      Intentionally Omitted.” 

     

    1.8 Amendment
      of Section 2(a)(ii)(E). Section
      2(a)(ii)(E) is hereby amended and restated in its entirety to read as
      follows:

     

    “(E)
      Intentionally Omitted.” 

     

    1.9  Amendment
      of Section 2(a)(ii)(F). Section
      2(a)(ii)(F) is hereby amended and restated in its entirety to read as
      follows:

     

    “(F)
      the
      Lead Lender shall have received a subordination/consent agreement from Ronco
      Inventions, LLC, Popeil Inventions, Inc., RP Productions, Inc., RMP Family
      Trust, and Ronald M. Popeil subordinating their interest in the Life Insurance
      Policy (as defined below) to the Loans; and the Lead Lender shall have received
      completed and executed consents to release of medical records of Ronald M.
      Popeil relating to the Life Insurance Policy;”

     

    1.10 Amendment
      of Section 3(c). Section
      3(c) is hereby amended and restated in its entirety to read as
      follows:

     

    “(c)
      As
      of the date of the Second Closing, the Borrower has delivered to the Lead Lender
      its consolidated balance sheet as of June 30, 2006 and the related consolidated
      statements of operations and cash flows for the year ended June 30, 2006 and
      stockholders' equity for the year ended June 30, 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.”

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    1.11 Amendment
      of Section 5(a).
      Section
      5(a) is hereby amended and restated in its entirety to read as
      follows:

     

    “(a) To
      the
      extent permissible under applicable federal and state securities laws, by
      the earlier to occur of seven days after (i) December 31, 2006 or (ii) the
      end of the Pricing Period, Borrower shall send 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 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.”

     

    1.12 Addition
      of Section 5(m).
      The
      Agreement is hereby amended to add Section 5(m) which reads in its entirety
      as
      follows:

     

    “(m)
      Borrower shall use reasonable commercial efforts to file Amendment No. 7 to
      Borrower’s Registration Statement on Form SB-2 on Form S-1 (No. 333-127056) no
      later than October 31, 2006, and thereafter shall use reasonable commercial
      efforts to promptly cause such registration statement to be declared effective
      and Borrower shall provide notice of such effectiveness to the stockholders
      listed in the selling stockholder table of such registration statement at such
      stockholder’s address as is shown in the Borrower’s records at the time of such
      notice.”

     

    1.13 Amendment
      of Section 6(c).
      Section
      6(c) is hereby amended and restated in its entirety to read as
      follows:

     

    “(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 (other than the issuance of
      Borrower’s securities pursuant to its settlement with the holders of its Series
      A Convertible Preferred Stock or to Laurus Master Fund, Ltd. in connection
      with
      Borrower’s entrance into a Senior Credit Agreement with Laurus Master Fund,
      Ltd.); or engage in any business, other than the businesses currently engaged
      in
      by Borrower and any business substantially similar or related thereto;”

     

    1.14 Amendment
      of Section 7(g). Section
      7(g) is hereby amended and restated in its entirety to read as
      follows:

     

    “(g) Intentionally
      Omitted;”

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    1.15 Amendment
      of Section 7(h).
      Section
      7(h) is hereby amended and restated in its entirety to read as
      follows:

     

    “(h) Intentionally
      Omitted”

     

    1.16 Amendment
      of Section 7(i).
      Section
      7(i) is hereby amended and restated in its entirety to read as
      follows:

     

    “(i) the
      Third
      Closing shall not have occurred by forty-five days after the date of the
      Mailing.”

     

    1.17 Amendment
      of Section 9.
      Section
      9 is hereby amended and restated in its entirety to read as
      follows:

     

    “9. Collateral.
      Subject
      to that certain Intercreditor and Subordination Agreement between Lead Lender
      and Laurus Master Fund, Ltd. and the collateral assignment of the Life Insurance
      Policy to Laurus Master Fund, Ltd., repayment of the Notes shall be secured
      by
      the Life Insurance Policy issued by John Hancock Life Insurance Company on
      the
      life of Ronald M. Popeil, as set forth in that certain Security Agreement,
      as
      amended, of even date herewith (the “Life
      Insurance Policy”).”

     

    1.18 Amendment
      of Section 10(b)(i).
      Section
      10(b)(i) is hereby amended and restated in its entirety to read as
      follows:

     

    
      	
              
                “(i)
                  Borrower:

              

            	
              Ronco
                Corporation

            
	 	
              61
                Moreland Road

            
	 	
              Simi
                Valley, CA 93065

            
	 	
              Attention:
                Chief Financial Officer

            
	 	
              Telecopy
                No.: (818) 698-6484”

            

    

     

    1.19 General
      Amendment. As
      of the
      Amendment Date, the
      defined term “Loan Documents” as used in the Agreement shall not include the
      Insurance Assignment.

     

    1.20 Use
      of Proceeds.
      Only as
      it applies to the use of proceeds by the Borrower from the Second Loan, the
      parties hereby agree that Schedule
      2
      to the
      Agreement includes the schedule set forth in Exhibit
      D
      hereto.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    2.           
      Note
      Amendment.

     

    2.1 Initial
      Note. The
      parties hereby agree to amend and restate the Initial Note in its entirety
      as of
      the Amendment Date to read as set forth in Exhibit
      A
      hereto
      (the “Amended
      Initial Note”).
      At
      the Second Closing, the Lead Lender shall surrender the predecessor to the
      Amended Initial Note to the Borrower for cancellation. 

     

    3.           
      Miscellaneous.

     

    3.1 Waiver.
      The
      Lenders hereby waive any breach of the Loan Documents, including the Insurance
      Assignment, occurring immediately prior to the Amendment Date. The Lenders
      hereby further waive any Event of Default under the Agreement or the Initial
      Note issued thereunder occurring immediately prior to the Amendment
      Date.

     

    3.2 No
      Other Changes.
      All
      terms of the Agreement (including, without limitation, the provisions of the
      Agreement which apply following termination of the Agreement) shall remain
      in
      full force and effect as amended hereby.

     

    3.3 Governing
      Law. This
      Amendment is being executed and delivered, and is 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 Amendment.

     

    3.4 Invalid
      Provisions.
      If any
      provision of this Amendment are held to be illegal, invalid or unenforceable
      under present or future laws effective during the term of this Amendment, such
      provision shall be fully severable and this Amendment shall be construed and
      enforced as if such illegal, invalid or unenforceable provision had never
      comprised a part of this Amendment, and the remaining provisions of this
      Amendment 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
      Amendment.

     

    3.5 Counterparts.
      This
      Amendment may be executed in any number of counterparts and signatures may
      be
      delivered by facsimile, each of which shall be deemed an original, but both
      of
      which together shall constitute one and the same instrument.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    In
      Witness Whereof,
      the
      parties have caused this Amendment No. 1 to Letter Loan Agreement to be executed
      by their respective authorized officers.

     

    

     

    COMPANY:

     

    RONCO
      CORPORATION 

    

    

    By:
      /s/Paul
      Kabashima                                                  

    Name:
      Paul Kabashima

    Title:
      Interim President and Chief Executive Officer

    

    

    

    

    

    LENDERS:

     

    SANDERS
      MORRIS HARRIS, INC.

     

    By:
      /s/Ben
      T.
      Morris                                                  

    

    Name:
      Ben
      T.
      Morris                                                 

    

    Title:
      Chief
      Executive
      Officer                                    

     

     

     

     

    

      [Signature
        Page to Amendment No. 1 to Letter
        Loan Agreement]ASSIGNMENT
      OF LIFE INSURANCE POLICY

    

    THIS
      ASSIGNMENT OF LIFE INSURANCE POLICY
      (“Assignment”)
      is
      made as of October 18, 2006, in favor of Ronco Corporation, a Delaware
      corporation (the “Assignee”),
      by
      Sanders Morris Harris Inc., a Texas corporation (the “Lead
      Lender”),
      individually and on behalf of the Lenders (the “Lenders,”
and
      collectively with the Lead Lender, the “Assignor”)
      parties to the Letter Loan Agreement dated June 9, 2006 (the “Loan
      Agreement”)
      among
      Assignor and Assignee.

    

    Whereas,
      the
      Assignor and the Assignee are parties to that certain Assignment of Life
      Insurance Policy dated June 9, 2006 (the “Original
      Assignment”)
      pursuant to which the Assignee assigned the Policy (as defined below) to the
      Assignor;

     

    Whereas, the
      Assignee and Laurus Master Fund, Ltd. (“Laurus”) intend to enter into a senior
      credit agreement (the “Laurus
      Loan”);

     

    Whereas, a
      condition to the Laurus Loan is that the Assignee make a collateral assignment
      of the Policy to Laurus; and

     

    Whereas, the
      Assignor must first assign the Policy back to Assignee, so that the Assignee
      may
      make such assignment to Laurus.

     

    Now,
      Therefore,
      in
      consideration of the mutual covenants and obligations set forth herein, and
      for
      other good and valuable consideration, the receipt and sufficiency of which
      is
      hereby acknowledged, the
      Assignor
      does hereby assign, transfer, and set over to Assignee all of Assignor’s right,
      title and interest in and to
      Policy
      No. 81 070 567, issued by John Hancock Life Insurance Company (herein called
      the
“Insurer”)
      and
      any supplementary contracts issued in connection therewith (said policy and
      contracts being herein called the “Policy”),
      upon
      the life of Ronald M. Popeil, and all claims, options, privileges, rights,
      title, and interest therein and thereunder. Assignor by this instrument agrees,
      and Assignee by the acceptance of this Assignment agrees, to the conditions
      and
      provisions herein set forth.

    

    1. It
      is
      expressly agreed that, without detracting from the generality of the foregoing,
      the following specific rights are included in this Assignment and pass by virtue
      hereof:

    

    (a) The
      sole
      right to collect from the Insurer the net proceeds of the Policy when it becomes
      a claim by death or maturity;

    

    (b) The
      sole
      right to surrender the Policy and receive the surrender value thereof at any
      time provided by the terms of the Policy and at such other times as the Insurer
      may allow;

    

    (c) The
      sole
      right to obtain one or more loans or advances on the Policy, either from the
      Insurer or, at any time, from other persons, and to pledge or assign the Policy
      as security for such loans or advances;

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (d) The
      sole
      right to collect and receive all distributions or shares of surplus, dividend
      deposits or additions to the Policy now or hereafter made or apportioned
      thereto, and to exercise any and all options contained in the Policy with
      respect thereto;

    

    (e) The
      sole
      right to exercise all nonforfeiture rights permitted by the terms of the Policy
      or allowed by the Insurer and to receive all benefits and advantages derived
      therefrom;

    

    (f) The
      sole
      right to designate and change the beneficiary of the Policy;

    

    (g) The
      sole
      right to elect any optional mode of settlement permitted by the Policy or
      allowed by the Insurer;

    

    (h) The
      sole
      right to return the Policy for cancellation or redemption;

    

    (i) The
      sole
      right to make deposits for the purpose of paying future premiums on the
      Policy;

    

    (j) The
      sole
      right to change the Policy to a plan of whole life or endowment insurance;
      and

    

    (k) The
      sole
      right to transfer, assign, or otherwise dispose of the Policy.

    

    3. The
      Assignor agrees that this Assignment supersedes the Original Assignment in
      its
      entirety and that the Original Assignment has no further force or
      effect.
      The
      Assignor further agrees that any security interest granted by the Original
      Assignment in the Policy is hereby terminated and the Assignor shall file any
      UCC termination statements necessary to effect such termination and Assignor
      will execute and deliver to Assignee any additional documents or instruments
      as
      Assignee shall reasonably request to evidence such termination.

    

    4. Assignor
      warrants and represents to Assignee that Assignor has not executed any prior
      assignment or pledge of its rights under the Policy and holds full and complete
      power and authority to transfer, pledge and assign its rights, as
      owner and beneficiary
      under the Policy, to Assignee free and clear of any rights of any third party
      whatsoever.

    

    5. The
      Insurer is hereby authorized to recognize Assignee’s claims to rights hereunder
      without investigating the reason for any action taken by Assignee. The sole
      signature of the Assignee shall be sufficient for the exercise of any rights
      under the Policy assigned hereby and the sole receipt of the Assignee for any
      sums received shall be a full discharge and release therefor to the Insurer.
      

    

    6. Assignor
      agrees to execute and deliver all such other and additional instruments and
      documents and do all such other acts and things as may be reasonably necessary
      to more fully effectuate this Assignment, including executing any form of
      assignment document reasonably requested by the Insurer or Laurus.

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    7. In
      the
      event of any conflict between the provisions of this Assignment and provisions
      of the Notes (as defined in the Loan Agreement), the Loan Agreement, or other
      evidence of any liability, with respect to the Policy or rights of collateral
      security therein, the provisions of this Assignment shall prevail.

    

    8. THIS
      ASSIGNMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
      THE
      STATE OF TEXAS AND APPLICABLE FEDERAL LAWS.

    

     

     

     

     

    
 

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF, the undersigned executes and delivers this Assignment as of
      the
      first day written above.

    

    
      	
              ASSIGNOR:

            	
              ASSIGNEE:

            
	 	 
	
              Sanders
                Morris Harris Inc.

            	
              Ronco
                Corporation

            
	 	 
	
              By:
                /s/ Ben T.
                Morris                                
                

            	
              By:
                /s/ Paul
                Kabashima                             
                

            
	
              Name:_________________________

            	
              Name:
                Paul Kabashima

            
	
              Title:__________________________

            	
              Title:
                Interim President and CEO

            

    

    

    

     

    
 

    
      
         

      

      
        4

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