Document:

SECURITY
      AGREEMENT

    

    THIS
      SECURITY AGREEMENT
      (“Agreement”)
      is
      made as of June 9, 2006, by RONCO CORPORATION, a Delaware corporation
      (hereinafter called “Debtor”),
      whose
      address is 21344 Superior Street, Chatsworth, California 91311 in favor of
      SANDERS MORRIS HARRIS INC., a Texas corporation, individually and as agent
      for
      the Lenders (“Secured
      Party”),
      whose
      address is 600 Travis Street, Suite 3100, Houston, Harris County, Texas 77002.
      Debtor hereby agrees with Secured Party as follows:

    

    1. Definitions.
      As used
      in this Agreement, the following terms shall have the meanings indicated
      below:

    

    (a) The
      term
“Borrower”
means
      Debtor.

    

    (b) The
      term
“Collateral”
means
      all of Debtor’s right, title, and interest in and to the life insurance policy
      issued by John Hancock Life Insurance on Ronald M. Popeil, and all products
      and
      proceeds of the foregoing. The designation of proceeds does not authorize Debtor
      to sell, transfer, or otherwise convey any of the foregoing property.

    

    (c) The
      term
“Indebtedness”
means
      the outstanding principal amount of and all accrued and unpaid interest on
      the
      promissory notes executed by Borrower and payable to the order of Secured Party
      under the Loan Agreement (as hereinafter defined) (the “Notes”); and (ii) all
      obligations of Borrower to Secured Party under any documents evidencing,
      securing, governing and/or pertaining to all or any part of the indebtedness
      described in (i) above.

    

    (d) The
      term
“Lenders”
means
      Lenders as defined in the Loan Agreement.

    

    (e) The
      term
“Loan
      Documents”
means
      this Agreement, the Letter Loan Agreement dated as of the date hereof (the
“Loan
      Agreement”), among the Borrower and the Lenders, the Note, and the Insurance
      Assignment (as defined in the Loan Agreement).

    

    2. Security
      Interest.
      As
      security for the Indebtedness, Debtor, for value received, hereby pledges and
      grants to Secured Party a continuing security interest in the Collateral.

    

    3. Representations
      and Warranties.
      In
      addition to any representations and warranties of Debtor set forth in the Loan
      Documents, which are incorporated herein by this reference, Debtor hereby
      represents and warrants the following to Secured Party as of the date
      hereof:

    

    (a) Accuracy
      of Information.
      To the
      knowledge of Debtor, all information heretofore or herein supplied to Secured
      Party in writing by or on behalf of Debtor with respect to the Collateral is
      true and correct in all material respects.

    

    (b) Ownership
      and Liens.
      Debtor
      has good and marketable title to the Collateral free and clear of all liens,
      security interests, encumbrances or adverse claims (collectively “Liens”),
      except for liens held by Wells
      Fargo Bank, National Association, Prestige Capital Corporation, Laurus Master
      Fund, Ltd.
      and
      Permitted Liens (as defined in the Loan 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Agreement).
      To Debtor’s knowledge, no dispute, right of setoff, counterclaim, or defense
      exists with respect to all or any part of the Collateral. Except with respect
      to
      the Security Agreement Securities Account between Ronco Corporation and Wells
      Fargo Bank National Association and the Purchase and Sale Agreement by and
      between Prestige Capital Corporation and Ronco Corporation dated as of October
      25, 2005, Debtor has not executed any other security agreement currently
      affecting the Collateral and no effective financing statement or other
      instrument similar in effect covering all or any part of the Collateral (other
      than filed on behalf of Wells Fargo Bank, National Association or Prestige
      Capital Corporation) is on file in any recording office except as may have
      been
      executed or filed in favor of Secured Party. 

    

    (c) No
      Conflicts or Consents.
      Neither
      the ownership, the intended use of the Collateral by Debtor, the grant of the
      security interest by Debtor to Secured Party herein nor the exercise by Secured
      Party of its rights or remedies hereunder, will (i) materially conflict with
      any
      provision of (A) to Debtor’s knowledge, any domestic or foreign law, statute,
      rule or regulation, (B) the certificate of incorporation or bylaws of Debtor,
      or
      (C) to Debtor’s knowledge, any agreement, judgment, license, order, or permit
      applicable to or binding upon Debtor, or (ii) to Debtor’s knowledge, result in
      or require the creation of any material Lien upon any assets or properties
      of
      Debtor or of any person except as may be expressly contemplated in the Loan
      Documents. Except as expressly contemplated in the Loan Documents, no consent,
      approval, authorization, or order of, and no notice to or filing with, any
      court, governmental authority, or third party, other than John Hancock Life
      Insurance, by Debtor is required in connection with the grant by Debtor of
      the
      security interest herein or the exercise by Secured Party of its rights and
      remedies hereunder.

    

    (d) Security
      Interest.
      Debtor
      has full right, power, and authority to grant a security interest in the
      Collateral to Secured Party in the manner provided herein, free and clear of
      any
      Liens, except for liens held by Wells
      Fargo Bank, National Association, Prestige Capital Corporation, Laurus Master
      Fund, Ltd.
      and
      Permitted Liens. Subject to any security interest that as of the date of this
      Agreement has a higher priority, this Agreement creates a legal, valid, and
      binding security interest in favor of Secured Party in the Collateral securing
      the Indebtedness. 

    

    (e) Location.
      Debtor’s residence or chief executive office, as the case may be, and the office
      where the records concerning the Collateral are kept is located at its address
      set forth on the first page hereof or the addresses specified on Schedule
      1
      to this
      Agreement. Except as specified elsewhere herein, all Collateral shall be kept
      at
      such address. 

    

    (f) Solvency
      of Debtor.
      As of
      the date hereof, and after giving effect to this Agreement and the completion
      of
      all other transactions contemplated by Debtor at the time of the execution
      of
      this Agreement, (i) Debtor is and will be solvent, (ii) the fair saleable value
      of Debtor’s assets exceeds and will continue to exceed Debtor’s liabilities
      (both fixed and contingent), and (iii) subject to consummation of the
      transactions contemplated by the Loan Agreement, including Section 2(a)(ii)(G)
      of the Loan Agreement, Debtor will have sufficient capital to carry on Debtor’s
      businesses and all businesses in which Debtor is about to engage.

    

    
      
         

      

      
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    4. Affirmative
      Covenants.
      In
      addition to all covenants and agreements of Debtor set forth in the Loan
      Documents, which are incorporated herein by this reference, Debtor will comply
      with the covenants contained in this Section
      4
      at all
      times during the period of time this Agreement is effective unless Secured
      Party
      shall otherwise consent in writing.

    

    (a) Ownership
      and Liens.
      Other
      than assignment of the Collateral pursuant to the provisions of the Insurance
      Assignment, Debtor will maintain good and marketable title to all Collateral
      free and clear of all Liens, except for Liens held by Wells
      Fargo Bank, National Association, Prestige Capital Corporation, Laurus Master
      Fund, Ltd.
      and the
      Permitted Liens. Debtor will cause any financing statement or other security
      instrument with respect to the Collateral, other than those held by Wells Fargo
      Bank, National Association and Prestige Capital Corporation, to be terminated,
      except as may exist or as may have been filed in favor of Secured Party. Debtor
      will defend at its reasonable expense Secured Party’s right, title and security
      interest in and to the Collateral against the claims of any third party other
      than Wells Fargo Bank, National Association, Laurus Master Fund, Ltd. and
      Prestige Capital Corporation.

    

    (b) Further
      Assurances.
      Debtor
      will from time to time at its expense promptly execute and deliver all further
      instruments and documents and take all further action necessary or appropriate
      or that Secured Party may reasonably request in order (i) to perfect and protect
      the security interest created or purported to be created hereby and the priority
      of such security interest, (ii) to enable Secured Party to exercise and enforce
      its rights and remedies hereunder in respect of the Collateral, and (iii) to
      otherwise effect the purposes of this Agreement, including without limitation
      executing and filing such financing or continuation statements, or amendments
      thereto.

    

    (c) Inspection
      of Collateral.
      Debtor
      will keep adequate records concerning the Collateral and will permit Secured
      Party and all representatives and agents appointed by Secured Party to inspect
      the Collateral upon reasonable prior notice during normal business hours, to
      make and take away photocopies or photographs thereof and to write down and
      record any such information.

    

    (d) Payment
      of Taxes.
      Debtor
      (i) will pay prior to delinquency all lawful claims which, if unpaid, might
      become a lien or charge upon the Collateral or any part thereof, and (ii) will
      maintain appropriate accruals and reserves for all such liabilities in a timely
      fashion in accordance with generally accepted accounting principles. Debtor
      may,
      however, delay paying or discharging any such taxes, assessments, charges,
      claims or liabilities so long as the validity thereof is contested in good
      faith
      by proper proceedings and provided Debtor has set aside on Debtor’s books
      adequate reserves therefor. 

     

    5. Negative
      Covenants.
      Debtor
      will comply with the covenants contained in this Section
      5
      at all
      times during the period of time this Agreement is effective, unless Secured
      Party shall otherwise consent in writing.

    

    
      
         

      

      
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    (a) Transfer
      or Encumbrance.
      Debtor
      will not other than pursuant to the Insurance Assignment and subject to the
      rights of Wells
      Fargo Bank, National Association, Laurus Master Fund, Ltd., Prestige Capital
      Corporation
      and the
      holders of Permitted Liens, (i) sell, assign (by operation of law or otherwise),
      transfer, exchange, lease or otherwise dispose of any of the Collateral, (ii)
      grant a lien or security interest in or execute, file or record any financing
      statement or other security instrument with respect to the Collateral to any
      party other than Secured Party, or (iii) deliver actual or constructive
      possession of any of the Collateral to any party other than Secured
      Party.

    

    (b) Impairment
      of Security Interest.
      Debtor
      will not take or fail to take any action which would in any manner impair the
      value or enforceability of Secured Party’s security interest in any
      Collateral.

    

    (c)  Financing
      Statement Filings.
      Debtor
      recognizes that financing statements pertaining to the Collateral have been
      or
      may be filed where Debtor maintains any Collateral, has its records concerning
      any Collateral or has its residence or chief executive office, as the case
      may
      be. Without limitation of any other covenant herein, Debtor will not cause
      or
      permit any change in the location of (i) any Collateral, (ii) any records
      concerning any Collateral, or (iii) Debtor’s residence or chief executive
      office, as the case may be, to a jurisdiction other than as represented in
      Subsection
      3(e)
      unless
      Debtor shall have notified Secured Party in writing of such change at least
      thirty (30) days prior to the effective date of such change, and shall have
      first taken all action required by Secured Party for the purpose of further
      perfecting or protecting the security interest in favor of Secured Party in
      the
      Collateral. In any written notice furnished pursuant to this Subsection, Debtor
      will expressly state that the notice is required by this Agreement and contains
      facts that may require additional filings of financing statements or other
      notices for the purpose of continuing perfection of Secured Party’s security
      interest in the Collateral.

    

    6. Rights
      of Secured Party.
      Secured
      Party shall have the rights contained in this Section
      6
      at all
      times during the period of time this Agreement is effective. 

    

    (a) Additional
      Financing Statements Filings.
      Debtor
      hereby authorizes Secured Party to file, without the signature of Debtor, one
      or
      more financing or continuation statements, and amendments thereto, relating
      to
      the Collateral. Debtor further agrees that a carbon, photographic or other
      reproduction of this Security Agreement or any financing statement describing
      any Collateral is sufficient as a financing statement and may be filed in any
      jurisdiction Secured Party may deem appropriate.

    

    (b) Power
      of Attorney.
      Debtor
      hereby irrevocably appoints Secured Party as Debtor’s attorney-in-fact, such
      power of attorney being coupled with an interest, with full authority in the
      place and stead of Debtor and in the name of Debtor or otherwise, to: (i) to
      execute and file financing or continuation statements, or amendments thereto
      in
      the name of Debtor, (ii) to demand, collect, sue for, recover, compound, receive
      and give acquittance and receipts for moneys due and to become due under or
      in
      respect of the Collateral; and (iii) to file any claims or take any action
      or
      institute any proceedings which Secured Party may deem necessary for the
      collection and/or preservation of the Collateral or otherwise to enforce the
      rights of Secured Party with respect to the Collateral; provided,
      however,
      that
      Secured Party shall not exercise any such powers granted pursuant to subsections
      (ii) and (iii) prior to the occurrence of an Event of Default (as defined below)
      and shall only exercise such powers during the continuance of an Event of
      Default. 

    

    
      
         

      

      
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    (c) Performance
      by Secured Party.
      If
      Debtor fails to perform any agreement or obligation provided herein, Secured
      Party may itself perform, or cause performance of, such agreement or obligation,
      and the expenses of Secured Party incurred in connection therewith shall be
      a
      part of the Indebtedness, secured by the Collateral and payable by Debtor on
      demand; provided,
      however,
      that
      Secured Party shall not exercise any such powers prior to the occurrence of
      an
      Event of Default and shall only exercise such powers during the continuance
      of
      an Event of Default.

    

    (d) Debtor’s
      Receipt of Proceeds.
      All
      amounts and proceeds (including instruments and writings) received by Debtor
      in
      respect of the Collateral shall be received in trust for the benefit of Secured
      Party hereunder and, upon request of Secured Party, shall be segregated from
      other property of Debtor and shall be forthwith delivered to Secured Party
      in
      the same form as so received (with any necessary endorsement) and applied to
      the
      Indebtedness in such manner as Secured Party deems appropriate in its sole
      discretion. Notwithstanding the foregoing, all amounts and proceeds in respect
      of the Collateral received by Secured Party in excess of the Indebtedness shall
      be promptly paid to Debtor. 

    

    7. Events
      of Default.
      Each of
      the following constitutes an “Event
      of Default”
under
      this Agreement:

    

    (a)  Default
      under Loan Agreement.
      Debtor
      shall be deemed in default under this Security Agreement upon the occurrence
      and
      during the continuance of an Event of Default (as defined in the Loan
      Agreement);

    

    (b) Execution
      on Collateral.
      The
      Collateral or any portion thereof is taken on execution or other process of
      law
      in any action against Debtor; or

    

    (c) Abandonment.
      Debtor
      abandons the Collateral or any portion thereof.

     

    8. Remedies
      and Related Rights.
      If an
      Event of Default shall have occurred and be continuing, and without limiting
      any
      other rights and remedies provided herein, under any of the other Loan Documents
      or otherwise available to Secured Party, Secured Party may exercise one or
      more
      of the rights and remedies provided in this Section.

    

    (a) Remedies.
      Secured
      Party may from time to time at its discretion, without limitation and without
      notice except as expressly provided in any of the Loan Documents:

    

    (i) exercise
      in respect of the Collateral all the rights and remedies of a secured party
      under the Uniform Commercial Code of the State of Texas;

    

    
      
         

      

      
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    (ii) require
      Debtor to, and Debtor hereby agrees that it will at its expense and upon request
      of Secured Party, assemble the Collateral as directed by Secured Party and
      make
      it available to Secured Party at a place to be designated by Secured Party
      which
      is reasonably convenient to both parties;

    

    (iii) reduce
      its claim to judgment or foreclose or otherwise enforce, in whole or in part,
      the security interest granted hereunder by any available judicial
      procedure;

    

    (iv) sell
      or
      otherwise dispose of, at its office, on the premises of Debtor or elsewhere,
      the
      Collateral, as a unit or in parcels, by public or private proceedings, and
      by
      way of one or more contracts (it being agreed that the sale or other disposition
      of any part of the Collateral shall not exhaust Secured Party’s power of sale,
      but sales or other dispositions may be made from time to time until all of
      the
      Collateral has been sold or disposed of or until the Indebtedness has been
      paid
      and performed in full), and at any such sale or other disposition it shall
      not
      be necessary to exhibit any of the Collateral;

    

    (v) buy
      the
      Collateral, or any portion thereof, at any public sale;

    

    (vi) buy
      the
      Collateral, or any portion thereof, at any private sale if the Collateral is
      of
      a type customarily sold in a recognized market or is of a type which is the
      subject of widely distributed standard price quotations;

    

    (vii) apply
      for
      the appointment of a receiver for the Collateral, and Debtor hereby consents
      to
      any such appointment; and

    

    (viii) at
      its
      option, retain the Collateral in satisfaction of the Indebtedness whenever
      the
      circumstances are such that Secured Party is entitled to do so.

    

    
      	 	
              Debtor
                agrees that in the event Debtor is entitled to receive any notice
                under
                the Uniform Commercial Code, as it exists in the state governing
                any such
                notice, of the sale or other disposition of any Collateral, reasonable
                notice shall be deemed given when such notice is deposited in a depository
                receptacle under the care and custody of the United States Postal
                Service,
                postage prepaid, at Debtor’s address set forth on the first page hereof,
                fifteen (15) days prior to the date of any public sale, or after
                which a
                private sale, of any of such Collateral is to be held. Secured Party
                shall
                not be obligated to make any sale of Collateral regardless of notice
                of
                sale having been given. Secured Party may adjourn any public or private
                sale from time to time by announcement at the time and place fixed
                therefor, and such sale may, without further notice, be made at the
                time
                and place to which it was so
                adjourned.

            

    

    

    (b) Application
      of Proceeds.
      If any
      Event of Default shall have occurred, Secured Party may at its discretion apply
      or use any cash held by Secured Party as Collateral, and any cash proceeds
      received by Secured Party in respect of any sale or other disposition of,
      collection from, or other realization upon, all or any part of the Collateral
      as
      follows in such order and manner as Secured Party may elect:

    

    
      
         

      

      
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    (i) to
      the
      repayment or reimbursement of the reasonable costs and expenses (including,
      without limitation, reasonable attorneys’ fees and expenses) incurred by Secured
      Party in connection with (A) the administration of the Loan Documents, (B)
      the
      custody, preservation, use or operation of, or the sale of, collection from,
      or
      other realization upon, the Collateral, and (C) the exercise or enforcement
      of
      any of the rights and remedies of Secured Party hereunder;

    

    (ii) to
      the
      payment or other satisfaction of any liens and other encumbrances upon the
      Collateral;

    

    (iii) to
      the
      satisfaction of the Indebtedness;

    

    (iv) by
      continuing to hold such cash and proceeds as Collateral under this
      Agreement;

    

    (v) to
      the
      payment of any other amounts required by applicable law; and

    

    (vi) by
      delivery to Debtor or any other party lawfully entitled to receive such cash
      or
      proceeds whether by direction of a court of competent jurisdiction or
      otherwise.

    

    (c) Deficiency.
      In the
      event that the proceeds of any sale of, collection from, or other realization
      upon, all or any part of the Collateral by Secured Party are insufficient to
      pay
      all amounts to which Secured Party is legally entitled, Borrower and any party
      who guaranteed or is otherwise obligated to pay all or any portion of the
      Indebtedness shall be liable for the deficiency, together with interest thereon
      as provided in the Loan Documents.

    

    (d) Other
      Recourse.
      To the
      extent permitted by applicable law, Debtor waives any right to require Secured
      Party to proceed against any third party, exhaust any Collateral or other
      security for the Indebtedness, or to have any third party joined with Debtor
      in
      any suit arising out of the Indebtedness or any of the Loan Documents, or pursue
      any other remedy available to Secured Party. Until all of the Indebtedness
      shall
      have been paid in full, Debtor shall have no right of subrogation and Debtor
      waives the right to enforce any remedy which Secured Party has or may hereafter
      have against any third party, and waives any benefit of and any right to
      participate in any other security whatsoever now or hereafter held by Secured
      Party. 

    

    9. Indemnity.
      Debtor
      hereby indemnifies and agrees to hold harmless Secured Party, and its officers,
      directors, employees, agents and representatives (each an “Indemnified
      Person”)
      from
      and against any and all liabilities, obligations, claims, losses, damages,
      penalties, actions, judgments, suits, costs, expenses or disbursements of any
      kind or nature (collectively, the “Claims”)
      which
      may be imposed on, incurred by, or asserted against, any Indemnified Person
      arising in 

     

    
      
         

      

      
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    connection
      with this Agreement,
      except
      to the extent that any such indemnified liability is finally determined by
      a
      court of competent jurisdiction to have resulted solely from such Indemnified
      Person’s gross negligence or willful misconduct.
      The
      indemnification provided for in this Section shall survive the termination
      of
      this Agreement and shall extend and continue to benefit each individual or
      entity who is or has at any time been an Indemnified Person hereunder.
Each
      Indemnified Person shall give notice to Debtor promptly after such Indemnified
      Person has actual knowledge of any claim as to which indemnity may be sought,
      and shall permit the Debtor to assume the defense of such claim or any
      litigation resulting therefrom; provided
      that
      counsel for the Debtor, who shall conduct the defense of such claim or any
      litigation resulting therefrom, shall be approved by the Indemnified Person
      (whose approval shall not be unreasonably withheld), and the Indemnified Person
      may participate in such defense at such party’s expense; and provided further
      that the
      failure of any Indemnified Person to give notice as provided herein shall not
      relieve Debtor of its obligations under this Section 9, to the extent such
      failure is not prejudicial. Debtor, in the defense of any such claim or
      litigation, shall not, except with the consent of each Indemnified Person,
      consent to entry of any judgment or enter into any settlement that does not
      include as an unconditional term thereof the giving by the claimant or plaintiff
      to such Indemnified Person of a release from all liability in respect to such
      claim or litigation. Each Indemnified Person shall furnish such information
      regarding itself or the claim in question as Debtor may reasonably request
      in
      writing and as shall be reasonably required in connection with defense of such
      claim and litigation resulting therefrom. 

    

    10. Miscellaneous.

    

    (a) Entire
      Agreement.
      This
      Agreement contains the entire agreement of Secured Party and Debtor with respect
      to the Collateral. If the parties hereto are parties to any prior agreement,
      either written or oral, relating to the Collateral, the terms of this Agreement
      shall amend and supersede the terms of such prior agreements as to transactions
      on or after the effective date of this Agreement, but all security agreements,
      financing statements, guaranties, other contracts and notices for the benefit
      of
      Secured Party shall continue in full force and effect to secure the Indebtedness
      unless Secured Party specifically releases its rights thereunder by separate
      release.

    

    (b) Amendment.
      No
      modification, consent or amendment of any provision of this Agreement shall
      be
      valid or effective unless the same is in writing and signed by the party against
      whom it is sought to be enforced.

    

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

    

    (d) Actions
      by Secured Party.
      The
      lien, security interest and other security rights of Secured Party hereunder
      shall not be impaired by (i) any renewal, extension, increase or modification
      with respect to the Indebtedness, (ii) any surrender, compromise, release,
      renewal, extension, exchange or substitution which Secured Party may grant
      with
      respect to the Collateral, or (iii) any release or indulgence granted to any
      endorser, guarantor or surety of the Indebtedness. The taking of additional
      security by Secured Party shall not release or impair the lien, security
      interest or other security rights of Secured Party hereunder or affect the
      obligations of Debtor hereunder.

    

    
      
         

      

      
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    (e) Waiver
      by Secured Party.
      Secured
      Party may waive any Event of Default without waiving any other prior or
      subsequent Event of Default. Secured Party may remedy any default without
      waiving the Event of Default remedied. Neither the failure by Secured Party
      to
      exercise, nor the delay by Secured Party in exercising, any right or remedy
      upon
      any Event of Default shall be construed as a waiver of such Event of Default
      or
      as a waiver of the right to exercise any such right or remedy at a later date.
      No single or partial exercise by Secured Party of any right or remedy hereunder
      shall exhaust the same or shall preclude any other or further exercise thereof,
      and every such right or remedy hereunder may be exercised at any time. No waiver
      of any provision hereof or consent to any departure by Debtor therefrom shall
      be
      effective unless the same shall be in writing and signed by Secured Party and
      then such waiver or consent shall be effective only in the specific instances,
      for the purpose for which given and to the extent therein specified. No notice
      to or demand on Debtor in any case shall of itself entitle Debtor to any other
      or further notice or demand in similar or other circumstances. 

    

    (f) Costs
      and Expenses.
      Debtor
      will upon demand pay to Sanders Morris Harris Inc. the amount of any and all
      reasonable costs and expenses (including without limitation, attorneys’ fees and
      expenses), which Sanders Morris Harris Inc. may incur in connection with (i)
      the
      transactions which give rise to this Agreement, (ii) the preparation of this
      Agreement and the perfection and preservation of the security interests granted
      under the this Agreement, (iii) the administration of this Agreement, (iv)
      the
      custody, preservation, use or operation of, or the sale of, collection from,
      or
      other realization upon, the Collateral, (v) the exercise or enforcement of
      any
      of the rights of Sanders Morris Harris Inc. under this Agreement, or (vi) the
      failure by Debtor to perform or observe any of the provisions
      hereof.

    

    (f) GOVERNING
      LAW.
      THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
      OF
      THE STATE OF TEXAS AND APPLICABLE FEDERAL LAWS, EXCEPT TO THE EXTENT PERFECTION
      AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST GRANTED
      HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL, ARE GOVERNED BY THE LAWS
      OF
      A JURISDICTION OTHER THAN THE STATE OF TEXAS. 

    

    (g) Venue.
      This
      Agreement has been entered into in the county in Texas where Secured Party’s
      address for notice purposes is located, and it shall be performable for all
      purposes in such county. Courts within the State of Texas shall have
      jurisdiction over any and all disputes arising under or pertaining to this
      Agreement and venue for any such disputes shall be in the county or judicial
      district where this Agreement has been executed and delivered.

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    (h) Severability.
      If any
      provision of this Agreement is held by a court of competent jurisdiction to
      be
      illegal, invalid or unenforceable under present or future laws, such provision
      shall be fully severable, shall not impair or invalidate the remainder of this
      Agreement and the effect thereof shall be confined to the provision held to
      be
      illegal, invalid or unenforceable.

    

    (i) Notices.
      All
      notices, requests, demands or other communications required or permitted to
      be
      given pursuant to this Agreement shall be in writing and given by (i) personal
      delivery, (ii) expedited delivery service with proof of delivery, or (iii)
      United States mail, postage prepaid, registered or certified mail, return
      receipt requested, sent to the intended addressee at the address set forth
      on
      the first page hereof or to such different address as the addressee shall have
      designated by written notice sent pursuant to the terms hereof and shall be
      deemed to have been received either, in the case of personal delivery, at the
      time of personal delivery, in the case of expedited delivery service, as of
      the
      date of first attempted delivery at the address and in the manner provided
      herein, or in the case of mail, five days after deposit in a depository
      receptacle under the care and custody of the United States Postal Service.
      Either party shall have the right to change its address for notice hereunder
      to
      any other location within the continental United States by notice to the other
      party of such new address at least thirty (30) days prior to the effective
      date
      of such new address.

    

    (j) Binding
      Effect and Assignment.
      This
      Agreement (i) creates a continuing security interest in the Collateral, (ii)
      shall be binding on Debtor and the successors and assigns of Debtor, and (iii)
      shall inure to the benefit of Secured Party and its successors and assigns.
      The
      Secured Party may assign the Note issued to such Secured Party under the terms
      of the Loan 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.
      Secured
      Party’s rights and obligations hereunder may not be assigned or otherwise
      transferred without the prior written consent of the Debtor. Debtor’s rights and
      obligations hereunder may not be assigned or otherwise transferred without
      the
      prior written consent of Secured Party.

    

    (k) Cumulative
      Rights.
      All
      rights and remedies of Secured Party hereunder are cumulative of each other
      and
      of every other right or remedy which Secured Party may otherwise have at law
      or
      in equity or under any of the other Loan Documents, and the exercise of one
      or
      more of such rights or remedies shall not prejudice or impair the concurrent
      or
      subsequent exercise of any other rights or remedies.

    

    (l) Termination
      of Security Interest.
      Upon
      the payment in full of all Indebtedness, the security interest granted herein
      shall terminate and all rights to the Collateral shall revert to Debtor. Upon
      such termination Secured Party hereby authorizes Debtor to file any UCC
      termination statements necessary to effect such termination and Secured Party
      will execute and deliver to Debtor any additional documents or instruments
      as
      Debtor shall reasonably request to evidence such termination.

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    (m) Descriptive
      Headings.
      The
      headings in this Agreement are for convenience only and shall in no way enlarge,
      limit or define the scope or meaning of the various and several provisions
      hereof.

    

    EXECUTED
      as of the date first written above.

    

    
      	 	
              DEBTOR:

            
	 	 
	 	
              RONCO
                CORPORATION

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

            
	 	
              Name:
                Richard F. Allen, Sr.

            
	 	
              Title:
                President and Chief Executive
                Officer

            

    

    

    

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    
 

    SCHEDULE
      1

    TO

    SECURITY
      AGREEMENT

    DATED
      JUNE 9, 2006

    

    

    

    

    

    The
      other
      addresses referenced in Subsection 3(e) are as follows:

    

    Ronco
      Corporation

    61
      Moreland Road

    Simi
      Valley, CA 93065

    

    

    

    
      
         

      

      
        12LETTER
      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
      office.
      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
                  Corporation

              
	 	 	
                21344
                  Superior Street

              
	 	 	
                Chatsworth,
                  California 91311

              
	 	 	
                Attention:
                  Chief Financial Officer

              
	 	 	
                Telecopy
                  No.: ________________

              
	 	 	 
	
                (ii)

              	
                Lead
                  Lender:

              	
                Sanders
                  Morris Harris Inc. 

              
	 	 	
                600
                  Travis Street, Suite 3100

              
	 	 	
                Houston,
                  Texas 77002

              
	 	 	
                Attn:
                  Bruce R. McMaken

              
	
              	
              	
                Telecopy
                  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

            	
              Loan

            
	 	 
	 	 
	
              Sanders
                Morris Harris Inc.

            	
              $1,500,000
                in the Initial Closing

            
	
              600
                Travis, Suite 3100

            	
              $1,500,000
                in the Second Closing 

            
	
              Houston,
                Texas 77002

            	 

    

     

     

     

     

    
 

    
      
         

      

      
        -17-

        
          

        

      

      
         

      

    

    SCHEDULE
      2

    Use
      of
      Proceeds

    

    [Please
      provide schedule]

     

     

     

    
 

    
      
         

      

      
        -18-

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