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 00000 Xxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxx 00000 in favor of
XXXXXXX XXXXXX XXXXXX INC., a Texas corporation, individually and as agent
for
the Lenders (“Secured
Party”),
whose
address is 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000.
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 Xxxx Xxxxxxx Life Insurance on Xxxxxx X. Xxxxxx, 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 Xxxxx
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 Xxxxx
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 Xxxxx 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 Xxxx Xxxxxxx 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 Xxxxx
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 Xxxxx
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 Xxxxx 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 Xxxxx 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
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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 Xxxxx
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)
xxxxx x xxxx 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, xxx 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.
4
(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.
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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.
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(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:
6
(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 Xxxxxxx Xxxxxx Xxxxxx Inc. the amount of any and all
reasonable costs and expenses (including without limitation, attorneys’ fees and
expenses), which Xxxxxxx Xxxxxx Xxxxxx 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 Xxxxxxx Xxxxxx Xxxxxx 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.
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(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.
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(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.
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DEBTOR:
|
|
|
RONCO
CORPORATION
|
|
|
By:
/s/Xxxxxxx X. Xxxxx,
Xx.
|
|
|
Name:
Xxxxxxx X. Xxxxx, Xx.
|
|
|
Title:
President and Chief Executive
Officer
|
11
SCHEDULE
1
TO
DATED
JUNE 9, 2006
The
other
addresses referenced in Subsection 3(e) are as follows:
Ronco
Corporation
00
Xxxxxxxx Xxxx
Xxxx
Xxxxxx, XX 00000
12
