TRANSITION SERVICES AGREEMENT
This
TRANSITION SERVICES AGREEMENT, dated as of June 30, 2005, is
entered
into by and among Ronco Inventions, LLC, a
California limited liability company
("Inventions"), Popeil Inventions, Inc., a
Nevada corporation ("Popeil Inc."),
and RP Productions, Inc. ("RP")
(Inventions, Popeil Inc. and RP being
collectively referred to herein as
"Corporate Sellers") and Ronco Marketing
Corporation, a Delaware corporation
("Purchaser").
BACKGROUND
A.
Corporate Sellers and Purchaser, together with other parties,
have
entered into an Asset Purchase Agreement,
dated December 10, 2004, as amended
and supplemented to the date hereof (the
"Asset Purchase Agreement"), pursuant
to which Purchaser has agreed to purchase
from Corporate Sellers and from
certain other seller parties certain assets
of the business of Corporate Sellers
as set forth in the Asset Purchase
Agreement.
B. In
connection with the Asset Purchase Agreement, Corporate Sellers
and
Purchaser desire to enter into this
Agreement to set forth their mutual
understanding and agreement concerning the
handling and transfer to Purchaser of
certain amounts on deposit from time to
time after the Closing in certain bank
accounts of Corporate Sellers maintained at
Mellon 1st Business Bank, N.A.
("Mellon Bank") all as provided herein.
C. All
capitalized terms not otherwise defined herein shall have the
meanings given such terms in the Asset
Purchase Agreement.
AGREEMENT
In
consideration of the mutual covenants contained herein, and for
other
good and valuable consideration, the
receipt and sufficiency of which is hereby
acknowledged, the parties agree as
follows:
1. Cash in
Seller Accounts. Until all checks or other debits written or
initiated prior to the Closing against
amounts in the accounts of Corporate
Sellers at Mellon Bank listed on Schedule A
hereto (the "Seller Accounts") have
cleared, but in no event later than August
15, 2005 (the period from the Closing
to August 15, 2005 being referred to as the
"Transition Period"), Corporate
Sellers shall (i) maintain the existence of
the Seller Accounts, (ii) permit
such uncleared checks or debits to clear or
otherwise be processed through the
Seller Accounts in the ordinary course, and
(iii) provide Purchaser with weekly
reports of the amounts on deposit in the
Seller Accounts and the withdrawals
from such accounts with respect to such
checks or debits. Purchaser and its
representatives shall not access the Seller
Accounts or withdraw any amounts on
deposit in such accounts during the
Transition Period. At the conclusion of the
Transition Period, Corporate Sellers shall
cause all amounts remaining on
deposit in the Seller Accounts, less (a)
the amount (if any) necessary to cover
any such checks or debits that have not
cleared as of such time and (b) the
amount of any Collateral (as defined below)
that is subject to a security
interest in favor of Mellon Bank as of such
time, to be transferred to
Purchaser, as reasonably directed by
Purchaser and at Purchaser's sole cost and
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expense. Purchaser shall promptly reimburse
Corporate Sellers for all costs
associated with the Seller Accounts
incurred during the Transition Period.
2.
Collateral for Letters of Credit. Purchaser acknowledges that,
pursuant
to a termination letter dated as of June
29, 2005 from Mellon Bank, Mellon Bank
has retained a security interest in
$150,616.96 (the "Collateral") as collateral
for certain letters of credit, and such
Collateral is and may continue to be on
deposit in one or more of the Seller
Accounts. Notwithstanding anything to the
contrary in this Agreement, Corporate
Sellers shall not be required to deliver
the Collateral to Purchaser until such time
as Me
