ASSIGNMENT OF LIFE INSURANCE POLICY
THIS
ASSIGNMENT OF LIFE INSURANCE POLICY
(“Assignment”)
is
made as of June 9, 2006, by Ronco Corporation, a Delaware corporation
(hereinafter called “Assignor),
whose
address is ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ in
favor
of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Inc., a Texas corporation (“Lead
Lender”),
individually and on behalf of the Lenders (“Lenders”)
parties to the Letter Loan Agreement dated as of the date hereof, among Assignor
and such Lenders (the “Loan
Agreement”),
whose
address is ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
In
consideration of certain financial accommodations extended by Lenders to
Assignor, Assignor does hereby assign, transfer, and set over to Lenders all
of
Assignor’s right, title and interest in and to
Policy
No. 81 070 567, issued by ▇▇▇▇ ▇▇▇▇▇▇▇ Life Insurance Company (herein called
the
“Insurer”)
and
any supplementary contracts issued in connection therewith (said policy and
contracts being herein called the “Policy”),
upon
the life of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, and all claims, options, privileges, rights,
title, and interest therein and thereunder (except as provided in Paragraph
2
hereof),
subject to all the terms and conditions of the Policy and to all superior liens,
if any, which the Insurer, ▇▇▇▇▇ Fargo Bank, National Association, Prestige
Capital Corporation, Laurus Master Fund, Ltd. or the holders of Permitted Liens
(as defined in the Loan Agreement) (collectively, the “Lienholders”)
may
have against the Policy. Assignor by this instrument agrees, and Lenders by
the
acceptance of this Assignment agree, to the conditions and provisions herein
set
forth.
1. Subject
to the terms and conditions of the Policy, it is expressly agreed that, without
detracting from the generality of the foregoing, the following specific rights
are included in this Assignment and pass by virtue hereof:
(a) The
sole
right to collect from the Insurer the net proceeds of the Policy when it becomes
a claim by death or maturity;
(b) The
sole
right to surrender the Policy and receive the surrender value thereof at any
time provided by the terms of the Policy and at such other times as the Insurer
may allow;
(c) The
sole
right to obtain one or more loans or advances on the Policy, either from the
Insurer or, at any time, from other persons, and to pledge or assign the Policy
as security for such loans or advances;
(d) The
sole
right to collect and receive all distributions or shares of surplus, dividend
deposits or additions to the Policy now or hereafter made or apportioned
thereto, and to exercise any and all options contained in the Policy with
respect thereto; provided, that unless and until the Lead Lender shall notify
the Insurer in writing to the contrary, the distributions or shares of surplus,
dividend deposits and additions shall continue on the plan in force at the
time
of this Assignment;
(e) The
sole
right to exercise all nonforfeiture rights permitted by the terms of the Policy
or allowed by the Insurer and to receive all benefits and advantages derived
therefrom;
(f) The
sole
right to designate and change the beneficiary of the Policy;
(g) The
sole
right to elect any optional mode of settlement permitted by the Policy or
allowed by the Insurer;
(h) The
sole
right to return the Policy for cancellation or redemption;
(i) The
sole
right to make deposits for the purpose of paying future premiums on the
Policy;
(j) The
sole
right to change the Policy to a plan of whole life or endowment insurance;
and
(k) The
sole
right to transfer, assign, or otherwise dispose of the Policy.
2. It
is
expressly agreed that the following specific rights, so long as the Policy
has
not been surrendered, are reserved and excluded from this Assignment and do
not
pass by virtue hereof:
(a) The
right
to collect from the Insurer any disability benefit payable in cash that does
not
reduce the amount of insurance, so long as the Policy has not been surrendered;
and
(b) The
right
to elect any optional mode of settlement permitted by the Policy or allowed
by
the Insurer; but the reservation of these rights shall in no way impair the
right of Lenders to surrender the Policy completely with all its incidents
or
impair any other right of Lenders hereunder, and any designation or change
of
beneficiary or election of a mode of settlement shall be made subject to this
Assignment and to the rights of Lenders hereunder.
3. This
Assignment is made and the Policy is to be held as collateral security for
the
outstanding principal amount of and all accrued and unpaid interest on the
promissory notes executed by Assignor and payable to the order of Lenders under
the Loan Agreement; and (ii) all obligations of Assignor to Lenders under any
documents evidencing, securing, governing and/or pertaining to all or any part
of the indebtedness described in (i) above (the “Indebtedness”).
4. Assignor
warrants and represents to Lenders, their successors and assigns
that:
(a) the
terms
and condition of the Policy are fully set out and disclosed in the copy thereof,
which has been delivered by Assignor to Lenders;
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(b) the
Policy has been accepted by ▇▇▇▇ ▇▇▇▇▇▇▇ Life Insurance Company, is in full
force and effect, and has not been amended, altered or revoked in any manner;
and
(c) Assignor
has not executed any prior assignment or pledge of its rights under the Policy,
except to the Lienholders, and holds full and complete power and authority
to
transfer, pledge and assign its rights, as owner and beneficiary
under the Policy, to Lenders free and clear of any rights of any third party
whatsoever, other than the Lienholders.
5. Assignor
hereby covenants and agrees with Lenders, their successors and assigns, that
Assignor shall not alter, amend, modify, endorse, borrow funds under, or
otherwise affect the Policy without the prior written consent of the Lead
Lender, shall keep the Policy in full force and effect, provide for the prompt
and timely payment of all premiums and other charges required to be made to
keep
said Policy in full force and effect, and, at the written direction of the
Lead
Lender shall do or cause to be done all proceedings, acts and things necessary
or proper to effect the performance and recovery under the Policy at its own
cost and expense.
6. The
Lenders covenant and agree with Assignor as follows:
(a) That
any
proceeds of the Policy received by the Lenders from the Insurer shall be applied
by Lenders to pay the then existing Indebtedness and any remaining proceeds
of
the Policy after the payment of such Indebtedness shall be promptly paid by
Lenders to Assignor;
(b) That
Lenders shall not exercise any rights under the Policy other than (i) the right
to collect from the Insurer the net proceeds of the Policy when it becomes
a
claim by death or maturity, (ii) the right to collect and receive all
distributions or shares of surplus, dividend deposits, or additions to the
Policy, and (iii) the right to make deposits for the purpose of paying future
premiums on the Policy, until there has been an Event of Default (as defined
in
the Loan Agreement) that shall have occurred and be continuing; and
(c) If
the
original Policy is in possession of Lenders, Lenders will upon request forward
without unreasonable delay to the Insurer the Policy for endorsement of any
designation or change of beneficiary or any election of an optional mode of
settlement.
7. The
Insurer is hereby authorized to recognize Lenders’ claims to rights hereunder
without investigating the reason for any action taken by Lenders, or the
validity or the amount of the Indebtedness or the existence of any default
therein, or the giving of any notice under Paragraph
6(b)
above or
otherwise, or the application to be made by Lenders of any amounts to be paid
to
Lenders. The sole signature of the Lead Lender shall be sufficient for the
exercise of any rights under the Policy assigned hereby and the sole receipt
of
the Lead Lender for any sums received shall be a full discharge and release
therefor to the Insurer. Checks for all or any part of the sums payable under
the Policy and assigned herein shall be drawn to the exclusive order of the
Lead
Lender if, when, and in such amounts as may be, requested by
Lenders.
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8. The
Assignor agrees to pay when due and before becoming delinquent, all premiums
necessary to keep the Policy in full force and effect and the amounts due on
any
loans or advances on the Policy. The Assignor agrees that it will not exercise
the right to obtain policy loans from the Insured. The Lenders shall be under
no
obligation to pay any premium, or the principal of or interest on any loans
or
advances on the Policy obtained by Assignor, or any other charges on the Policy,
but any such amounts so paid by Lenders from their own funds shall become a
part
of the Indebtedness hereby secured, shall be due immediately, and shall draw
interest at the highest rate permitted by applicable law.
9. Lenders
may take or release other security, may release any party primarily or
secondarily liable for any of the Indebtedness, may grant extensions, renewals
or indulgences with respect to the Indebtedness, or may apply to the
Indebtedness in such order Lenders shall determine the proceeds of the Policy
hereby assigned or any amount received on account of the Policy by the exercise
of any right permitted under this Assignment, without resorting or regard to
other security.
10. Assignor
declares, represents, and warrants that no insolvency proceedings or proceedings
in bankruptcy are pending against it, that its Policy is not subject to any
assignment for the benefit of creditors (other than the Lienholders), that
the
Policy is in full force and effect, that Assignor has made no material
representation or omission in the application for the Policy, that Assignor
has
no current knowledge of any event which might cause the Policy to be
unenforceable and that there are no loans outstanding from the
Policy.
11. In
the
event of any conflict between the provisions of this Assignment and provisions
of the Notes (as defined in the Loan Agreement), the Loan Agreement, or other
evidence of any liability, with respect to the Policy or rights of collateral
security therein, the provisions of this Assignment shall prevail.
12. Upon
payment in full of all of the Indebtedness, this Assignment shall be of no
further force and effect.
13. THIS
ASSIGNMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE
STATE OF TEXAS AND APPLICABLE FEDERAL LAWS.
4
IN
WITNESS WHEREOF, the undersigned executes and delivers this Assignment as of
the
first day written above.
|
ASSIGNOR:
|
LEAD
LENDER:
|
|
Ronco
Corporation
|
▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
|
|
By:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇.
|
By:
/s/ ▇▇▇ ▇.
▇▇▇▇▇▇
|
|
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
|
Name:
▇▇▇ ▇. ▇▇▇▇▇▇
|
|
Title:
President and Chief Executive Officer
|
Title:
Chief Executive Officer
|
▇
▇▇▇
▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇ §
§
▇▇▇▇▇▇
OF
___________ §
This
instrument was acknowledged before me on the ___ day of ________________, 2006,
by ____________________, ________________________ of Ronco Corporation, a
Delaware corporation, on behalf of said corporation.
___________________________________
Notary
Public in and for the State of Texas]
6
THE
STATE
OF TEXAS §
§
COUNTY
OF
▇▇▇▇▇▇
§
This
instrument was acknowledged before me on the 9
day
of
June,
2006,
by ▇▇▇
▇.
▇▇▇▇▇▇,
Chief
Executive Officer
of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc., a Texas corporation, on behalf of said
association.
_/s/▇▇▇▇▇
Eva Bailey___________________
Notary
Public in and for the State of Texas
7
ACKNOWLEDGMENT
OF ASSIGNMENT BY INSURER
__________________________
hereby acknowledges receipt of a duplicate of this Assignment of Life Insurance
Policy Number 81070567 and waives all prohibitions against assignment, if any,
contained in the above-described policy and consents to the assignment of all
right, title, and interest by the Assignor in that policy to the full extent
described in the Assignment.
EXECUTED
on this the _____ day of _____________________, 2006.
▇▇▇▇
▇▇▇▇▇▇▇ Life Insurance Company
By:_______________________________
Name:_____________________________
Title:______________________________
8