EXCHANGE AGREEMENT



         This Exchange Agreement ("Agreement") is dated as of September 28, 2005

and is made by and between Salton, Inc., a Delaware corporation (the "Company"),

and the person listed on the signature page attached hereto (the "Holder").

Certain capitalized terms used herein and not otherwise defined have the

meanings set forth in Article VIII hereof.



         WHEREAS, the Holder is the beneficial owner of the aggregate principal

amount of 10-3/4% Senior Subordinated Notes due 2005 (the "2005 Notes") issued

pursuant to the Indenture, dated as of December 16, 1998, among the Company, the

Guarantors (as defined therein) and SunTrust Bank (as successor to Wells Fargo

Bank Minnesota, N.A.), as trustee (the "2005 Indenture") as set forth under the

Holder's name on the signature page hereto; and



         WHEREAS, the Holder has agreed with the Company to exchange all of the

Notes beneficially owned by the Holder, including all accrued but unpaid or

deferred interest, as the case may be, thereon, for Second Lien Notes (as

defined in Section 8.1 below), upon the terms and subject to the conditions set

forth below; and



         NOW, THEREFORE, in consideration of the premises and the

representations, warranties, covenants and agreements herein contained and

intending to be legally bound hereby, the Company and the Holder hereby agree as

follows:



                                   ARTICLE I

                      EXCHANGE OF NOTES AND RELATED MATTERS



         Section 1.1 (a) Exchange of 2005 Notes. At the Closing, the Holder

shall be deemed to have transferred and delivered, and shall promptly thereafter

cause to be transferred and delivered, to the Company or its duly authorized

agent (the "Exchange Agent"), the aggregate principal amount of the 2005 Notes

including all interest accrued and unpaid or deferred thereon, as set forth

under the Holder's name on the signature page hereto (the "2005 Exchanged

Notes"). In consideration of such deemed and actual transfer and delivery, at

the Closing, the Company shall, or shall cause the Exchange Agent to, issue and

deliver to and in the name of the registered holder of the 2005 Exchanged Notes:

$4,078,385.79 of aggregate principal amount of Second Lien Notes. Effective

immediately as of the Closing, the 2005 Exchanged Notes shall no longer

represent evidence of indebtedness under the 2005 Indenture or otherwise but

shall instead represent only the right to receive the aggregate principal amount

of Second Lien Notes pursuant to this Section 1.1 (the "New Securities").



         (b) Closing. The closing of the exchange described in Section 1.1 shall

take place at the offices of Sonnenschein Nath & Rosenthal LLP, 8000 Sears

Tower, Chicago, IL 60606 at 10:00 a.m., Chicago time, as soon as reasonably

practicable after satisfaction or waiver of the conditions set forth in Articles

IV or V hereof, but in no event not later than two business days after

satisfaction of such conditions or at such other time and place as the Company

and the Holder mutually agree upon orally or in writing (which time and place

are designated as the "Closing").



         Section 1.2 Liens; Transfer. Prior to the Closing, the Holder shall not

(a) encumber the 2005 Exchanged Notes with any Lien, (b) permit such 2005

Exchanged Notes to be





<PAGE>



encumbered with any Lien or (c) sell, transfer or otherwise dispose of any of

such 2005 Exchanged Notes.



         Section 1.3 Waivers; Release. Effective immediately prior to the

Closing, the Holder hereby waives and releases, and at the request of the

Company shall cause its nominee to waive and release all rights, claims and

causes of action against the Company, its Subsidiaries or its Agents based upon

Losses sustained from the purchase or ownership of the 2005 Exchanged Notes.



         Section 1.4 Indemnification by the Holder. The Holder shall indemnify

the Company and its Agents against, and hold them harmless from, all Losses

incurred by them arising out of the failure of such Holder to deliver its 2005

Exchanged Notes in accordance with this Agreement or arising out of the loss,

theft or destruction of the certificate(s) representing the Holder's 2005

Exchanged Notes.



                                   ARTICLE II

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

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