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Agreement - Salton Inc. and Sam Perlmutter

                                    AGREEMENT

     AGREEMENT, dated as of September 7, 2000, between Salton, Inc., a
Delaware corporation (the "Company"), and Sam Perlmutter, an individual
("Perlmutter").

                                   WITNESSETH

     WHEREAS, the Company and Sam Perlmutter are parties to an agreement (the
"Perlmutter Agreement") dated July 1, 1999 pursuant to which the Company
purchased from Perlmutter stock and other property; and

     WHEREAS, under the Agreement, Perlmutter has the right to receive four
annual cash installments of $1,375,000 each on the first, second, third and
fourth anniversary of the closing of the transactions contemplated by the
Perlmutter Agreement (the "Future Consideration"); and

     WHEREAS, the parties desire to, among other things, amend the terms of the
Future Consideration to provide for the payment to Perlmutter on the date hereof
of shares of common stock, $.01 par value per share, of the Company (the "Common
Stock") valued at $1,375,000 in lieu of the first annual $1,375,000 cash
installment of the balance of the Purchase Price payable pursuant to Section
4(a)(ii) of the Perlmutter Agreement;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto agree as follows:

     1.   Amendment.

               (a) Notwithstanding Section 4(a)(ii) of the Perlmutter Agreement,
     the parties hereto agree that, in lieu of the second installment of the
     balance of the Purchase Price payable pursuant to Section 4(a)(ii) of the
     Perlmutter Agreement, the Company shall issue to Perlmutter on the date
     hereof 37,543 shares of Common Stock:

               (b) Except as specifically set forth in this Agreement, the terms
     and provisions of the Perlmutter Agreement and the agreements contemplated
     thereby (including, without limitation, the Trademark Security Agreement)
     shall continue in full force and effect.

     2.   Representations and Warranties of the Company. The Company hereby
represents and warrants to Perlmutter as follows:

               (a) Organization and Standing of the Company. The Company is a
     corporation duly incorporated, validly existing and in good standing under
     the laws of the State of Delaware.

               (b) Authority. The Company has the requisite corporate power and
     authority to enter into this Agreement and to carry out its obligations
     hereunder. The execution, delivery and performance of this Agreement by the
     Company have been duly and validly authorized by all requisite corporate
     proceedings on the part of the Company and do not require the approval or
     consent of any stockholders of the 


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     Company. This Agreement has been duly executed and delivered by the Company
     and is (assuming the due authorization, execution and delivery by
     Perlmutter) a valid and binding agreement of the Company, enforceable
     against it in accordance with its terms, except as such enforceability may
     be limited by bankruptcy and insolvency laws and by other laws affecting
     the rights of creditors generally or by the availability of equitable
     remedies and except as rights of indemnity or contribution may be limited
     by federal or state securities or other laws or the public policy
     underlying such laws.

               (c) Status of Shares. The Shares (as defined below) have been (or
     will be) duly authorized by all necessary corporate action on the part of
     the Company (no consent or approval of stockholders being required by law,
     the Certificate of Incorporation of the Company, as amended and restated,
     or its By-laws). The Shares, when delivered pursuant to this Agreement,
     will be validly issued and outstanding, fully paid and nonassessable and
     free and clear of any liens (other than those imposed by the securities
     laws), and the issuance of such Shares is not and will not be subject to
     preemptive or similar rights of any other stockholder of the Company. For
     purposes of this Agreement, "Shares" shall mean the shares of Common Stock
     issued to Perlmutter pursuant to this Agreement, and any additional shares
     of Common Stock issued to Perlmutter in accordance with Section 4(e) of
     this Agreement.

     3.   Representations and Warranties of Perlmutter. Perlmutter hereby
represents and warrants to the Company as follows:

               (a) Authority and Authorization of Perlmutter. Perlmutter has the
     requisite power to enter into this Agreement. This Agreement has been duly
     executed and delivered by Perlmutter and is (assuming the due
     authorization, execution and delivery by the Company) a valid and binding
     agreement of Perlmutter, enforceable against Perlmutter in accordance with
     its terms except as may be limited by bankruptcy and insolvency laws and by
     other laws affecting the rights of creditors generally and except as may be
     limited by the availability of equitable remedies and except as rights of
     indemnity or contribution may be limited by federal or state securities or
     other laws or the public policy underlying such laws.

               (b) Experience of Perlmutter; Acquisition for Investment.
     Perlmutter is an accredited investor as defined in Regulation D under the
     Securities Act of 1933. Perlmutter has extensive knowledge and experience
     in financial and business matters and has the capability to evaluate the
     merits and risks of an investment in the Shares and has had the opportunity
     to ask any and all questions of the Company's management. Perlmutter
     represents that he is not acquiring the Shares with a view to or for sale
     in connection with any distribution thereof, except as permitted by and
     pursuant to Section 4 of this Agreement, and that he has no present
     intention or plan to effect any distribution of the Shares, except as
     permitted by and pursuant to Section 4 of this Agreement; provided, however
     that the disposition of Perlmutter's property shall at all times be and
     remain within his control, subject to the provisions of this Agreement.
     Perlmutter understands that the Shares have not yet been registered under
     the Securities Act of 1933 (the "Securities Act") by reason of specific
     exemptions therefrom which depend upon, among 

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     other things, the accuracy of his representations as expressed herein. The
     Shares shall bear the following legend:

               THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
          ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER
          THE SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE
          SECURITIES LAWS. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED
          IN THE ABSENCE OF SUCH REGISTRATIONS OR EXEMPTIONS THEREFROM
          UNDER SAID ACT OR LAWS.

               (c) Rule 144. Perlmutter acknowledges that the Shares must be
     held indefinitely unless subsequently registered under the Securities Act
     or any applicable state securities laws or unless exemptions from such
     registrations are available. Perlmutter is aware of the provisions of Rule
     144 promulgated under the Securities Act which permit limited resale of
     securities purchased in a private placement subject to the satisfaction of
     certain conditions.

               (d) Shares. Perlmutter acknowledges and agrees that he will not,
     except in connection with a merger, tender offer or similar transaction
     involving the Company, sell, transfer or otherwise dispose of the Shares
     except to the public pursuant to the registration statement contemplated by
     Section 4 hereof or in brokerage transactions in accordance with Rule 144
     under the Securities Act.

     4.   Registration.

               (a) The Company agrees, at its sole expense, to prepare and file
     with the Securities and Exchange Commission (the "Commission") as soon as
     reasonably practicable after the issuance of any Shares to Perlmutter
     pursuant to this Agreement a registration statement (including a prospectus
     therein) (or amend and continue the effectiveness of any registration
     statement) with respect to the sale of such Shares to the public in
     brokerage transactions and to use its reasonable best efforts to cause such
     registration statement to become and remain effective for such period as
     may be necessary to permit the successful marketing of such Shares, but not
     exceeding the earlier of (i) September 30, 2001 and (ii) the date on which
     Perlmutter could dispose of any remaining Shares to the public pursuant to
     Rule 144(k) under the Securities Act. The date on which Perlmutter is
     entitled to use such prospectus for the sale of the Shares is sometimes
     referred to herein as the "Effective Date". Notwithstanding the foregoing,
     the Company shall be entitled to prohibit any offers or sales of the Shares
     pursuant to the prospectus for a reasonable period of time (but not
     exceeding an aggregate of 90 days during any 12 month period) if the
     Company determines, in its reasonable judgment, that (i) the Company is in
     possession of material information that has not been disclosed to the
     public and the Company reasonably determines that it would be significantly
     detrimental to the Company and its stockholders to disclose such
     information at such time in a registration statement or (ii) such
     registration and offering would interfere with any 

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     financing, acquisition, corporate reorganization or other material
     transaction involving the Company or any of its affiliates and, in any such
     case, the Company promptly gives Perlmutter written notice of such
     determination, containing a general statement of the reasons for such
     postponement and an approximation of the anticipated delay. Perlmutter
     agrees that, upon receipt of any such written notice, he will forthwith
     discontinue disposition of any Shares until he receives notice in writing
     from the Company that the use of the prospectus may be resumed. The Company
     shall furnish to Perlmutter promptly after the date when the registration
     statement becomes effective such number of prospectuses as may be needed in
     order to facilitate the public sale of the Shares. Perlmutter shall furnish
     to the Company such information regarding Perlmutter and the distribution
     of the Shares as the Company may from time to time reasonably request in
     order to comply with the Securities Act.

               (b) In the event that the aggregate proceeds (after reasonable
     and customary brokerage commissions) from the sale of Shares by Perlmutter
     to the public prior to the one year anniversary of the Effective Date plus
     the market value (based on the average closing price of the Common Stock
     (as reported on the NYSE Composite Transactions Reporting system as
     published in The Wall Street Journal or, if not published therein, in
     another alternative source) during the ninety (90) trading days ending on
     the third trading day preceding the one year anniversary of the Effective
     Date) of Shares which Perlmutter continues to hold on the one year
     anniversary of the Effective Date are less than the product of (x) the
     number of Shares multiplied by (y) $36.625, then the Company shall pay to
     Perlmutter an amount in cash (or, at the election of the Company in
     accordance with Section 4(e) hereof, in additional shares of Common Stock)
     equal to the difference between (a) the product of (x) the number of Shares
     sold during the specified one year period multiplied by (y) $36.625 and (b)
     the aggregate proceeds (after reasonable and customary brokerage
     commissions) from the sale of such Shares.

               (c) In the event the aggregate proceeds (after reasonable and
     customary brokerage commissions) from the sale of Shares by Perlmutter to
     the public prior to the one year anniversary of the Effective Date plus the
     market value (based on the average closing price of the Common Stock (as
     reported on the NYSE Composite Transactions Reporting system as published
     in The Wall Street Journal or, if not published therein, in another
     alternative source) during the ninety (90) trading days ending on the third
     trading day preceding the one year anniversary of the Effective Date) are
     more than the product of (x) the number of Shares multiplied by (y)
     $36.625, then Perlmutter shall pay to the Company an amount in cash equal
     to fifty percent (50%) of the excess.

               (d) Perlmutter agrees that he will not sell in the aggregate more
     than 50,000 Shares during any trading day and that he will use his
     reasonable best efforts to obtain the best available sales price for any
     Shares sold on or prior to the one year anniversary of the Effective Date.

               (e) Payments required to be made by any party to any other party
     pursuant to Section 4(b) or 4(c) shall be made promptly after the one year
     anniversary of the Effective Date (and in any event not later than fifteen
     (15) days after the 

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     one year anniversary of the Effective Date). In the event that the Company
     elects to make any payment required by Section 4(b) hereof with respect to
     any fiscal year by issuing shares of Common Stock to Perlmutter, then the
     Company shall issue to Perlmutter that number of shares of Common Stock
     that is equal to (1) the dollar amount of the payment required, divided by
     (2) the average closing price of the Common Stock (as reported on the NYSE
     Corporate Reporting System as published in The Wall Street Journal or, if
     not published therein, in another alternative source) during the ninety
     (90) trading days ending on the third trading day preceding the one year
     anniversary of the Effective Date. Each of the parties will cooperate with
     each other and furnish each other information (including, without
     limitation, documented information concerning any sales of the Shares) to
     determine the amount of payments due pursuant to Sections 4(b) through (d)
     above. For purposes of Sections 4(b), in the event that Perlmutter sells
     any of the Shares pursuant to a merger, tender offer or similar transaction
     involving the Company, he shall be deemed to have sold such Shares to the
     public for an amount equal to the aggregate consideration he receives for
     the sale of such Shares in such transaction.

               (f) The Company shall indemnify and hold harmless Perlmutter any
     expenses, losses, claims, damages or liabilities, joint or several, to
     which Perlmutter may become subject under the Securities Act or the
     Securities Exchange Act of 1934, as amended, including any of the foregoing
     incurred in settlement of any litigation, commenced or threatened, insofar
     as such expenses, losses, claims, damages or liabilities (or actions in
     respect thereof) arise out of or are based upon (i) any untrue statement or
     alleged untrue statement of any material fact contained in the registration
     statement or final prospectus contained therein, or any amendment or
     supplement thereto; or (ii) any omission or alleged omission to state
     therein a material fact required to be stated therein or necessary to make
     the statements therein, in light of the circumstances under which they were
     made, not misleading; and shall reimburse each Perlmutter for any legal or
     any other expenses reasonably incurred by him in connection with
     investigating or defending any such loss, claim, damage, liability or
     action; provided, however, that the Company shall not be liable in any such
     case to the extent that any such expense, loss, claim, damage or liability
     arises out of or is based upon an untrue statement or alleged untrue
     statement or omission or alleged omission made in the registration
     statement or said prospectus or said amendment or supplement in reliance
     upon and in conformity with written information furnished to the Company by
     Perlmutter specifically for use in the preparation thereof.

               (g) Perlmutter shall indemnify and hold harmless the Company and
     each person, if any, who controls the Company within the meaning of the
     Securities Act, each officer of the Company who signs the registration
     statement and each director of the Company, against any and all such
     expenses, losses, claims, damages or liabilities referred to in Section
     4(f) above if the statement, alleged statement, omission or alleged
     omission in respect of which such expense, loss, claim, damage or liability
     was made in reliance upon and in conformity with information furnished in
     writing to the Company by Perlmutter specifically for use in connection
     with the preparation of the registration statement, prospectus, amendment
     or supplement.


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               (h) Promptly after receipt by an indemnified party of notice of
     the commencement of any action, such indemnified party shall, if a claim in
     respect thereof is to be made against the indemnifying party, notify the
     indemnifying party in writing of the commencement thereof; but the omission
     so to notify the indemnifying party shall not relieve it from any liability
     which it may have to any indemnified party otherwise than under this
     Section 4 or to the extent that it has not been prejudiced as a proximate
     result of such failure. In case any such action shall be brought against
     any indemnified party, and it shall notify the indemnifying party of the
     commencement thereof, the indemnifying party shall be entitled to
     participate therein and, to the extent that it shall wish, to assume the
     defense thereof, with counsel reasonably satisfactory to such indemnified
     party; provided, however, that if the defendants in any such action include
     both the indemnified party and the indemnifying party and the indemnified
     party shall have reasonably concluded that there may be legal defenses
     available to it and/or other indemnified parties which are different from
     or additional to those available to the indemnifying party, the indemnified
     party or parties shall have the right to select one separate counsel to
     assert such legal defenses (in which case the indemnifying party shall not
     have the right to direct the defense of such action on behalf of the
     indemnified party or parties). Upon the permitted assumption by the
     indemnifying party of the defense of such action, and approval by the
     indemnified party of counsel, the indemnifying party shall not be liable to
     such indemnified party under this Section 4 for any legal or other expenses
     subsequently incurred by such indemnified party in connection with the
     defense thereof (other than reasonable costs or investigation) unless (i)
     the indemnified party shall have employed one separate counsel in
     connection with the assertion of legal defenses in accordance with the
     proviso to the next preceding sentence, (ii) the indemnifying party shall
     not have employed counsel reasonably satisfactory to the indemnified party
     to represent the indemnified party within a reasonable time, (iii) the
     indemnifying party and its counsel do not actively and vigorously pursue
     the defense of such action or (iv) the indemnifying party has authorized
     the employment of counsel for the indemnified party at the expense of the
     indemnifying party.

               (i) From the date hereof until September 30, 2001, the Company
     agrees to use its reasonable best efforts to file with the Commission such
     information as is required under the Securities Exchange Act of 1934, as
     amended, and to take all actions as may be required as a condition to the
     availability of Rule 144 under the Securities Act.

     5.   Miscellaneous.

               (a) Specific Performance. The parties hereto agree that
     irreparable damage would occur in the event that any of the provisions of
     this Agreement were not performed by the applicable party hereto in
     accordance with the specific terms of this Agreement or were otherwise
     breached. Each of the parties hereto shall be entitled to an injunction or
     injunctions to prevent breaches of this Agreement by the other and to
     enforce specifically the terms and provisions hereof in addition to any
     other remedy to which such party is entitled at law or in equity, and each
     party waives the posting of any bond or security in connection with any
     proceeding related thereto.

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               (b) Expenses. Except for the Company's payment of the costs and
     expenses of filing a registration statement (including a prospectus
     therein) with respect to the sale of the Shares, no party hereto shall be
     responsible for the payment of any other party's expenses incurred in
     connection with this Agreement.

               (c) Third Party Beneficiaries. The terms and provisions of this
     Agreement are intended solely for the benefit of each party hereto and his
     or its respective successors and permitted assigns, and it is not the
     intention of the parties to confer third party beneficiary rights upon any
     other person or entity.

               (d) Amendments. This Agreement may not be modified, amended,
     altered or supplemented except upon the execution and delivery of a written
     agreement executed by each of Perlmutter and the Company.

               (e) Assignment. Neither this Agreement nor any of the rights,
     interests or obligations hereunder shall be assigned, in whole or in part,
     by Perlmutter without the prior written consent of the Company. Subject to
     the preceding sentence, this Agreement will be binding upon, inure to the
     benefit of, and be enforceable by, the parties and their respective
     successors and assigns.

               (f) Notices. All notices, requests, claims, demands and other
     communications hereunder shall be in writing and shall be deemed given if
     delivered personally or sent by overnight courier (providing proof of
     delivery) to the parties at the following addresses (or at such other
     address for a party as shall be specified by like notice).

                         (i)      if to Perlmutter, to

                   Sam Perlmutter

                         (ii)     if to the Company, to

                   Salton, Inc.

                   Attention: William B. Rue, President

                   with a copy to:

                   Sonnenschein Nath & Rosenthal
                   8000 Sears Tower
                   Chicago, Illinois  60606

                   Attention: Neal Aizenstein, Esq.

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               (g) Governing Law. This Agreement shall be governed by, and
     interpreted in accordance with, the laws of the State of Delaware, without
     regard to the conflict of law principles thereof. All actions and
     proceedings arising out of or relating to this Agreement shall be heard and
     determined in any state or Federal court sitting in Delaware. Each of the
     parties hereto (i) consents to submit such party to the personal
     jurisdiction of any Federal court located in the State of Delaware or any
     Delaware state court in the event any dispute arises out of this Agreement
     or any of the transactions contemplated hereby, (ii) agrees that such party
     will not attempt to deny or defeat such personal jurisdiction by motion or
     other request for leave from any such court, (iii) agrees that such party
     will not bring any action relating to this Agreement or the transactions
     contemplated hereby in any court other than a Federal court sitting in the
     State of Delaware or a Delaware state court and (iv) waives any right to
     trial by jury with respect to any claim or proceeding related to or arising
     out of this Agreement or any of the transactions contemplated hereby.

               (h) Counterparts. This Agreement may be executed in one or more
     counterparts, each of which shall be deemed to constitute an original. This
     Agreement shall become effective when one counterpart signature page has
     been signed by each party hereto and delivered to each of the other
     parties.

               (i) Effect of Headings. The descriptive headings contained herein
     are for convenience of reference only and shall not affect in any way the
     meaning or interpretation of this Agreement.

               (j) Further Assurances. Each of the parties hereto agrees to
     execute and deliver all such further documents, certificates and
     instruments, and take all such further reasonable action as may be
     necessary or reasonably appropriate, in order to consummate the
     transactions contemplated hereby.




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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth above.

                                         SALTON, INC.


                                         By:
                                         Its:


                                         SAM PERLMUTTER


                                         By:








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